Most businesses use a standard, monthly accounting cycle. This cycle uses the standard 12
month-year, with each month representing a period. However, some businesses such as restaurants or retail establishments
use an accounting cycle based on a 52/53-week year. These cycles have their periods end on the same day of the week
(say the last Sunday of the month), regardless of the day’s date. Examples of these 52/53-week years would be 4-4-5
accounting, or 13-period accounting, with each period representing four weeks. Sage FAS handles these 52/53-week
accounting cycles in Sage FAS 500 Asset Accounting, which uses the Microsoft SQL database engine.
By employing this type of a cycle, instead of getting the same amount of depreciation every month, regardless of the
length, you will normally get depreciation allocated by the number of weeks in a period. Let's say that an asset is
entitled to $260 of depreciation this year. With the standard, monthly accounting cycle, FAS will calculate about
$21.67 of depreciation every month, regardless of whether the month has 28, 29, 30, or 31 days. With the alternate
accounting cycle, this depreciation is determined by the week, which in this case would be $5 per week ($260/52 weeks
in a year). So, if you are using a 4-4-5 accounting cycle, you would get $20 of depreciation in the first 2
periods ($5 per week * 4 weeks in the cycle), and $25 in the 3rd period ($5 per week * 5 week in the cycle). Of
course, there would be four repetitions of the 4-4-5 cycle per year. With the 13-period accounting, there would be
$20 in each of the 4-week accounting periods.
How would you set this up in FAS 500 Asset Accounting? To set this up, go to File\Edit Company. This dialog box
will appear:
Look in the row that is labeled "Calendar Used", and you will see that all books are using Calendar 1. In
FAS 500 Asset Accounting, you can establish up to 7 calendars, one for each Book in FAS. To change a calendar, push
the button at the bottom of the box marked "Edit Calendars". That will open this dialog box:
Note that in this box, you can rename the calendars. The default names are Calendar 1, Calendar 2, etc. Once you
have selected the calendar to edit, highlight the year you wish to edit and push the button on the left that is
marked "Edit Fiscal Year". That will open this dialog box:
In this window, you need to add the information about your cycle. First, you need to select the month for the
fiscal year-end. Second, you will need to enter the accounting cycle you wish to use. The choice shown is 13 Periods.
The other choices are 4-4-5 Accounting, 4-5-4 Accounting, 5-4-4 Accounting, and Monthly, which is the default. Next
you need to enter the day of the week on which the year ends (and all of the periods within the year).
The final decision to be made is the Year-End Election. The choices are to either end the year on the last Saturday
in December, or the closest Saturday to the last day of December. That day could be in January. If December 31st fell
on a Thursday, the last Saturday in December would be December 24th. However, the closest Saturday to December 31st
would be January 2nd. The Year-End Election allows you to make the choice between December 24th and January 2nd as
a year-end.
Finally, since these are cycles based on weeks, every 5 or 6 years there will be a year with 53 Saturdays. If you
are using one of these cycles, the extra week is added on to the last cycle. This would change a 4-week period
into a 5-week period, or a 5-week period into a 6-week period. This change will not change the amount of depreciation
the program calculates. FAS will calculate the 4 or 5 weeks worth of depreciation, depending on the cycle chosen.
Alternate Accounting Cycles is a unique feature of FAS 500 Asset Accounting that gives you extra flexibility to set
up your periods to account for something other than the normal monthly defaults.
Comments