Advanced Revenue Management automates revenue forecasting, allocation,
recognition, reclassification, and auditing through a rule-based event handling
framework. In Advanced Revenue Management you can defer revenue for recognition
across future periods according to the rules you configure.
The following records and transactions are used in Advanced Revenue Management:
Revenue arrangements – Advanced Revenue Management automatically creates
revenue arrangements from predefined revenue sources, such as approved sales
transactions.
Revenue elements – Each revenue element represents a performance obligation.
Revenue elements are attached as lines on a revenue arrangement.
Revenue recognition rules – Records that define patterns for revenue recognition.
They include, for example, the recognition method, amount source, and start and end
date sources.
Revenue recognition plans – Revenue plans are derived from revenue recognition
rules. The actual revenue plans control the posting of revenue.
Fair value price list – Fair value price is used to allocate revenue in revenue
arrangements.
Revenue Management Roles and Permissions
When you enable the Advanced Revenue Management feature, two roles are added
to your account: revenue manager and revenue accountant.
• Revenue manager – Defines key revenue recognition configurations and
rules, and monitors and analyzes revenue results through various revenue
reports
• Revenue accountant – Processes daily revenue transactions, revenue
recognition plans, and journal entries
The revenue manager and revenue accountant roles use the Accounting Center.
When Advanced Revenue Management is enabled, a Revenue tab is added to the
Accounting Center to facilitate navigation.
Revenue Recognition Rules
Revenue recognition rules define how revenue recognition plans are generated after
a revenue element is created.
Fair Value Setup
Complete the following procedures to set up your fair value rules.
Adding Fair Value Formulas
Adding Fair Value Dimensions
Creating the Fair Value Price List
Adding Fair Value Formulas
Fair value formulas are used in the fair value price list and on item revenue category
records. The formulas appear in a dropdown list on those records. Fair value
formulas use symbols for the basic operator multiply (*), divide (/), add (+), and
subtract (-).
Adding Fair Value Dimensions
Fair value dimensions are fields that you add to the fair value price record. For
example, if you add a fair value dimension for a subsidiary, a subsidiary field appears
on the fair value price record. The dimensions you add appear in the Fair Value
Dimension group on the fair value price record. The dimensions do not automatically
appear in the fair value price list, but you can create a custom list view to add them.