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Dynamics 365 Community / Forums / Microsoft Dynamics GP (Archived) / Proejct Accounting Rev...
Microsoft Dynamics GP (Archived)

Proejct Accounting Reveue Recongnition

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Posted on by Community Member

Hi,

I have not used project accounting before so dont know how system calculates revenue recogition figure. Here in my company users claims that cost and revenue is incorrect which is generated by GP. I am sure it cant be wrong but I cant work out how figure derived. What I would like to know, when system generate revenue recognition, from which table it picks figure so I can verify those number and explain users how cost & reveue derived

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  • Community Member Profile Picture
    Community Member on at

    The revenue recognised is almost definately correct - based on the set up choices you make. This however, might not agree to what your users think the revenue should be - based on their own calculations.

    Revenue is recognised on projects based on the type of project it is (Cost Plus, Fixed price etc), and the Accounting Method chosen (Completed, Cost to Cost, Effort Expended etc).

    The default method of recognising revenue is as a percentage of the forecast for individual cost categories. So for a category, if 50% of the cost has been booked, then 50% of the revenue will be recognised. If the forecast changes, then adjustments will be posted next time you run a revenue recognition.

    If the differences in the calculations are small in percentage terms, note that GP rounds all calculations up to 2 decimal places. If you are modelling the calculations in XL to try and proove the revenue, remember to round all calculation results (not just to display 2 decimal places, but actually set the calculation to calculate to 2 decimals).

    Note also tha you can combine inddividual cost categories for income recognition. This will give a different figure than if you leave at thedefault ofcalculating them individually.

    You should be able to proove the revenue  recognised from the project enquiry window. Also, in the revenue recognition window, the calculations are explained.

    Best regards,

     

  • Community Member Profile Picture
    Community Member on at

    Hi Ian, Thank you very much for your quick response.

    Sorry actually I didnt explain problem. Let me try to explain

    I am looking one project and it is Fixed cost and accounting method is cost to cost

    When GP passed revenue recognition there are five distribution which are as follows

    COST

    WIP

    REV

    EIEB

    BLGS

    From above 5 ditribution last 3 i.e. REV, EIEB & BLGS are matching where as COST are more then actual difference between total cost and previous recorded cost and WIP is less (First two entry were correct and start differece from 3rd time. and from 4th transactions onward cost was always less then actual or even in minus).

    I have downloaded all information on excel sheet and try to work out how system has calculated those COST & WIP figure and spent a week but no luck.

    I am 100% sure system must have calculated based on some logic but couldnt figure out how.

    If you like, I can send you my excel working for more information.

    Thank you very much for your time and I will be appreciated if you throw some light where should I look to reconcile numbers

  • Community Member Profile Picture
    Community Member on at

    Hi Hatim,

    PM me and I'll respond to your email and you can then send me the XL sheet.

    The cost is based on the Forecast cost - not the original budgetted cost - would this explain anything?

  • Community Member Profile Picture
    Community Member on at

    Hi,

    Please note that a percentage of profit will be booked to WIP.  WIP will also be affected by actual losses incurred.

    Hope this helps.

    Hugh

  • Community Member Profile Picture
    Community Member on at
    Hi Ian, Thanks. My email id is hatim.motani@intergraph.com
  • Community Member Profile Picture
    Community Member on at

    Hi Hugh,

    Thanks. Yes this is where I have difference. We have a profit but WIP figure is different once billing started.

    Thanks,

    Hatim

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