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Former Member
May 12, 2009 at 06:55 AM

Results analysis with method 3

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Hi All

There is requirement from client for revenue recognition. It will be done by cost based method. The revenue will be recognised on the basis of % of completion.

For this the following scenario is mapped.

Each sales order is assigned with wbs element in which milestones are set. Therefore on the project we are able to see the pln cost / act cost / pln rev / & actual rev on invoicing.

But the client requires following entries to be taking place:

on invoicing

Customer dr

To unbilled /deferred rev cr (b/s GL)

and after RA and settlement i.e actual rev recog the following entry will take place

Unbilled / deffered rev dr

To Sales - rev recognised cr. (P&L GL)

But if i keep the unbilled /deffered rev as balance sheet GL then the system does not consider it as planned rev in project as well as actual. Therefore when i run RA on wbs element the system only shows POC and pln rev as 0. The incurred cost is treated as loss.

How can the above requirement treated. Request you all to help me out.

Regards

Parimal