Revenue Recognition Plans

Revenue recognition plans lists events that define when revenue is recognized for each contract line that is linked to that revenue recognition plan. You associate events with either percentages or amounts. The percentage or amount reflects how much of the contract line's negotiated amount is recognized upon a certain date, milestone, or user-initiated action.

The Generate process in PeopleSoft Proposal Management fills in the appropriate fields on the Rev Rec Plan (revenue recognition plan) page in PeopleSoft Contracts based on the defaults that you set up for the PeopleSoft Contracts business unit and on information contained in the proposal. When you change the contract status to Active, the system automatically changes the status of the revenue recognition plan to Ready.

Data from PeopleSoft Contracts drives the creation of accounting entries for fixed-amount contract lines. For rate-based contract lines, data from PeopleSoft Contracts and PeopleSoft Project Costing drives the creation of accounting entries. In both cases, PeopleSoft Contracts creates accounting entries to send to PeopleSoft General Ledger and creates the bill lines that the system sends to PeopleSoft Billing.

PeopleSoft Contracts generates the revenue entries, crediting revenue and debiting contract asset, and then sends these entries to PeopleSoft General Ledger. PeopleSoft Billing generates the offsetting entries, crediting contract asset and debiting PeopleSoft Receivables.

Note:

The system creates revenue recognition plans only if a revenue plan template is assigned to the product ID used on the contract line.