Prospective Accounting for Price Adjustments

 You can enable prospective accounting for price adjustments made after subscription is active. Oracle Subscription Management now supports prospective accounting for charge adjustments added after subscription activation. When you add price adjustments to active subscription products, you can control how revenue is handled for those post-activation changes by using revenue accounting options and revenue period effectivity settings. This enhancement is designed to address the added complexity that arises when price adjustments are entered in active status and revenue already allocated or recognized in prior periods must be segregated correctly.

Subscription profile now has a new section under Revenue Management to capture the revenue accounting option for Price Adjustments.

Subscription Profile: Revenue Management: Price Adjustments

Subscription Profile: Revenue Management: Price Adjustments

This feature helps you manage post-activation price changes more accurately by aligning revenue treatment with the timing and scope of the adjustment. It improves revenue accounting accuracy for active subscriptions, supports prospective treatment of charge adjustments without disturbing prior recognized revenue, and gives you more control over how revenue is recalculated when bill lines are split or adjustments overlap. It also supports more flexible handling of post-activation pricing scenarios than legacy retrospective-only behavior.

Steps to enable and configure

You don't need to do anything to enable this feature.

Tips and considerations

  1. Prospective accounting for charge adjustments after activation applies only in specific scenarios. The feature is available only when prospective accounting is enabled, the subscription product is eligible for prospective accounting, and the adjustment is on a recurring non-usage charge.
  2. New revenue options are exposed only after activation and only for eligible adjustments. Revenue accounting option and revenue period effectivity default from Subscription Profile settings for Price Adjustments, and the first post-activation price adjustment establishes the baseline behavior for later adjustments.
  3. When renewals or amendments copy price adjustments, the revenue attributes aren’t copied because the first revenue-line version is neither prospective nor retrospective.
  4. If Basic Pricing Term is enabled and bill lines aren’t generated for the full subscription term, post-activation price adjustments aren’t available. Pricing-term scenarios also constrain revenue effectivity to the relevant pricing-term scope.
  5. Date effective price adjustments can be added before and after activation when prospective accounting is enabled.
  6. The new revenue attributes are not defaulted to Subscription header and product from the subscription profile.
  7. Only the revenue effectivity Current and Future Periods is supported.

Key resources

See the whitepaper on Prospective Accounting in MOS to know about prospective accounting.