diff --git a/src/Apps/W1/Subscription Billing/App/Base/Codeunits/UpgradeSubscriptionBilling.Codeunit.al b/src/Apps/W1/Subscription Billing/App/Base/Codeunits/UpgradeSubscriptionBilling.Codeunit.al
index 0b0e5fb1ec..bfdb24d89b 100644
--- a/src/Apps/W1/Subscription Billing/App/Base/Codeunits/UpgradeSubscriptionBilling.Codeunit.al	
+++ b/src/Apps/W1/Subscription Billing/App/Base/Codeunits/UpgradeSubscriptionBilling.Codeunit.al	
@@ -3,7 +3,9 @@ namespace Microsoft.SubscriptionBilling;
 #if not CLEANSCHEMA29
 using Microsoft.Finance.GeneralLedger.Setup;
 #endif
+using Microsoft.Purchases.History;
 using Microsoft.Sales.Document;
+using Microsoft.Sales.History;
 using System.Upgrade;
 
 codeunit 8032 "Upgrade Subscription Billing"
@@ -28,6 +30,7 @@ codeunit 8032 "Upgrade Subscription Billing"
         UpdateCreateContractDeferralsFlag();
         DeleteSalesSubscriptionLinesConnectedToDeletedQuote();
         RemoveDocumentNoFromBillingLines();
+        FillPostingGroupsInContractDeferrals();
     end;
 
 #if not CLEANSCHEMA29
@@ -321,6 +324,83 @@ codeunit 8032 "Upgrade Subscription Billing"
         exit('MS-XXXXXX-RemoveDocumentNoFromBillingLines-20250819');
     end;
 
+    local procedure FillPostingGroupsInContractDeferrals()
+    var
+        CustContractDeferral: Record "Cust. Sub. Contract Deferral";
+        VendContractDeferral: Record "Vend. Sub. Contract Deferral";
+        UpgradeTag: Codeunit "Upgrade Tag";
+    begin
+        if UpgradeTag.HasUpgradeTag(FillPostingGroupsInContractDeferralsTag()) then
+            exit;
+
+        CustContractDeferral.SetRange("Gen. Bus. Posting Group", '');
+        CustContractDeferral.SetRange("Gen. Prod. Posting Group", '');
+        if CustContractDeferral.FindSet(true) then
+            repeat
+                UpdateCustDeferralPostingGroups(CustContractDeferral);
+            until CustContractDeferral.Next() = 0;
+
+        VendContractDeferral.SetRange("Gen. Bus. Posting Group", '');
+        VendContractDeferral.SetRange("Gen. Prod. Posting Group", '');
+        if VendContractDeferral.FindSet(true) then
+            repeat
+                UpdateVendDeferralPostingGroups(VendContractDeferral);
+            until VendContractDeferral.Next() = 0;
+
+        UpgradeTag.SetUpgradeTag(FillPostingGroupsInContractDeferralsTag());
+    end;
+
+    local procedure UpdateCustDeferralPostingGroups(var CustContractDeferral: Record "Cust. Sub. Contract Deferral")
+    var
+        SalesInvoiceLine: Record "Sales Invoice Line";
+        SalesCrMemoLine: Record "Sales Cr.Memo Line";
+        CustContractDeferralToUpdate: Record "Cust. Sub. Contract Deferral";
+    begin
+        CustContractDeferralToUpdate := CustContractDeferral;
+        case CustContractDeferral."Document Type" of
+            "Rec. Billing Document Type"::Invoice:
+                if SalesInvoiceLine.Get(CustContractDeferral."Document No.", CustContractDeferral."Document Line No.") then begin
+                    CustContractDeferralToUpdate."Gen. Bus. Posting Group" := SalesInvoiceLine."Gen. Bus. Posting Group";
+                    CustContractDeferralToUpdate."Gen. Prod. Posting Group" := SalesInvoiceLine."Gen. Prod. Posting Group";
+                    CustContractDeferralToUpdate.Modify(false);
+                end;
+            "Rec. Billing Document Type"::"Credit Memo":
+                if SalesCrMemoLine.Get(CustContractDeferral."Document No.", CustContractDeferral."Document Line No.") then begin
+                    CustContractDeferralToUpdate."Gen. Bus. Posting Group" := SalesCrMemoLine."Gen. Bus. Posting Group";
+                    CustContractDeferralToUpdate."Gen. Prod. Posting Group" := SalesCrMemoLine."Gen. Prod. Posting Group";
+                    CustContractDeferralToUpdate.Modify(false);
+                end;
+        end;
+    end;
+
+    local procedure UpdateVendDeferralPostingGroups(var VendContractDeferral: Record "Vend. Sub. Contract Deferral")
+    var
+        PurchInvLine: Record "Purch. Inv. Line";
+        PurchCrMemoLine: Record "Purch. Cr. Memo Line";
+        VendContractDeferralToUpdate: Record "Vend. Sub. Contract Deferral";
+    begin
+        VendContractDeferralToUpdate := VendContractDeferral;
+        case VendContractDeferral."Document Type" of
+            "Rec. Billing Document Type"::Invoice:
+                if PurchInvLine.Get(VendContractDeferral."Document No.", VendContractDeferral."Document Line No.") then begin
+                    VendContractDeferralToUpdate."Gen. Bus. Posting Group" := PurchInvLine."Gen. Bus. Posting Group";
+                    VendContractDeferralToUpdate."Gen. Prod. Posting Group" := PurchInvLine."Gen. Prod. Posting Group";
+                    VendContractDeferralToUpdate.Modify(false);
+                end;
+            "Rec. Billing Document Type"::"Credit Memo":
+                if PurchCrMemoLine.Get(VendContractDeferral."Document No.", VendContractDeferral."Document Line No.") then begin
+                    VendContractDeferralToUpdate."Gen. Bus. Posting Group" := PurchCrMemoLine."Gen. Bus. Posting Group";
+                    VendContractDeferralToUpdate."Gen. Prod. Posting Group" := PurchCrMemoLine."Gen. Prod. Posting Group";
+                    VendContractDeferralToUpdate.Modify(false);
+                end;
+        end;
+    end;
+
+    local procedure FillPostingGroupsInContractDeferralsTag(): Text[250]
+    begin
+        exit('MS-623188-FillPostingGroupsInContractDeferrals-20250209');
+    end;
+
     [EventSubscriber(ObjectType::Codeunit, Codeunit::"Upgrade Tag", OnGetPerCompanyUpgradeTags, '', false, false)]
     local procedure RegisterPerCompanyTags(var PerCompanyUpgradeTags: List of [Code[250]])
     begin
@@ -335,5 +415,6 @@ codeunit 8032 "Upgrade Subscription Billing"
         PerCompanyUpgradeTags.Add(GetUpdateCreateContractDeferralsFlag());
         PerCompanyUpgradeTags.Add(DeleteSalesSubscriptionLinesConnectedToDeletedQuoteTag());
         PerCompanyUpgradeTags.Add(RemoveDocumentNoFromBillingLinesTag());
+        PerCompanyUpgradeTags.Add(FillPostingGroupsInContractDeferralsTag());
     end;
 }
diff --git a/src/Apps/W1/Subscription Billing/App/Deferrals/Codeunits/CustomerDeferralsMngmt.Codeunit.al b/src/Apps/W1/Subscription Billing/App/Deferrals/Codeunits/CustomerDeferralsMngmt.Codeunit.al
index bab90908db..ba0d87340b 100644
--- a/src/Apps/W1/Subscription Billing/App/Deferrals/Codeunits/CustomerDeferralsMngmt.Codeunit.al	
+++ b/src/Apps/W1/Subscription Billing/App/Deferrals/Codeunits/CustomerDeferralsMngmt.Codeunit.al	
@@ -4,7 +4,6 @@ using Microsoft.Finance.Currency;
 using Microsoft.Finance.GeneralLedger.Journal;
 using Microsoft.Finance.GeneralLedger.Ledger;
 using Microsoft.Finance.GeneralLedger.Posting;
-using Microsoft.Finance.GeneralLedger.Preview;
 using Microsoft.Finance.GeneralLedger.Setup;
 using Microsoft.Foundation.AuditCodes;
 using Microsoft.Foundation.Navigate;
@@ -19,17 +18,9 @@ codeunit 8067 "Customer Deferrals Mngmt."
         tabledata "Sales Invoice Line" = r;
 
     var
-        TempCustomerContractDeferral: Record "Cust. Sub. Contract Deferral" temporary;
         GLSetup: Record "General Ledger Setup";
         DeferralEntryNo: Integer;
 
-    [EventSubscriber(ObjectType::Codeunit, Codeunit::"Sales-Post", OnBeforePostSalesDoc, '', false, false)]
-    local procedure ClearGlobals()
-    begin
-        TempCustomerContractDeferral.Reset();
-        TempCustomerContractDeferral.DeleteAll(false);
-    end;
-
     [EventSubscriber(ObjectType::Codeunit, Codeunit::"Sales Post Invoice Events", OnPrepareLineOnBeforeSetAccount, '', false, false)]
     local procedure OnPrepareLineOnBeforeSetAccount(SalesLine: Record "Sales Line"; var SalesAccount: Code[20])
     var
@@ -63,20 +54,6 @@ codeunit 8067 "Customer Deferrals Mngmt."
         InsertContractDeferrals(SalesHeader, xSalesLine, SalesInvHeader."No.");
     end;
 
-    [EventSubscriber(ObjectType::Codeunit, Codeunit::"Sales-Post", OnPostSalesLineOnBeforeInsertCrMemoLine, '', false, false)]
-    local procedure InsertCustomerDeferralsFromSalesCrMemoOnPostSalesLineOnBeforeInsertCrMemoLine(SalesHeader: Record "Sales Header"; SalesLine: Record "Sales Line"; var IsHandled: Boolean; xSalesLine: Record "Sales Line"; SalesCrMemoHeader: Record "Sales Cr.Memo Header")
-    var
-        SalesDocuments: Codeunit "Sales Documents";
-    begin
-        if (xSalesLine.Quantity >= 0) or (xSalesLine."Unit Price" >= 0) then
-            exit;
-
-        if SalesDocuments.GetAppliesToDocNo(SalesHeader) <> '' then
-            exit;
-
-        InsertContractDeferrals(SalesHeader, xSalesLine, SalesCrMemoHeader."No.");
-    end;
-
     local procedure InsertContractDeferrals(SalesHeader: Record "Sales Header"; SalesLine: Record "Sales Line"; DocumentNo: Code[20])
     var
         CustContractHeader: Record "Customer Subscription Contract";
@@ -90,6 +67,8 @@ codeunit 8067 "Customer Deferrals Mngmt."
             exit;
         if SalesLine.Quantity = 0 then
             exit;
+        if SalesLine.Amount = 0 then
+            exit;
         if SalesLine."Recurring Billing from" > SalesLine."Recurring Billing to" then
             exit;
         if not (SalesLine."Document Type" in [Enum::"Sales Document Type"::Invoice, Enum::"Sales Document Type"::"Credit Memo"]) then
@@ -138,153 +117,136 @@ codeunit 8067 "Customer Deferrals Mngmt."
         CustomerContractDeferral."Deferral Base Amount" := SalesLine.Amount;
         SalesLine."Line Discount Amount" := Sign * SalesLine."Line Discount Amount";
 
-        if SalesLine."Recurring Billing from" = CalcDate('<-CM>', SalesLine."Recurring Billing from") then
-            InsertContractDeferralsWhenStartingOnFirstDayInMonth(CustomerContractDeferral, SalesLine)
-        else
-            InsertContractDeferralsWhenNotStartingOnFirstDayInMonth(CustomerContractDeferral, SalesLine);
+        InsertContractDeferralPeriods(CustomerContractDeferral, SalesLine);
     end;
 
-    local procedure GetDeferralParametersFromSalesLine(SalesLine: Record "Sales Line"; var FirstDayOfBillingPeriod: Date; var LastDayOfBillingPeriod: Date; var TotalLineAmount: Decimal; var TotalLineDiscountAmount: Decimal; var NumberOfPeriods: Integer)
+    local procedure GetNumberOfDeferralPeriods(FirstDayOfBillingPeriod: Date; LastDayOfBillingPeriod: Date) NumberOfPeriods: Integer
     var
         LoopDate: Date;
     begin
-        LoopDate := SalesLine."Recurring Billing from";
+        LoopDate := FirstDayOfBillingPeriod;
         repeat
             NumberOfPeriods += 1;
             LoopDate := CalcDate('<1M>', LoopDate);
-        until LoopDate > CalcDate('<CM>', SalesLine."Recurring Billing to");
-
-        FirstDayOfBillingPeriod := SalesLine."Recurring Billing from";
-        LastDayOfBillingPeriod := SalesLine."Recurring Billing to";
-        TotalLineAmount := SalesLine.Amount;
-        TotalLineDiscountAmount := SalesLine."Line Discount Amount";
+        until LoopDate > CalcDate('<CM>', LastDayOfBillingPeriod);
     end;
 
-    local procedure InsertContractDeferralsWhenStartingOnFirstDayInMonth(var CustomerContractDeferral: Record "Cust. Sub. Contract Deferral"; SalesLine: Record "Sales Line")
+    local procedure InsertContractDeferralPeriods(var CustomerContractDeferral: Record "Cust. Sub. Contract Deferral"; SalesLine: Record "Sales Line")
     var
         NumberOfPeriods: Integer;
         i: Integer;
         NextPostingDate: Date;
-        LastDayOfBillingPeriod: Date;
-        TotalLineAmount: Decimal;
-        TotalLineDiscountAmount: Decimal;
-        LineAmountPerPeriod: Decimal;
-        LineDiscountAmountPerPeriod: Decimal;
+        FirstDayOfBillingPeriod: Date;
+        LineAmountPerDay: Decimal;
+        LineDiscountAmountPerDay: Decimal;
+        FullMonthLineAmount: Decimal;
+        FullMonthLineDiscountAmount: Decimal;
+        PartialFirstMonthAmount: Decimal;
+        PartialFirstMonthDiscountAmount: Decimal;
+        PartialLastMonthAmount: Decimal;
+        PartialLastMonthDiscountAmount: Decimal;
+        PeriodLineAmount: Decimal;
+        PeriodLineDiscountAmount: Decimal;
         RunningLineAmount: Decimal;
         RunningLineDiscountAmount: Decimal;
+        NumberOfDaysInSchedule: Integer;
+        FirstMonthDays: Integer;
+        LastMonthDays: Integer;
+        FullMonthCount: Integer;
+        FirstMonthIsPartial: Boolean;
+        LastMonthIsPartial: Boolean;
     begin
-        RunningLineAmount := 0;
-        RunningLineDiscountAmount := 0;
-        GetDeferralParametersFromSalesLine(SalesLine, NextPostingDate, LastDayOfBillingPeriod, TotalLineAmount, TotalLineDiscountAmount, NumberOfPeriods);
-        LineAmountPerPeriod := Round(TotalLineAmount / NumberOfPeriods, GLSetup."Amount Rounding Precision");
-        LineDiscountAmountPerPeriod := Round(TotalLineDiscountAmount / NumberOfPeriods, GLSetup."Amount Rounding Precision");
-
-        for i := 1 to NumberOfPeriods do begin
-            CustomerContractDeferral."Posting Date" := NextPostingDate;
-            NextPostingDate := CalcDate('<1M>', NextPostingDate);
-            if i = NumberOfPeriods then begin
-                LineAmountPerPeriod := TotalLineAmount - RunningLineAmount;
-                LineDiscountAmountPerPeriod := TotalLineDiscountAmount - RunningLineDiscountAmount;
+        FirstDayOfBillingPeriod := SalesLine."Recurring Billing from";
+        NumberOfPeriods := GetNumberOfDeferralPeriods(FirstDayOfBillingPeriod, SalesLine."Recurring Billing to");
+
+        // Determine which months are partial (not covering the entire calendar month)
+        FirstMonthIsPartial := FirstDayOfBillingPeriod <> CalcDate('<-CM>', FirstDayOfBillingPeriod);
+        LastMonthIsPartial := SalesLine."Recurring Billing to" <> CalcDate('<CM>', SalesLine."Recurring Billing to");
+
+        // Calculate daily rate for day-proportioning partial months
+        NumberOfDaysInSchedule := SalesLine."Recurring Billing to" - FirstDayOfBillingPeriod + 1;
+        LineAmountPerDay := SalesLine.Amount / NumberOfDaysInSchedule;
+        LineDiscountAmountPerDay := SalesLine."Line Discount Amount" / NumberOfDaysInSchedule;
+        FirstMonthDays := CalcDate('<CM>', FirstDayOfBillingPeriod) - FirstDayOfBillingPeriod + 1;
+        LastMonthDays := Date2DMY(SalesLine."Recurring Billing to", 1);
+
+        // Calculate partial month amounts and determine how many full months remain
+        FullMonthCount := NumberOfPeriods;
+        if FirstMonthIsPartial then begin
+            // When first month is partial, day-proportion both first and last months
+            CalcPartialMonthAmounts(FirstMonthDays, LineAmountPerDay, LineDiscountAmountPerDay, PartialFirstMonthAmount, PartialFirstMonthDiscountAmount);
+            CalcPartialMonthAmounts(LastMonthDays, LineAmountPerDay, LineDiscountAmountPerDay, PartialLastMonthAmount, PartialLastMonthDiscountAmount);
+            FullMonthCount -= 2;
+        end else
+            if LastMonthIsPartial and (NumberOfPeriods > 1) then begin
+                // When only last month is partial, day-proportion just that month
+                CalcPartialMonthAmounts(LastMonthDays, LineAmountPerDay, LineDiscountAmountPerDay, PartialLastMonthAmount, PartialLastMonthDiscountAmount);
+                FullMonthCount -= 1;
             end;
-            RunningLineAmount += LineAmountPerPeriod;
-            RunningLineDiscountAmount += LineDiscountAmountPerPeriod;
 
-            CustomerContractDeferral."Number of Days" := Date2DMY(CalcDate('<CM>', CustomerContractDeferral."Posting Date"), 1);
-            CustomerContractDeferral.Amount := LineAmountPerPeriod;
-            CustomerContractDeferral."Discount Amount" := LineDiscountAmountPerPeriod;
-            CustomerContractDeferral."Entry No." := 0;
-            OnBeforeInsertCustomerContractDeferralWhenStartingOnFirstDayInMonth(CustomerContractDeferral, SalesLine, i, NumberOfPeriods);
-            CustomerContractDeferral.Insert(false);
-            TempCustomerContractDeferral := CustomerContractDeferral;
-            TempCustomerContractDeferral.Insert(false); //Used for Preview Posting
+        // Equal share for full months from the remaining amount after partial months
+        if FullMonthCount > 0 then begin
+            FullMonthLineAmount := Round((SalesLine.Amount - PartialFirstMonthAmount - PartialLastMonthAmount) / FullMonthCount, GLSetup."Amount Rounding Precision");
+            FullMonthLineDiscountAmount := Round((SalesLine."Line Discount Amount" - PartialFirstMonthDiscountAmount - PartialLastMonthDiscountAmount) / FullMonthCount, GLSetup."Amount Rounding Precision");
         end;
-    end;
 
-    local procedure InsertContractDeferralsWhenNotStartingOnFirstDayInMonth(var CustomerContractDeferral: Record "Cust. Sub. Contract Deferral"; SalesLine: Record "Sales Line")
-    var
-        NumberOfPeriods: Integer;
-        NextPostingDate: Date;
-        FirstDayOfBillingPeriod: Date;
-        LastDayOfBillingPeriod: Date;
-        TotalLineAmount: Decimal;
-        TotalLineDiscountAmount: Decimal;
-        LineAmountPerPeriod: Decimal;
-        LineDiscountAmountPerPeriod: Decimal;
-        LineAmountPerDay: Decimal;
-        LineDiscountAmountPerDay: Decimal;
-        LineAmountPerMonth: Decimal;
-        LineDiscountAmountPerMonth: Decimal;
-        FirstMonthDays: Integer;
-        FirstMonthLineAmount: Decimal;
-        FirstMonthLineDiscountAmount: Decimal;
-        LastMonthDays: Integer;
-        LastMonthLineAmount: Decimal;
-        LastMonthLineDiscountAmount: Decimal;
-        RunningLineAmount: Decimal;
-        RunningLineDiscountTotal: Decimal;
-        NumberOfDaysInSchedule: Integer;
-        i: Integer;
-    begin
-        RunningLineAmount := 0;
-        RunningLineDiscountTotal := 0;
-        GetDeferralParametersFromSalesLine(SalesLine, FirstDayOfBillingPeriod, LastDayOfBillingPeriod, TotalLineAmount, TotalLineDiscountAmount, NumberOfPeriods);
+        // Insert deferral records for each period
         NextPostingDate := FirstDayOfBillingPeriod;
-        NumberOfDaysInSchedule := LastDayOfBillingPeriod - FirstDayOfBillingPeriod + 1;
-        LineAmountPerDay := TotalLineAmount / NumberOfDaysInSchedule;
-        LineDiscountAmountPerDay := TotalLineDiscountAmount / NumberOfDaysInSchedule;
-        FirstMonthDays := CalcDate('<CM>', NextPostingDate) - NextPostingDate + 1;
-        FirstMonthLineAmount := Round(FirstMonthDays * LineAmountPerDay, GLSetup."Amount Rounding Precision");
-        FirstMonthLineDiscountAmount := Round(FirstMonthDays * LineDiscountAmountPerDay, GLSetup."Amount Rounding Precision");
-        LastMonthDays := Date2DMY(LastDayOfBillingPeriod, 1);
-        LastMonthLineAmount := Round(LastMonthDays * LineAmountPerDay, GLSetup."Amount Rounding Precision");
-        LastMonthLineDiscountAmount := Round(LastMonthDays * LineDiscountAmountPerDay, GLSetup."Amount Rounding Precision");
-        if NumberOfPeriods > 2 then begin
-            LineAmountPerMonth := Round((TotalLineAmount - FirstMonthLineAmount - LastMonthLineAmount) / (NumberOfPeriods - 2), GLSetup."Amount Rounding Precision");
-            LineDiscountAmountPerMonth := Round((TotalLineDiscountAmount - FirstMonthLineDiscountAmount - LastMonthLineDiscountAmount) / (NumberOfPeriods - 2), GLSetup."Amount Rounding Precision");
-        end;
+        RunningLineAmount := 0;
+        RunningLineDiscountAmount := 0;
 
         for i := 1 to NumberOfPeriods do begin
             CustomerContractDeferral."Posting Date" := NextPostingDate;
             NextPostingDate := CalcDate('<1M-CM>', NextPostingDate);
-            case i of
-                1:
-                    begin
-                        LineAmountPerPeriod := FirstMonthLineAmount;
-                        LineDiscountAmountPerPeriod := FirstMonthLineDiscountAmount;
-                        CustomerContractDeferral."Number of Days" := FirstMonthDays;
-                    end;
-                NumberOfPeriods:
-                    begin
-                        LineAmountPerPeriod := TotalLineAmount - RunningLineAmount;
-                        LineDiscountAmountPerPeriod := TotalLineDiscountAmount - RunningLineDiscountTotal;
-                        CustomerContractDeferral."Number of Days" := LastMonthDays;
-                    end;
-                else begin
-                    LineAmountPerPeriod := LineAmountPerMonth;
-                    LineDiscountAmountPerPeriod := LineDiscountAmountPerMonth;
-                    CustomerContractDeferral."Number of Days" := Date2DMY(CalcDate('<CM>', CustomerContractDeferral."Posting Date"), 1);
+
+            // Determine period amount: last period absorbs rounding, first partial is day-proportioned, rest are equal
+            if i = NumberOfPeriods then begin
+                PeriodLineAmount := SalesLine.Amount - RunningLineAmount;
+                PeriodLineDiscountAmount := SalesLine."Line Discount Amount" - RunningLineDiscountAmount;
+            end else
+                if (i = 1) and FirstMonthIsPartial then begin
+                    PeriodLineAmount := PartialFirstMonthAmount;
+                    PeriodLineDiscountAmount := PartialFirstMonthDiscountAmount;
+                end else begin
+                    PeriodLineAmount := FullMonthLineAmount;
+                    PeriodLineDiscountAmount := FullMonthLineDiscountAmount;
                 end;
-            end;
-            RunningLineAmount += LineAmountPerPeriod;
-            RunningLineDiscountTotal += LineDiscountAmountPerPeriod;
 
-            CustomerContractDeferral.Amount := LineAmountPerPeriod;
-            CustomerContractDeferral."Discount Amount" := LineDiscountAmountPerPeriod;
+            // Determine number of days: partial months use actual day count, full months use calendar month days
+            if (i = NumberOfPeriods) and (NumberOfPeriods > 1) and (FirstMonthIsPartial or LastMonthIsPartial) then
+                CustomerContractDeferral."Number of Days" := LastMonthDays
+            else
+                if (i = 1) and FirstMonthIsPartial then
+                    CustomerContractDeferral."Number of Days" := FirstMonthDays
+                else
+                    CustomerContractDeferral."Number of Days" := Date2DMY(CalcDate('<CM>', CustomerContractDeferral."Posting Date"), 1);
+
+            RunningLineAmount += PeriodLineAmount;
+            RunningLineDiscountAmount += PeriodLineDiscountAmount;
+
+            CustomerContractDeferral.Amount := PeriodLineAmount;
+            CustomerContractDeferral."Discount Amount" := PeriodLineDiscountAmount;
             CustomerContractDeferral."Entry No." := 0;
-            OnBeforeInsertCustomerContractDeferralWhenNotStartingOnFirstDayInMonth(CustomerContractDeferral, SalesLine, i, NumberOfPeriods);
+#if not CLEAN29
+#pragma warning disable AL0432
+            if FirstMonthIsPartial then
+                OnBeforeInsertCustomerContractDeferralWhenNotStartingOnFirstDayInMonth(CustomerContractDeferral, SalesLine, i, NumberOfPeriods)
+            else
+                OnBeforeInsertCustomerContractDeferralWhenStartingOnFirstDayInMonth(CustomerContractDeferral, SalesLine, i, NumberOfPeriods);
+#pragma warning restore AL0432
+#endif
+            OnBeforeInsertCustomerContractDeferral(CustomerContractDeferral, SalesLine, i, NumberOfPeriods);
             CustomerContractDeferral.Insert(false);
-            TempCustomerContractDeferral := CustomerContractDeferral;
-            TempCustomerContractDeferral.Insert(false); //Used for Preview Posting
         end;
     end;
 
     [EventSubscriber(ObjectType::Codeunit, Codeunit::"Sales-Post", OnAfterSalesCrMemoLineInsert, '', false, false)]
-    local procedure InsertCustomerDeferralsFromSalesCrMemo(var SalesCrMemoLine: Record "Sales Cr.Memo Line"; SalesHeader: Record "Sales Header")
+    local procedure InsertCustomerDeferralsFromSalesCrMemo(var SalesCrMemoLine: Record "Sales Cr.Memo Line"; SalesHeader: Record "Sales Header"; SalesLine: Record "Sales Line")
     begin
-        ReleaseAndCreditCustomerContractDeferrals(SalesHeader, SalesCrMemoLine);
+        ProcessCreditMemoContractDeferrals(SalesHeader, SalesCrMemoLine, SalesLine);
     end;
 
-    local procedure ReleaseAndCreditCustomerContractDeferrals(SalesHeader: Record "Sales Header"; var SalesCrMemoLine: Record "Sales Cr.Memo Line")
+    local procedure ProcessCreditMemoContractDeferrals(SalesHeader: Record "Sales Header"; var SalesCrMemoLine: Record "Sales Cr.Memo Line"; SalesLine: Record "Sales Line")
     var
         InvoiceCustContractDeferral: Record "Cust. Sub. Contract Deferral";
         CreditMemoCustContractDeferral: Record "Cust. Sub. Contract Deferral";
@@ -294,6 +256,10 @@ codeunit 8067 "Customer Deferrals Mngmt."
         AppliesToDocNo: Code[20];
     begin
         AppliesToDocNo := SalesDocuments.GetAppliesToDocNo(SalesHeader);
+        if AppliesToDocNo = '' then begin
+            InsertContractDeferrals(SalesHeader, SalesLine, SalesCrMemoLine."Document No.");
+            exit;
+        end;
         if SalesDocuments.IsInvoiceCredited(AppliesToDocNo) then
             exit;
         InvoiceCustContractDeferral.FilterOnDocumentTypeAndDocumentNo(Enum::"Rec. Billing Document Type"::Invoice, AppliesToDocNo);
@@ -327,28 +293,10 @@ codeunit 8067 "Customer Deferrals Mngmt."
                 ContractDeferralRelease.SetRequestPageParameters(CreditMemoCustContractDeferral."Posting Date", SalesCrMemoLine."Posting Date");
                 ContractDeferralRelease.ReleaseCustomerContractDeferralAndInsertTempGenJournalLine(CreditMemoCustContractDeferral);
                 ContractDeferralRelease.PostTempGenJnlLineBufferForCustomerDeferrals();
-
-                TempCustomerContractDeferral := CreditMemoCustContractDeferral;
-                TempCustomerContractDeferral.Insert(false); //Used for Preview Posting
             until InvoiceCustContractDeferral.Next() = 0;
         end;
     end;
 
-    [EventSubscriber(ObjectType::Codeunit, Codeunit::"Posting Preview Event Handler", OnAfterFillDocumentEntry, '', false, false)]
-    local procedure OnAfterFillDocumentEntry(var DocumentEntry: Record "Document Entry")
-    var
-        PostingPreviewEventHandler: Codeunit "Posting Preview Event Handler";
-    begin
-        PostingPreviewEventHandler.InsertDocumentEntry(TempCustomerContractDeferral, DocumentEntry);
-    end;
-
-    [EventSubscriber(ObjectType::Codeunit, Codeunit::"Posting Preview Event Handler", OnAfterShowEntries, '', false, false)]
-    local procedure OnAfterShowEntries(TableNo: Integer)
-    begin
-        if TableNo = Database::"Cust. Sub. Contract Deferral" then
-            Page.Run(Page::"Customer Contract Deferrals", TempCustomerContractDeferral);
-    end;
-
     [EventSubscriber(ObjectType::Page, Page::Navigate, OnAfterNavigateFindRecords, '', false, false)]
     local procedure OnAfterFindEntries(var DocumentEntry: Record "Document Entry"; DocNoFilter: Text)
     var
@@ -424,13 +372,35 @@ codeunit 8067 "Customer Deferrals Mngmt."
         DeferralEntryNo := NewDeferralNo;
     end;
 
+    local procedure CalcPartialMonthAmounts(MonthDays: Integer; LineAmountPerDay: Decimal; LineDiscountAmountPerDay: Decimal; var PartialMonthAmount: Decimal; var PartialMonthDiscountAmount: Decimal)
+    begin
+        PartialMonthAmount := CalcDaysAmount(MonthDays, LineAmountPerDay);
+        PartialMonthDiscountAmount := CalcDaysAmount(MonthDays, LineDiscountAmountPerDay);
+    end;
+
+    local procedure CalcDaysAmount(MonthDays: Integer; AmountPerDay: Decimal): Decimal
+    begin
+        exit(Round(MonthDays * AmountPerDay, GLSetup."Amount Rounding Precision"));
+    end;
+
+    [IntegrationEvent(false, false)]
+    local procedure OnBeforeInsertCustomerContractDeferral(var CustSubContractDeferral: Record "Cust. Sub. Contract Deferral"; SalesLine: Record "Sales Line"; PeriodNo: Integer; NumberOfPeriods: Integer)
+    begin
+    end;
+
+#if not CLEAN29
+    [Obsolete('Replaced by OnBeforeInsertCustomerContractDeferral.', '29.0')]
     [IntegrationEvent(false, false)]
     local procedure OnBeforeInsertCustomerContractDeferralWhenStartingOnFirstDayInMonth(var CustSubContractDeferral: Record "Cust. Sub. Contract Deferral"; SalesLine: Record "Sales Line"; PeriodNo: Integer; NumberOfPeriods: Integer)
     begin
     end;
+#endif
 
+#if not CLEAN29
+    [Obsolete('Replaced by OnBeforeInsertCustomerContractDeferral.', '29.0')]
     [IntegrationEvent(false, false)]
     local procedure OnBeforeInsertCustomerContractDeferralWhenNotStartingOnFirstDayInMonth(var CustSubContractDeferral: Record "Cust. Sub. Contract Deferral"; SalesLine: Record "Sales Line"; PeriodNo: Integer; NumberOfPeriods: Integer)
     begin
     end;
+#endif
 }
diff --git a/src/Apps/W1/Subscription Billing/App/Deferrals/Codeunits/DeferralPostPreviewBinding.Codeunit.al b/src/Apps/W1/Subscription Billing/App/Deferrals/Codeunits/DeferralPostPreviewBinding.Codeunit.al
new file mode 100644
index 0000000000..4f0a0776ee
--- /dev/null
+++ b/src/Apps/W1/Subscription Billing/App/Deferrals/Codeunits/DeferralPostPreviewBinding.Codeunit.al	
@@ -0,0 +1,34 @@
+namespace Microsoft.SubscriptionBilling;
+
+using Microsoft.Finance.GeneralLedger.Preview;
+
+codeunit 8076 "Deferral Post. Preview Binding"
+{
+
+    [EventSubscriber(ObjectType::Codeunit, Codeunit::"Gen. Jnl.-Post Preview", OnAfterBindSubscription, '', false, false)]
+    local procedure BindDeferralPreviewHandlerOnAfterBindSubscription()
+    begin
+        TryBindPostingPreviewHandler();
+    end;
+
+    [EventSubscriber(ObjectType::Codeunit, Codeunit::"Gen. Jnl.-Post Preview", OnAfterUnbindSubscription, '', false, false)]
+    local procedure UnbindDeferralPreviewHandlerOnAfterUnbindSubscription()
+    begin
+        TryUnbindPostingPreviewHandler();
+    end;
+
+    local procedure TryBindPostingPreviewHandler(): Boolean
+    var
+        DeferralPostingPreviewHandler: Codeunit "Deferral Post. Preview Handler";
+    begin
+        DeferralPostingPreviewHandler.DeleteAll();
+        exit(BindSubscription(DeferralPostingPreviewHandler));
+    end;
+
+    local procedure TryUnbindPostingPreviewHandler(): Boolean
+    var
+        DeferralPostingPreviewHandler: Codeunit "Deferral Post. Preview Handler";
+    begin
+        exit(UnbindSubscription(DeferralPostingPreviewHandler));
+    end;
+}
diff --git a/src/Apps/W1/Subscription Billing/App/Deferrals/Codeunits/DeferralPostPreviewHandler.Codeunit.al b/src/Apps/W1/Subscription Billing/App/Deferrals/Codeunits/DeferralPostPreviewHandler.Codeunit.al
new file mode 100644
index 0000000000..bc3ba09fb1
--- /dev/null
+++ b/src/Apps/W1/Subscription Billing/App/Deferrals/Codeunits/DeferralPostPreviewHandler.Codeunit.al	
@@ -0,0 +1,77 @@
+namespace Microsoft.SubscriptionBilling;
+
+codeunit 8077 "Deferral Post. Preview Handler"
+{
+    EventSubscriberInstance = Manual;
+    SingleInstance = true;
+
+    var
+        TempCustSubContractDeferral: Record "Cust. Sub. Contract Deferral" temporary;
+        TempVendSubContractDeferral: Record "Vend. Sub. Contract Deferral" temporary;
+
+    [EventSubscriber(ObjectType::Table, Database::"Cust. Sub. Contract Deferral", OnAfterInsertEvent, '', false, false)]
+    local procedure OnInsertCustContractDeferral(var Rec: Record "Cust. Sub. Contract Deferral"; RunTrigger: Boolean)
+    begin
+        if Rec.IsTemporary() then
+            exit;
+
+        if TempCustSubContractDeferral.Get(Rec."Entry No.") then
+            exit;
+
+        TempCustSubContractDeferral := Rec;
+        TempCustSubContractDeferral.Insert();
+    end;
+
+    [EventSubscriber(ObjectType::Table, Database::"Cust. Sub. Contract Deferral", OnAfterModifyEvent, '', false, false)]
+    local procedure OnModifyCustContractDeferral(var Rec: Record "Cust. Sub. Contract Deferral"; var xRec: Record "Cust. Sub. Contract Deferral"; RunTrigger: Boolean)
+    begin
+        if Rec.IsTemporary() then
+            exit;
+
+        TempCustSubContractDeferral := Rec;
+        if not TempCustSubContractDeferral.Insert() then
+            TempCustSubContractDeferral.Modify();
+    end;
+
+    [EventSubscriber(ObjectType::Table, Database::"Vend. Sub. Contract Deferral", OnAfterInsertEvent, '', false, false)]
+    local procedure OnInsertVendContractDeferral(var Rec: Record "Vend. Sub. Contract Deferral"; RunTrigger: Boolean)
+    begin
+        if Rec.IsTemporary() then
+            exit;
+
+        if TempVendSubContractDeferral.Get(Rec."Entry No.") then
+            exit;
+
+        TempVendSubContractDeferral := Rec;
+        TempVendSubContractDeferral.Insert();
+    end;
+
+    [EventSubscriber(ObjectType::Table, Database::"Vend. Sub. Contract Deferral", OnAfterModifyEvent, '', false, false)]
+    local procedure OnModifyVendContractDeferral(var Rec: Record "Vend. Sub. Contract Deferral"; var xRec: Record "Vend. Sub. Contract Deferral"; RunTrigger: Boolean)
+    begin
+        if Rec.IsTemporary() then
+            exit;
+
+        TempVendSubContractDeferral := Rec;
+        if not TempVendSubContractDeferral.Insert() then
+            TempVendSubContractDeferral.Modify();
+    end;
+
+    procedure DeleteAll()
+    begin
+        TempCustSubContractDeferral.Reset();
+        TempCustSubContractDeferral.DeleteAll();
+        TempVendSubContractDeferral.Reset();
+        TempVendSubContractDeferral.DeleteAll();
+    end;
+
+    procedure GetTempCustContractDeferral(var OutTempCustSubContractDeferral: Record "Cust. Sub. Contract Deferral" temporary)
+    begin
+        OutTempCustSubContractDeferral.Copy(TempCustSubContractDeferral, true);
+    end;
+
+    procedure GetTempVendContractDeferral(var OutTempVendSubContractDeferral: Record "Vend. Sub. Contract Deferral" temporary)
+    begin
+        OutTempVendSubContractDeferral.Copy(TempVendSubContractDeferral, true);
+    end;
+}
diff --git a/src/Apps/W1/Subscription Billing/App/Deferrals/Codeunits/DeferralPostPreviewSubscr.Codeunit.al b/src/Apps/W1/Subscription Billing/App/Deferrals/Codeunits/DeferralPostPreviewSubscr.Codeunit.al
new file mode 100644
index 0000000000..dc43e5abad
--- /dev/null
+++ b/src/Apps/W1/Subscription Billing/App/Deferrals/Codeunits/DeferralPostPreviewSubscr.Codeunit.al	
@@ -0,0 +1,52 @@
+namespace Microsoft.SubscriptionBilling;
+
+using Microsoft.Finance.GeneralLedger.Preview;
+using Microsoft.Foundation.Navigate;
+
+codeunit 8078 "Deferral Post. Preview Subscr."
+{
+    var
+        TempCustSubContractDeferral: Record "Cust. Sub. Contract Deferral" temporary;
+        TempVendSubContractDeferral: Record "Vend. Sub. Contract Deferral" temporary;
+        PostingPreviewEventHandler: Codeunit "Posting Preview Event Handler";
+
+    [EventSubscriber(ObjectType::Codeunit, Codeunit::"Posting Preview Event Handler", OnGetEntries, '', false, false)]
+    local procedure GetEntriesOnGetEntries(TableNo: Integer; var RecRef: RecordRef)
+    begin
+        GetAllTables();
+        case TableNo of
+            Database::"Cust. Sub. Contract Deferral":
+                RecRef.GetTable(TempCustSubContractDeferral);
+            Database::"Vend. Sub. Contract Deferral":
+                RecRef.GetTable(TempVendSubContractDeferral);
+        end;
+    end;
+
+    [EventSubscriber(ObjectType::Codeunit, Codeunit::"Posting Preview Event Handler", OnAfterShowEntries, '', false, false)]
+    local procedure ShowEntriesOnAfterShowEntries(TableNo: Integer)
+    begin
+        GetAllTables();
+        case TableNo of
+            Database::"Cust. Sub. Contract Deferral":
+                Page.Run(Page::"Customer Contract Deferrals", TempCustSubContractDeferral);
+            Database::"Vend. Sub. Contract Deferral":
+                Page.Run(Page::"Vendor Contract Deferrals", TempVendSubContractDeferral);
+        end;
+    end;
+
+    [EventSubscriber(ObjectType::Codeunit, Codeunit::"Posting Preview Event Handler", OnAfterFillDocumentEntry, '', false, false)]
+    local procedure FillDocumentEntryOnAfterFillDocumentEntry(var DocumentEntry: Record "Document Entry")
+    begin
+        GetAllTables();
+        PostingPreviewEventHandler.InsertDocumentEntry(TempCustSubContractDeferral, DocumentEntry);
+        PostingPreviewEventHandler.InsertDocumentEntry(TempVendSubContractDeferral, DocumentEntry);
+    end;
+
+    local procedure GetAllTables()
+    var
+        DeferralPostingPreviewHandler: Codeunit "Deferral Post. Preview Handler";
+    begin
+        DeferralPostingPreviewHandler.GetTempCustContractDeferral(TempCustSubContractDeferral);
+        DeferralPostingPreviewHandler.GetTempVendContractDeferral(TempVendSubContractDeferral);
+    end;
+}
diff --git a/src/Apps/W1/Subscription Billing/App/Deferrals/Codeunits/VendorDeferralsMngmt.Codeunit.al b/src/Apps/W1/Subscription Billing/App/Deferrals/Codeunits/VendorDeferralsMngmt.Codeunit.al
index 99fba60253..b006de302e 100644
--- a/src/Apps/W1/Subscription Billing/App/Deferrals/Codeunits/VendorDeferralsMngmt.Codeunit.al	
+++ b/src/Apps/W1/Subscription Billing/App/Deferrals/Codeunits/VendorDeferralsMngmt.Codeunit.al	
@@ -3,7 +3,6 @@ namespace Microsoft.SubscriptionBilling;
 using Microsoft.Finance.GeneralLedger.Journal;
 using Microsoft.Finance.GeneralLedger.Ledger;
 using Microsoft.Finance.GeneralLedger.Posting;
-using Microsoft.Finance.GeneralLedger.Preview;
 using Microsoft.Finance.GeneralLedger.Setup;
 using Microsoft.Foundation.AuditCodes;
 using Microsoft.Foundation.Navigate;
@@ -19,19 +18,11 @@ codeunit 8068 "Vendor Deferrals Mngmt."
         tabledata "Purch. Inv. Line" = r;
 
     var
-        TempVendorContractDeferral: Record "Vend. Sub. Contract Deferral" temporary;
         GLSetup: Record "General Ledger Setup";
         TempPurchaseLine: Record "Purchase Line" temporary;
         DeferralEntryNo: Integer;
         VendorContractDeferralLinePosting: Boolean;
 
-    [EventSubscriber(ObjectType::Codeunit, Codeunit::"Purch.-Post", OnBeforePostPurchaseDoc, '', false, false)]
-    local procedure ClearGlobals()
-    begin
-        TempVendorContractDeferral.Reset();
-        TempVendorContractDeferral.DeleteAll(false);
-    end;
-
     [EventSubscriber(ObjectType::Codeunit, Codeunit::"Purch. Post Invoice Events", OnPrepareLineOnBeforeSetAccount, '', false, false)]
     local procedure OnPrepareLineOnBeforeSetAccount(PurchLine: Record "Purchase Line"; var SalesAccount: Code[20])
     var
@@ -73,18 +64,6 @@ codeunit 8068 "Vendor Deferrals Mngmt."
         end;
     end;
 
-    [EventSubscriber(ObjectType::Codeunit, Codeunit::"Purch.-Post", OnPostPurchLineOnBeforeInsertCrMemoLine, '', false, false)]
-    local procedure InsertVendorDeferralsFromPurchaseInvoiceOnPostPurchLineOnBeforeInsertCrMemoLine(PurchaseHeader: Record "Purchase Header"; PurchaseLine: Record "Purchase Line"; var IsHandled: Boolean; var PurchCrMemoLine: Record "Purch. Cr. Memo Line"; xPurchaseLine: Record "Purchase Line");
-    begin
-        if (PurchaseLine.Quantity >= 0) or (PurchaseLine."Direct Unit Cost" >= 0) then
-            exit;
-
-        if GetAppliesToDocNo(PurchaseHeader) <> '' then
-            exit;
-
-        InsertContractDeferrals(PurchaseHeader, PurchaseLine, PurchaseHeader."Posting No.");
-    end;
-
     [EventSubscriber(ObjectType::Codeunit, Codeunit::"Purch.-Post", OnBeforePurchInvLineInsert, '', false, false)]
     local procedure InsertVendorDeferralsFromPurchaseInvoiceOnBeforePurchInvLineInsert(var PurchInvHeader: Record "Purch. Inv. Header"; var PurchaseLine: Record "Purchase Line")
     begin
@@ -103,6 +82,8 @@ codeunit 8068 "Vendor Deferrals Mngmt."
             exit;
         if PurchaseLine.Quantity = 0 then
             exit;
+        if PurchaseLine.Amount = 0 then
+            exit;
         if PurchaseLine."Recurring Billing from" > PurchaseLine."Recurring Billing to" then
             exit;
         if not (PurchaseLine."Document Type" in [Enum::"Purchase Document Type"::Invoice, Enum::"Purchase Document Type"::"Credit Memo"]) then
@@ -136,151 +117,128 @@ codeunit 8068 "Vendor Deferrals Mngmt."
         VendorContractDeferral."Deferral Base Amount" := PurchaseLine.Amount;
         PurchaseLine."Line Discount Amount" := Sign * PurchaseLine."Line Discount Amount";
 
-        if PurchaseLine."Recurring Billing from" = CalcDate('<-CM>', PurchaseLine."Recurring Billing from") then
-            InsertContractDeferralsWhenStartingOnFirstDayInMonth(VendorContractDeferral, PurchaseLine)
-        else
-            InsertContractDeferralsWhenNotStartingOnFirstDayInMonth(VendorContractDeferral, PurchaseLine);
+        InsertContractDeferralPeriods(VendorContractDeferral, PurchaseLine);
     end;
 
-    local procedure GetDeferralParametersFromPurchaseLine(PurchaseLine: Record "Purchase Line"; var FirstDayOfBillingPeriod: Date; var LastDayOfBillingPeriod: Date; var TotalLineAmount: Decimal; var TotalLineDiscountAmount: Decimal; var NumberOfPeriods: Integer)
+    local procedure GetNumberOfDeferralPeriods(FirstDayOfBillingPeriod: Date; LastDayOfBillingPeriod: Date) NumberOfPeriods: Integer
     var
         LoopDate: Date;
     begin
-        LoopDate := PurchaseLine."Recurring Billing from";
+        LoopDate := FirstDayOfBillingPeriod;
         repeat
             NumberOfPeriods += 1;
             LoopDate := CalcDate('<1M>', LoopDate);
-        until LoopDate > CalcDate('<CM>', PurchaseLine."Recurring Billing to");
-
-        FirstDayOfBillingPeriod := PurchaseLine."Recurring Billing from";
-        LastDayOfBillingPeriod := PurchaseLine."Recurring Billing to";
-        TotalLineAmount := PurchaseLine.Amount;
-        TotalLineDiscountAmount := PurchaseLine."Line Discount Amount";
+        until LoopDate > CalcDate('<CM>', LastDayOfBillingPeriod);
     end;
 
-    local procedure InsertContractDeferralsWhenStartingOnFirstDayInMonth(var VendorContractDeferral: Record "Vend. Sub. Contract Deferral"; PurchaseLine: Record "Purchase Line")
+    local procedure InsertContractDeferralPeriods(var VendorContractDeferral: Record "Vend. Sub. Contract Deferral"; PurchaseLine: Record "Purchase Line")
     var
         NumberOfPeriods: Integer;
         i: Integer;
         NextPostingDate: Date;
-        LastDayOfBillingPeriod: Date;
-        TotalLineAmount: Decimal;
-        TotalLineDiscountAmount: Decimal;
-        LineAmountPerPeriod: Decimal;
-        LineDiscountAmountPerPeriod: Decimal;
+        FirstDayOfBillingPeriod: Date;
+        LineAmountPerDay: Decimal;
+        LineDiscountAmountPerDay: Decimal;
+        FullMonthLineAmount: Decimal;
+        FullMonthLineDiscountAmount: Decimal;
+        PartialFirstMonthAmount: Decimal;
+        PartialFirstMonthDiscountAmount: Decimal;
+        PartialLastMonthAmount: Decimal;
+        PartialLastMonthDiscountAmount: Decimal;
+        PeriodLineAmount: Decimal;
+        PeriodLineDiscountAmount: Decimal;
         RunningLineAmount: Decimal;
         RunningLineDiscountAmount: Decimal;
+        NumberOfDaysInSchedule: Integer;
+        FirstMonthDays: Integer;
+        LastMonthDays: Integer;
+        FullMonthCount: Integer;
+        FirstMonthIsPartial: Boolean;
+        LastMonthIsPartial: Boolean;
     begin
-        RunningLineAmount := 0;
-        RunningLineDiscountAmount := 0;
-        GetDeferralParametersFromPurchaseLine(PurchaseLine, NextPostingDate, LastDayOfBillingPeriod, TotalLineAmount, TotalLineDiscountAmount, NumberOfPeriods);
-        LineAmountPerPeriod := Round(TotalLineAmount / NumberOfPeriods, GLSetup."Amount Rounding Precision");
-        LineDiscountAmountPerPeriod := Round(TotalLineDiscountAmount / NumberOfPeriods, GLSetup."Amount Rounding Precision");
-
-        for i := 1 to NumberOfPeriods do begin
-            VendorContractDeferral."Posting Date" := NextPostingDate;
-            NextPostingDate := CalcDate('<1M>', NextPostingDate);
-            if i = NumberOfPeriods then begin
-                LineAmountPerPeriod := TotalLineAmount - RunningLineAmount;
-                LineDiscountAmountPerPeriod := TotalLineDiscountAmount - RunningLineDiscountAmount;
+        FirstDayOfBillingPeriod := PurchaseLine."Recurring Billing from";
+        NumberOfPeriods := GetNumberOfDeferralPeriods(FirstDayOfBillingPeriod, PurchaseLine."Recurring Billing to");
+
+        // Determine which months are partial (not covering the entire calendar month)
+        FirstMonthIsPartial := FirstDayOfBillingPeriod <> CalcDate('<-CM>', FirstDayOfBillingPeriod);
+        LastMonthIsPartial := PurchaseLine."Recurring Billing to" <> CalcDate('<CM>', PurchaseLine."Recurring Billing to");
+
+        // Calculate daily rate for day-proportioning partial months
+        NumberOfDaysInSchedule := PurchaseLine."Recurring Billing to" - FirstDayOfBillingPeriod + 1;
+        LineAmountPerDay := PurchaseLine.Amount / NumberOfDaysInSchedule;
+        LineDiscountAmountPerDay := PurchaseLine."Line Discount Amount" / NumberOfDaysInSchedule;
+        FirstMonthDays := CalcDate('<CM>', FirstDayOfBillingPeriod) - FirstDayOfBillingPeriod + 1;
+        LastMonthDays := Date2DMY(PurchaseLine."Recurring Billing to", 1);
+
+        // Calculate partial month amounts and determine how many full months remain
+        FullMonthCount := NumberOfPeriods;
+        if FirstMonthIsPartial then begin
+            // When first month is partial, day-proportion both first and last months
+            CalcPartialMonthAmounts(FirstMonthDays, LineAmountPerDay, LineDiscountAmountPerDay, PartialFirstMonthAmount, PartialFirstMonthDiscountAmount);
+            CalcPartialMonthAmounts(LastMonthDays, LineAmountPerDay, LineDiscountAmountPerDay, PartialLastMonthAmount, PartialLastMonthDiscountAmount);
+            FullMonthCount -= 2;
+        end else
+            if LastMonthIsPartial and (NumberOfPeriods > 1) then begin
+                // When only last month is partial, day-proportion just that month
+                CalcPartialMonthAmounts(LastMonthDays, LineAmountPerDay, LineDiscountAmountPerDay, PartialLastMonthAmount, PartialLastMonthDiscountAmount);
+                FullMonthCount -= 1;
             end;
-            RunningLineAmount += LineAmountPerPeriod;
-            RunningLineDiscountAmount += LineDiscountAmountPerPeriod;
 
-            VendorContractDeferral."Number of Days" := Date2DMY(CalcDate('<CM>', VendorContractDeferral."Posting Date"), 1);
-            VendorContractDeferral.Amount := LineAmountPerPeriod;
-            VendorContractDeferral."Discount Amount" := LineDiscountAmountPerPeriod;
-            VendorContractDeferral."Entry No." := 0;
-            VendorContractDeferral.Insert(false);
-            TempVendorContractDeferral := VendorContractDeferral;
-            TempVendorContractDeferral.Insert(false); //Used for Preview Posting
+        // Equal share for full months from the remaining amount after partial months
+        if FullMonthCount > 0 then begin
+            FullMonthLineAmount := Round((PurchaseLine.Amount - PartialFirstMonthAmount - PartialLastMonthAmount) / FullMonthCount, GLSetup."Amount Rounding Precision");
+            FullMonthLineDiscountAmount := Round((PurchaseLine."Line Discount Amount" - PartialFirstMonthDiscountAmount - PartialLastMonthDiscountAmount) / FullMonthCount, GLSetup."Amount Rounding Precision");
         end;
-    end;
 
-    local procedure InsertContractDeferralsWhenNotStartingOnFirstDayInMonth(var VendorContractDeferral: Record "Vend. Sub. Contract Deferral"; PurchaseLine: Record "Purchase Line")
-    var
-        NumberOfPeriods: Integer;
-        NextPostingDate: Date;
-        FirstDayOfBillingPeriod: Date;
-        LastDayOfBillingPeriod: Date;
-        TotalLineAmount: Decimal;
-        TotalLineDiscountAmount: Decimal;
-        LineAmountPerPeriod: Decimal;
-        LineDiscountAmountPerPeriod: Decimal;
-        LineAmountPerDay: Decimal;
-        LineDiscountAmountPerDay: Decimal;
-        LineAmountPerMonth: Decimal;
-        LineDiscountAmountPerMonth: Decimal;
-        FirstMonthDays: Integer;
-        FirstMonthLineAmount: Decimal;
-        FirstMonthLineDiscountAmount: Decimal;
-        LastMonthDays: Integer;
-        LastMonthLineAmount: Decimal;
-        LastMonthLineDiscountAmount: Decimal;
-        RunningLineAmount: Decimal;
-        RunningLineDiscountTotal: Decimal;
-        NumberOfDaysInSchedule: Integer;
-        i: Integer;
-    begin
-        RunningLineAmount := 0;
-        RunningLineDiscountTotal := 0;
-        GetDeferralParametersFromPurchaseLine(PurchaseLine, FirstDayOfBillingPeriod, LastDayOfBillingPeriod, TotalLineAmount, TotalLineDiscountAmount, NumberOfPeriods);
+        // Insert deferral records for each period
         NextPostingDate := FirstDayOfBillingPeriod;
-        NumberOfDaysInSchedule := (LastDayOfBillingPeriod - FirstDayOfBillingPeriod + 1);
-        LineAmountPerDay := TotalLineAmount / NumberOfDaysInSchedule;
-        LineDiscountAmountPerDay := TotalLineDiscountAmount / NumberOfDaysInSchedule;
-        FirstMonthDays := CalcDate('<CM>', NextPostingDate) - NextPostingDate + 1;
-        FirstMonthLineAmount := Round(FirstMonthDays * LineAmountPerDay, GLSetup."Amount Rounding Precision");
-        FirstMonthLineDiscountAmount := Round(FirstMonthDays * LineDiscountAmountPerDay, GLSetup."Amount Rounding Precision");
-        LastMonthDays := Date2DMY(LastDayOfBillingPeriod, 1);
-        LastMonthLineAmount := Round(LastMonthDays * LineAmountPerDay, GLSetup."Amount Rounding Precision");
-        LastMonthLineDiscountAmount := Round(LastMonthDays * LineDiscountAmountPerDay, GLSetup."Amount Rounding Precision");
-        if NumberOfPeriods > 2 then begin
-            LineAmountPerMonth := Round((TotalLineAmount - FirstMonthLineAmount - LastMonthLineAmount) / (NumberOfPeriods - 2), GLSetup."Amount Rounding Precision");
-            LineDiscountAmountPerMonth := Round((TotalLineDiscountAmount - FirstMonthLineDiscountAmount - LastMonthLineDiscountAmount) / (NumberOfPeriods - 2), GLSetup."Amount Rounding Precision");
-        end;
+        RunningLineAmount := 0;
+        RunningLineDiscountAmount := 0;
 
         for i := 1 to NumberOfPeriods do begin
             VendorContractDeferral."Posting Date" := NextPostingDate;
             NextPostingDate := CalcDate('<1M-CM>', NextPostingDate);
-            case i of
-                1:
-                    begin
-                        LineAmountPerPeriod := FirstMonthLineAmount;
-                        LineDiscountAmountPerPeriod := FirstMonthLineDiscountAmount;
-                        VendorContractDeferral."Number of Days" := FirstMonthDays;
-                    end;
-                NumberOfPeriods:
-                    begin
-                        LineAmountPerPeriod := TotalLineAmount - RunningLineAmount;
-                        LineDiscountAmountPerPeriod := TotalLineDiscountAmount - RunningLineDiscountTotal;
-                        VendorContractDeferral."Number of Days" := LastMonthDays;
-                    end;
-                else begin
-                    LineAmountPerPeriod := LineAmountPerMonth;
-                    LineDiscountAmountPerPeriod := LineDiscountAmountPerMonth;
-                    VendorContractDeferral."Number of Days" := Date2DMY(CalcDate('<CM>', VendorContractDeferral."Posting Date"), 1);
+
+            // Determine period amount: last period absorbs rounding, first partial is day-proportioned, rest are equal
+            if i = NumberOfPeriods then begin
+                PeriodLineAmount := PurchaseLine.Amount - RunningLineAmount;
+                PeriodLineDiscountAmount := PurchaseLine."Line Discount Amount" - RunningLineDiscountAmount;
+            end else
+                if (i = 1) and FirstMonthIsPartial then begin
+                    PeriodLineAmount := PartialFirstMonthAmount;
+                    PeriodLineDiscountAmount := PartialFirstMonthDiscountAmount;
+                end else begin
+                    PeriodLineAmount := FullMonthLineAmount;
+                    PeriodLineDiscountAmount := FullMonthLineDiscountAmount;
                 end;
-            end;
-            RunningLineAmount += LineAmountPerPeriod;
-            RunningLineDiscountTotal += LineDiscountAmountPerPeriod;
 
-            VendorContractDeferral.Amount := LineAmountPerPeriod;
-            VendorContractDeferral."Discount Amount" := LineDiscountAmountPerPeriod;
+            // Determine number of days: partial months use actual day count, full months use calendar month days
+            if (i = NumberOfPeriods) and (NumberOfPeriods > 1) and (FirstMonthIsPartial or LastMonthIsPartial) then
+                VendorContractDeferral."Number of Days" := LastMonthDays
+            else
+                if (i = 1) and FirstMonthIsPartial then
+                    VendorContractDeferral."Number of Days" := FirstMonthDays
+                else
+                    VendorContractDeferral."Number of Days" := Date2DMY(CalcDate('<CM>', VendorContractDeferral."Posting Date"), 1);
+
+            RunningLineAmount += PeriodLineAmount;
+            RunningLineDiscountAmount += PeriodLineDiscountAmount;
+
+            VendorContractDeferral.Amount := PeriodLineAmount;
+            VendorContractDeferral."Discount Amount" := PeriodLineDiscountAmount;
             VendorContractDeferral."Entry No." := 0;
+            OnBeforeInsertVendorContractDeferral(VendorContractDeferral, PurchaseLine, i, NumberOfPeriods);
             VendorContractDeferral.Insert(false);
-            TempVendorContractDeferral := VendorContractDeferral;
-            TempVendorContractDeferral.Insert(false); //Used for Preview Posting
         end;
     end;
 
     [EventSubscriber(ObjectType::Codeunit, Codeunit::"Purch.-Post", OnAfterPurchCrMemoLineInsert, '', false, false)]
-    local procedure InsertVendorDeferralsFromPurchaseCrMemo(var PurchCrMemoLine: Record "Purch. Cr. Memo Line"; var PurchaseHeader: Record "Purchase Header")
+    local procedure InsertVendorDeferralsFromPurchaseCrMemo(var PurchCrMemoLine: Record "Purch. Cr. Memo Line"; var PurchaseHeader: Record "Purchase Header"; var PurchLine: Record "Purchase Line")
     begin
-        ReleaseAndCreditVendorContractDeferrals(PurchaseHeader, PurchCrMemoLine);
+        ProcessCreditMemoContractDeferrals(PurchaseHeader, PurchCrMemoLine, PurchLine);
     end;
 
-    local procedure ReleaseAndCreditVendorContractDeferrals(PurchaseHeader: Record "Purchase Header"; var PurchCrMemoLine: Record "Purch. Cr. Memo Line")
+    local procedure ProcessCreditMemoContractDeferrals(PurchaseHeader: Record "Purchase Header"; var PurchCrMemoLine: Record "Purch. Cr. Memo Line"; var PurchaseLine: Record "Purchase Line")
     var
         InvoiceVendorContractDeferral: Record "Vend. Sub. Contract Deferral";
         CreditMemoVendorContractDeferral: Record "Vend. Sub. Contract Deferral";
@@ -290,6 +248,10 @@ codeunit 8068 "Vendor Deferrals Mngmt."
         AppliesToDocNo: Code[20];
     begin
         AppliesToDocNo := GetAppliesToDocNo(PurchaseHeader);
+        if AppliesToDocNo = '' then begin
+            InsertContractDeferrals(PurchaseHeader, PurchaseLine, PurchCrMemoLine."Document No.");
+            exit;
+        end;
         if PurchaseDocuments.IsInvoiceCredited(AppliesToDocNo) then
             exit;
         InvoiceVendorContractDeferral.FilterOnDocumentTypeAndDocumentNo(Enum::"Rec. Billing Document Type"::Invoice, AppliesToDocNo);
@@ -324,28 +286,10 @@ codeunit 8068 "Vendor Deferrals Mngmt."
                 ContractDeferralRelease.SetRequestPageParameters(CreditMemoVendorContractDeferral."Posting Date", PurchCrMemoLine."Posting Date");
                 ContractDeferralRelease.ReleaseVendorContractDeferralsAndInsertTempGenJournalLines(CreditMemoVendorContractDeferral);
                 ContractDeferralRelease.PostTempGenJnlLineBufferForVendorDeferrals();
-
-                TempVendorContractDeferral := CreditMemoVendorContractDeferral;
-                TempVendorContractDeferral.Insert(false); //Used for Preview Posting
             until InvoiceVendorContractDeferral.Next() = 0;
         end;
     end;
 
-    [EventSubscriber(ObjectType::Codeunit, Codeunit::"Posting Preview Event Handler", OnAfterFillDocumentEntry, '', false, false)]
-    local procedure OnAfterFillDocumentEntry(var DocumentEntry: Record "Document Entry")
-    var
-        PostingPreviewEventHandler: Codeunit "Posting Preview Event Handler";
-    begin
-        PostingPreviewEventHandler.InsertDocumentEntry(TempVendorContractDeferral, DocumentEntry);
-    end;
-
-    [EventSubscriber(ObjectType::Codeunit, Codeunit::"Posting Preview Event Handler", OnAfterShowEntries, '', false, false)]
-    local procedure OnAfterShowEntries(TableNo: Integer)
-    begin
-        if TableNo = Database::"Vend. Sub. Contract Deferral" then
-            Page.Run(Page::"Vendor Contract Deferrals", TempVendorContractDeferral);
-    end;
-
     [EventSubscriber(ObjectType::Page, Page::Navigate, OnAfterNavigateFindRecords, '', false, false)]
     local procedure OnAfterFindEntries(var DocumentEntry: Record "Document Entry"; DocNoFilter: Text)
     var
@@ -420,4 +364,20 @@ codeunit 8068 "Vendor Deferrals Mngmt."
             exit(PurchHeader."Applies-to Doc. No.");
         exit(BillingLine.GetCorrectionDocumentNo("Service Partner"::Vendor, PurchHeader."No."));
     end;
+
+    local procedure CalcPartialMonthAmounts(MonthDays: Integer; LineAmountPerDay: Decimal; LineDiscountAmountPerDay: Decimal; var PartialMonthAmount: Decimal; var PartialMonthDiscountAmount: Decimal)
+    begin
+        PartialMonthAmount := CalcDaysAmount(MonthDays, LineAmountPerDay);
+        PartialMonthDiscountAmount := CalcDaysAmount(MonthDays, LineDiscountAmountPerDay);
+    end;
+
+    local procedure CalcDaysAmount(MonthDays: Integer; AmountPerDay: Decimal): Decimal
+    begin
+        exit(Round(MonthDays * AmountPerDay, GLSetup."Amount Rounding Precision"));
+    end;
+
+    [IntegrationEvent(false, false)]
+    local procedure OnBeforeInsertVendorContractDeferral(var VendSubContractDeferral: Record "Vend. Sub. Contract Deferral"; PurchaseLine: Record "Purchase Line"; PeriodNo: Integer; NumberOfPeriods: Integer)
+    begin
+    end;
 }
diff --git a/src/Apps/W1/Subscription Billing/App/Deferrals/Pages/CustomerContractDeferrals.Page.al b/src/Apps/W1/Subscription Billing/App/Deferrals/Pages/CustomerContractDeferrals.Page.al
index cf67a15fca..73c640f242 100644
--- a/src/Apps/W1/Subscription Billing/App/Deferrals/Pages/CustomerContractDeferrals.Page.al	
+++ b/src/Apps/W1/Subscription Billing/App/Deferrals/Pages/CustomerContractDeferrals.Page.al	
@@ -95,6 +95,12 @@ page 8079 "Customer Contract Deferrals"
                 {
                     ToolTip = 'Specifies whether the Subscription Line is used as a basis for periodic invoicing or discounts.';
                 }
+                field("Gen. Bus. Posting Group"; Rec."Gen. Bus. Posting Group")
+                {
+                }
+                field("Gen. Prod. Posting Group"; Rec."Gen. Prod. Posting Group")
+                {
+                }
                 field("G/L Entry No."; Rec."G/L Entry No.")
                 {
                     ToolTip = 'Specifies the number of the G/L item with which the deferral was released.';
diff --git a/src/Apps/W1/Subscription Billing/App/Deferrals/Pages/VendorContractDeferrals.Page.al b/src/Apps/W1/Subscription Billing/App/Deferrals/Pages/VendorContractDeferrals.Page.al
index 8e78c4a011..1eeb308695 100644
--- a/src/Apps/W1/Subscription Billing/App/Deferrals/Pages/VendorContractDeferrals.Page.al	
+++ b/src/Apps/W1/Subscription Billing/App/Deferrals/Pages/VendorContractDeferrals.Page.al	
@@ -95,6 +95,12 @@ page 8081 "Vendor Contract Deferrals"
                 {
                     ToolTip = 'Specifies whether the Subscription Line is used as a basis for periodic invoicing or discounts.';
                 }
+                field("Gen. Bus. Posting Group"; Rec."Gen. Bus. Posting Group")
+                {
+                }
+                field("Gen. Prod. Posting Group"; Rec."Gen. Prod. Posting Group")
+                {
+                }
                 field("G/L Entry No."; Rec."G/L Entry No.")
                 {
                     ToolTip = 'Specifies the number of the G/L item with which the deferral was released.';
diff --git a/src/Apps/W1/Subscription Billing/App/Deferrals/Reports/ContractDeferralsRelease.Report.al b/src/Apps/W1/Subscription Billing/App/Deferrals/Reports/ContractDeferralsRelease.Report.al
index 80aa0d4f9c..e14fd1c541 100644
--- a/src/Apps/W1/Subscription Billing/App/Deferrals/Reports/ContractDeferralsRelease.Report.al	
+++ b/src/Apps/W1/Subscription Billing/App/Deferrals/Reports/ContractDeferralsRelease.Report.al	
@@ -138,25 +138,38 @@ report 8051 "Contract Deferrals Release"
         end;
     end;
 
-    internal procedure ReleaseCustomerContractDeferralAndInsertTempGenJournalLine(var CustomerContractDeferral: Record "Cust. Sub. Contract Deferral")
+    internal procedure ReleaseCustomerContractDeferralAndInsertTempGenJournalLine(CustomerContractDeferral: Record "Cust. Sub. Contract Deferral")
     var
-        GenBusPostingGroup: Code[20];
-        GenProdPostingGroup: Code[20];
+        ShouldRelease: Boolean;
+        PostingAmount: Decimal;
     begin
-        if not CustomerContractDeferral.GetDocumentPostingGroups(GenBusPostingGroup, GenProdPostingGroup) then
+        ShouldRelease := true;
+        OnBeforeReleaseCustomerContractDeferral(CustomerContractDeferral, ShouldRelease);
+        if not ShouldRelease then begin
+            UpdateWindow(CustomerContractDeferral."Subscription Contract No.");
             exit;
-        CheckGenPostingSetup(GenBusPostingGroup, GenProdPostingGroup, Enum::"Service Partner"::Customer);
-        ReleaseContractDeferral(Enum::"Service Partner"::Customer, CustomerContractDeferral."Entry No.");
-        InsertTempGenJournalLine(
-            CustomerContractDeferral."Document No.",
-            CustomerContractDeferral."Subscription Contract No.",
-            CustomerContractDeferral."Entry No.",
-            CustomerContractDeferral."Dimension Set ID",
-            GenPostingSetup."Cust. Sub. Contract Account",
-            GenPostingSetup."Cust. Sub. Contr. Def Account",
-            GenBusPostingGroup,
-            GenProdPostingGroup,
-            GetPostingAmount(CustomerContractDeferral.Amount, CustomerContractDeferral."Discount Amount"));
+        end;
+
+        if (CustomerContractDeferral.Amount <> 0) or (CustomerContractDeferral."Discount Amount" <> 0) then
+            CheckGenPostingSetup(CustomerContractDeferral."Gen. Bus. Posting Group", CustomerContractDeferral."Gen. Prod. Posting Group", Enum::"Service Partner"::Customer);
+
+        CustomerContractDeferral.Released := true;
+        CustomerContractDeferral."Release Posting Date" := PostingDate;
+        CustomerContractDeferral.Modify(false);
+
+        PostingAmount := GetPostingAmount(CustomerContractDeferral.Amount, CustomerContractDeferral."Discount Amount");
+        if PostingAmount <> 0 then
+            InsertTempGenJournalLine(
+                CustomerContractDeferral."Document No.",
+                CustomerContractDeferral."Subscription Contract No.",
+                CustomerContractDeferral."Entry No.",
+                CustomerContractDeferral."Dimension Set ID",
+                GenPostingSetup."Cust. Sub. Contract Account",
+                GenPostingSetup."Cust. Sub. Contr. Def Account",
+                CustomerContractDeferral."Gen. Bus. Posting Group",
+                CustomerContractDeferral."Gen. Prod. Posting Group",
+                PostingAmount);
+
         if LineDiscountPosting and (CustomerContractDeferral."Discount Amount" <> 0) then
             InsertTempGenJournalLine(
                 CustomerContractDeferral."Document No.",
@@ -165,8 +178,8 @@ report 8051 "Contract Deferrals Release"
                 CustomerContractDeferral."Dimension Set ID",
                 GenPostingSetup."Sales Line Disc. Account",
                 GenPostingSetup."Cust. Sub. Contr. Def Account",
-                GenBusPostingGroup,
-                GenProdPostingGroup,
+                CustomerContractDeferral."Gen. Bus. Posting Group",
+                CustomerContractDeferral."Gen. Prod. Posting Group",
                 -CustomerContractDeferral."Discount Amount");
     end;
 
@@ -180,25 +193,38 @@ report 8051 "Contract Deferrals Release"
         end;
     end;
 
-    internal procedure ReleaseVendorContractDeferralsAndInsertTempGenJournalLines(var VendorContractDeferral: Record "Vend. Sub. Contract Deferral")
+    internal procedure ReleaseVendorContractDeferralsAndInsertTempGenJournalLines(VendorContractDeferral: Record "Vend. Sub. Contract Deferral")
     var
-        GenBusPostingGroup: Code[20];
-        GenProdPostingGroup: Code[20];
+        ShouldRelease: Boolean;
+        PostingAmount: Decimal;
     begin
-        if not VendorContractDeferral.GetDocumentPostingGroups(GenBusPostingGroup, GenProdPostingGroup) then
+        ShouldRelease := true;
+        OnBeforeReleaseVendorContractDeferral(VendorContractDeferral, ShouldRelease);
+        if not ShouldRelease then begin
+            UpdateWindow(VendorContractDeferral."Subscription Contract No.");
             exit;
-        CheckGenPostingSetup(GenBusPostingGroup, GenProdPostingGroup, Enum::"Service Partner"::Vendor);
-        ReleaseContractDeferral(Enum::"Service Partner"::Vendor, VendorContractDeferral."Entry No.");
-        InsertTempGenJournalLine(
-            VendorContractDeferral."Document No.",
-            VendorContractDeferral."Subscription Contract No.",
-            VendorContractDeferral."Entry No.",
-            VendorContractDeferral."Dimension Set ID",
-            GenPostingSetup."Vend. Sub. Contract Account",
-            GenPostingSetup."Vend. Sub. Contr. Def. Account",
-            GenBusPostingGroup,
-            GenProdPostingGroup,
-            GetPostingAmount(VendorContractDeferral.Amount, VendorContractDeferral."Discount Amount"));
+        end;
+
+        if (VendorContractDeferral.Amount <> 0) or (VendorContractDeferral."Discount Amount" <> 0) then
+            CheckGenPostingSetup(VendorContractDeferral."Gen. Bus. Posting Group", VendorContractDeferral."Gen. Prod. Posting Group", Enum::"Service Partner"::Vendor);
+
+        VendorContractDeferral.Released := true;
+        VendorContractDeferral."Release Posting Date" := PostingDate;
+        VendorContractDeferral.Modify(false);
+
+        PostingAmount := GetPostingAmount(VendorContractDeferral.Amount, VendorContractDeferral."Discount Amount");
+        if PostingAmount <> 0 then
+            InsertTempGenJournalLine(
+                VendorContractDeferral."Document No.",
+                VendorContractDeferral."Subscription Contract No.",
+                VendorContractDeferral."Entry No.",
+                VendorContractDeferral."Dimension Set ID",
+                GenPostingSetup."Vend. Sub. Contract Account",
+                GenPostingSetup."Vend. Sub. Contr. Def. Account",
+                VendorContractDeferral."Gen. Bus. Posting Group",
+                VendorContractDeferral."Gen. Prod. Posting Group",
+                PostingAmount);
+
         if LineDiscountPosting and (VendorContractDeferral."Discount Amount" <> 0) then
             InsertTempGenJournalLine(
                 VendorContractDeferral."Document No.",
@@ -207,8 +233,8 @@ report 8051 "Contract Deferrals Release"
                 VendorContractDeferral."Dimension Set ID",
                 GenPostingSetup."Purch. Line Disc. Account",
                 GenPostingSetup."Vend. Sub. Contr. Def. Account",
-                GenBusPostingGroup,
-                GenProdPostingGroup,
+                VendorContractDeferral."Gen. Bus. Posting Group",
+                VendorContractDeferral."Gen. Prod. Posting Group",
                 -VendorContractDeferral."Discount Amount");
     end;
 
@@ -249,27 +275,6 @@ report 8051 "Contract Deferrals Release"
         end;
     end;
 
-    local procedure ReleaseContractDeferral(Partner: Enum "Service Partner"; DeferralEntryNo: Integer)
-    var
-        CustContractDeferralsToUpdate: Record "Cust. Sub. Contract Deferral";
-        VendContractDeferralsToUpdate: Record "Vend. Sub. Contract Deferral";
-    begin
-        case Partner of
-            Enum::"Service Partner"::Customer:
-                if CustContractDeferralsToUpdate.Get(DeferralEntryNo) then begin
-                    CustContractDeferralsToUpdate.Released := true;
-                    CustContractDeferralsToUpdate."Release Posting Date" := PostingDate;
-                    CustContractDeferralsToUpdate.Modify(false);
-                end;
-            Enum::"Service Partner"::Vendor:
-                if VendContractDeferralsToUpdate.Get(DeferralEntryNo) then begin
-                    VendContractDeferralsToUpdate.Released := true;
-                    VendContractDeferralsToUpdate."Release Posting Date" := PostingDate;
-                    VendContractDeferralsToUpdate.Modify(false);
-                end;
-        end;
-    end;
-
     local procedure GetPostingAmount(Amount: Decimal; DiscountAmount: Decimal): Decimal
     begin
         if LineDiscountPosting then
@@ -406,4 +411,14 @@ report 8051 "Contract Deferrals Release"
     begin
         AllowGUI := NewAllowGUI;
     end;
+
+    [IntegrationEvent(false, false)]
+    local procedure OnBeforeReleaseCustomerContractDeferral(var CustomerContractDeferral: Record "Cust. Sub. Contract Deferral"; var ShouldReleaseDeferral: Boolean)
+    begin
+    end;
+
+    [IntegrationEvent(false, false)]
+    local procedure OnBeforeReleaseVendorContractDeferral(var VendorContractDeferral: Record "Vend. Sub. Contract Deferral"; var ShouldReleaseDeferral: Boolean)
+    begin
+    end;
 }
diff --git a/src/Apps/W1/Subscription Billing/App/Deferrals/Reports/CustContrDefAnalysis.Report.al b/src/Apps/W1/Subscription Billing/App/Deferrals/Reports/CustContrDefAnalysis.Report.al
index b4ea806dc0..17ee3d9fc8 100644
--- a/src/Apps/W1/Subscription Billing/App/Deferrals/Reports/CustContrDefAnalysis.Report.al	
+++ b/src/Apps/W1/Subscription Billing/App/Deferrals/Reports/CustContrDefAnalysis.Report.al	
@@ -221,6 +221,7 @@ report 8052 "Cust. Contr. Def. Analysis"
         CustomerContractDeferral.SetRange("Subscription Contract No.", SourceContractNo);
         CustomerContractDeferral.SetFilter("Document Type", Format(DocumentTypeFilter));
         CustomerContractDeferral.SetFilter("Document No.", DocumentNoFilter);
+        OnAfterSetContractDeferralFilter(CustomerContractDeferral, SourceContractNo);
     end;
 
     local procedure SetPeriodFilter()
@@ -314,4 +315,9 @@ report 8052 "Cust. Contr. Def. Analysis"
         if CustomerContractDeferral.FindLast() then
             DateLastRelease := CustomerContractDeferral."Posting Date";
     end;
+
+    [IntegrationEvent(false, false)]
+    local procedure OnAfterSetContractDeferralFilter(var CustomerContractDeferral: Record "Cust. Sub. Contract Deferral"; SourceContractNo: Code[20])
+    begin
+    end;
 }
diff --git a/src/Apps/W1/Subscription Billing/App/Deferrals/Reports/VendContrDefAnalysis.Report.al b/src/Apps/W1/Subscription Billing/App/Deferrals/Reports/VendContrDefAnalysis.Report.al
index 94abadaf5f..420c522975 100644
--- a/src/Apps/W1/Subscription Billing/App/Deferrals/Reports/VendContrDefAnalysis.Report.al	
+++ b/src/Apps/W1/Subscription Billing/App/Deferrals/Reports/VendContrDefAnalysis.Report.al	
@@ -221,6 +221,7 @@ report 8053 "Vend Contr. Def. Analysis"
         VendorContractDeferral.SetRange("Subscription Contract No.", SourceContractNo);
         VendorContractDeferral.SetFilter("Document Type", Format(DocumentTypeFilter));
         VendorContractDeferral.SetFilter("Document No.", DocumentNoFilter);
+        OnAfterSetContractDeferralFilter(VendorContractDeferral, SourceContractNo);
     end;
 
     local procedure SetPeriodFilter()
@@ -314,4 +315,9 @@ report 8053 "Vend Contr. Def. Analysis"
         if VendorContractDeferral.FindLast() then
             DateLastRelease := VendorContractDeferral."Posting Date";
     end;
+
+    [IntegrationEvent(false, false)]
+    local procedure OnAfterSetContractDeferralFilter(var VendorContractDeferral: Record "Vend. Sub. Contract Deferral"; SourceContractNo: Code[20])
+    begin
+    end;
 }
diff --git a/src/Apps/W1/Subscription Billing/App/Deferrals/Tables/CustSubContractDeferral.Table.al b/src/Apps/W1/Subscription Billing/App/Deferrals/Tables/CustSubContractDeferral.Table.al
index 5c8535cef1..613788f4a7 100644
--- a/src/Apps/W1/Subscription Billing/App/Deferrals/Tables/CustSubContractDeferral.Table.al	
+++ b/src/Apps/W1/Subscription Billing/App/Deferrals/Tables/CustSubContractDeferral.Table.al	
@@ -2,6 +2,7 @@ namespace Microsoft.SubscriptionBilling;
 
 using Microsoft.Finance.Dimension;
 using Microsoft.Finance.GeneralLedger.Ledger;
+using Microsoft.Finance.GeneralLedger.Setup;
 using Microsoft.Sales.Customer;
 using Microsoft.Sales.Document;
 using Microsoft.Sales.History;
@@ -134,6 +135,18 @@ table 8066 "Cust. Sub. Contract Deferral"
         {
             Caption = 'Currency Code';
         }
+        field(74; "Gen. Bus. Posting Group"; Code[20])
+        {
+            Caption = 'Gen. Bus. Posting Group';
+            ToolTip = 'Specifies the general business posting group.';
+            TableRelation = "Gen. Business Posting Group";
+        }
+        field(75; "Gen. Prod. Posting Group"; Code[20])
+        {
+            Caption = 'Gen. Prod. Posting Group';
+            ToolTip = 'Specifies the general product posting group.';
+            TableRelation = "Gen. Product Posting Group";
+        }
         field(480; "Dimension Set ID"; Integer)
         {
             Caption = 'Dimension Set ID';
@@ -180,6 +193,9 @@ table 8066 "Cust. Sub. Contract Deferral"
         Rec."Document Posting Date" := SalesLine."Posting Date";
         Rec.Discount := SalesLine."Discount";
         Rec."Currency Code" := SalesLine."Currency Code";
+        Rec."Gen. Bus. Posting Group" := SalesLine."Gen. Bus. Posting Group";
+        Rec."Gen. Prod. Posting Group" := SalesLine."Gen. Prod. Posting Group";
+        OnAfterInitFromSalesLine(Rec, SalesLine, Sign);
     end;
 
     internal procedure ShowDimensions()
@@ -217,4 +233,9 @@ table 8066 "Cust. Sub. Contract Deferral"
         end;
         exit(false);
     end;
+
+    [IntegrationEvent(false, false)]
+    local procedure OnAfterInitFromSalesLine(var CustSubContractDeferral: Record "Cust. Sub. Contract Deferral"; SalesLine: Record "Sales Line"; var Sign: Integer)
+    begin
+    end;
 }
diff --git a/src/Apps/W1/Subscription Billing/App/Deferrals/Tables/VendSubContractDeferral.Table.al b/src/Apps/W1/Subscription Billing/App/Deferrals/Tables/VendSubContractDeferral.Table.al
index 7423680bb5..533001fc49 100644
--- a/src/Apps/W1/Subscription Billing/App/Deferrals/Tables/VendSubContractDeferral.Table.al	
+++ b/src/Apps/W1/Subscription Billing/App/Deferrals/Tables/VendSubContractDeferral.Table.al	
@@ -2,6 +2,7 @@ namespace Microsoft.SubscriptionBilling;
 
 using Microsoft.Finance.Dimension;
 using Microsoft.Finance.GeneralLedger.Ledger;
+using Microsoft.Finance.GeneralLedger.Setup;
 using Microsoft.Purchases.Document;
 using Microsoft.Purchases.History;
 using Microsoft.Purchases.Vendor;
@@ -135,6 +136,18 @@ table 8072 "Vend. Sub. Contract Deferral"
         {
             Caption = 'Currency Code';
         }
+        field(74; "Gen. Bus. Posting Group"; Code[20])
+        {
+            Caption = 'Gen. Bus. Posting Group';
+            ToolTip = 'Specifies the general business posting group.';
+            TableRelation = "Gen. Business Posting Group";
+        }
+        field(75; "Gen. Prod. Posting Group"; Code[20])
+        {
+            Caption = 'Gen. Prod. Posting Group';
+            ToolTip = 'Specifies the general product posting group.';
+            TableRelation = "Gen. Product Posting Group";
+        }
         field(480; "Dimension Set ID"; Integer)
         {
             Caption = 'Dimension Set ID';
@@ -180,6 +193,9 @@ table 8072 "Vend. Sub. Contract Deferral"
         Rec."Pay-to Vendor No." := PurchaseLine."Pay-to Vendor No.";
         Rec.Discount := PurchaseLine."Discount";
         Rec."Currency Code" := PurchaseLine."Currency Code";
+        Rec."Gen. Bus. Posting Group" := PurchaseLine."Gen. Bus. Posting Group";
+        Rec."Gen. Prod. Posting Group" := PurchaseLine."Gen. Prod. Posting Group";
+        OnAfterInitFromPurchaseLine(Rec, PurchaseLine, Sign);
     end;
 
     internal procedure ShowDimensions()
@@ -217,4 +233,9 @@ table 8072 "Vend. Sub. Contract Deferral"
         end;
         exit(false);
     end;
+
+    [IntegrationEvent(false, false)]
+    local procedure OnAfterInitFromPurchaseLine(var VendSubContractDeferral: Record "Vend. Sub. Contract Deferral"; PurchaseLine: Record "Purchase Line"; var Sign: Integer)
+    begin
+    end;
 }
diff --git a/src/Apps/W1/Subscription Billing/App/Permission Sets/SubBillingObjects.PermissionSet.al b/src/Apps/W1/Subscription Billing/App/Permission Sets/SubBillingObjects.PermissionSet.al
index f607846052..9810690500 100644
--- a/src/Apps/W1/Subscription Billing/App/Permission Sets/SubBillingObjects.PermissionSet.al	
+++ b/src/Apps/W1/Subscription Billing/App/Permission Sets/SubBillingObjects.PermissionSet.al	
@@ -23,6 +23,9 @@ permissionset 8001 "Sub. Billing Objects"
         codeunit "Customer Management" = X,
         codeunit "Date Formula Management" = X,
         codeunit "Date Time Management" = X,
+        codeunit "Deferral Post. Preview Binding" = X,
+        codeunit "Deferral Post. Preview Handler" = X,
+        codeunit "Deferral Post. Preview Subscr." = X,
         codeunit "Dimension Mgt." = X,
         codeunit "Document Change Management" = X,
         codeunit "Extend Sub. Contract Mgt." = X,
diff --git a/src/Apps/W1/Subscription Billing/App/Sales Service Commitments/Table Extensions/PurchaseLine.TableExt.al b/src/Apps/W1/Subscription Billing/App/Sales Service Commitments/Table Extensions/PurchaseLine.TableExt.al
index 4c623085bf..e7d79f1bfb 100644
--- a/src/Apps/W1/Subscription Billing/App/Sales Service Commitments/Table Extensions/PurchaseLine.TableExt.al	
+++ b/src/Apps/W1/Subscription Billing/App/Sales Service Commitments/Table Extensions/PurchaseLine.TableExt.al	
@@ -31,10 +31,21 @@ tableextension 8065 "Purchase Line" extends "Purchase Line"
             FieldClass = FlowField;
             CalcFormula = exist("Billing Line" where("Document Type" = filter(Invoice), "Document No." = field("Document No."), "Document Line No." = field("Line No.")));
         }
+        modify("Deferral Code")
+        {
+            trigger OnAfterValidate()
+            begin
+                if Rec."Deferral Code" <> '' then
+                    if Rec.IsLineAttachedToBillingLine() then
+                        if Rec.CreateContractDeferrals() then
+                            Error(DeferralCodeCannotBeUsedWithContractDeferralsErr);
+            end;
+        }
     }
 
     var
         DimMgt: Codeunit DimensionManagement;
+        DeferralCodeCannotBeUsedWithContractDeferralsErr: Label 'A Deferral Code cannot be used on a line where Subscription Contract Deferrals are active. Either remove the Deferral Code or disable Contract Deferrals on the subscription line or contract.';
 
     internal procedure GetCombinedDimensionSetID(DimSetID1: Integer; DimSetID2: Integer)
     var
diff --git a/src/Apps/W1/Subscription Billing/App/Sales Service Commitments/Table Extensions/SalesLine.TableExt.al b/src/Apps/W1/Subscription Billing/App/Sales Service Commitments/Table Extensions/SalesLine.TableExt.al
index 651f3d97d8..c1047609e4 100644
--- a/src/Apps/W1/Subscription Billing/App/Sales Service Commitments/Table Extensions/SalesLine.TableExt.al	
+++ b/src/Apps/W1/Subscription Billing/App/Sales Service Commitments/Table Extensions/SalesLine.TableExt.al	
@@ -143,6 +143,16 @@ tableextension 8054 "Sales Line" extends "Sales Line"
                         Error(Item.GetDoNotAllowInvoiceDiscountForServiceCommitmentItemErrorText());
             end;
         }
+        modify("Deferral Code")
+        {
+            trigger OnAfterValidate()
+            begin
+                if Rec."Deferral Code" <> '' then
+                    if Rec.IsLineAttachedToBillingLine() then
+                        if Rec.CreateContractDeferrals() then
+                            Error(DeferralCodeCannotBeUsedWithContractDeferralsErr);
+            end;
+        }
     }
     var
         BillingLineExist, IsBillingLineCached : Boolean;
@@ -168,6 +178,7 @@ tableextension 8054 "Sales Line" extends "Sales Line"
     var
         DimMgt: Codeunit DimensionManagement;
         TypeCannotBeSelectedManuallyErr: Label 'Type "%1" cannot be selected manually.', Comment = '%1 = Sales Line Type';
+        DeferralCodeCannotBeUsedWithContractDeferralsErr: Label 'A Deferral Code cannot be used on a line where Subscription Contract Deferrals are active. Either remove the Deferral Code or disable Contract Deferrals on the subscription line or contract.';
 
     procedure InitFromSalesHeader(SourceSalesHeader: Record "Sales Header")
     begin
diff --git a/src/Apps/W1/Subscription Billing/Test/Deferrals/CustomerDeferralsTest.Codeunit.al b/src/Apps/W1/Subscription Billing/Test/Deferrals/CustomerDeferralsTest.Codeunit.al
index e4ca028654..a63091c360 100644
--- a/src/Apps/W1/Subscription Billing/Test/Deferrals/CustomerDeferralsTest.Codeunit.al	
+++ b/src/Apps/W1/Subscription Billing/Test/Deferrals/CustomerDeferralsTest.Codeunit.al	
@@ -1,6 +1,7 @@
 namespace Microsoft.SubscriptionBilling;
 
 using Microsoft.Finance.Currency;
+using Microsoft.Finance.Deferral;
 using Microsoft.Finance.GeneralLedger.Ledger;
 using Microsoft.Finance.GeneralLedger.Setup;
 using Microsoft.Inventory.Item;
@@ -47,6 +48,7 @@ codeunit 139912 "Customer Deferrals Test"
         LibraryTestInitialize: Codeunit "Library - Test Initialize";
         LibraryRandom: Codeunit "Library - Random";
         LibrarySales: Codeunit "Library - Sales";
+        LibraryERM: Codeunit "Library - ERM";
         CorrectedDocumentNo: Code[20];
         PostedDocumentNo: Code[20];
         PostingDate: Date;
@@ -234,6 +236,55 @@ codeunit 139912 "Customer Deferrals Test"
         until CustomerContractDeferral.Next() = 0;
     end;
 
+    [Test]
+    [HandlerFunctions('CreateCustomerBillingDocsContractPageHandler,MessageHandler')]
+    procedure CheckContractDeferralsWhenStartDateIsOnFirstDayInMonthAndEndDateIsMidMonthLCY()
+    var
+        DeferralCount: Integer;
+        FullMonthAmount: Decimal;
+        TotalDeferralBaseAmount: Decimal;
+        i: Integer;
+        LastDayOfBillingPeriod: Date;
+    begin
+        // [SCENARIO] When billing starts on 1st of month and ends mid-month (partial last month),
+        // full months get equal deferral amounts and the partial last month gets a day-proportioned amount.
+        Initialize();
+
+        // [GIVEN] A customer contract with deferrals starting on Jan 1
+        CreateCustomerContractWithDeferrals('<-CY>', true);
+
+        // [WHEN] Billing from Jan 1 to Jul 23 (partial last month) and document is posted
+        CreateBillingProposalAndCreateBillingDocuments('<-CY>', '<-CY+6M+22D>');
+        PostSalesDocumentAndFetchDeferrals();
+
+        DeferralCount := CustomerContractDeferral.Count;
+        TotalDeferralBaseAmount := CustomerContractDeferral."Deferral Base Amount";
+        LastDayOfBillingPeriod := CalcDate('<-CY+6M+22D>', WorkDate());
+
+        // [THEN] 7 deferral periods are created (Jan through Jul)
+        Assert.AreEqual(7, DeferralCount, 'Expected 7 deferral periods for Jan to Jul billing.');
+
+        // Use the first full-month deferral amount as reference; verify all other full months match it
+        FullMonthAmount := CustomerContractDeferral.Amount;
+
+        // [THEN] The first 6 full-month periods have equal amounts and full month Number of Days
+        for i := 1 to DeferralCount - 1 do begin
+            Assert.AreEqual(FullMonthAmount, CustomerContractDeferral.Amount, 'Full month deferrals should have equal amounts.');
+            CustomerContractDeferral.TestField("Number of Days", Date2DMY(CalcDate('<CM>', CustomerContractDeferral."Posting Date"), 1));
+            CustomerContractDeferral.Next();
+        end;
+
+        // [THEN] Last partial month has a different (day-proportioned) amount and correct Number of Days
+        Assert.AreNotEqual(FullMonthAmount, CustomerContractDeferral.Amount, 'Partial last month should have a different amount than full months.');
+        CustomerContractDeferral.TestField("Number of Days", Date2DMY(LastDayOfBillingPeriod, 1));
+
+        // [THEN] Sum of all deferral amounts equals the total deferral base amount
+        CustomerContractDeferral.Reset();
+        CustomerContractDeferral.SetRange("Document No.", PostedDocumentNo);
+        CustomerContractDeferral.CalcSums(Amount);
+        Assert.AreEqual(TotalDeferralBaseAmount, CustomerContractDeferral.Amount, 'Sum of deferral amounts must equal the deferral base amount.');
+    end;
+
     [Test]
     [HandlerFunctions('CreateCustomerBillingDocsContractPageHandler,MessageHandler')]
     procedure DeferralsAreCorrectAfterPostingPartialSalesCreditMemo()
@@ -545,16 +596,20 @@ codeunit 139912 "Customer Deferrals Test"
     procedure TestIfDeferralsExistOnAfterPostSalesCreditMemoWithoutAppliesToDocNo()
     begin
         Initialize();
+        // [GIVEN] Contract has been created and the billing proposal with a posted contract invoice
         CreateCustomerContractWithDeferrals('<2M-CM>', true);
         CreateBillingProposalAndCreateBillingDocuments('<2M-CM>', '<8M+CM>');
         PostSalesDocumentAndGetSalesInvoice();
 
+        // [WHEN] A credit memo is created from the posted invoice but without any link to the original invoice
         CorrectPostedSalesInvoice.CreateCreditMemoCopyDocument(SalesInvoiceHeader, SalesCrMemoHeader);
-        // Force Applies to Doc No. and Doc Type to be empty
-        SalesCrMemoHeader."Applies-to Doc. Type" := SalesCrMemoHeader."Applies-to Doc. Type"::Invoice;
+        SalesCrMemoHeader."Applies-to Doc. Type" := SalesCrMemoHeader."Applies-to Doc. Type"::" ";
         SalesCrMemoHeader."Applies-to Doc. No." := '';
         SalesCrMemoHeader.Modify(false);
+        ClearCorrectionDocumentNoFromBillingLines(SalesCrMemoHeader."No.");
         CorrectedDocumentNo := LibrarySales.PostSalesDocument(SalesCrMemoHeader, true, true);
+
+        // [THEN] Deferral entries are created for the standalone credit memo
         FetchCustomerContractDeferrals(CorrectedDocumentNo);
     end;
 
@@ -747,6 +802,96 @@ codeunit 139912 "Customer Deferrals Test"
         SubscriptionHeader.Modify(true);
     end;
 
+    [Test]
+    [HandlerFunctions('CreateCustomerBillingDocsContractPageHandler,MessageHandler')]
+    procedure TestPostingGroupsAreFilledOnCustomerContractDeferrals()
+    var
+        TotalDeferralCount: Integer;
+    begin
+        // [SCENARIO] When posting a sales invoice with contract deferrals, the Gen. Bus. Posting Group and Gen. Prod. Posting Group fields are populated on the deferral entries.
+        Initialize();
+
+        // [GIVEN] A customer contract with deferrals
+        CreateCustomerContractWithDeferrals('<2M-CM>', true);
+        CreateBillingProposalAndCreateBillingDocuments('<2M-CM>', '<8M+CM>');
+
+        // [WHEN] The sales document is posted
+        PostSalesDocumentAndFetchDeferrals();
+
+        // [THEN] Gen. Bus. Posting Group and Gen. Prod. Posting Group are filled on each deferral entry
+        SalesInvoiceLine.SetRange("Document No.", PostedDocumentNo);
+        SalesInvoiceLine.SetFilter("No.", '<>%1', '');
+        SalesInvoiceLine.FindFirst();
+        CustomerContractDeferral.SetRange("Document No.", PostedDocumentNo);
+        TotalDeferralCount := CustomerContractDeferral.Count;
+        CustomerContractDeferral.SetRange("Gen. Bus. Posting Group", SalesInvoiceLine."Gen. Bus. Posting Group");
+        CustomerContractDeferral.SetRange("Gen. Prod. Posting Group", SalesInvoiceLine."Gen. Prod. Posting Group");
+        Assert.RecordIsNotEmpty(CustomerContractDeferral);
+        Assert.RecordCount(CustomerContractDeferral, TotalDeferralCount);
+    end;
+
+    [Test]
+    [HandlerFunctions('CreateCustomerBillingDocsContractPageHandler,ContractDeferralsReleaseRequestPageHandler,MessageHandler')]
+    procedure TestZeroAmountDeferralsReleasedWithoutGLEntries()
+    var
+        ContractDeferralsRelease: Report "Contract Deferrals Release";
+    begin
+        // [SCENARIO] Zero-amount customer contract deferrals should be marked as released without creating GL entries.
+        Initialize();
+        SetPostingAllowTo(0D);
+
+        // [GIVEN] A customer contract with deferrals that have been posted
+        CreateCustomerContractWithDeferrals('<2M-CM>', true);
+        CreateBillingProposalAndCreateBillingDocuments('<2M-CM>', '<8M+CM>');
+        PostSalesDocumentAndFetchDeferrals();
+
+        // [GIVEN] All deferral amounts are set to 0 (simulating zero-amount service commitments)
+        CustomerContractDeferral.Reset();
+        CustomerContractDeferral.SetRange("Document No.", PostedDocumentNo);
+        CustomerContractDeferral.ModifyAll(Amount, 0, false);
+        CustomerContractDeferral.ModifyAll("Discount Amount", 0, false);
+        CustomerContractDeferral.FindFirst();
+
+        // [WHEN] Release deferrals is run
+        PostingDate := CustomerContractDeferral."Posting Date";
+        Commit();
+        ContractDeferralsRelease.Run(); // ContractDeferralsReleaseRequestPageHandler
+
+        // [THEN] The first deferral is released without creating a GL entry
+        CustomerContractDeferral.Get(CustomerContractDeferral."Entry No.");
+        CustomerContractDeferral.TestField(Released, true);
+        CustomerContractDeferral.TestField("G/L Entry No.", 0);
+    end;
+
+    [Test]
+    [HandlerFunctions('CreateCustomerBillingDocsContractPageHandler,MessageHandler')]
+    procedure DeferralCodeNotAllowedWithContractDeferralsOnSalesLine()
+    var
+        DeferralTemplate: Record "Deferral Template";
+        DeferralCodeCannotBeUsedWithContractDeferralsErr: Label 'A Deferral Code cannot be used on a line where Subscription Contract Deferrals are active. Either remove the Deferral Code or disable Contract Deferrals on the subscription line or contract.', Locked = true;
+    begin
+        // [SCENARIO] A standard Deferral Code must not be assigned to a sales invoice line
+        //            that already has subscription contract deferrals enabled.
+        Initialize();
+
+        // [GIVEN] A customer contract with deferrals enabled and a billing document
+        CreateCustomerContractWithDeferrals('<2M-CM>', true);
+        CreateBillingProposalAndCreateBillingDocuments('<2M-CM>', '<8M+CM>');
+
+        // [GIVEN] A standard BC deferral template
+        LibraryERM.CreateDeferralTemplate(DeferralTemplate, Enum::"Deferral Calculation Method"::"Straight-Line",
+            Enum::"Deferral Calculation Start Date"::"Posting Date", 3);
+
+        // [WHEN] Assigning the Deferral Code to the sales line that has contract deferrals
+        SalesLine.SetRange("Document No.", SalesHeader."No.");
+        SalesLine.SetFilter("No.", '<>%1', '');
+        SalesLine.FindFirst();
+
+        // [THEN] An error is raised preventing double deferrals
+        asserterror SalesLine.Validate("Deferral Code", DeferralTemplate."Deferral Code");
+        Assert.ExpectedError(DeferralCodeCannotBeUsedWithContractDeferralsErr);
+    end;
+
     #endregion Tests
 
     #region Procedures
@@ -865,6 +1010,16 @@ codeunit 139912 "Customer Deferrals Test"
         CustomerContractDeferral.FindFirst();
     end;
 
+    local procedure ClearCorrectionDocumentNoFromBillingLines(CreditMemoDocumentNo: Code[20])
+    var
+        CrMemoBillingLine: Record "Billing Line";
+    begin
+        CrMemoBillingLine.SetRange(Partner, CrMemoBillingLine.Partner::Customer);
+        CrMemoBillingLine.SetRange("Document Type", CrMemoBillingLine."Document Type"::"Credit Memo");
+        CrMemoBillingLine.SetRange("Document No.", CreditMemoDocumentNo);
+        CrMemoBillingLine.ModifyAll("Correction Document No.", '', false);
+    end;
+
     local procedure GetCalculatedMonthAmountsForDeferrals(SourceDeferralBaseAmount: Decimal; NumberOfPeriods: Integer; FirstDayOfBillingPeriod: Date; LastDayOfBillingPeriod: Date; CalculateInLCY: Boolean)
     var
         DailyDefBaseAmount: Decimal;
diff --git a/src/Apps/W1/Subscription Billing/Test/Deferrals/VendorDeferralsTest.Codeunit.al b/src/Apps/W1/Subscription Billing/Test/Deferrals/VendorDeferralsTest.Codeunit.al
index ac5df83204..e88b16bcc9 100644
--- a/src/Apps/W1/Subscription Billing/Test/Deferrals/VendorDeferralsTest.Codeunit.al	
+++ b/src/Apps/W1/Subscription Billing/Test/Deferrals/VendorDeferralsTest.Codeunit.al	
@@ -1,6 +1,7 @@
 namespace Microsoft.SubscriptionBilling;
 
 using Microsoft.Finance.Currency;
+using Microsoft.Finance.Deferral;
 using Microsoft.Finance.GeneralLedger.Account;
 using Microsoft.Finance.GeneralLedger.Journal;
 using Microsoft.Finance.GeneralLedger.Ledger;
@@ -49,6 +50,7 @@ codeunit 139913 "Vendor Deferrals Test"
         LibraryTestInitialize: Codeunit "Library - Test Initialize";
         LibraryPurchase: Codeunit "Library - Purchase";
         LibraryUtility: Codeunit "Library - Utility";
+        LibraryERM: Codeunit "Library - ERM";
         CorrectedDocumentNo: Code[20];
         PostedDocumentNo: Code[20];
         PostingDate: Date;
@@ -241,6 +243,55 @@ codeunit 139913 "Vendor Deferrals Test"
         until VendorContractDeferral.Next() = 0;
     end;
 
+    [Test]
+    [HandlerFunctions('CreateVendorBillingDocsContractPageHandler,MessageHandler')]
+    procedure CheckContractDeferralsWhenStartDateIsOnFirstDayInMonthAndEndDateIsMidMonthLCY()
+    var
+        DeferralCount: Integer;
+        FullMonthAmount: Decimal;
+        TotalDeferralBaseAmount: Decimal;
+        i: Integer;
+        LastDayOfBillingPeriod: Date;
+    begin
+        // [SCENARIO] When billing starts on 1st of month and ends mid-month (partial last month),
+        // full months get equal deferral amounts and the partial last month gets a day-proportioned amount.
+        Initialize();
+
+        // [GIVEN] A vendor contract with deferrals starting on Jan 1
+        CreateVendorContractWithDeferrals('<-CY>', true);
+
+        // [WHEN] Billing from Jan 1 to Jul 23 (partial last month) and document is posted
+        CreateBillingProposalAndCreateBillingDocuments('<-CY>', '<-CY+6M+22D>');
+        PostPurchDocumentAndFetchDeferrals();
+
+        DeferralCount := VendorContractDeferral.Count;
+        TotalDeferralBaseAmount := VendorContractDeferral."Deferral Base Amount";
+        LastDayOfBillingPeriod := CalcDate('<-CY+6M+22D>', WorkDate());
+
+        // [THEN] 7 deferral periods are created (Jan through Jul)
+        Assert.AreEqual(7, DeferralCount, 'Expected 7 deferral periods for Jan to Jul billing.');
+
+        // Use the first full-month deferral amount as reference; verify all other full months match it
+        FullMonthAmount := VendorContractDeferral.Amount;
+
+        // [THEN] The first 6 full-month periods have equal amounts and full month Number of Days
+        for i := 1 to DeferralCount - 1 do begin
+            Assert.AreEqual(FullMonthAmount, VendorContractDeferral.Amount, 'Full month deferrals should have equal amounts.');
+            VendorContractDeferral.TestField("Number of Days", Date2DMY(CalcDate('<CM>', VendorContractDeferral."Posting Date"), 1));
+            VendorContractDeferral.Next();
+        end;
+
+        // [THEN] Last partial month has a different (day-proportioned) amount and correct Number of Days
+        Assert.AreNotEqual(FullMonthAmount, VendorContractDeferral.Amount, 'Partial last month should have a different amount than full months.');
+        VendorContractDeferral.TestField("Number of Days", Date2DMY(LastDayOfBillingPeriod, 1));
+
+        // [THEN] Sum of all deferral amounts equals the total deferral base amount
+        VendorContractDeferral.Reset();
+        VendorContractDeferral.SetRange("Document No.", PostedDocumentNo);
+        VendorContractDeferral.CalcSums(Amount);
+        Assert.AreEqual(TotalDeferralBaseAmount, VendorContractDeferral.Amount, 'Sum of deferral amounts must equal the deferral base amount.');
+    end;
+
     [Test]
     [HandlerFunctions('CreateVendorBillingDocsContractPageHandler,MessageHandler')]
     procedure DeferralsAreCorrectAfterPostingPartialPurchCreditMemo()
@@ -584,15 +635,21 @@ codeunit 139913 "Vendor Deferrals Test"
     procedure TestIfDeferralsExistOnAfterPostPurchCreditMemoWithoutAppliesToDocNo()
     begin
         Initialize();
+        // [GIVEN] Contract has been created and the billing proposal with a posted contract invoice
         CreateVendorContractWithDeferrals('<2M-CM>', true);
         CreateBillingProposalAndCreateBillingDocuments('<2M-CM>', '<8M+CM>');
         PostPurchDocumentAndGetPurchInvoice();
+
+        // [WHEN] A credit memo is created from the posted invoice but without any link to the original invoice
         CorrectPostedPurchaseInvoice.CreateCreditMemoCopyDocument(PurchaseInvoiceHeader, PurchaseCrMemoHeader);
         PurchaseCrMemoHeader.Validate("Vendor Cr. Memo No.", LibraryUtility.GenerateGUID());
         PurchaseCrMemoHeader."Applies-to Doc. Type" := PurchaseCrMemoHeader."Applies-to Doc. Type"::" ";
         PurchaseCrMemoHeader."Applies-to Doc. No." := '';
         PurchaseCrMemoHeader.Modify(false);
+        ClearCorrectionDocumentNoFromBillingLines(PurchaseCrMemoHeader."No.");
         CorrectedDocumentNo := LibraryPurchase.PostPurchaseDocument(PurchaseCrMemoHeader, true, true);
+
+        // [THEN] Deferral entries are created for the standalone credit memo
         FetchVendorContractDeferrals(CorrectedDocumentNo);
     end;
 
@@ -756,6 +813,98 @@ codeunit 139913 "Vendor Deferrals Test"
         Assert.IsTrue(PurchaseLine2.CreateContractDeferrals(), FunctionReturnedWrongResultErr);
     end;
 
+    [Test]
+    [HandlerFunctions('CreateVendorBillingDocsContractPageHandler,MessageHandler')]
+    procedure TestPostingGroupsAreFilledOnVendorContractDeferrals()
+    var
+        TotalDeferralCount: Integer;
+    begin
+        // [SCENARIO] When posting a purchase invoice with contract deferrals, the Gen. Bus. Posting Group and Gen. Prod. Posting Group fields are populated on the deferral entries.
+        Initialize();
+
+        // [GIVEN] A vendor contract with deferrals
+        CreateVendorContractWithDeferrals('<2M-CM>', true);
+        CreateBillingProposalAndCreateBillingDocuments('<2M-CM>', '<8M+CM>');
+
+        // [WHEN] The purchase document is posted
+        BillingLine.FindLast();
+        PostPurchDocumentAndFetchDeferrals();
+
+        // [THEN] Gen. Bus. Posting Group and Gen. Prod. Posting Group are filled on each deferral entry
+        PurchInvLine.SetRange("Document No.", PostedDocumentNo);
+        PurchInvLine.SetFilter("No.", '<>%1', '');
+        PurchInvLine.FindFirst();
+        VendorContractDeferral.SetRange("Document No.", PostedDocumentNo);
+        TotalDeferralCount := VendorContractDeferral.Count;
+        VendorContractDeferral.SetRange("Gen. Bus. Posting Group", PurchInvLine."Gen. Bus. Posting Group");
+        VendorContractDeferral.SetRange("Gen. Prod. Posting Group", PurchInvLine."Gen. Prod. Posting Group");
+        Assert.RecordIsNotEmpty(VendorContractDeferral);
+        Assert.RecordCount(VendorContractDeferral, TotalDeferralCount);
+    end;
+
+    [Test]
+    [HandlerFunctions('CreateVendorBillingDocsContractPageHandler,ContractDeferralsReleaseRequestPageHandler,MessageHandler')]
+    procedure TestZeroAmountVendorDeferralsReleasedWithoutGLEntries()
+    var
+        ContractDeferralsRelease: Report "Contract Deferrals Release";
+    begin
+        // [SCENARIO] Zero-amount vendor contract deferrals should be marked as released without creating GL entries.
+        Initialize();
+        SetPostingAllowTo(0D);
+
+        // [GIVEN] A vendor contract with deferrals that have been posted
+        CreateVendorContractWithDeferrals('<2M-CM>', true);
+        CreateBillingProposalAndCreateBillingDocuments('<2M-CM>', '<8M+CM>');
+        BillingLine.FindLast();
+        PostPurchDocumentAndFetchDeferrals();
+
+        // [GIVEN] All deferral amounts are set to 0 (simulating zero-amount service commitments)
+        VendorContractDeferral.Reset();
+        VendorContractDeferral.SetRange("Document No.", PostedDocumentNo);
+        VendorContractDeferral.ModifyAll(Amount, 0, false);
+        VendorContractDeferral.ModifyAll("Discount Amount", 0, false);
+        VendorContractDeferral.FindFirst();
+
+        // [WHEN] Release deferrals is run
+        PostingDate := VendorContractDeferral."Posting Date";
+        Commit();
+        ContractDeferralsRelease.Run(); // ContractDeferralsReleaseRequestPageHandler
+
+        // [THEN] The first deferral is released without creating a GL entry
+        VendorContractDeferral.Get(VendorContractDeferral."Entry No.");
+        VendorContractDeferral.TestField(Released, true);
+        VendorContractDeferral.TestField("G/L Entry No.", 0);
+    end;
+
+    [Test]
+    [HandlerFunctions('CreateVendorBillingDocsContractPageHandler,MessageHandler')]
+    procedure DeferralCodeNotAllowedWithContractDeferralsOnPurchaseLine()
+    var
+        DeferralTemplate: Record "Deferral Template";
+        DeferralCodeCannotBeUsedWithContractDeferralsErr: Label 'A Deferral Code cannot be used on a line where Subscription Contract Deferrals are active. Either remove the Deferral Code or disable Contract Deferrals on the subscription line or contract.', Locked = true;
+    begin
+        // [SCENARIO] A standard Deferral Code must not be assigned to a purchase invoice line
+        //            that already has subscription contract deferrals enabled.
+        Initialize();
+
+        // [GIVEN] A vendor contract with deferrals enabled and a billing document
+        CreateVendorContractWithDeferrals('<2M-CM>', true);
+        CreateBillingProposalAndCreateBillingDocuments('<2M-CM>', '<8M+CM>');
+
+        // [GIVEN] A standard BC deferral template
+        LibraryERM.CreateDeferralTemplate(DeferralTemplate, Enum::"Deferral Calculation Method"::"Straight-Line",
+            Enum::"Deferral Calculation Start Date"::"Posting Date", 3);
+
+        // [WHEN] Assigning the Deferral Code to the purchase line that has contract deferrals
+        PurchaseLine.SetRange("Document No.", PurchaseHeader."No.");
+        PurchaseLine.SetFilter("No.", '<>%1', '');
+        PurchaseLine.FindFirst();
+
+        // [THEN] An error is raised preventing double deferrals
+        asserterror PurchaseLine.Validate("Deferral Code", DeferralTemplate."Deferral Code");
+        Assert.ExpectedError(DeferralCodeCannotBeUsedWithContractDeferralsErr);
+    end;
+
     #endregion Tests
 
     #region Procedures
@@ -781,7 +930,6 @@ codeunit 139913 "Vendor Deferrals Test"
         GLAccount: Record "G/L Account";
         GenJournalBatch: Record "Gen. Journal Batch";
         GenJournalLine: Record "Gen. Journal Line";
-        LibraryERM: Codeunit "Library - ERM";
     begin
         CreateGeneralJournalBatch(GenJournalBatch);
         LibraryERM.CreateGLAccount(GLAccount);
@@ -852,7 +1000,6 @@ codeunit 139913 "Vendor Deferrals Test"
     local procedure CreateGeneralJournalBatch(var GenJournalBatch: Record "Gen. Journal Batch")
     var
         GenJournalTemplate: Record "Gen. Journal Template";
-        LibraryERM: Codeunit "Library - ERM";
     begin
         GenJournalTemplate.SetRange(Recurring, false);
         GenJournalTemplate.SetRange(Type, GenJournalTemplate.Type::General);
@@ -913,6 +1060,16 @@ codeunit 139913 "Vendor Deferrals Test"
         VendorContractDeferral.FindFirst();
     end;
 
+    local procedure ClearCorrectionDocumentNoFromBillingLines(CreditMemoDocumentNo: Code[20])
+    var
+        CrMemoBillingLine: Record "Billing Line";
+    begin
+        CrMemoBillingLine.SetRange(Partner, CrMemoBillingLine.Partner::Vendor);
+        CrMemoBillingLine.SetRange("Document Type", CrMemoBillingLine."Document Type"::"Credit Memo");
+        CrMemoBillingLine.SetRange("Document No.", CreditMemoDocumentNo);
+        CrMemoBillingLine.ModifyAll("Correction Document No.", '', false);
+    end;
+
     local procedure GetCalculatedMonthAmountsForDeferrals(SourceDeferralBaseAmount: Decimal; NumberOfPeriods: Integer; FirstDayOfBillingPeriod: Date; LastDayOfBillingPeriod: Date; CalculateInLCY: Boolean)
     var
         DailyDefBaseAmount: Decimal;