Description of Revenue Recognition methods

The revenue recognition method can follow different methods. The chosen methods depend in particular on the products or services sold by the company.

This appendix describes, for each revenue recognition method, the columns displayed in the search results and how they are calculated. The options selected in the revenue recognition settings (see Revenue recognition) may modify certain columns for each recognition method.

The revenue calculation is similar to the way time-based billing works. It takes into account time spent of employees of the company.

Field Description
Initial budget Signed quotes with a date earlier than or equal to the closing date.
Budget

When the updated sales forecast option is selected for the Budget calculated with parameter in the Calculation of the revenue basis section of the revenue recognition setup, it corresponds to the sum of:

  • Validated undelivered orders without a billing schedule created on or before the closing date;
  • Non-billed deliveries created before or the day of the closing date;
  • Lines of validated but non-billed billing schedules created before or the day of the closing date.
  • Invoices created before or the day of the closing date.

When the the signed quotations option is selected for the Budget calculated with parameter in the Calculation of the revenue basis section of the revenue recognition setup, the budget corresponds to quotations signed on or before the closing date.
Billed Invoices created before or the day of the closing date.
Amount to be billed

The amount to be billed matches the sum of:

  • Validated undelivered orders without a billing schedule created on or before the closing date;
  • Non-billed deliveries created before or the day of the closing date;
  • Lines of validated but non-billed billing schedules created before or the day of the closing date.
Billing % The billing percentage corresponds to the result of the following calculation: Billed divided by Budget.
Invoices to be issued

When the Revenue calculated based on deliveries only checkbox in the Calculation of the revenue basis section of the revenue recognition setup is:

  • checked, Invoices to be issued corresponds to Recognized revenue (when Recognized revenue is greater than Billed). If not, the Invoices to be issued is equal to 0.
  • unchecked, Invoices to be issued corresponds to:

Non-billed deliveries before or the day of the closing date + Lines of billing schedules non-validated and non-billed before or the day of the closing date
Deferred revenue

When the Revenue calculated based on deliveries only checkbox in the Calculation of the revenue basis section of the revenue recognition setup is

  • checked, Deferred revenue corresponds to Recognized revenue (when Recognized revenue is greater than Billed). If not, the Deferred revenue is equal to 0.
  • unchecked, the Deferred revenue cannot be calculated.
Free maintenance Matches the percentage of free maintenance defined on the lines.
Recognized revenue

When the Revenue calculated based on deliveries only checkbox in the Calculation of the revenue basis section of the revenue recognition setup is:

  • checked, Recognized revenue corresponds to deliveries dated earlier than or equal to the closing date.
  • unchecked, Recognized revenue corresponds to:

Billed + Invoices to be issued - Deferred revenue
Revenue to recognize

Matches:

Budget - Recognized revenue
Revenue M-1 Logged revenue retrieved based on the logging date defined in the start screen of the revenue recognition.
Monthly production

Matches:

Recognized revenue - Revenue M-1

The revenue is calculated by applying a percentage of progress on the ordered amount. The ordered amount corresponds to the sum of:

  • non-delivered orders;
  • non-billed deliveries;
  • sales invoices.

The progress percentage is calculated by comparing the timesheets and the number of sold days (matching the quantities in the order lines).

Field Description
Initial budget No initial budget.
Budget

When the updated sales forecast option is selected for the Budget calculated with parameter in the Calculation of the revenue basis section of the revenue recognition setup, it corresponds to the sum of:

  • Validated undelivered orders without a billing schedule created on or before the closing date;
  • Non-billed deliveries created before or the day of the closing date;
  • Lines of validated but non-billed billing schedules created before or the day of the closing date.
  • Invoices created before or the day of the closing date.

When the the signed quotations option is selected for the Budget calculated with parameter in the Calculation of the revenue basis section of the revenue recognition setup, it corresponds to signed and unsigned quotations dated earlier than or equal to the closing date.
Timesheet

Timesheets in days (according to the time status codes selected in the set up) before or the day of the closing date.
Billed Invoices created before or the day of the closing date.
Amount to be billed

The amount to be billed corresponds to:

Budget - Billed
Sold days Matches the budget (in days).
Days done

Matches the timesheets inputted by the employee.
Actual remaining tasks

Matches the schedules (in days) created before or the day of the closing date.

When the RECCA_RAF_PLG management rule is enabled, timesheets in the future and/or schedules in the future can also be taken into account.

Reference

For more information about the RECCA_RAF_PLG management rule, refer to RECCA_RAF_PLG.
Theoretical remaining tasks

Allows you to check that the schedule is up to date. The Theoretical remaining tasks corresponds to:

Sold days - Days done
Difference

Matches:

Theoretical remaining tasks - Actual remaining tasks
Updated forecast

Matches:

Days done + Actual remaining tasks
Calculated progress %

Matches:

Days done / Updated forecast
Theoretical progress %

Matches:

Days done / Sold days
Forced progress %

Matches the theoretical progress by default. It is possible to manually specify it when the user has the DMF 070817 ACCOUNTING PERIODIC WORKS REVENUE RECOGNITION - INPUT.
Invoices to be issued

Matches:

Recognized revenue - Billed
Deferred revenue

Matches:

Billed - Recognized revenue
Recognized revenue

Matches:

Budget * Forced progress
Revenue to recognize

Matches:

Budget - Recognized revenue
Revenue M-1 Logged revenue retrieved based on the logging date defined in the start screen of the revenue recognition.
Monthly production

Matches:

Recognized revenue - Revenue M-1

The revenue is calculated by applying a percentage of progress on the ordered amount.

Field Description
Initial budget Matches the signed quotations before or the day of the closing date.
Budget

When the updated sales forecast option is selected for the Budget calculated with parameter in the Calculation of the revenue basis section of the revenue recognition setup, the budget corresponds to the sum of:

  • Validated undelivered orders without a billing schedule created on or before the closing date;
  • Non-billed deliveries created before or the day of the closing date;
  • Lines of validated but non-billed billing schedules created before or the day of the closing date.
  • Invoices created before or the day of the closing date.

When the the signed quotations option is selected for the Budget calculated with parameter in the Calculation of the revenue basis section of the revenue recognition setup, it corresponds to signed and unsigned quotations converted into orders on or before the closing date.
Timsheets or Actual costs (when the Calculation of expenses with valuated time and purchases box is checked)

Matches the sum of:

  • Timesheets valued before or the day of the closing date;
  • Purchase invoices created before or the day of the closing date;
  • Non-billed receptions created before or the day of the closing date (only taken into account when the Calculation of expenses with valuated time and purchases box is checked).

When the Logging of expense recognition option is selected for the Actual calculated with parameter in the Calculation of revenue basis section of the revenue recognition setup, the Actual costs matches the sum of the lines of the expenses history > Recognized expenses column, inputted before or the day of the closing date.

Note

When the Calculation of expenses with valuated time and purchases and Logging of expense recognition boxes are checked for the Actual calculated with parameter in the Calculation of revenue basis section of the revenue recognition setup, the actual costs are calculated the same way as with the Logging of expense recognition alone.
Billed Invoices created before or the day of the closing date.
Actual remaining tasks

When the of valued schedules option is selected for the Remaining tasks calculated from parameter in the Calculation of the revenue basis section of the revenue recognition setup, the Actual remaining tasks corresponds to the sum of:

  • Valuated timesheets after the closing date;
  • Valuated schedules after the closing date;
  • Supplier orders validated and non-received before or the day of the closing date;
  • Receptions non billed (without a period, with a period before or after the closing date, with a reception date after the closing date);
  • Lines of purchase billing non-billed schedules (without a period, with a period before or after the closing date, with a reception date after the closing date);
  • Supplier invoices created after the closing date (when the Calculation of expenses with valuated time and purchase is checked in the revenue recognition setup);
  • Validated quotes before or the day of the closing date (when the Inclusion of validated quotes option is selected in the Calculation of the revenue basis section of the revenue recognition setup)

When the of the remaining project tasks option is selected for the Remaining tasks calculated from parameter in the Calculation of the revenue basis section of the revenue recognition setup, the Actual remaining tasks corresponds to the sum of:

  • Valuated timesheets after the closing date;
  • The remaining tasks of the valuated project with the employee linked to this task;
  • Supplier orders validated and non-received before or the day of the closing date;
  • Receptions non billed (without a period, with a period before or after the closing date, with a reception date after the closing date);
  • Lines of purchase billing non-billed schedules (without a period, with a period before or after the closing date, with a reception date after the closing date);
  • Supplier invoices created after the closing date and without period(when the Calculation of expenses with valuated time and purchase is checked in the revenue recognition setup);
  • Validated quotes before or the day of the closing date (when the Inclusion of validated quotes option is selected in the Calculation of the revenue basis section of the revenue recognition setup)

When the Logging of expense recognition option is checked in the revenue recognition setup, the Actual remaining tasks matches the sum of the lines of the expenses history > Expenses to recognize column, inputted before or the day of the closing date.

Note

When the Calculation of expenses with valuated time and purchases and Logging of expense recognition boxes are checked for the Actual calculated with parameter in the Calculation of revenue basis section of the revenue recognition setup, the Actual remaining tasks is calculated the same way as with the Logging of expense recognition alone.
Updated forecast

Matches:

Timesheets + Actual remaining tasks

Note

When the Calculation of expenses with valuated time and purchases box is checked in the setup, the Actual costs replaces the Timesheets in the calculation.
Calculated progress %

Matches:

Timesheets / Updated forecast

Note

When the Calculation of expenses with valuated time and purchases box is checked in the setup, the Actual costs replaces the Timesheets in the calculation.
Forced progress %

Matches the theoretical progress by default. It is possible to manually specify it when the user has the DMF 070817 ACCOUNTING PERIODIC WORKS REVENUE RECOGNITION - INPUT.
Invoices to be issued

When the Recognized revenue is higher or equal to the Billed, the Invoices to be issued corresponds to:

Recognized revenue - Billed
Deferred revenue

When the Recognized revenue is lower than the Billed, the Deferred revenue corresponds to:

Billed - Recognized revenue
Recognized revenue

Matches:

Budget * Forced progress
Revenue to recognize

Matches:

Budget - Recognized revenue
Revenue M-1 Logged revenue retrieved based on the logging date defined in the start screen of the revenue recognition.
Monthly production

Matches:

Recognized revenue - Revenue M-1

Calculation of the revenue recognition is not in correlation with the billing where various activities coexists in the company and requires to calculate multiple revenue recognition.

Field Description
Initial budget Matches the signed quotations before or the day of the closing date.
Budget

When the updated sales forecast option is selected for the Budget calculated with parameter in the Calculation of the revenue basis section, it corresponds to the sum of:

  • Validated undelivered orders without a billing schedule created on or before the closing date;
  • Non-billed deliveries created before or the day of the closing date;
  • Lines of validated but non-billed billing schedules created before or the day of the closing date.
  • Invoices created before or the day of the closing date.

When the the signed quotations option is selected for the Budget calculated with parameter in the Calculation of the revenue basis section, the budget corresponds to signed and unsigned quotations converted into orders on or before the closing date.
Billed Invoices created before or the day of the closing date.
Suggested invoices to be issued

When the Revenue calculated based on deliveries only checkbox in the Calculation of the revenue basis section of the revenue recognition setup is:

  • checked, Invoices to be issued corresponds to:

Recognized revenue - Billed (when the Recognized revenue is higher than Billed)

  • unchecked, Invoices to be issued corresponds to:

Non-billed deliveries created before or the day of the closing date + Lines of billing schedules validated and non-billed created before or on the day of the closing date.
Selected invoices to be issued Matches the Suggested invoices to be issued by default (the input of the Selected invoices to be issued is possible when the user has the DMF 070817 070817 ACCOUNTING PERIODIC WORKS REVENUE RECOGNITION - INPUT).
Suggested deferred revenue

When the Revenue calculated based on deliveries only checkbox in the Calculation of the revenue basis section of the revenue recognition setup is:

  • checked, Deferred revenue corresponds to:

Billed - Recognized revenue (when the Recognized revenue is lower than the Billed)

  • unchecked, Recognized revenue corresponds to invoice lines prorated over the period relative to the closing date.
Selected deferred revenue Corresponds to the default Suggested deferred revenue (entering the Selected deferred revenue is possible when the user has the DMF 070817 ACCOUNTING PERIODIC WORKS REVENUE RECOGNITION - INPUT).
Recognized revenue

When the Revenue calculated based on deliveries only checkbox in the Calculation of the revenue basis section of the revenue recognition setup is

  • checked, the Recognized revenue corresponds to delivered lines, whether billed or not (when the date specified in the Delivered on field is on or before the closing date), prorated over the lines with a period up to the closing date.

  • unchecked, Recognized revenue corresponds to:

Billed + Selected invoices to be issued - Selected deferred revenue
Revenue M-1 Logged revenue retrieved based on the logging date defined in the start screen of the revenue recognition.
Monthly production

Matches:

Recognized revenue - Revenue M-1