Crunchafi

Options for Handling 13-Period Accounting in Lease Accounting Software

The article outlines four methods for handling 13-period or 4-4-5 period accounting in Crunchafi Lease Accounting software—aligning entries to calendar months, skipping the 13th period, using a clearing account to defer 1/13th of expenses to the final period, or allocating expenses between expense and asset accounts to match the 13th period—while noting that minor mismatches due to lease terms are generally immaterial.

Options for Handling 13-Period and 4-4-5 Period Accounting in Lease Accounting Software

Crunchafi Lease Accounting reports operate on calendar month periods. If your accounting periods do not align with calendar months, you have the following options:

  1. 1.Book entries on a calendar month basis: Align the 12 entries with the periods that most closely match the calendar months.
  2. 2.Book entries in the first 12 periods, skipping the last period: Only record entries for the first 12 periods and omit the 13th.
  3. 3.Book entries in the first 12 periods with a clearing account: Record entries for the first 12 periods and create a standing Journal Entry to offload 1/13th of the expense each month to a clearing account. This account accumulates the amounts throughout the year and is then expensed in the 13th period.
  4. 4.Use Cost Center Allocation: Allocate each expense account so that 12/13 is expensed and 1/13 is posted to an asset account, which is then expensed in the 13th period.

Note: Leases with terms that do not align with the calendar period may result in some mismatch. However, the difference is likely to be immaterial.