Deferred Revenue/Revenue Recognition

Hi Jeff,

We use NAV 3.7, 4.0, 5.0 and 2009R2 to systematically defer revenue and recognize over a period of time -complying with IAS 8. This is a customization and NAV can't handle this automatically out of the box.

Basically we have recognition criteria for products/services we sell.

Eg1 Product A is  100% recognized at the time of sale so - Cr Deferred Revenue Dr Debtors  Recognized as Cr Sales Dr Deferred Revenue

Eg2 Product Bi is 100% deferred and recognized over the invoice period - 12000.00 over 12 months

(Invoice posting date Cr Deferred Revenue 12000 Dr Debtors 12000)

( First month  Cr Sales 1000  Dr Deferred Revenue 1000)  

So first thing is to understand the criteria and start customizing the system. We have modifications in Items,Resources, sales invoices, Posting groups and posting routines.

Other manual out of the box way to handle this is to use suitable recurring journals. Set the posting groups sales account to a b/s deferred account then use a  recurring journal to move the recognized amount from b/s to your p/l...hope this helps ;-)

Chaminda.

Hi,

we are doing it with a somewhat tailored eccel file but the idea of creating a B/S account and move it with fixed journals seems to be a good work around.

Could you maybe send me a screenshot or something like that? Need to expalin that to my team/manager...

Thanks

Rebecca

Hi Rebecca,

Please watch this video.  Depending on your requirement, you could select the correct type of recurring journal

thanks :-)

Jeff,

Best of breed revenue recognition applications are available that are purpose built to address these types of needs to bypass custom development within the Navision UI. Our website has several resources available that may help you determine the most appropriate revenue deferral models based on your go-to market channels. www.tensoft.com

Regards,

Mike

Other built in options for Rev Rec are in Jobs.  You have to be using specific job functionality to take advantage of this though.  In my experience, most rev rec models require a third party app, or simple modification.  

Also, prepayments can be used as well, however your model must fit the functionality available there.