Revenue distribution calculation
Learn about revenue distribution calculation
Use case: Distribution logic for a monthly revenue recognition rule applied for a partial month
Consider the following revenue distribution logic:
| Recognition Model | Recognition Term Start Date | Recognition Term End Date | Distribution | Rounding | Transaction Date |
|---|---|---|---|---|---|
| Billing - Monthly recognition over time | Start recognizing revenue from the Invoice Item Period Start | Start recognizing revenue from the Invoice Item Period End | Proration by Days | Round Trailing | Does not recognize revenue before the transaction occurs |
Revenue Schedule:
| Revenue Schedule Amount | Revenue Schedule Date | Recognition Start Date | Recognition End Date |
|---|---|---|---|
9600 JPY |
June 01, 2023 | January 01, 2023 | October 19, 2023 |
Revenue Distribution Result:
| June 2023 | July 2023 | August 2023 | September 2023 | October 2023 |
|---|---|---|---|---|
5,994 JPY |
999 JPY |
999 JPY |
999 JPY |
999 JPY |
Here is the calculation logic:
Total Days: From January 01, 2023 to October 19, 2023
which is, 292 days
Total Amount: 9600 JPY
Amount per Day: 9600/292 = 32 JPY; Remainder = 256 JPY
Amount for Partial Month: 19 days in October
which is, 19 days * 32 JPY = 608 JPY
Total Amount for Full Months: January 2023 to September 2023
which is, 9600 JPY - 608 JPY = 8992 JPY
Amount per Month: January 2023 to September 2023 = 9 months
which is, 8229 JPY / 9 = 999 JPY
And the remainder = 1 JPY
Add the remainder to the last month in this period,
which is, Sum of Amount for the partial month(19 days in October) and the remainder amount = 608 JPY + 1 JPY = 609 JPY
Since the revenue schedule date is June 01, 2023, the revenue recognition date for January 01, 2023 to May 31, 2023 is moved to June 2023.
Hence the amount for June 2023 is = 999 JPY * 5 + 999 JPY = 5994 JPY
Amount calculated for the rest of the full months = 999 JPY