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Can a credit not be revenue recognised for a specific period and not for all the contract period?

Hi all and thanks for your time,

I have the following scenario:

A Sales Contract is issued for a year and billed for the whole year. Revenue Recognition is run every month. After 9 months the customer wants to terminate the contract. What we do now is that we issue a credit note with the rest of the amount, so for example if the contract is 1200 USD and we billed this amount then we are going to create a Credit Note for 300 USD. The issue that we have is that the 300 USD are splitted and show in Revenue Recognition for the whole year but what we want is this amount to be revenue recognized for the rest of the period.

Is this doable?

Thank you,

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1 Answer

  • Posted on 4 days ago

    Hi,

    Now as your contract is for 12 months.however,he decides to request for cancellation.There are two possible scenarios that the customer can encounter,depending on how Help. Would like to enforce its contractual rights.

    In the case of cancellation with refund ,he cancels the services from Help in the start of particular month with refund.Help also creates a credit note for the particular amount and refunds the amount to substantiate the cancellation.

    I think this may help you to get an idea

    Regards

    sukanya Reddy

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