Accounting Distributions
The accounting distribution entries made by PeopleSoft Contracts depend upon several factors. This table shows the type of accounting distribution setup that is required based upon the product that is managing revenue, whether or not you are booking entries to contract liability, and the contract line's pricing type:
|
Product That Manages Revenue |
Contract Liability Enabled |
Contract Line Pricing Type |
Required Distribution Types |
|---|---|---|---|
|
PeopleSoft Contracts |
Yes |
Amount, Percent |
Revenue, contract liability, contract asset |
|
PeopleSoft Contracts |
No |
Amount, Percent |
Revenue, Contract Asset |
|
PeopleSoft Contracts |
No |
Rate |
Contract Asset (only if assigned to a value-based billing plan) |
|
PeopleSoft Billing |
No |
Amount, Percent, Recurring |
Revenue |
|
PeopleSoft Billing |
Yes |
Recurring |
Revenue, contract liability |
Note: PeopleSoft Billing can manage revenue for fixed-amount and recurring contract lines only. When PeopleSoft Billing manages revenue for fixed-amount contract lines, PeopleSoft Contracts does not support booking to contract liability. Billing Manages Revenue is the only available revenue recognition method for recurring contract lines.
This section discusses:
Fixed-amount contract lines.
Rate-based contract lines.
Recurring contract lines.
A fixed-amount contract line is a product or service for which you charge a defined amount. Fixed-amount contract lines have a price type of Amount or Percent. When PeopleSoft Contracts manages revenue for fixed-amount contract lines, you associate the contract line with a revenue plan that has a revenue recognition method of Apportionment, Milestone, or % Complete. When PeopleSoft Billing manages revenue for a fixed-amount contract line, you do not associate the contract line with a revenue plan. Regardless of which product manages revenue, you must associate the fixed-amount contract line with account distribution information either using distribution sets and distribution codes or by manually entering PeopleSoft General Ledger ChartField information.
A rate-based contract line is a transaction-based product or service for which you have set up one or more projects in PeopleSoft Project Costing. The revenue and Contract Asset accounting distributions for these types of service products are stored in the accounting rules. As work is performed against a project, PeopleSoft Project Costing receives transactional information relating to that work. PeopleSoft Project Costing prices the transactions based on the rate plan or rate set. PeopleSoft Contracts picks up the PeopleSoft Project Costing billable transactions and sends them to PeopleSoft Billing.
Upon sending the billable transactions to PeopleSoft Billing, the PeopleSoft Contracts process also sends the Contract Asset accounting distribution. For rate-based lines assigned to as-incurred billing plans, the Contract Asset is pulled from the accounting rules. For rate-based lines assigned to value-based billing plans, the Contract Asset is pulled from the accounting distribution page in PeopleSoft Contracts (CA_DETAIL_UAR).
Additionally, the rate-based revenue process (Accounting Rules Engine) picks up eligible Projects PROJ_RESOURCE rows and sends them to PeopleSoft General Ledger. The revenue and Contract Asset accounting distributions are defined to each PeopleSoft Project Costing transaction eligible for revenue recognition based on the accounting rules defined.
A recurring contract line is a product or service for which you charge recurring bills. With a revenue recognition method of Billing Manages Revenue, for a recurring contract line, you do not associate the contract line with a revenue plan. However, you must associate the recurring contract line with account distribution information using distribution sets and distribution codes or by manually entering PeopleSoft General Ledger ChartField information on the Accounting Distribution page.
When setting up billing for recurring contract lines, you must select the recurring billing method. There are no billing plan lines or events associated with a recurring billing plan. You define the start date and schedule, and each time the plan is eligible for billing, the system generates the appropriate invoice lines and sends them to PeopleSoft Billing along with the accounting distribution.