A TCI vessel may have multiple voyages. Some period costs like TC Hire and Bunker expenses, although incurred during one voyage, may not be totally consumed in that voyage. IMOS allocates such costs among voyages by using Voyage Period Journals to match actual expenses and posted invoices from a financial perspective.
There are two models to do this.
Model A: Invoices are considered prepayments and suspended in balance sheet (preferred solution)
The hire and bunker invoices are posted into the balance sheet, and the posted P&L shows no amounts. After running the Voyage Period Journals, IMOS will credit the balance sheet and debit the P&L for the same amounts as the actual P&L (regardless of the balance of the Bunkers paid in advance and Hire paid in advance accounts). All hire and bunkers paid for, but not expenses against the voyage, remain posted in the balance sheet.
Example:
Posted cost during voyage 1:
Hire invoice: 250,000
DEBIT: Hire Paid in advance 250,000 Credit: Account Payable 250,000
Hire payment bunkers on delivery: 300,000
DEBIT: Bunkers Paid in advance 250,000 Credit: Account Payable 300,000
Bunker lifting invoice: 250,000
DEBIT: Bunkers Paid in advance 250,000 Credit: Account Payable 250,000
Hire invoice 2: 250,000
DEBIT: Hire Paid in advance 250,000 Credit: Account Payable 250,000
During the voyage:
Voyage 1 actual bunker expense: 300,000
Voyage 1 actual hire: 350,000
At the end of the voyage, voyage 1 will show P&L as below:
P&L | Actual | Posted |
Bunker Expenses | 300,000 | - |
Hire Expenses | 350,000 | - |
The Balance sheet will show as below:
Balance Sheet | ||
Bunkers paid in advance | 550,000 | |
Hire paid in advance | 500,000 |
After running the Voyage Period Journal:
Voyage 1 will show P&L as below:
P&L | Actual | Posted |
Bunker Expenses | 300,000 | 300,000 |
Hire Expenses | 350,000 | 350,000 |
The Balance sheet will show as below:
Balance Sheet | ||
Bunkers paid in advance | 250,000 | |
Hire paid in advance | 150,000 |
The remaining prepaid amount (asset) on the balance sheet will be brought to the next voyage.
Model B: Invoices are considered expenses and immediately posted in P&L
The hire and bunker invoices are posted into the (voyage) P&L, and the posted P&L shows full invoice amounts. After running the Voyage Period Journals, IMOS will credit the voyage P&L for voyage 1 for the non-consumed hire and bunkers and debit the P&L of voyage 2 for the same amount. All hire and bunkers not consumed (and through Voyage Period Journal no longer expensed) in voyage 1 are expected to be consumed in the consecutive voyage(s), and thus the expenses are posted in the consecutive voyage P&L.
Example:
Posted cost during voyage 1:
Hire invoice: 250,000
DEBIT: Hire Expenses 250,000 Credit: Account Payable 250,000
Hire payment bunkers on delivery: 300,000
DEBIT: Bunkers Expenses 250,000 Credit: Account Payable 300,000
Bunker lifting invoice: 250,000
DEBIT: Bunkers Expenses 250,000 Credit: Account Payable 250,000
Hire invoice 2: 250,000
DEBIT: Hire Expenses 250,000 Credit: Account Payable 250,000
During the voyage:
Voyage 1 actual bunker expense: 300,000
Voyage 1 actual hire: 350,000
At the end of the voyage, voyage 1 will show P&L as below:
P&L | Actual | Posted |
Bunker Expenses | 300,000 | 550,000 |
Hire Expenses | 350,000 | 500,000 |
After running the Voyage Period Journal:
P&L | Actual | Posted |
Bunker Expenses | 300,000 | 300,000 |
Hire Expenses | 350,000 | 350,000 |
After debiting the posted expenses, the remaining 250,000 (550,000 – 300,000) bunker expenses and 150,000 Hire Expenses will be credited to the next voyage in the Posted column.
Flags to control the model to use
CFGAllocateTciHireToVoy: When set to ‘N’, TCI Hire expense will be posted according to model A; When set to ‘Y’, TCI Hire expense will be posted according to model B.
CFGAllocateBunkersToVoy: When set to ‘N’, Bunker expense will be posted according to model A; When set to ‘Y’, Bunker expense will be posted according to model B.