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IMOS - Allocating Period Cost to Voyages

A TC In 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. Such costs are allocated 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 (Recommended): Invoices Are Considered Prepayments & Suspended in the Balance Sheet

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, the balance sheet will be credited and the P&L will be debited 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 300,000

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, the voyage 1 P&L will appear as follows:

P&L

Actual

Posted

Bunker Expenses

          300,000

                             -  

Hire Expenses

          350,000

                             -  

The balance sheet will appear as follows:

Balance Sheet

Bunkers paid in advance


                  550,000

Hire paid in advance


                  500,000

After running the Voyage Period Journal, the voyage 1 P&L will appear as follows:

P&L

Actual

Posted

Bunker Expenses

          300,000

                  300,000

Hire Expenses

          350,000

                  350,000

The balance sheet will appear as follows:

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 & Immediately Posted in the 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, the voyage 1 P&L will be credited for the unconsumed hire and bunkers, and the voyage 2 P&L will be debited for the same amount. All hire and bunkers not consumed (and, through Voyage Period Journals, no longer expensed) in voyage 1 are expected to be consumed in the consecutive voyage(s); 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 300,000

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, the voyage 1 P&L will appear as follows:

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.

Related Configuration Flags

Note: The following configuration flags are set during implementation and should not be changed without first consulting the Veson Nautical Services team.

Name/Flag

Description

Allocate TCI Hire to Voyage
CFGAllocateTciHireToVoy

  • When set to N, TC In Hire expense will be posted according to Model A.

  • When set to Y, TC In Hire expense will be posted according to Model B.

Allocate Bunkers to Voyage
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.

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