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May 21, 2020 at 08:32 AM

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

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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,