Understanding Revenue Accounting

In this topic, you will learn how to better understand revenue accounting.

Steps:

1. When you select a product onto a contract, the system populates the revenue distribution accounting based on distribution sets to the revenue fields on the Accounting Distribution page.

   Step 1

2. The GL Unit (General Ledger business unit) on the Accounting Distribution page is populated with the General Ledger business unit that's associated with the Unit (PeopleSoft Contracts business unit) of the contract.

   Step 2

3. The GL Unit and revenue account are editable for each amount-based contract line on the Accounting Distribution page.

   Step 3

4. You can edit the existing revenue account distribution or split the revenue across multiple account distributions (such as departments).

   Step 4

5. For rate-based contract lines, the revenue distribution accounting is defined by using accounting rules through the As Incurred Accounting Distribution page. Like distribution sets, rate-based accounting rules may reference distribution codes for ease of use. However, each accounting rule allows only one revenue distribution to be defined. When forecasting revenue for rate-based lines, use distribution sets with distribution codes.

   Step 5

6. For recurring contract lines, the system handles the accounting similar to fixed fee. The system populates the revenue distribution on the Accounting Distribution page based on distribution sets. If the revenue distribution code in the distribution set has a related deferred revenue distribution code, the system also populates the deferred revenue distribution on the Accounting Distribution page.

   Step 6

Congratulations, you have successfully gained an understanding of revenue accounting.

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