Calculate/Confirm Contract Revenues (tsctm4250m000)

Use this session to calculate and/or confirm contract revenues.

Calculation of contract revenues can be based on one of the following:

  • Number of days per period
  • Cumulative days
  • Earned Revenue Factor (Cost per Period)
  • Earned Revenue Factor (Cumulative Cost)

The method to be used to calculate the revenue for a contract is specified in the contract itself. Contract revenue can be calculated on the whole contract, or per configuration under the contract.

This session also confirms the revenue amount to be recognized. When the contract revenue is in Free status, changes to the amount to be recognized are allowed. Once the contract revenue is confirmed, it means the amount is finalized and is ready to be posted. Therefore, in the Confirmed status you cannot modify any of the attributes of contract revenue.

Field Information

Revenue Recognition Based on
Number of days per period

The basis of revenue recognition per period is by the number of days per fiscal period. The number of days the contract is live in the fiscal period determines the amount that needs to be recognized for that fiscal period. The contract duration in days, based on the start date and end date of the contract, forms the basis of the contract price per day. The following formulas are used:

amount to be recognized = (net contract amount / total days of contract) * number of days	contract or configuration belong to the fiscal	period
net contract amount = (total contract sales amount) * (100 – p)%

Where 'p' is the percentage specified in the Provision field of the contract header. If 'p' is zero, the net contract amount is the current total contract sales amount.

Cumulative days

The number of days elapsed since the last recognition for the contract forms the basis to calculate the amount to be recognized. The creation date of the contract revenue is considered and the fiscal period to which the creation date belongs will be the fiscal period in which the amount will be recognized. The following formulas are used:

amount to be recognized = ((net contract amount / total days of contract * cumulative number of days to date) – cumulative recognized revenue until date)
net contract amount = (total contract sales amount) * (100 – p)%

Where 'p' is the percentage specified in the Provision field of the contract header.

Earned Revenue Factor (Cost per Period)

When from Service Order Control , Call Management or Maintenance Sales Control , the material, labor and other lines are costed, the cost incurred for the contract is transferred to Contract Management and stored against the fiscal period in which the costing occurred. The following formulas are used:

ERF = total contract sales amount/ total estimated costs amount to be recognized = (cost incurred for the period * ERF)
net contract amount = (total contract sales amount) * (100 – p)%
net	configuration amount = (total configuration sales amount) * (100 – p)%
Earned Revenue Factor (Cumulative Cost)

The cost incurred since the last recognition for the contract forms the basis to calculate the amount to be recognized. The creation date of the contract revenue is considered, and the fiscal period to which the creation date belongs, will be the fiscal period in which the amount will be recognized. The following formulas are used:

ERF = total contract sales amount/ total estimated costs amount to be recognized = (lesser of A or B) – cumulative recognized revenue until date

A = cumulative cost incurred to date * ERF

B = net contract amount

net contract amount = (total contract sales amount) * (100 – p)%

If recognition is at the configuration level:

ERF = contract configuration	sales amount / estimated costs for configuration amount to be recognized = (lesser of A or B) – cumulative recognized revenue until date

A = cumulative cost incurred to date * ERF

B = net contract configuration amount

net contract configuration amount = (total contract configuration sales amount) * (100 – p)%
Not Applicable
Rate Date

The date and time used for selecting the active currency rates for calculating the revenue amount in the home currencies. . By default, this field is set to the current date and time.

Note: This field is displayed only if the Use Multiple Functional Currencies check box is selected in the Companies (tcemm1170m000) session.
Calculate Revenue

If this check box is selected, revenue is calculated.

Confirm Revenue

If this check box is selected, revenue is confirmed.

Match Recognized Amount with Invoiced Amount

If this check box is selected, the total recognized amount and the total invoiced amount are equal.

Revenue Amount for the last revenue period = Total Installment - Sum of revenues for all previous periods
Note: This field is displayed only if the Use Multiple Functional Currencies check box is cleared in the Companies (tcemm1170m000) session.
Process Report
Error Report
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