1. Using Revenue Management
  2. Devolve Performance Obligations Associated with Revenue Contracts

Devolve Performance Obligations Associated with Revenue Contracts

You can devolve a performance obligation into a series of performance obligations over time.

This is useful for situations in which you want to limit your contract liability to one month (period) at a time on your books, for example, with service-based revenue contract lines. In this case, you can devolve a performance obligation into a series of performance obligations over time.

To use this feature set the Devolve Performance Obligation option to Yes on the Edit Performance Obligation Identification Rule page or the Edit Implied Performance Obligation Template page. When you enable this option, the application:

  • Automatically devolves a performance obligation into a series of performance obligations based on your setup on the Manage Performance Obligation Identification Rules page.

  • Automatically devolves implied performance obligations into a series of performance obligations based on setup in the Manage Implied Performance Obligation Template page.

  • Devolves performance obligations by the accounting period defined in General Ledger.

  • Displays the automatically devolved performance obligations on the Performance Obligations tab in the Edit Customer Contract page.

  • Displays the logically split obligations for each accounting period along with the performance obligation amount, allocation amount, revenue recognized amount, and initial performance amount on the Performance Obligations tab in the Edit Customer Contract page.

  • Creates the initial performance event for each obligation in the performance obligation series with the current date as the first day of the accounting period.

  • Uses the Daily Rate, Partial Periods rule to calculate the amounts displayed on the Series subtab.

  • Recalculates performance obligation series when contracts are revised or when products are returned.

After devolving your performance obligations, you can review the newly devolved performance obligations on the Performance Obligations tab in the Edit Customer Contract page. The devolved performance obligations appear in the Series subtab in the Details section.