Saturday, May 11, 2019

Extending the Schedule of a Revenue Recognition Schedule from an Invoice that has its Revenue Fully Recognized

1. Make sure that the users are allowed to modify revenue recognition schedules. Navigate to Setup > Accounting > Accounting Preferences and under General tab, the Allow Users to Modify Revenue Recognition Schedule preference must be checked.



2. Open the invoice and then open the associated revenue recognition schedule that is to be extended. Open it on edit mode.



3. Reduce the revenue recognized: under the last line, add lines that will reduce the recognized revenue from the periods. The periods to be used in reducing the revenues will depend on the user. If the user decides to reduce the recognized revenues from the same periods when the revenue recognition journals are created, the periods need to be open for posting.


For example, the revenue recognition schedule has 4 recognition periods from June to September and all the revenue recognition journals have already been created and approved. The user may opt to use the same periods in reducing the recognized revenue provided that the periods are open for posting. If the user decides to use the same period, the additional lines will be plotted as follows:


Posting Period = June; Amount = -xxx

Posting Period = July; Amount = -xxx

Posting Period = August; Amount = -xxx

Posting Period = September; Amount = -xxx


Take note that the amounts are negative. On the Account field, specify the account that will be debited on the revenue recognition journal.



4. Next, add more lines that will extend the recognition of revenues to other periods.


To continue the example above, if the user decides to extend the recognition to another four periods, then additional lines will be as follows:


Posting Period = October; Amount = xxx

Posting Period = November; Amount = xxx

Posting Period = December; Amount = xxx

Posting Period = January; Amount = xxx


Take note that the amounts are positive. On the Account field, specify the account that will be credited on the revenue recognition journal.



5. Click Save.



6. When Revenue Recognition Journal Entries are generated, the Journal Entries will automatically recognize the negative revenue amount for the specific period.

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