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Any international transfer suffering from ACCA?
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Oh gosh, I've seen clients record it that way though. No, it's not a prepaid if they've not pre-paid it. If they're doing monthly payments that are just the $100K divided by 12, then yes, just credit cash debit expense (you might have one month of prepaid OR payable depending on the timing of the payment). Sometimes, however, they pay 25% upfront and then the rest over 9 months, in that case, you'd put what they actual paid to prepaid, then expense 1/12 of the annual premium monthly.
I agree with this, in addition, you’ll just have to see the timing when the insurance is paid vs the month you report it. For example if you pay the insurance the 15 of each month that covers the month, then you’ll have to accrue the 15 days assuming you’re closing the books before the payments are made.
It depends in my opinion. If they just paying monthly directly to the insurance company, then yes just expense monthly. A lot of my clients do insurance premium financing through someone like AFCO. In that case, we are okay with the day one entry being debit prepaid expense, credit insurance payable and then amortizing off.
Yea some companies just plug it to Prepaid to offset the liability because they entered into a contract so they do have a commitment to pay 100k. If you don't like the idea of it sitting in a Prepaid Asset account for classification purposes then they can just plug it to a general "Other Non Current Asset" account and just Dr Payable / Cr Cash and Dr Expense / CR Asset each month
Yep and leases are considered executory agreements as well and we see what happened with ASC 842 lol
If they didn’t prepay it, it’s not a prepaid