Post on 27-Mar-2022
FASB/IASB Revenue RecognitionOverview
FASB/IASB Revenue Recognition
2 Copyright © 2021, Oracle and/or its affiliates
What § Create a new Accounts Receivable Revenue Recognition feature which will provide:§ A means to configure which invoice lines are to be pushed to the new process.§ An Interactive process to recognize all of the revenue§ An Interactive process to recognize all, less than, more than, or none of the COGS§ A batch process to recognize all of the revenue and COGS on selected invoices in the new
process§ Performance Liability accounting for invoice lines in the new process.
§ Update the Contract and Service Billing System with specific point enhancements for additional flexibility when recognizing revenue.
Why § Compliance with IASB/FASB Standards published in May 2014.§ Standards to be in effect for financial reporting after December 15, 2016.
How § Accounts Receivable - New feature to support recognition of revenue for invoices§ Performance Liability Accounting§ Recognize all of the revenue and COGS§ Audit trail of all revenue recognition activity
§ Contract and Service Billing§ Summarize Lump Sum and Unit Price billing line transactions by subledger/subledger type§ Adjust Stored Material invoice amounts by subledger/subledger type§ Additional reporting related to revenue recognition
Results § Our customers will now be able to be compliant with new Accounting Standards
Customers § All customers reporting under the new Revenue Recognition standards
FASB/IASB Revenue Recognition StandardContract and Service Billing Revenue Recognition
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• Summarize Lump Sum and Unit Price billing line transactions by subledger/subledger type
• Adjust Stored Material invoice amounts by subledger/subledger type
• Additional reporting related to revenue recognition
• Run Profit Recognition and adjustments formultiple performance obligations in a single job
Additional Flexibility
Contract Entered
• Identify performance obligations (billing lines)
•Trace project tasks to performance obligations
Project Executed
•Accumulation of costs•Contract invoices created
Manage changes to contract
•Add new performance obligations
•Disposition existing performance obligations
Revenue Recognized
•Performed independently from contract invoicing
•Specified for each performance obligation
•Revenue Booked in G/L
FASB/IASB Revenue Recognition StandardAccounts Receivable Revenue Recognition
4 Copyright © 2021, Oracle and/or its affiliates
• New feature to support recognition of revenue and cost of goods sold for invoices without a contract
• Performance Liability Accounting
• Recognize all of the revenue amount• Recognize all, none, more than, or less than the
COGS amount• Audit trail of all revenue recognition activity
New Feature
Invoice Entered
•A/R Invoice•Sales Order•Contract Billing•Service Billing
Invoice to Revenue Recognition Process
•Trigger processing from source invoice entry process
Performance Liability Booked in G/L
Performance obligation complete
•Determined by customer business process
Revenue Recognized
•Performance Liability Cleared from G/L
•Revenue Booked in G/L
•Cost of Goods Sold Booked in G/L
FASB/IASB Revenue Recognition Standard
5 Copyright © 2021, Oracle and/or its affiliates
Contract and Service Billing
Additional Flexibility
• Summarize Lump Sum and Unit Price billing line transactions by subledger/subledger type
• Adjust Stored Material invoice amounts by subledger/subledger type
• Additional reporting related to revenue recognition
• Run Profit Recognition and adjustments for multiple performance obligations in a single job
Accounts Receivable Process
New feature• Support for recognition of revenue and
cost of goods sold for invoices without a contract
• Performance Liability Accounting• Recognize all of the revenue amount
• Recognize all, none, more than, or less than the COGS amount
• Audit trail of all revenue recognition activity
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