Tax Information for Additional Cost Details

You enter additional costs only with receipts, invoices, credit notes, and debit notes. The same tax information is displayed for additional cost details as for item details (described above).

Tax on prorated additional costs. For each additional cost detail, you can choose a proration method that specifies how or whether to prorate the additional cost and associated allocated tax amounts to the item costs.

Prorating automatically. If you choose to prorate automatically, posting or Day End Processing calculates the tax amount for each additional cost and prorates the additional cost amount and allocated taxes to item details, according to the proration method you choose (by quantity, cost, or weight).

The prorated amounts are not displayed with the affected details. They are also not included in the tax amounts you see in the Item Tax Distribution form (because they are not part of the base on which taxes are calculated for items), but they are shown on the posting journals for the transactions.

Recoverable and expensed taxes. Journal entries for recoverable and expensed taxes are created in Accounts Payable when the invoice batch from Purchase Orders is posted.

Adding taxes to manually prorated additional cost amounts. If you prorate additional costs manually, you must accurately calculate the tax amount for each cost you are prorating, then allocate the full amount of the cost and applicable allocated taxes to item details. You must enter the exact amount to prorate to each item detail in the Manual Proration field for the detail line on the receipt or return.

Multicurrency ledgers. If you use multicurrency accounting, you can enter additional costs to be manually prorated only for vendors who use the functional currency.

Checking manual proration tax amounts. If you are manually prorating an additional cost, you can use the Additional Cost Vendor Taxes form to check the allocated tax amount calculated by the program for the additional cost detail.

If the tax calculations for a transaction include recoverable and expensed taxes, you should calculate the allocated tax to prorate manually for each detail, using the Item/Tax button on the detail entry grid (on the first tab) or in Detail Items/Taxes form.

Use the Totals tab to check the total additional cost amount (including taxes) to prorate manually to item details. The Totals tab lists:

• The total amount to be prorated manually (in the Additional Cost To Be Allocated field). This amount is for all vendors included in the transaction whose costs you are prorating manually.

• The amount you have prorated so far (in the Manually Prorated field).

• The amount, if any, which has not been prorated or by which the manual proration is greater or less than the total (in the Out Of Balance field).