Defining a Deferred Revenue Schedule

You can create a revenue recognition schedule for revenue that cannot be recognized on the initial product invoice. A deferred revenue schedule indicates the amount of revenue that can be recognized at specified intervals during the contract period. Deferred revenue schedules might be used at the contract level if there are excessive service discounts or payment terms. At the product level, deferred revenue schedules can accommodate backlogs in paperwork or other miscellaneous issues. Deferred revenue schedules can be created for only unreleased product contracts. You can define a schedule for an individual product, or for an entire product contract.

To define a deferred revenue schedule

  1. Access Product Deferred Revenue Schedule (BR53.1).
  2. Use the following guidelines to enter field values:
    Contract

    Type or select the product contract for which you are defining a deferred revenue schedule.

    Product

    Type or select the product for which you are creating a deferred revenue schedule. If you are creating a schedule for an entire contract, leave this field blank. This field is required if Apply to All = N.

    Version

    If you selected a product, type or select the version of the product for which you are creating a deferred revenue schedule.

    Apply to All

    Select whether or not the schedule applies to all products in a contract. This applies only to those products in a contract that have their deferred revenue flags set to Yes.

    If you are defining a schedule at the contract level, this should be Yes. If you are defining a schedule for a specific product, this should be No.

    Once a schedule is created with Apply to All=Y, this field cannot be changed. If you need to make subsequent changes to the deferred revenue schedule for one of the products in a contract, you must do so at the product detail level.

    Product Deferred Total

    Type the deferred revenue amount for the product. The amount that defaults to the detail lines below is calculated by spreading this amount among all the product detail lines in the same proportion as the net product price to the net contract price.

    Note: Detail lines with Def Rev = X (not shipped) will automatically have the deferred amount calculated to equal the net product revenue.

    The total of all deferred revenue lines must equal the amount entered in Product Deferred Total.

    Note: If a deferred amount is entered for both the contract and a product, the product level amount is processed first.
  3. Define the deferred revenue schedule by adding the appropriate number of lines for the product or product contract.
    Note: If you want to create a deferred revenue schedule that amortizes equally over a set number of periods and is the same for each product in the product contract, click the Auto Scheduler button to access Product Deferred Revenue Auto Scheduler (BR53.2). This form automatically creates a deferred revenue schedule based on the starting date, amount, and number of periods entered (term).
  4. To manually create a schedule for each line, use the following guidelines to enter field values:
    Date

    Type the date on which the product will be available for revenue processing.

    Amt to Recognize

    Type the revenue amount to recognize for this product on the date specified in Date. You must enter either an amount in this field, or a percentage in the Pct To Rec field.

    The amount that defaults from the Product Deferred Total field is calculated by spreading the total contract's deferred amount among all the product detail lines in the same proportion as the net product price to the net contract price.

    You can modify this value as long as the product contract is not released. The total of all deferred revenue lines must equal the amount entered in Product Deferred Total.

    Note:  If a deferred amount is entered for both the contract and a product, the product level amount is processed first.
    Pct To Rec (Percent to Recognize)

    Type the percent of total deferred revenue to recognize for this product on the date specified in Date. You must enter either a percent here or an amount in Amt To Recognize. Each detail line percent and the total of all detail lines cannot be greater than 100%.

    Status

    Select the status of this line of the deferred revenue schedule. The status is used in conjunction with Date to determine if revenue can be recognized for this product. Valid values are:

    • 1=To Process (default)

    • 2=Processed

    • 3=Anticipated Hold

    • 4=Tentative Hold

    You can not manually change the status to 2 (Processed). This is done by Product Revenue Calculation (BR153).

    Post Dt (Posting Date)

    Displays the date that the deferred revenue schedule detail line was posted as revenue.

  5. Select the Add form action to add the revenue schedule lines.

Followup Tasks

  • Release the product contract on Product Contract (BR51.1) to make amounts available for revenue recognition. Note that when a product contract is released, you can not modify the deferred revenue schedule. You can unrelease the contract to make changes if necessary.

    In order to release a product contract, all items with deferred revenue must have a revenue schedules that add up to 100% or the total deferred revenue amount for the product.