FASB/IASB Revenue RecognitionOverview

FASB/IASB Revenue Recognition

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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

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• 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

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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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