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Project Revenue Recognition

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Posted on by roshan m

Hi ,

I have an issue with the revenue recognition calculation method,

Scenario:

I have a project with 3 milestone.

I have invoiced the first 2 milestone and incurred some cost. as per my setup the cost will be going to P&l and Customer invoice will be to WIP. So when i do the estimates for that month with work progress percentage my calculation percentage is 100% where as i have invoiced only 2 Milestone.

Setup: Costs to Profit and Loss, On- account to Balance Sheet, Cost template is Automatic, Matching Principle is Sales Value.

Is there any setups i have missed, Kindly help me out to resolve this issue.

thanks,

Roshan

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Community Member on at

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have you defined project ledger postings setup?

Assuming yes, in fixed price projects, you should also consider estimate ledger setting in project group for revenue recognition as complete %

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André Arnaud de Cal... 301,210 Super User 2025 Season 2 on at

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Hi Roshan,

PoC is not based on sent invoices, but completed work based on cost budget versus realized costs. Did you setup a budget for this project? Also check if you setup cost templates correctly: docs.microsoft.com/.../about-cost-templates

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roshan m 67 on at

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Hi rahul,

thank you for your reply.

Yes i have given my ledger posting setups, my revenue recogn. accounting principle is Completed percentage with sales value and automatic cost.

In cost template it is automatic and in cost lines cost to complete method i have given as remaining budget. Should i change that to work percentage complete?

is there any thing else i have missed?

Regards,

Roshan

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roshan m 67 on at

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Hi Andre,

thanks for your reply.

My invoices are posted and is in WIP, costs are to P&L. i didn't use the budget option. Kindly let me know is it necessary to have the budget set? whereas i have the WBS.

No forecast models is set. Is it because of this my percentage is calculating as 100%?

Thanks for sharing the link, (completion based on heading in the link - is it mentioning the cost to complete method in cost template).

Regards,

Roshan

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Eugen Glasow 6,359 on at

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Exactly. You _must_ have a forecast for every cost project category. This is what is referred by a "remaining budget".

The forecast model must be selected in the estimates dialog window (it can be made default in the period table for the revenue recognition).

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roshan m 67 on at

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Hi Eugen,

So i have to transfer from WBS to the forecast and i have to select it when i am processing the estimate? i tried it still the percentage is 100% Which is the cost to complete method should i select. Kindly suggest.

Regards,

Roshan

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Eugen Glasow 6,359 on at

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Both the principles "percentage" and "complete" calculate the the percentage of completion by the same formula. Is is just that the former posts revenue accruals every month and the second does not do it up until the very end (elimination).

There are no miracles. With the proper forecast it always works. Compare the totals per project category in your forecasts, check the actual cost (there is a button on the estimates screen to see the details of the selected calculation).

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roshan m 67 on at

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Thank you. will check this.

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