Considerations for Changing a Revenue Method

The following scenarios describe the outcome of changing the revenue method on a revenue plan that's linked to multiple contract lines after revenue distributions are created.

In this example, the transactions were created over a two month period. Revenue was recognized for some transactions, some transactions weren't processed, and some transactions are on revenue hold. The revenue method on the revenue plan was changed, with a date to make the change retroactive after the end of the first month.

Note: The changes take place after the contract amendment is approved.

As Incurred to Amount Based

Revenue distributions are reversed for expenditure items previously recognized for revenue with transaction dates in the second month. These expenditure items aren't recognized for revenue again.

Amount Based to As Incurred

Revenue distributions for manual events with event completion dates in the second month aren't reversed. Manual events can be entered and recognized for revenue regardless of the revenue method classification. If the event is no longer applicable, change the event amount to zero or place it on permanent revenue hold.

Expenditure items are selected for as-incurred revenue recognition based on the revenue method classification you select when generating revenue.

As Incurred to Percent Complete

Revenue distributions are reversed for expenditure items previously recognized for revenue with transaction dates in the second month.

Oracle Fusion Project Billing creates automatic events for revenue recognition starting in the second month. The percent complete billing extension calculates the event amounts.

Percent Complete to As Incurred

Revenue distributions that were already created from events using the percent complete billing extension aren't affected. Expenditure items are selected for as-incurred revenue recognition, based on the revenue method classification you select when generating revenue.

As Incurred to Percent Spent

Revenue distributions are reversed for expenditure items previously recognized for revenue with transaction dates in the second month.

Oracle Fusion Project Billing creates automatic events for revenue recognition starting in the second month. The percent spent billing extension calculates the event amounts.

Percent Spent to As Incurred

Revenue distributions that were created from events using the percent spent billing extension aren't affected. Expenditure items are selected for as-incurred revenue recognition, based on the revenue method classification you select when generating revenue.

As Incurred and As Billed

When you change the revenue method from as incurred to as billed, revenue distributions are reversed for expenditure items previously recognized for revenue with transactions dates in the second month. Revenue is recognized again in the invoice amount after the expenditure items are invoiced.

Note: Unrecognized expenditure items won't be eligible for revenue recognition until they're invoiced and accepted by Oracle Fusion Receivables.

When you change the revenue method from as billed to as incurred, revenue distributions are reversed for expenditure items previously recognized for revenue with transaction dates in the second month. Revenue is recalculated for these and all other unrecognized expenditure items using the shared schedule and rate information in the bill plan, and new revenue distributions are created.