Methods for entering historical equipment revenue records

Equipment revenue records provide information about the income generated by equipment. You can analyze revenue generated by a piece of equipment and adjust cost recovery rates to maintain profitability. Equipment revenue records do not impact the general ledger.

Look over each of the methods outlined below. Method 1 is by far the simplest, but it is also the most limited for reports. Method 2 is the most commonly used method. Method 3 provides the most detail, but requires more time and effort.

Method 1

For each piece of equipment, enter one equipment revenue record. Determine the amount from the total revenue to date for the equipment at the time when the general ledger was set up.

Because you are entering a single amount that may cover many cost codes, create a special cost code for this purpose. You might name the cost code something like Unassigned or Lump Sum or Start Up.

Reports based on cost codes or accounting periods do not contain any detailed data.

Method 2

For each piece of equipment, enter one equipment revenue record for each cost code. Determine the amount from the total revenue from the total revenue to date for each cost code for each piece of equipment at the time when the general ledger was set up.

Provides reports with an accurate breakdown of costs for each cost code. Reports based on accounting periods do not contain any detailed data.

Method 3

For each piece of equipment, enter an equipment revenue record for each cost code in the prior fiscal year and another revenue record for the current fiscal year. First, determine the accumulated costs for each cost code in the prior fiscal year. Then enter a separate revenue record for each cost code. Post each record to period 0.

Next, determine the accumulated revenue for each cost code in the current fiscal year. Then enter a separate revenue record. Post each record to the appropriate accounting period.

Suppose you are starting up in period 7. Determine the accumulated revenue of each cost code in each period. Then enter a revenue record for each cost code in periods one through six.

Reports will contain an accurate breakdown of costs for each cost code except in Journal reports or Current Cost Summary reports.