Advanced Techniques- Using Pre-Paid Asset accounts

I travel frequently, and often make travel arrangements for several months at one time. This created significant problems when budgeting- I may spend several hundred dollars for train tickets, hotel reservations, and other travel fees in January for trips in March, May, and June. I also had yearly expenses, such as membership fees, which I wanted to apply to my budget on a monthly basis. To accurately track my expenses I use a "Pre-Paid Asset" (or in accounting terms, a Pre-Paid Expense) account to more accurately track these expenses.

To track these expenses, I first created a "Pre-Paid Asset" account. This account was an "Asset" account. To properly attritubute the expense, I first categorized the membership fee as a transfer between my bank account and the "Pre-Paid Asset" account. (Please note, we are not affiliated with Amazon, nor did I receive and compensation for using them in this example. It's merely a clear, simple example of this technique.)

Next, I opened the account register of the "Pre-Paid Asset" account. I entered 12 transactions, one per month, dividing the cost of the membership over the next 12 months. As you can see in this example, my payment for this membership increased the value of the Pre-Paid Asset. The monthly transactions gradually decrease the value of this asset and are recorded as expense.

Finally, I decided that while I wanted to see this Asset account in the sidebar, I wanted the balance in the sidebar to display as the value of all transactions in the account, including future transactions. To do this, I opened my Preferences and in the General tab changed the "Sidebar Balance Type" to Balance. Current Balance would display the total of the transactions up to and including today, and Cleared Balance would display the Initial Balance of the account, plus cleared Increases and minus cleared Decreases.