Sage 100

From my perspective, not sure why you accrue something that is dependent on an event that may or may NOT happen and is totally based on management's discretion.  Inventory arrived but not the invoice, you accrue it.  Bonus is earned as of a certain date, you accrue it.  Invoice arrives but you may or may not take the discount (depends on how management feels that day), why bother?  But I digress......

Odds are (most extremely likely) that this is the way it has always been in Sage.  Big ol WAD.

You make a good point @Jeff Schwenk about not accruing a potential customer discount in most situations.  However, similar to accruing bad debts to allowance for doubtful accounts as opposed to the direct write-off method, I believe there is appropriate circumstances to accrue customer discounts.

If a company does most or all of it's customer invoicing at the end of the month, then, if the discounts aren't recognized until the following month or months, then the matching principle is violated. The revenue and associated costs of a transaction should be recognized in the same reporting period.  If a large percentage of the discounts will be potentially recognized in a future period then it would be appropriate to create an allowance for customer discounts account to estimate the discounts taken in a later month.

From my perspective, not sure why you accrue something that is dependent on an event that may or may NOT happen and is totally based on management's discretion.  Inventory arrived but not the invoice, you accrue it.  Bonus is earned as of a certain date, you accrue it.  Invoice arrives but you may or may not take the discount (depends on how management feels that day), why bother?  But I digress......

Odds are (most extremely likely) that this is the way it has always been in Sage.  Big ol WAD.

I think you must be clear about WHY they want to book this contra-asset.

If it's for auditors, isn't it a moot point for all sales older than 30 days? If they want to book it for EOY B/S, then make the entry equal to the average % of 30-day sales that took discounts. Or better yet, just take the actual $$ amount of discounts experienced in January and apply it to 12/31. 

If it's for cash flow management, think about simply entering an amount equal to the past 90-day average of discounts taken. Then make periodic updates to the actuals.

For management, I'd rather focus on how to get the 60- and 90-day accounts to pay in 30- 45-days.

You make a good point @Jeff Schwenk about not accruing a potential customer discount in most situations.  However, similar to accruing bad debts to allowance for doubtful accounts as opposed to the direct write-off method, I believe there is appropriate circumstances to accrue customer discounts.

If a company does most or all of it's customer invoicing at the end of the month, then, if the discounts aren't recognized until the following month or months, then the matching principle is violated. The revenue and associated costs of a transaction should be recognized in the same reporting period.  If a large percentage of the discounts will be potentially recognized in a future period then it would be appropriate to create an allowance for customer discounts account to estimate the discounts taken in a later month.

From my perspective, not sure why you accrue something that is dependent on an event that may or may NOT happen and is totally based on management's discretion.  Inventory arrived but not the invoice, you accrue it.  Bonus is earned as of a certain date, you accrue it.  Invoice arrives but you may or may not take the discount (depends on how management feels that day), why bother?  But I digress......

Odds are (most extremely likely) that this is the way it has always been in Sage.  Big ol WAD.

Yep, auditors get a major voice as does the CFO.....

I would also hope that the amounts are material

I think you must be clear about WHY they want to book this contra-asset.

If it's for auditors, isn't it a moot point for all sales older than 30 days? If they want to book it for EOY B/S, then make the entry equal to the average % of 30-day sales that took discounts. Or better yet, just take the actual $$ amount of discounts experienced in January and apply it to 12/31. 

If it's for cash flow management, think about simply entering an amount equal to the past 90-day average of discounts taken. Then make periodic updates to the actuals.

For management, I'd rather focus on how to get the 60- and 90-day accounts to pay in 30- 45-days.

You make a good point @Jeff Schwenk about not accruing a potential customer discount in most situations.  However, similar to accruing bad debts to allowance for doubtful accounts as opposed to the direct write-off method, I believe there is appropriate circumstances to accrue customer discounts.

If a company does most or all of it's customer invoicing at the end of the month, then, if the discounts aren't recognized until the following month or months, then the matching principle is violated. The revenue and associated costs of a transaction should be recognized in the same reporting period.  If a large percentage of the discounts will be potentially recognized in a future period then it would be appropriate to create an allowance for customer discounts account to estimate the discounts taken in a later month.

From my perspective, not sure why you accrue something that is dependent on an event that may or may NOT happen and is totally based on management's discretion.  Inventory arrived but not the invoice, you accrue it.  Bonus is earned as of a certain date, you accrue it.  Invoice arrives but you may or may not take the discount (depends on how management feels that day), why bother?  But I digress......

Odds are (most extremely likely) that this is the way it has always been in Sage.  Big ol WAD.

Yep.  I just execute whatever accounting treatment the CFO and outside CPAs decide.  I make it clear I don't provide accounting advice.  It's fun to speculate on their reasoning though!

Yep, auditors get a major voice as does the CFO.....

I would also hope that the amounts are material

I think you must be clear about WHY they want to book this contra-asset.

If it's for auditors, isn't it a moot point for all sales older than 30 days? If they want to book it for EOY B/S, then make the entry equal to the average % of 30-day sales that took discounts. Or better yet, just take the actual $$ amount of discounts experienced in January and apply it to 12/31. 

If it's for cash flow management, think about simply entering an amount equal to the past 90-day average of discounts taken. Then make periodic updates to the actuals.

For management, I'd rather focus on how to get the 60- and 90-day accounts to pay in 30- 45-days.

You make a good point @Jeff Schwenk about not accruing a potential customer discount in most situations.  However, similar to accruing bad debts to allowance for doubtful accounts as opposed to the direct write-off method, I believe there is appropriate circumstances to accrue customer discounts.

If a company does most or all of it's customer invoicing at the end of the month, then, if the discounts aren't recognized until the following month or months, then the matching principle is violated. The revenue and associated costs of a transaction should be recognized in the same reporting period.  If a large percentage of the discounts will be potentially recognized in a future period then it would be appropriate to create an allowance for customer discounts account to estimate the discounts taken in a later month.

From my perspective, not sure why you accrue something that is dependent on an event that may or may NOT happen and is totally based on management's discretion.  Inventory arrived but not the invoice, you accrue it.  Bonus is earned as of a certain date, you accrue it.  Invoice arrives but you may or may not take the discount (depends on how management feels that day), why bother?  But I digress......

Odds are (most extremely likely) that this is the way it has always been in Sage.  Big ol WAD.

We all have clients where our accounting radar goes off.....

Yep.  I just execute whatever accounting treatment the CFO and outside CPAs decide.  I make it clear I don't provide accounting advice.  It's fun to speculate on their reasoning though!

Yep, auditors get a major voice as does the CFO.....

I would also hope that the amounts are material

I think you must be clear about WHY they want to book this contra-asset.

If it's for auditors, isn't it a moot point for all sales older than 30 days? If they want to book it for EOY B/S, then make the entry equal to the average % of 30-day sales that took discounts. Or better yet, just take the actual $$ amount of discounts experienced in January and apply it to 12/31. 

If it's for cash flow management, think about simply entering an amount equal to the past 90-day average of discounts taken. Then make periodic updates to the actuals.

For management, I'd rather focus on how to get the 60- and 90-day accounts to pay in 30- 45-days.

You make a good point @Jeff Schwenk about not accruing a potential customer discount in most situations.  However, similar to accruing bad debts to allowance for doubtful accounts as opposed to the direct write-off method, I believe there is appropriate circumstances to accrue customer discounts.

If a company does most or all of it's customer invoicing at the end of the month, then, if the discounts aren't recognized until the following month or months, then the matching principle is violated. The revenue and associated costs of a transaction should be recognized in the same reporting period.  If a large percentage of the discounts will be potentially recognized in a future period then it would be appropriate to create an allowance for customer discounts account to estimate the discounts taken in a later month.