Hi gurus, good quarantine.
We are implementing RA method 15 on our project, we have came across below scenario.
1) Month 1 .
There is 10 USD of cost posted to the project, 2 hrs (5USD per hr), no revenue exist. COST = 10 USD. for 2 hrs.
We execute RA and system does
A. Calculate revenue in excess of billing base on the price agree 8 USD (4 USD per hr, loss project), the revenue gets settle to FI and
B. system calculate the profit/loss of -2 (loss project at these point) and settle to COPA, at these point we are ok.
2) Month 2.
We get some real revenue posted 4 USD , so 1 hr only for real revenue and no cost.
We execute RA and system does
A. No new revenue in excess calculation, keep original 8 USD calculation, I am little ok with these, as there no new cost but below you can see the issue on revenue.
B. Its calculating the revenue affecting income on the base of actual rev (4 USD) + the 8 USD of the revenue in excess of billing, this is ok too.
C. Cost of sales = actual cost, also ok.
D. Its calculating the capitalized profit, as 2 USD of profit (Rev its now 12, cost is 10).
My issue is that the revenue is too high for the project, the system should calculate and do a posting to lower the FI revenue to keep the same 8 USD as there is no more work deliver so no more revenue is allow.
Have anybody had any scenario like these?