Using the VSOE Feature
The VSOE feature is a feature of NetSuite classic revenue recognition. Classic revenue recognition features are not available in new NetSuite implementations. Classic revenue recognition (also called legacy revenue recognition) is still supported for customers who previously enabled it. NetSuite currently offers the Advanced Revenue Management (Essentials) feature to automate revenue deferral and recognition. For information about the current feature, see Advanced Revenue Management (Essentials) and (Revenue Allocation).
You can use the Vendor-Specific Objective Evidence (VSOE) feature to ensure that your company properly recognizes revenue for products and services sold as part of a bundle. VSOE revenue recognition is commonly used by companies that sell software products and services in multiple-element bundles. VSOE focuses on the fair market value of an item sold individually, as opposed to the assigned sales value of the item sold as part of a multiple-element bundle. You can use the VSOE feature to determine VSOE prices of items and defer the recognition of this revenue.
The VSOE feature is intended for use by United States companies to maintain GAAP compliance with the American Institute of Certified Public Accountants (AICPA) Statement of Position 97-2 (SOP 97-2) and SOP 98-9 (the residual method). For more information on these SOPs, visit www.aicpa.org.
The following topics provide details about using the VSOE feature:
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Understanding VSOE Prices and Allocation summarizes how VSOE works in NetSuite.
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Setting Up the VSOE Feature describes how to enable the VSOE feature, set its preferences, and set up VSOE on an item record.
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Creating VSOE Bundles describes how to predefine the bundles that you sell as item groups or to designate an entire transaction as a bundle.
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Recognizing Revenue for VSOE Bundles describes how revenue for items in a bundle are allocated for a transaction, how to enter VSOE information on a sales order, and how to fulfill and bill VSOE items in a transaction.
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VSOE Revenue Recognition Examples describes scenarios that demonstrate the affect of options such as delivery statuses, deferral settings, and unmatched or incomplete VSOE prices.
Note that the Revenue Recognition feature must first be enabled for VSOE to be available. For information about this feature, see Using Revenue Recognition.