1. Using Revenue Management
  2. Classify Contract Revisions

Classify Contract Revisions

The ASC 606 and IFRS 15 accounting standards disclosure requirements require entities to distinguish between revisions to contract data that reflect estimation accounting and those that reflect true contract modifications.

Revision Intent Type

The two categories of revision are as follows:

Revision Intent Type

Description

Variable Consideration Estimation Correction (Estimate Correction)

Estimate corrections occur when an organization originally estimates contract terms at the inception of the contract, and later the organization needs to adjust the initial estimate.

Contract Modification

Contract modifications occur when an organization and their customer agree to a change in the scope or price of the contract. For example, the customer may want to purchase additional goods or services that weren't originally agreed upon.

In support of the reporting requirement, use the revision intent type to indicate the classification of the revision by:

  • Including the revision intent type value in the Revenue Basis Data Import file-based data import worksheet to capture the intent from your upstream source systems.

  • Specifying a default revision intent type based on the source type on the Manage Source Document Types page to automatically assign when processing a contract revision.

  • Manually assigning the revision intent type using the Manage Customer Contracts page.

Assign the Revision Intent Type in Upstream Source Applications

If your upstream source application enables you to assign and provide the revision classification for contract revision lines, you can use the Revision Intent attribute in the Revenue Basis Data Import FBDI worksheet to capture the revision intent type. Use the Correct Source Document Line Errors integrated workbook to correct any errors.

Assign the Revision Intent Type Based on the Source Document Type

If you're not able to assign a revision classification in the upstream source applications, you can systematically assign a default revision classification to the revision line based on the source of the line in the Manage Source Document Types page.

Revenue Management includes predefined revision intent values for the following source document types:

Source Document Name

Predefined Default Revision Intent Type

CPQ Cloud

Contract Modification

DOO Sales Order

Contract Modification

Oracle Fusion Contracts

Contract Modification

Oracle Fusion Receivables

Contract Modification

Project Billing

Estimate Correction

Receivables

Contract Modification

Sales Orders

Contract Modification

Update the Revision Intent Type

You can update the revision intent type on the Manage Customer Contracts page, regardless of whether the revision intent type was originally assigned:

  • By the source application.

  • By default based on the source document type.