Understanding the Revenue Recognition Program (P03B116)
The Revenue Recognition program (P03B116) enables you to recognize revenue and cost of goods sold (COGS) for an individual invoice or multiple invoices. You can recognize revenue and COGS on both domestic and foreign invoices, and you can also recognize revenue for credit memos.
When not in summarized mode, you can recognize less, recognize more, or recognize all revenue for invoices that originate from the Accounts Receivable, Sales Order Management, Contract and Service Billing, or Real Estate Management systems. You can recognize less, recognize more, or recognize all of the COGS for a sales order invoice that originates from the Sales Order Management system.
Optionally, you can use the following methods in summarized mode to recognize revenue:
Use blind recognition to recognize revenue and COGS for the entire invoice. During blind recognition, you enter a G/L date and reason code for all of the invoices that you select.
Use guided recognition to review the invoice prior to revenue recognition. During guided recognition, you enter a G/L date and reason code for each invoice you select.
(Release 9.2 Additional Update) Use a schedule to determine when portions of the invoice are eligible for revenue recognition. You can automatically split the amount of a pay item across a number of periods, or you can manually schedule portions of the G/L distribution line for recognition, until the pay item is fully recognized.
The system uses the following tables to store information about each invoice in the revenue recognition process:
Customer Ledger Tag table (F03B11T)
When you enter an invoice, the system updates the Revenue Recognition Inclusion column in the F03B11T table with a Y to identify those invoices that are sent to the revenue recognition process. Otherwise, the system displays an N in this column.
Revenue Recognition Schedule table (F03B115)
The system stores each schedule record when you use a schedule to recognize revenue.
Revenue Recognition Invoice table (F03B116)
The system stores all revenue information related to the domestic or foreign revenue recognition amounts and amounts not recognized, the revenue recognition status, the revenue recognition reason code, the revenue recognition date, and the eligible for recognition date.
Revenue Recognition G/L Information table (F03B117)
The system stores all revenue and COGS information related to the domestic or foreign revenue recognition amounts and amounts not recognized, the revenue recognition reason code, and the revenue recognition date. The system also stores the G/L distribution information for the invoice.
Account Ledger table (F0911)
Based on the values in the F03B117 table, the system creates entries in the Performance Liability Account (PLA), PLA adjustment account, Cost of Goods Sold Performance Liability Account (COGS PLA), and the COGS PLA adjustment account in the F0911 table. The system also updates the F0911 table to indicate whether the record is related to an inventory transaction or revenue recognition transaction.
Revenue Recognition Invoice Audit table (F03B118)
When information is updated in the F03B116 table, the system also includes before images of the records to be updated in the F03B118 table to provide an audit trail of the invoice activity.
Revenue Recognition G/L Information Audit table (F03B119)
When information is updated in the F03B117 table, the system also includes before images of the records to be updated in the F03B119 table to provide an audit trail of the G/L distribution activity.