Prepaid expenses schedule calculation error?

Prepaid expense schedule doesn’t calculate properly when there is an amount in prior year prepaid column.

when only putting an amount on original amount column it works fine

But when there is an amount in prior year prepaid column, it is deducting prior year prepaid from current year prepaid.

Is there a fix for the formula or do we just have to enter prior year prepaid in a separate line?



Hi Eunice,

There should always be an original amount amount entered for each prepaid entry whether in the first year or years forward. In the example above, it looks like the dates of the period covered may be incorrect. You are showing start/finish dates in 2020, however you are putting a prepaid amount in the 2019 column.

In the first year when you enter in a new prepaid entry, it calculates the current expense and prepaid amount by using the expense in days. Next year when the file is rolled forward, the current expense is calculated by using the expense in days times the original amount. Each year new prepaid items would be on a different line.

Although prepaid expense is generally expensed in the second year, the working paper will calculate annual expense even if the period of coverage is over more than two years.

I hope this helps. If I have misunderstood the issue, please let me know.

hi Lori,

Thank you very much for your explanation. it make sense now.