This episode of PeopleSoft Spotlight Series provides the user with a rudimentary understanding of the new revenue accounting standard and its impact. Additionally, the video will provide the user with an overview of new functionality to address requirements of the new standard, including an overview of key items of configuration and a description of interactions with other modules impacted by the enhancements. Additional resources are available for further information.
The revenue recognition feature allows customers to identify a contract as having amounts or rates for revenue that are different from those used for billing. In doing so, new billing and revenue allocation pages were created to enter a total contract price for revenue and the structure to be able to allocate that price across contract line items. This functionality is available before contract activation and through amendment processing after contract activation. A new field was added to the contract line referred to as ‘bundle’ that allows users to group related contract lines. In project costing, the use of rate sets to create calculations of revenue separate from rates used for billing was expanded and now made available on all contract classifications; whereas in prior versions, this was available only for government contracts. Defaults were provided to streamline selections when adding a contract and the integration of other modules with contracts was enhanced to allow customers to take advantage of new functionality available in contracts and project costing.
Applying New Functionality
Certain new functionality can be applied to existing contracts by identifying the contract as having separate billing and revenue. When new functionality is applied, an application engine will run that updates the new data fields added to the contracts module. You can configure contract accounting distributions to include project chart fields, such as PC business unit, project, and activity. The PS contracts module was enhanced to allow customers to separate prices for billing and revenue. When adding a contract, users will identify if revenue should be separated from billing on amount baseline. If such is the case, then users will update a new revenue amount field on the contract line. Users will also update the billing amount on the contract line, which was previously referred to as the ‘negotiated amount.’ If the contract does not separate billing and revenue, then the revenue amount field is read-only and updated to match the billing amount. In this scenario, a single amount is used for both billing and revenue consistent with prior functionality. For amount-based lines, the billing amount is always answerable and should match the terms of the contract.
The new revenue amount field is enterable if prices for revenue are different from billing for the contract. In addition, users will be able to enter the total price for the contract and this is done for both billing and revenue and like updating line level amounts, if revenue and billing are managed as one amount, then the new total revenue field is read-only and matches total billing. These changes support users and identifying a total price for the contract and then allocating that price across contract line items.
For more information check out this PeopleSoft Spotlight Series: Contracts Revenue Recognition Video from Oracle PeopleSoft.
Want to learn more about new PeopleSoft features and functionality? Come to COLLABORATE 18, April 22 – 26to hear about the latest changes to PeopleSoft from the Oracle PeopleSoft Product Strategy and Development Teams.