How Revenue is Calculated

Oracle Fusion Cloud Project Billing generates revenue based on the transactions that you charge to your contracts and their associated projects.

You can configure your contracts to recognize revenue based on your company policies. Submit the Generate Revenue process when you are ready to recognize revenue for a contract.

Settings That Affect Revenue Amounts

Generate revenue for a single contract or range of contracts in a business unit. The following table describes some key parameters of the Generate Revenue process.

Parameter	Description
Billing Type	Values are: External Intercompany Interproject
Multicurrency Values Only	Select Yes to only generate revenue for contracts with a different contract currency than the ledger currency of the contract business unit.
Pending Adjustments Only	Select Yes to recalculate and create revenue only for fully or partially recognized transactions in Adjustment Pending status. This is useful when adjusting revenue for actual versus estimated burden schedule rates.
Generate Ineligible Data	Values are: None. Ineligible data is not included on the Generate Revenue process output report. Summary. A summary count of ineligible data only is included on the Generate Revenue process output report. Detail. A summary count and a list of ineligible objects is included on the Generate Revenue process output report.

For contract types with billing controls enabled, transactions must pass all matching billing controls to be recognized for revenue. If a transaction does not find a matching billing control, the transaction is considered ineligible and revenue is not recognized. If a transaction matches one or more billing controls, but does not pass all of them, revenue is not recognized and a billing transaction exception is created.

The revenue plan contains detailed instructions for recognizing revenue for all contract lines associated with that revenue plan. It also points to a revenue method, which determines the schedule type to be used to derive rates and contains the assigned billing extensions that are copied to the revenue plan. The revenue method in turn points to a revenue method classification that determines the overall approach to recognizing revenue.

How Revenue Is Calculated

The Generate Revenue process performs the steps in the following table to recognize contract revenue.

Step in the Process	Description
Identify eligible transactions	Identifies the transactions eligible for revenue recognition.
Adjust revenue	Adjusts revenue for transactions in the Adjustment Pending revenue status.
Map expenditure items	Maps expenditure items from associated projects and tasks to contract lines.
Create revenue events	Creates revenue events for billing extensions.
Calculate eligible revenue	Calculates potential and eligible revenue based on contract terms.
Check billing controls	Verifies that the transactions pass all matching billing controls.
Calculate revenue amount to recognize	Calculates qualified revenue and revenue for recognition.
Create billing transactions	Creates billing transactions and billing transaction exceptions.
Create revenue distributions	Creates revenue distributions for recognized revenue.
Update transactions	Updates revenue status on billing transactions and transactions.
Summarize revenue	Calls the subprocess to summarize revenue by contract and project.
Call accounting	Calls the process to create accounting events. This is an optional step.