Media Accruals & Deferrals

Why Media Accruals & Deferrals Are Needed

In Accountability, when a client media invoice is generated and posted, the system records media sales, commissions, and cost of sales in the current accounting period. This ensures billing activity is immediately reflected in the general ledger.

However, media is commonly pre-billed or billed after the media has already run. As a result, billing timing does not always align with the media service period.

This creates two common scenarios:

Media runs but the client has not been billed

When media runs during an accounting period and no client media invoice has been generated for the media schedule, revenue and cost of sales are not yet recognized.

In this scenario, a media accrual is required to recognize commissions, sales, and cost of sales in the period in which the media activity occurred.

Client is billed before the media runs

When a client media invoice is generated in an accounting period for media that runs in a future period, revenue and cost of sales are recognized too early.

In this scenario, a media deferral is required to move commissions, sales, and cost of sales out of the current period and into the appropriate future period(s).

The Media Accruals & Deferrals functionality automates this process by evaluating media schedules and client billing activity for a selected accounting period and generating the appropriate accruals or deferrals.

Navigation

Media menu > Media Accounting > Media Accruals & Deferrals

Creating a Media Accrual or Deferral

1. Navigate to Media > Media Accounting > Media Accruals & Deferrals

2. Click the New Accrual/Deferral button in the top-right corner

3. Select the Accounting Period

4. Select the Office(s) to include

5. Click Next to allow the system to automatically generate accruals and deferrals

The system evaluates each media schedule entry that overlaps with the selected accounting period and determines whether an accrual or deferral is required.

Accrual vs. Deferral Logic

For each applicable media schedule entry, the system applies the following logic:

Accrual
An accrual is generated when no client media invoice exists for the media schedule during the selected accounting period.

Deferral
A deferral is generated when a client media invoice exists for the media schedule during the selected accounting period.

How the System Calculates Accrual and Deferral Values

When an accrual or deferral is generated, the system calculates the value automatically for each applicable media schedule entry. The calculation is based on the total rate of the media schedule entry and the full media schedule entry period, from start date to end date.

The system applies the following logic:

• The total rate of the media schedule entry is evenly allocated across the full date range of the schedule to determine a daily rate
• The daily rate is multiplied by the number of days that fall within the selected accounting period
• The system compares the prorated amount for the period to what has already been billed for the media schedule
• The difference between the prorated amount and the billed amount determines the accrual or deferral value

This ensures that commissions, sales, and cost of sales are recognized in proportion to the actual media service period, regardless of when client billing occurs.

Example: Media Schedule Spanning Multiple Periods

The following example illustrates how the system calculates a deferral for a media schedule that spans multiple accounting periods.

Media schedule entry details:

• Media schedule period: January 1 – March 31, 2026
• Total media schedule rate: $9,000
• Total number of days in the schedule: 90 days

Based on the full media schedule period, the system calculates a daily rate:

$9,000 ÷ 90 days = $100 per day

January Accounting Period

For the January accounting period, the system identifies 31 days that fall within the media schedule.

The system calculates the prorated amount for January as follows:

$100 × 31 days = $3,100

If a client media invoice was generated in January for the full media schedule amount, the system determines that revenue and cost of sales have been recognized too early for the portion related to future media activity.

As a result, the system generates a $3,100 deferral for January, adjusting revenue and cost of sales to reflect only the portion of the media schedule that relates to the January service period.

In subsequent accounting periods, the same calculation logic may be applied again when accruals or deferrals are generated for those periods, based on the media schedule dates and any billing activity that exists at that time.

Review, Posting, and Reversal Behavior

When media accruals and deferrals are generated, the system creates the corresponding journal entries in an unposted state.

This allows users to review the calculated accrual or deferral entries before posting them to the general ledger.

Once posted, the system automatically creates a reversing entry in the following accounting period. This reversal ensures that accruals and deferrals do not permanently impact balances and that revenue and cost of sales are ultimately recognized through normal billing activity.