Contract Interim Results (tpctm0180m000)

Use this session to define the revenue recognition settings at a contract and/ or the contract line (CLIN) level. The settings defined are applicable for all the contract lines linked to the contract in case of no exceptions.

Note: 

The fields in the Revenue Recognition and the Cost of Sales group boxes are enabled only if the Revenue Recognition by field is set to Contract or Contract Line.

LN allows you to override the revenue recognition settings on the contract level when you define the revenue recognition settings at the contract line level.

Infor LN validates the interim result setting only if the project is linked to multiple contract line with different contract types.

Field Information

Contract

The code of the contract for which the revenue recognition settings must be defined.

Contract Line

The contract line number.

Scenario

The setting for the scenario, based on which the contract interim result is generated. You can use this to generate alternate data of the interim results. You can also compare the result of this scenario with the primary result for financial reporting purposes such as SAB 74 (accounting standard).

Allowed values

Alternate
Not Applicable
Primary
Description

The description of the primary or alternate results.

Revenue Recognition by

The level at which revenue must be recognized.

Allowed values

Contract

The revenue recognition settings are defined at the contract level.

Contract Line

The revenue recognition settings are defined at the contract line level.

Project

The revenue recognition settings are defined at the project level.

Revenue Recognition
Method

The method used for revenue recognition.

Allowed values

Completed Project
Percentage of Completion
Milestones
Reimbursement
Earned Revenue Factor
Actual Revenues
Not Applicable
Calculation Method

The method to calculate the percentage of the work completed.

Allowed values

Cost to Cost

The percentage of completion is the cost incurred on the project divided by the estimated total cost of the project. If the cost control level, Project is not used for this method, the Actual Cost and the Forecast Cost cannot be used to calculate the percentage of completion.

Hours Progress

The percentage of completion is the number of actual hours spent on the project divided by the total hours forecasted for the completion of the project. If the cost control level, Project/Cost Type is used, the Excl. Commit Actual and Forecast Quantity fields are available for the cost type Labor and can be used to calculate the percentage of completion.

Note: If the Forecast Quantity is not defined, you can use the Budget Quantity and the Excl. Commit Actual to calculate the percentage of completion.
Manual Entry

The percentage of completion is entered manually. You must specify the percentage in which the estimate of the completed work is expressed, manually.

Note: 

Default value is Cost to Cost.

This field is enabled only if the Method field is set to Percentage of Completion.

To calculate the revenue to be recognized based on the Percentage of Completion method:

  • In the Project Accounting Parameters (tpppc0100s000) session, the value specified in the Leading Forecast Method field is used to calculate the Percentage of Completion.
  • You must run the Build Actual Cost Control (tpppc4803m000) session to retrieve the latest aggregated cost for the project, based on which the percentage of completion is calculated.
Percentage of Completion

The percentage of completion of the project. Based on this method, the expected expenses and revenues are distributed across specific periods, of the contract, when revenues are received.

Note: 

You can specify this value manually or click Calculate to retrieve the calculated value. Infor LN calculates this percentage using the following formula:

Percentage of Completion = Costs (incurred) / Estimate at Completion cost

Infor LN calculates the revenue to be recognized using the following formula:

Revenue recognized = Percentage Complete * Contract Amount

Earned Revenue Factor

Specify the earned revenue factor. To calculate the revenue to be recognized, you must multiply this value with the costs incurred for the current period.

Note: 

This field is enabled only if the Method field is set to Earned Revenue Factor.

You can specify this value manually or click Calculate to retrieve the calculated value. Infor LN calculates the earned revenue factor (ERF) using the following formula:

Earned Revenue Factor = Project Contract Amount/ Total Budgeted Costs

Infor LN calculates the revenue to be recognized using the following formula:

Revenue Recognized = Costs (incurred) * Earned Revenue Factor
Note: You can calculate the earned revenue factor (ERF) only for projects with the status Active or Finished.
Base for Earned Revenue Factor

The method based on which the Earned Revenue Factor Method is calculated.

Allowed values

Estimate at Completion
Budget
Manual Entry
Not Applicable
Revenue Recognition Threshold

The minimum percentage of completion that must be defined before the revenue is recognized.

Note: 

The revenue can be recognized when the interim results are generated using the Generate Interim Results (tpppc3250m000) session, only if the percentage of completion is greater than this value. However, if the Profit Percentage is negative, the revenue is recognized even if the minimum percentage of completion is not met.

Default value is 0.

Revenue Recognition Limit

Specify the maximum limit (percentage) on the revenue to be recognized.

Note: 

This value is applicable for all the revenue recognition methods other than Completed Project. The maximum revenue to be recognized is calculated using the following formula:

Maximum Revenue to be Recognized = Revenue Recognition Limit (percentage) * Contract Amount

Default value is 100.

Currency

The code of the currency in which the revenue to be recognized is expressed.

Cost of Sales
Method

The method to calculate the cost of goods sold (COGS).

Allowed values

Completed Project
Profit Percentage
Reimbursement
Percentage of Completion
Not Applicable
Note: This field is enabled only if the Method field is set to Percentage of Completion or Actual Revenues.

When COGS is set to Percentage of Completion:

COGS = Percentage Completed * Estimate at Completion; Revenue = Percentage Complete * Contract Amount

When calculating the COGS, Infor LN also considers the loss component. In which case:

COGS = Revenue + Loss; and Loss = Contract Amount - EAC (estimate-at-completion)
Percentage of Completion

The percentage of completion of the project. You must multiply this percentage with the estimate at completion (EAC) to calculate the cost to be recognized.

Note: 

Infor LN defaults this value with the percentage completed calculated for the project when the Method field is set to Percentage of Completion.

You cannot use this value to calculate the cost to be recognized if the Method field is set to Profit Percentage.

Profit Percentage

Specify the profit percentage. The COGS is calculated based on this percentage and revenue recognized.

Note: 

This field is enabled only if the Method field is set to Profit Percentage.

You can specify this value manually or click Calculate Profit Percentage to retrieve the calculated value. Infor LN calculates this percentage using the following formulae:

Profit Percentage = 100 x (1- Budget/Contract amount)

or

Profit Percentage = 100 x {1- (Estimate at Completion/Contract Amount)}

The COGS is calculated using the following formula:

COGS = Total Revenue Recognized to date x (1 - Profit Percentage)

When COGS is determined at the project level, Infor LN allows you to select either Budget or Estimate at Completion as the base to calculate the profit percentage.