Carve In/Carve Out Adjustment
Carve in/carve out adjustments allocate billing amounts in multiple element arrangements to the individual revenue elements. This adjustment occurs only in those periods that include an invoice for the revenue arrangement. When the sales prices of all revenue elements in an arrangement are the same as their revenue amounts, reclassification skips this step.
The Advanced Revenue Management (Revenue Allocation) feature must be enabled as a prerequisite for the carve in/carve out adjustment. To enable this feature, see Enabling the Advanced Revenue Management (Revenue Allocation) Feature.
Allocation for billing amounts uses the same carve-out and carve-in ratios as the revenue arrangement. For information about carving in revenue arrangements, see Fair Value and Allocation.
The general ledger impact of this adjustment to deferred revenue for positive elements is:
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For carve out – Debit deferred revenue account
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For carve in – Credit deferred revenue account
Revenue elements with Allocation Type set to Exclude do not participate in this step of reclassification. For more information, see Revenue Elements Excluded from Reclassification.
The following topics include examples of the carve in/carve out adjustment:
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Carve In/Carve Out Adjustment Example Retrospective Merge Before Billing
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Carve In/Carve Out Adjustment Example Prospective Merge After Billing