1. Accounting
  2. Revenue and Expense Recognition
  3. Advanced Revenue Management (Essentials) and (Revenue Allocation)
  4. Setup for Advanced Revenue Management (Revenue Allocation)
  5. Fair Value Setup
  6. Creating the Fair Value Price List

Creating the Fair Value Price List

The fair value price list enables you to create different fair value rules for different items and item revenue categories. To create the list, you add fair value price records. The fair values for items are used to allocate revenue in revenue arrangements.

The Fair Value Price permission controls access to Fair Value Price page. This permission belongs to the Lists permission type.

You can edit fair value prices after you add them. Any changes you make apply to new customer performance obligations only. They do not affect existing revenue elements and arrangements.

Fair Value Price record is available in transaction searches in the Allocation Details fields. The results for Fair Value Price record show the internal ID.

Note:

You can import your fair value price list. For more instructions and an example of the file structure, see Fair Value Price CSV Import.

To add a fair value price record:

  1. Go to Revenue > Setup > Fair Value Price Lists > New.

  2. Select an Item or Item Revenue Category from the lists.

    • If you select an Item that belongs to a category, the Item Revenue Category field is automatically populated.

    • If you select an Item Revenue Category, you can leave Item blank. For more information, see Adding Item Revenue Categories.

  3. In Base Fair Value, enter the base fair value for the item. This value is used for range checking.

  4. Select an option from the Currency list. This field is available only when the Multiple Currencies feature is enabled. The fair value for other currencies is derived using the transaction exchange rate.

  5. Select an option from the Default Fair Value Formula list.

    If the Item Revenue Category you select includes a Fair Value Formula, that value is selected by default. To add formulas to the list, click the New button New icon, which looks like a plus sign to the right of the field. For more information, see Adding Fair Value Formulas.

  6. Enter the following optional values as appropriate:

    • Subsidiary – This list is available only on OneWorld accounts.

    • Accounting Book – This list is available only when the Multi-Book Accounting feature is enabled.

    • Source Type – This list enables you to create fair value prices that are specific to the type of revenue source. By default, the fair value price applies to any source that matches the other criteria.

    • Customer:Project – This list enables you to create fair value prices that are specific to a customer or project. By default, the fair value price applies to any customer or project that matches the other criteria.

    • Fair Value Range Checking Policy – This list and its related fields appear only when the Enable Fair Value Range Checking accounting preference is checked. The policy determines the value to use in the allocation ratio by comparing an item’s discounted sales price with its calculated fair value. If the Item Revenue Category you select includes a Fair Value Range Checking Policy, that value is selected by default.

      When you select a Fair Value Range Checking Policy, the following additional fields are required, regardless of the option you select:

      • Low Value Percent – Enter a percent of the base fair value to set the low end of the range. A percent sign is not required. The Low Value is automatically calculated.

      • High Value Percent – Enter a percent of the base fair value to set the high end of the range. A percent sign is not required. The High Value is automatically calculated.

      The options for Fair Value Range Checking Policy are:

      • Boundary – If the discounted sales amount is between the high and low values of the range, it is used as the calculated fair value amount. If it is outside the range, either the high or the low value is used, whichever is closer to the discounted sales amount.

      • Fair Value – If the discounted sales amount is outside the range, the calculated fair value is used as fair value.

      • High – If the discounted sales amount is outside the range, the high value is used.

      • Low – If the discounted sales amount is outside the range, the low value is used.

      Note:

      The calculated fair value for a return element does not follow the Fair Value Range Checking Policy. For more information, see Revenue Allocation for Returns.

    • Units Type – This list is available only when the Multiple Units of Measure feature is enabled.

    • Is VSOE Price? – Check this box to indicate that the fair value is VSOE. If this box is not checked, the fair value is considered an estimate. The value of this field, whether checked or not, is passed to the revenue element. This field is not a dimension for purposes of the fair value lookup.

    • Start Date and End Date – These fields enable you to set up fair value prices for future use. When a revenue arrangement is created, its date is checked against these dates.

      Note:

      When running a prospective merge, if the Change Order Effective Date is outside the date range of the related fair value price records, those fair value price records are not applied.

      Use the following guidelines for these fields:

      • You can leave both dates blank.

      • You can enter a Start Date and leave the End Date blank.

      • If you enter an End Date, you must enter a Start Date.

      • The End Date must be later than the Start Date.

    • Fair Value Dimension – When you add fair value dimensions, they appear in a Fair Value Dimension group below the Primary Information. Each dimension list includes the following values in addition to the dimension values for the account:

      • Any – When you select this value, the fair value price may apply to all items regardless of their dimension value. This is the default. If another fair value price matches the dimension value exactly, that fair value price is used.

      • Unassigned – When you select this value, the fair value price applies only to items that do not have a value selected for the dimension.

      For more information, see Logic for Fair Value Price Selection with Fair Value Dimensions.

  7. Click Save or Save & New.

After you save the fair value price record, you can copy it to create similar fair value prices as needed.

To copy a fair value price:

  1. Go to Revenue > Setup > Fair Value Price Lists.

  2. Click View next to the fair value price you want to copy.

  3. On the Fair Value Price page, from the Actions list, select Make Copy.

    A copy of the fair value price record opens in edit mode.

  4. Make the changes you want for the new fair value price, and click Save.

Related Topics

General Notices