Generating Recognition Schedules after Revenue or Cost Has Been Recognized

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 schedule lines for current and future periods are updated. Depending on the adjustment type used by the source record's recognition template, either an additional catchup adjustment is applied in the generate period to correct the amount that should have been recognized to date (retrospective adjustment), or the values of the remaining "Recognizable" schedule lines are adjusted according to the template's calculation type (prospective adjustment). Any periods that end before the generate date, and the Total Recognized Revenue or Total Recognized Cost on the recognition schedule, are unchanged.

See the examples below for more information, and Regenerate Following Source Record Changes for the full rules about how recognition schedules are regenerated.

Note:

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.

Examples

The following examples illustrate how recognition schedule lines are recalculated when a source record's value or duration changes after revenue has been recognized.

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, when schedules are generated in period 4 the unrecognized recognition schedule lines are recalculated as follows:

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, when schedules are generated in period 4 the unrecognized recognition schedule lines are recalculated as follows:

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, when schedules are generated in period 4 the unrecognized recognition schedule lines are recalculated as follows:

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, when schedules are generated in period 4 the unrecognized recognition schedule lines are recalculated as follows:

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, when schedules are generated in period 004 the unrecognized recognition schedule lines are recalculated as follows. Note that recognition schedule lines are not created for the November 2021 and December 2021 periods because we do not create new recognition schedule lines with a value of zero.

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

Note:

Revenue Management stores and displays currency values using the correct number of decimal places specified for the currency in Salesforce. For more information, see Currency Decimal Places and Rounding.