Specifies how to handle unrealized tax, which is tax that is calculated but not due until the invoice is paid. The unrealized VAT type determines how a payment is allocated to the invoice amount (excluding tax) and the tax amount itself, and how tax amounts are transferred from the unrealized tax account to the (realized) tax account.

Note that the default for this field is Blank. The option can only be changed if there is a check mark in the Unrealized VAT field in the General Ledger Setup window.

The options available for handling tax when posting payments are as follows:

Option Description

Blank

Select this option if you do not want the program to use the unrealized tax feature for the current tax jurisdiction.

Percentage

When you select this option, each payment covers both tax and invoice amounts in proportion to the payment's percentage of the remaining invoice amount. The paid tax amount is transferred from the unrealized tax account to the tax account.

First

When you select this option, payments cover tax first and then invoice the amount.

Last

When you select this option, payments cover the invoice amount first and then tax. In this case, no amount will be transferred from the unrealized tax account to the tax account until the total invoice amount, exclusive of tax, has been paid.

First (Fully Paid)

When you select this option, payments will cover tax first (as in the First option), but no amount will be transferred to the tax account until the full tax amount has been paid.

Last (Fully Paid)

When you select this option, payments will cover the invoice amount first (as in the Last option), but no amount will be transferred to the tax account until the full tax amount has been paid.

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See Also