33 Work with Profit Recognition Journal Entries (Update A9.4)

This chapter contains these topics:

33.1 Working with Profit Recognition Journal Entries

After you generate and revise your profit recognition information, you can create profit recognition journal entries and post them to the Account Balances table. The Create Journal Entries program creates journal entries for each profit recognition record you process. Profit recognition records are created when you run the Build Recognition Data program. They include over billing and under billing information, revenue and cost information, projected amounts, and so on.

You use profit recognition journal entries to create a batch of unposted Account Balances journal entries for the profit recognition information calculated by the Build Recognition Data program.

You must first create your profit recognition journal entries. You can then review them and post them to the Account Balances table.

Note:

After journal entries are created, the profit recognition record is moved to history and cannot be revised. To change the estimated profit, see Section 33.5, "Revising Profit Recognition Journal Entries"

Complete the following tasks:

  • Creating Profit Recognition Journal Entries

  • Reviewing Journal Entries

  • Posting Journal Entries

  • Revising Profit Recognition Journal Entries

See Also:

33.2 Creating Profit Recognition Journal Entries (Update A9.4)

Navigation

From Job Cost (G51), choose Profit Recognition/Job Close

From Profit Recognition/Job Close (G5122), choose Create Journal Entries

You can assign a General Ledger date for journal entries in Processing Options as long as it falls within the current fiscal period/year and does not fall before the Effective Date entered in Create Journal Entries. If you leave this processing option blank, the system will use the Effective Date.

When you run the Create Journal Entries program for revenue performance obligations (RPOs), the system uses the RPO AAIs to determine the accounts to use for the debit and credit journal entries. You set up RPO AAIs in the Revenue Performance Obligation AAI Criteria program (P5104).

See Understanding Revenue Performance Obligation AAIs.

When creating journal entries for RPOs, the system also uses records from the Revenue Performance Obligation Master table (F5102) and the Revenue Performance Obligation Detail table (F5103).

See Understanding Revenue Performance Obligations.

33.3 Reviewing Journal Entries

Navigation

From Job Cost (G51), choose Profit Recognition/Job Close

From Profit Recognition/Job Close (G5122), choose General Journal Review

After you create your profit recognition journal entries, you can review them to determine if they are correct.

To review journal entries

On General Journal Review

Figure 33-1 General Journal Review screen

Description of Figure 33-1 follows
Description of ''Figure 33-1 General Journal Review screen''

  1. Complete one of the following fields:

  • User ID

  • Batch Number

  • Batch Status

33.4 Posting Journal Entries

Navigation

From Job Cost (G51), choose Profit Recognition/Job Close

From Profit Recognition/Job Close (G5122), choose Post General Journal

After you create and review your profit recognition journal entries, run the Post General Journal program to post your profit recognition journal entries to the Account Balances table.

See Also:

33.5 Revising Profit Recognition Journal Entries

After journal entries are created, the profit recognition record is moved to the Profit Recognition History table and cannot be revised. To change the estimated profit, you must post it to the Account Balances table and regenerate the profit recognition record using the Build Recognition Data program for the same period, making any necessary changes. You must then create new journal entries. Journal entries that are created in this way include only the incremental change to the original information.

Follow the procedures below to revise job information:

33.5.1 Revising Job Information Before Journal Entries are Created

  1. Run the Remove a Recognition Version program (P51810).

  2. Make the necessary changes to the job information.

  3. 3. Re-run the Profit Recognition Build program (PP51800).

33.5.2 Revising Job Information After Journal Entries are Created

  1. Post the journal entry to the general ledger. DO NOT delete the journal entry.

  2. Re-run the Profit Recognition Build program (PP51800).

  3. 3. Re-run the Create Journal Entries program (P51444). The journal entries created will include only the incremental changes to the original information.

33.6 Marking Profit Recognition Records as Obsolete (Release A9.4 Update)

Navigation

From Technical Operations (G5131), choose Profit Recognition/Job Close

Use the Obsolete Profit Recognition Records program (P51446) to mark records as obsolete in the Profit Recognition (F5144) and Profit Recognition Account Balance (F51445) tables. The system initially created these records in the F5144 and F5145 tables when you generate profit information using the P51800 program. If you need to rerun P51800 at a different summarization level than it was previously run at, you first have to mark the existing profit recognition records as obsolete.

Note:

You may need to rerun a job at a different summarization level than it was previously run at in order to adhere to the revenue recognition accounting standards.

"Overview to Revenue Recognition" in the JD Edwards World Accounts Receivable Guide

Review the following rules related to the R51446 report:

  • If you run P51446 at a summarization level that is different from the level at which you ran P51800 for the job, the system does not mark any records as obsolete.

  • If you re-run P51800 at a different summarization level after you run P51446 in proof mode, the system displays an error.

  • If you re-run P51800 at a different summarization level after you run P51446 in final mode, the system updates the percent complete, percent final, and earned amounts, but the system does not update amounts that were updated when the R51800 program was initially run at the previous level.

  • If you run P51800 twice (both before and after you run P51446 for a job at the same level (project, job, subledger, or RPO), the system displays an error.

Whether you run P51446 in either proof or final mode, the system creates a report with the job number, summarization level and number of obsolete records. When you run P51446 in final mode, the system also updates the Obsolete Flag in the records in the F5144 table.

When you access either the Group Job Adjustments program (P5144) or the Single Job Adjustments program (P51440) after you run P51446, the system displays only active profit recognition records, not obsolete records. When you run either the Create Journal Entries report (R51444) or the Profit Recognition Job Status report (R51445) after you run the R51446 report, the system does not consider obsolete records.