How Reclassified Billing Offset Balances are Calculated

Unbilled receivables and deferred revenue aren't automatically cleared during regular invoice and revenue processing. Periodically submit the Create Accounting Transactions process to automatically create reclassification accounting transactions that net the unbilled receivables and deferred revenue balances together into a single balance.

Tip: Create an accounting transaction if you want to manually override the projected reclassified amount or the reversal option on the reclassification accounting transaction for a single contract line. The billing offset balances are reclassified when you save the accounting transaction.

Settings That Affect Reclassified Billing Offset Balances

Select the business unit and accounting period that contain the balances you want to reclassify. If you choose to generate a success report, the Create Accounting Transactions output report will contain detail of the accounting transactions. Additional criteria you can select are:

• Contract type

• Revenue method classification

• Contract number

• Contract line number

How Accounting Transactions for Reclassified Billing Offset Balances Are Calculated

Project Billing uses a formula to calculate the projected amount of an accounting transaction for reclassified billing offset balances. This formula uses the lesser value of either the inception-to-date (ITD) revenue amount or the ITD invoice amount, and the period-to-date (PTD) reclassification amount. The formula is as follows:

Projected Accounting Transaction Amount = Lesser value of ITD Revenue Amount or ITD Invoice Amount - PTD Reclassification Amount

Oracle Fusion Project Billing performs these steps when reclassifying billing offset balances:

1. Create accounting transactions.

   • Set the accounting type to Billing Offset Reclassification.

   • Calculate the reclassification amounts.

2. Create reversal accounting transactions when the reversal option is selected.

   • Set the accounting type to Billing Offset Reclassification Reversal.

   • Change the accounting period to the next period, and set the accounting date to the first day of that period.

   • The reclassification amount is equal to the value of the billing offset reclassification accounting transaction, multiplied by -1.

3. If the contract business unit is configured to transfer revenue to general ledger, Oracle Fusion Project Billing creates accounting events.

Reclassified Billing Offset Balances Example

The following tables illustrate a scenario where existing revenue and invoice accounting entries are reclassified.

Revenue Accounting Entry for Month 1

Entry	Distribution	Account	Debit	Credit
SLA1	RDL1	Unbilled Receivables	100	0
SLA1	RDL1	Revenue	0	100

Invoice Accounting Entry for Month 1

Entry	Receivables Item	Account	Debit	Credit
SLA2	AR1	Accounts Receivable	120	0
SLA2	AR1	Deferred Revenue	0	120

Reclassified Billing Offsets Accounting Entry for Month 1

Entry	Accounting	Account	Debit	Credit
SLA3	RCLS1	Deferred Revenue	100	0
SLA3	RCLS1	Unbilled Receivables	0	100

Reclassified Billing Offsets Reversal Accounting Entry for Month 2

Entry	Accounting	Account	Debit	Credit
SLA4	RCLSR1	Unbilled Receivables	100	0
SLA4	RCLSR1	Deferred Revenue	0	100