How does my revenue policy affect revenue recognition?

If you set up a revenue policy, Receivables assigns revenue contingencies to any transaction or transaction line that violates the policy, and defers revenue on these transactions or transaction lines.

There are three policy areas that can cause the assignment of revenue contingencies:

• Creditworthy customer: If a customer is considered not creditworthy, Receivables assigns a payment-based revenue contingency to the transaction and only recognizes revenue to the extent of payments received.

• Refund policy: If the transaction is associated with a contract that offers a refund period that exceeds the refund policy, Receivables assigns a time-based revenue contingency to the transaction and only recognizes revenue after the refund policy period expires.

• Payment terms: If the transaction has payment terms that exceed the payment terms policy, Receivables assigns a payment-based revenue contingency to the transaction and only recognizes revenue to the extent of payments received.