Revenue Contingency Removal Events

The event-based revenue management process in Receivables manages the recognition of revenue on transactions with revenue contingencies. If a transaction has one or more revenue contingencies, Receivables defers revenue to an unearned revenue account until the contingencies expire.

The extent of the revenue deferral, and the subsequent timing of revenue recognition, depends on the nature of the contingency:

• Time-based contingencies must expire before the contingency can be removed and revenue recognized.

• Payment-based contingencies require payment before the contingency can be removed and revenue recognized.

• Post-billing customer acceptance clauses must expire (implicit acceptance), or be manually accepted (explicit acceptance), before the contingency can be removed and revenue recognized.

• Prior billing customer acceptance clauses require the recording of customer acceptance in the feeder system, or its expiration, before importing into Receivables for invoicing. Customer acceptance or its expiration must occur before the contingency can be removed, and the order can be imported into Receivables for invoicing.

Each contingency that Receivables provides has a corresponding removal event. The removal event determines the action or event necessary to remove the contingency from a transaction or transaction line.

This table lists the revenue contingencies with their corresponding removal events:

Contingency Name	Contingency Removal Event
Cancellation	Contingency expiration date or expiration period
Customer Creditworthiness	Receipt application
Delivery	Proof of delivery
Doubtful Collectibility, due to conditions such as late charges and other fees	Receipt application
Explicit Acceptance	Customer acceptance
Extended Payment Terms	Receipt application
Installation	Customer acceptance
Prior Billing Acceptance	Invoicing
Refund	Contingency expiration date or expiration period