Presettings

Sequence number definition structures

Open: Setup > General parameters > Sequence number definition > Structures

Before processing revenue recognition, you need to define two sequence number definitions, one for the revenue recognition key and identifier and one for document types. The suggested settings and related field values are displayed below:

To create the revenue recognition key

• Sequence: RRV

• Definition level: Folder

• RTZ level: No RTZ

• Type: Alphanumeric

• Components:
  

  Component type	Length	Formula
  Constant	3	RRV
  Sequence number	10

• Sequence type: Normal
• Miscellaneous: Chronological control

To create the revenue recognition sequence number

Use the REVRC sequence number when defining your document type for posting.

• Sequence: REVRC

• Definition level: Company

• RTZ level: Fiscal year

• Type: Alphanumeric

• Components:
  

  Component type	Length	Formula
  Constant	5	REVRC
  Company	5
  Fiscal year	2
  Sequence number	6

• Sequence type: Normal
• Miscellaneous: Chronological control

Journal codes

Open: Common data > General accounting tables > General > Journal codes

A dedicated journal code is needed to categorize the revenue recognition postings and is assigned to your document type.

Document types

Open: Setup > Financials > Document types

The document type is used for calculating and posting to the general ledger. 

The document type definition is flexible. You can, for example, define a different document type when calculating and posting a record in simulation or actual mode. You can define a given document type for the revenue and another one for the expense. And there are specific parameters for revenue and expense, and for actual and simulation generation types.

The sequence number and the journal code for revenue recognition must be assigned to the document type(s) along with the following requirements:

• It must be active, and you need to select the All legislations check box or enter the legislation assigned to the company.

• If assigned to a company group, the group must include the company selected in the revenue recognition code.

• Under Journal category, select Actual if the document type is used for an actual journal entry generation type, or select Simulation if the document type is used for a simulation journal entry generation type.

Accounting code lines

Open: Setup > Financials > Accounting interface > Accounting code lines

You need to define the default accounts used when generating revenue recognition journal entries. The accounting code lines are linked to the project type.

You also need to define one for the customer type for the invoice to be issued.

The automatic journal triggered relies on these accounting code lines to default debit and credit accounts, given the context: sales accruals, invoices to be issued, etc.

Default dimensions

Open: Setup > Financials > Accounting interface > Default dimensions

Four default dimension codes have been provided in the SEED folder and must be manually copied to your production folder: RRCSA, RRCEA, RRCII, and RRCIR. These default dimensions are linked to the automatic journal to populate analytical dimensions when the related dimension type is mandatory, and no analytical dimension was found upstream of the project.

Automatic journals

Open: Setup > Financials > Accounting interface > Automatic journals

Four automatic journals manage the revenue recognition journal entry generation:

• RRCII - Rev. rec. inv. to issue

• RRCSA - Rev. rec. rev. accruals

• RRCIR - Rev. rec. unbilled acct. payab

• RRCEA - Rev. rec. exp. accruals

In the standard setup, each code generates the journal entries for the revenue and expense given the context. For example, sales accruals or invoices to be issued for the revenue, and expense accruals or invoices to be received for the expense.

Parameter values

Open: Setup > General parameters > Parameter values

Several parameters located in the TC chapter, REV group are needed for revenue recognition functionality:

• ENTTYPEXP - Rev. rec. expense entry type:

  Select the document type used for revenue recognition when posting an actual expense journal entry.

• ENTTYPREV - Rev. rec. revenue entry type:

  Select the document type used for revenue recognition when posting an actual revenue journal entry.

• GAUREA - Rev. rec. expense accruals:

  Define the automatic journal used for revenue recognition posting for an expense accrual. The default value is RRCEA.

• GAURII - Rev. rec. invoice to issue:

  Define the automatic journal used for revenue recognition posting for an invoice to issue. The default value is RRCII.

• GAURIR - Rev. rec. unbilled payable:

  Define the automatic journal used for revenue recognition posting for an unbilled payable. The default value is RRCIR.

• GAURSA - Rev. rec. revenue accruals:

  Define the automatic journal used for posting a sale accrual. The default value is RRCSA.

• SIMEXPREC - Expense rec. sim. entry type:

  Select the document type used when posting a simulated expense journal entry.

• SIMREVREC - Revenue rec. sim. entry type:

  Select the document type used when posting a simulated revenue journal entry.

• TMPMSGREV - Temporary journals warning:

  Select Yes to display a warning message if temporary journals are included in the revenue recognition calculation.