Oracle Fusion Cloud Revenue Management Integration
The integration with Oracle Fusion Cloud Revenue Management enables you to identify revenue contracts as sales order documents are submitted. In compliance with IFRS 15 and ASC 606, Oracle Revenue Management automatically identifies accounting contracts, performance obligations, and their valuations at inception.
This provides you with insight into the expected consideration from the sale of goods and services to customers as soon as the orders are booked. This integration enables Oracle Revenue Management to process fulfillment data from Oracle Fusion Cloud Order Management and recognize revenue when performance obligations are satisfied.
When a revenue satisfaction event is accounted in Oracle Revenue Management, the associated cost of goods sold is accurately recognized in the same period and the same proportion to the revenue recognized. The revenue and the cost of goods sold information is available for you to perform detailed gross margin analysis.
When you set up integration with Oracle Revenue Management, Oracle Receivables isn't used as the revenue source and, therefore, running the Import Revenue Lines process isn't necessary.
These steps help recognize the cost of goods sold if Oracle Revenue Management is used for revenue recognition.
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After sales orders are transferred from Oracle Order Management to Oracle Revenue Management, contracts are created and revenue satisfaction events are accounted by the Revenue Management Create Accounting process. The process automatically transfers the revenue accounting events to Cost Management.
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Run the Create Cost Accounting Distributions process with the Cost of Goods Sold processor option selected.
The revenue lines are matched to the shipment lines and the accounting distributions are created to recognize the cost of goods sold to the extent of revenue recognition.
The cost of goods sold recognition differs based on the type of sales order. This table summarizes the costs of goods sold recognition for the different sales order types.
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Sales Order Type |
Cost of Goods Sold Recognition |
|---|---|
|
Ship-only sales orders |
Oracle Revenue Management creates the revenue lines as per the ASC606 standard. The cost of goods sold recognition isn't based on the revenue recognition. The cost of goods sold recognition is always at 100% and occurs at sales order issue. |
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Ship and bill sales orders |
Cost of goods sold recognition happens for item or items that are shipped. The percentage of recognition is derived from the invoice revenue lines that are matched to the shipment lines. |
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Bill-only sales orders |
In this case, there are no shipments but the Analyze Product Gross Margin page displays the revenue information. |