TRANXACT.AI Training

Revenue Recognition

Invoicing and revenue are not the same event. Five steps, the schedule they produce, and the deferred revenue that falls out of it.

14 steps · 10 questions · 8 screens on this shelf

The screens on this shelf

Records Revenue Contracts Invoicing and revenue are not the same event, and this is where the difference is held. Allocation is a decision; the schedule is its consequence. 15 stepsOpen Records Performance Obligations A promise that is distinct. Three lines on an order can be one obligation, and one line can be three — and the allocation moves money between them. 16 stepsOpen Records Billing Schedule What has actually been invoiced against a contract, which the recognition schedule knows nothing about and the contract balance cannot be computed without. 16 stepsOpen View Recognition Schedule Written forward for the whole term at the moment of allocation, so a deferred revenue waterfall is a query and not a projection. 15 stepsOpen View Revenue Runs Step 5, per period. A contract whose allocation is stale is reported as an exception rather than recognised on the old price. 18 stepsOpen View Revenue Waterfall What is still deferred and which period it will be earned in — the IFRS 15 disclosure, and what a board calls backlog. 15 stepsOpen Records Revenue Templates How a kind of obligation is earned, so "monthly subscription" means the same thing on every contract and a new one does not invent its own rule. 13 stepsOpen Records Standalone Selling Prices What a thing is worth on its own. Step 4 of the standard cannot be done without it, and an estimated price has to name the method it was estimated by. 15 stepsOpen

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