Examples of Migration Updates to Revenue Plans
When revenue has been recognized for a revenue plan, the current plan is updated and a new revenue plan may also be created. A new plan is created when the revenue recognition rule or value of the Create Revenue Plans On on the item has changed. The amounts of any unrecognized lines in the original plan change to 0.
If an actual revenue plan has no recognized revenue, migration updates the current plan and does not create a new plan. If you updated your revenue arrangements and plans and then created revenue recognition and reclassification journal entries, this is unlikely to happen.
The following examples show both cases. The accounts in the examples are the revenue recognition accounts.
Plan with Recognized Revenue
Values prior to migration:
|
Total Revenue |
100 |
|
Revenue Recognition Rule |
3 month prorate first & last |
|
Create Revenue Plans On |
Revenue Arrangement Creation |
|
Term |
3 months |
|
Rev Rec Start Date |
May 21 |
Revenue recognition plan before migration:
|
|
May |
June |
July |
August |
Total |
|---|---|---|---|---|---|
|
Amount |
posted 11.96 |
33.15 |
33.15 |
21.74 |
100 |
|
Account |
Revenue |
Revenue |
Revenue |
Revenue |
Revenue |
Reconfigured values:
|
Revenue Recognition Rule |
3 month billing prorate first & last Rev Rec Start Date Source Type is Event Date |
|
Create Revenue Plans On |
Billing |
|
Invoice Date |
June 1 |
|
Cut-off Period |
May |
|
Revenue Migration Adjustment Account |
Retained Earnings |
Because the revenue recognition rule and value for Create Revenue Plans On changed, when the original plan is updated, it is zeroed out and a new plan is created. The updated plan has an amount planned for May to reverse the previously recognized amount. Because May was closed in preparation for the migration, this updated original plan needs to be recognized in June.
|
|
|
May |
June |
July |
August |
Total |
|---|---|---|---|---|---|---|
|
Recognized before migration |
Amount |
11.96 |
|
|
|
11.96 |
|
Account |
Revenue |
|
|
|
Revenue |
|
|
Planned after migration |
Amount |
–11.96 |
0 |
0 |
0 |
–11.96 |
|
|
Account |
Retained Earnings |
Revenue |
Revenue |
Revenue |
Retained Earnings/Revenue |
|
Total |
Amount |
0 |
0 |
0 |
0 |
0 |
The trigger for creation of the new plan is the billing event. The invoice is dated June 1. The new revenue recognition plan has a Rev Rec Start Date of June 1 and these values:
|
|
June |
July |
August |
Total |
|---|---|---|---|---|
|
Amount |
33.33 |
33.33 |
33.34 |
100 |
|
Account |
Revenue |
Revenue |
Revenue |
|
Plan with No Recognized Revenue
Values prior to migration:
|
Total Revenue |
100 |
|
Term |
4 months |
|
Rev Rec Start Date |
May 1 |
Revenue recognition plan before migration:
|
|
May |
June |
July |
August |
Total |
|---|---|---|---|---|---|
|
Amount |
25 |
25 |
25 |
25 |
100 |
|
Account |
Revenue |
Revenue |
Revenue |
Revenue |
Revenue |
Reconfigured values:
|
Term |
5 months |
|
Cut-off Period |
May |
|
Revenue Migration Adjustment Account |
Retained Earnings |
Revenue recognition plan updated by migration:
|
|
May |
June |
July |
August |
September |
Total |
|---|---|---|---|---|---|---|
|
Amount |
25 |
20 |
20 |
20 |
20 |
105 |
|
Account |
Revenue |
Revenue |
|
Revenue |
Revenue |
|
|
Amount |
-5 |
|
|
|
|
-5 |
|
Account |
Retained Earnings |
|
|
|
|
|
|
Total |
20 |
20 |
20 |
20 |
20 |
100 |