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Prepaid Expense Amortization RecomputeRemaining Months of Coverage

What is this money worth, or what does it cost, over time?

Expected prepaid balance and expense to date from the amount paid, coverage months and months elapsed, compared with the recorded prepaid.

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  • Nothing stored or sent
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Your figures
Example figuresIllustrative only. Type over them with your own.
Break (recorded less recomputed)
$15,500
Recorded prepaid less the recompute
Monthly amortization
$15,500
Expense to date
$108,500
Drawn to one scale
Monthly amortization$15,500
Expense to date$108,500
Recomputed prepaid balance$77,500
Recorded amount$93,000
Break (recorded less recomputed)$15,500
All results
MeasureResult
Monthly amortization$15,500
Expense to date$108,500
Recomputed prepaid balance$77,500
Recorded amount$93,000
Break (recorded less recomputed)
Recorded is higher
$15,500
How this was worked out
Work shownrecomputed as you type
Monthly amortization = amount paid / coverage months
Recomputed prepaid = amount paid x (coverage months - months elapsed) / coverage months
Expense to date = amount paid - recomputed prepaid

Illustrative arithmetic on the figures you enter. Check the result against your firm's methodology before relying on it.

The formulas

  • Monthly amortization = amount paid / coverage months
  • Recomputed prepaid = amount paid x (coverage months - months elapsed) / coverage months
  • Expense to date = amount paid - recomputed prepaid

How it works

Insurance, software subscriptions, maintenance contracts and rent paid in advance are expensed over the period they cover. The remaining prepaid at period end is the unexpired share of the payment.

A recorded balance above the recompute often means amortization stopped or started late. A balance below it can mean the full payment was expensed on receipt. Months elapsed are capped at the coverage period.

Illustrative figures only. Check the result against your firm's methodology before relying on it.

Common questions

What if the policy started mid-month?

Use days instead of months: enter coverage days and days elapsed in the two month fields.

How do audits of premiums work?

Trace the payment to the invoice and policy, confirm the coverage dates, then recompute the remaining balance as here.

Should financed premiums be handled differently?

The prepaid is the same. The financing creates a separate note payable.

Formulas on this page are the standard definitions.

Runs in your browser. The figures you type are not sent to CORAA or stored. Check the result against your firm's methodology before relying on it.

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