Generating Recognition Schedules after Revenue or Cost Has Been Recognized
When you generate recognition schedules after revenue or cost has been recognized:
- Recognition schedule lines with the status "Complete" are not updated.
- Revenue Management uses the Recognized Revenue and Recognized Cost amounts on a source record's "Complete" recognition schedule lines to calculate the revenue and cost recognized to date, rather than deriving them from the source record. This is to ensure data integrity.
You might need to edit a source record's Total Revenue, Total Cost, Start Date or End Date after some of its recognition schedule lines have been recognized. If this happens, the next time you generate recognition schedules the source record's
The following examples illustrate how recognition schedule lines are recalculated when a source record's value or duration changes.
If you have a source record with a total revenue of 12000 using an Equal Split - Months recognition template over one calendar year (12 periods), the monthly revenue amount is calculated using the formula: Total Revenue / Number of Periods
This means that recognition schedule lines are generated for this source record as follows:
Period |
Revenue |
---|---|
2022/001 | 1000 |
2022/002 | 1000 |
2022/003 | 1000 |
2022/004 | 1000 |
2022/005 | 1000 |
2022/006 | 1000 |
2022/007 | 1000 |
2022/008 | 1000 |
2022/009 | 1000 |
2022/010 | 1000 |
2022/011 | 1000 |
2022/012 | 1000 |
Total | 12000 |
The following scenarios show how recognition schedule lines are recalculated when the source record changes after the first three periods have been recognized.
If the source record's total revenue increases to 24000 after the first three periods have been recognized,
Period |
Revenue |
Recognized |
Recalculated Revenue using Retrospective Adjustment |
Recalculated Revenue using Prospective Adjustment |
---|---|---|---|---|
2022/001 | 1000 | 1000 | 1000 | 1000 |
2022/002 | 1000 | 1000 | 1000 | 1000 |
2022/003 | 1000 | 1000 | 1000 | 1000 |
2022/004 | 1000 | 5000 | 2333.33 | |
2022/005 | 1000 | 2000 | 2333.34 | |
2022/006 | 1000 | 2000 | 2333.33 | |
2022/007 | 1000 | 2000 | 2333.33 | |
2022/008 | 1000 | 2000 | 2333.34 | |
2022/009 | 1000 | 2000 | 2333.33 | |
2022/010 | 1000 | 2000 | 2333.33 | |
2022/011 | 1000 | 2000 | 2333.34 | |
2022/012 | 1000 | 2000 | 2333.33 | |
Total | 12000 | 3000 | 24000 | 24000 |
Calculation Using Retrospective Adjustment
Recalculated monthly revenue is: 24000 / 12 = 2000
Period 2022/004 includes an adjustment to correct the amount that should have been recognized to date. This is worked out as follows:
Recognized to Date = 3000
Recalculated Recognized to Date = 6000
Difference = 3000
Therefore the revenue calculated for period 2022/004 is: 2000 + 3000 = 5000
Calculation Using Prospective Adjustment
Total Revenue - Recognized to Date: 24000 - 3000 = 21000
Number of periods remaining = 9
Recalculated monthly revenue is: 21000 / 9 = 2333.333333
If the source record's total revenue decreases to 6000 after the first three periods have been recognized,
Period |
Revenue |
Recognized |
Recalculated Revenue using Retrospective Adjustment |
Recalculated Revenue using Prospective Adjustment |
---|---|---|---|---|
2022/001 | 1000 | 1000 | 1000 | 1000 |
2022/002 | 1000 | 1000 | 1000 | 1000 |
2022/003 | 1000 | 1000 | 1000 | 1000 |
2022/004 | 1000 | -1000 | 333.33 | |
2022/005 | 1000 | 500 | 333.34 | |
2022/006 | 1000 | 500 | 333.33 | |
2022/007 | 1000 | 500 | 333.33 | |
2022/008 | 1000 | 500 | 333.34 | |
2022/009 | 1000 | 500 | 333.33 | |
2022/010 | 1000 | 500 | 333.33 | |
2022/011 | 1000 | 500 | 333.34 | |
2022/012 | 1000 | 500 | 333.33 | |
Total | 12000 | 3000 | 6000 | 6000 |
Calculation Using Retrospective Adjustment
Recalculated monthly revenue is: 6000 / 12 = 500
Period 2022/004 includes an adjustment to correct the amount that should have been recognized to date. This is worked out as follows:
Recognized to Date = 3000
Recalculated Recognized to Date = 1500
Difference = -1500
Therefore the revenue calculated for period 2022/004 is: 500 - 1500 = -1000
Calculation Using Prospective Adjustment
Total Revenue - Recognized to Date: 6000 - 3000 = 3000
Number of periods remaining = 9
Recalculated monthly revenue is: 3000 / 9 = 333.333333
If the source record's end date is extended by another three months after the first three periods have been recognized,
Period |
Revenue |
Recognized |
Recalculated Revenue using Retrospective Adjustment |
Recalculated Revenue using Prospective Adjustment |
---|---|---|---|---|
2022/001 | 1000 | 1000 | 1000 | 1000 |
2022/002 | 1000 | 1000 | 1000 | 1000 |
2022/003 | 1000 | 1000 | 1000 | 1000 |
2022/004 | 1000 | 200 | 750 | |
2022/005 | 1000 | 800 | 750 | |
2022/006 | 1000 | 800 | 750 | |
2022/007 | 1000 | 800 | 750 | |
2022/008 | 1000 | 800 | 750 | |
2022/009 | 1000 | 800 | 750 | |
2022/010 | 1000 | 800 | 750 | |
2022/011 | 1000 | 800 | 750 | |
2022/012 | 1000 | 800 | 750 | |
2023/001 | 800 | 750 | ||
2023/002 | 800 | 750 | ||
2023/003 | 800 | 750 | ||
Total | 12000 | 3000 | 12000 | 12000 |
Calculation Using Retrospective Adjustment
Recalculated monthly revenue is: 12000 / 15 = 800
Period 2022/004 includes an adjustment to correct the amount that should have been recognized to date. This is worked out as follows:
Recognized to Date = 3000
Recalculated Recognized to Date = 2400
Difference = -600
Therefore the revenue calculated for period 2022/004 is: 800 - 600 = 200
Calculation Using Prospective Adjustment
Total Revenue - Recognized to Date: 12000 - 3000 = 9000
Number of periods remaining = 12
Recalculated monthly revenue is: 9000 / 12 = 750
If the source record's start date is put back three months after the first three periods have been recognized,
Period |
Revenue |
Recognized |
Recalculated Revenue using Retrospective Adjustment |
Recalculated Revenue using Prospective Adjustment |
---|---|---|---|---|
2022/001 | 1000 | 1000 | 1000 | 1000 |
2022/002 | 1000 | 1000 | 1000 | 1000 |
2022/003 | 1000 | 1000 | 1000 | 1000 |
2022/004 | 1000 | -1666.66 | 1000 | |
2022/005 | 1000 | 1333.33 | 1000 | |
2022/006 | 1000 | 1333.33 | 1000 | |
2022/007 | 1000 | 1333.34 | 1000 | |
2022/008 | 1000 | 1333.33 | 1000 | |
2022/009 | 1000 | 1333.33 | 1000 | |
2022/010 | 1000 | 1333.34 | 1000 | |
2022/011 | 1000 | 1333.33 | 1000 | |
2022/012 | 1000 | 1333.33 | 1000 | |
Total | 12000 | 3000 | 12000 | 12000 |
Calculation Using Retrospective Adjustment
Recalculated monthly revenue is: 12000 / 9 = 1333.333333
Period 2022/004 includes an adjustment to correct the amount that should have been recognized to date. This is worked out as follows:
Recognized to Date = 3000
Recalculated Recognized to Date = 0
Difference = -3000
Therefore the revenue calculated for period 2022/004 is: 1333.333333 - 3000 = -1666.666667
Calculation Using Prospective Adjustment
Total Revenue - Recognized to Date: 12000 - 3000 = 9000
Number of periods remaining = 9
Recalculated monthly revenue is: 9000 / 9 = 1000
If the source record's start date is brought forward two months after the first three periods have been recognized,
Period |
Revenue |
Recognized |
Recalculated Revenue using Retrospective Adjustment |
Recalculated Revenue using Prospective Adjustment |
---|---|---|---|---|
2021/011 | - | - | - | - |
2021/012 | - | - | - | - |
2022/001 | 1000 | 1000 | 1000 | 1000 |
2022/002 | 1000 | 1000 | 1000 | 1000 |
2022/003 | 1000 | 1000 | 1000 | 1000 |
2022/004 | 1000 | 2142.86 | 1000 | |
2022/005 | 1000 | 857.14 | 1000 | |
2022/006 | 1000 | 857.14 | 1000 | |
2022/007 | 1000 | 857.15 | 1000 | |
2022/008 | 1000 | 857.14 | 1000 | |
2022/009 | 1000 | 857.14 | 1000 | |
2022/010 | 1000 | 857.14 | 1000 | |
2022/011 | 1000 | 857.15 | 1000 | |
2022/012 | 1000 | 857.14 | 1000 | |
Total | 12000 | 3000 | 12000 | 12000 |
Calculation Using Retrospective Adjustment
Although recognition schedule lines are not created for the November 2021 and December 2021 periods, the two extra periods are included in the calculation.
Recalculated monthly revenue is: 12000 / 14 = 857.1428571
Period 2022/004 includes an adjustment to correct the amount that should have been recognized to date. This is worked out as follows:
Recognized to Date = 3000
Recalculated Recognized to Date = 4285.714286
Difference = 1285.714286
Therefore the revenue calculated for period 2022/004 is: 857.1428571 + 1285.714286 = 2142.857143
Calculation Using Prospective Adjustment
Total Revenue - Recognized to Date: 12000 - 3000 = 9000
Number of periods remaining = 9
Recalculated monthly revenue is: 9000 / 9 = 1000