Advanced Revenue Management (Revenue Allocation)

The Advanced Revenue Management (Revenue Allocation) feature must enabled as a prerequisite for revenue allocation. For more information, see Enabling the Advanced Revenue Management (Revenue Allocation) Feature.

When you have multi-element sales, the sales prices of the elements may not be the same as their fair value. The sum of the fair value amounts also may not equal the total sales price. Revenue allocation distributes the revenue from a sale across its elements in proportion to their calculated fair value amounts.

The Allocation Type of the item usually determines the initial Allocation Type for the revenue element. If you use the Rule-Based Recognition Treatment feature, you can create a rule to use a different value for the revenue element. For information, see Rule-Based Recognition Treatment.

The following options are available for Allocation Type:

Normal – Revenue allocation for the item follows the fair value price list. This is the default value.
Exclude – The item is excluded from revenue allocation. The item discounted sales amount is the revenue amount.
Software – The item is software. Revenue allocation follows the fair value price list. If the fair value prices for any of items in the allocation are estimates rather than VSOE, the system recalculates allocation using the residual method.

The following topics provide details about revenue allocation when you use the Advanced Revenue Management (Revenue Allocation) feature:

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