CM-C line collected after RORD
A scenario that explains RORD and CM-RO accounting entries
In this scenario, a CM-C line is collected after the RORD line has reduced revenue and created Contra AR entries. When CM-C line joins, Zuora Revenue will perform unbilled to billed conversion for Contract Liability and reverse the Contra AR entries.
The current open period is Jan-2020. Both the SO line and the invoice line are collected in Zuora Revenue in January 2020. The POB ratable method is Immediate using current open period.
|
Line ID |
Transaction Type |
Ext. Sell Price |
Allocatable |
Start Date |
End Date |
Deferred |
Released |
Period ID |
|---|---|---|---|---|---|---|---|---|
|
1.1 |
SO |
12000 |
1200 |
1/1/2020 |
12/31/2020 |
0 |
1200 |
202001 |
|
1.1 |
INV |
12000 |
1200 |
1/1/2020 |
12/31/2020 |
0 |
1200 |
202001 |
The accounting entries are created as follows:
|
Account type |
Dr |
Cr |
Period ID |
|---|---|---|---|
Contract Liability | 1200 | 202001 | |
Contract Liability | 1200 | 202001 | |
Revenue | 1200 | 202001 |
In the Feb-2020 period, the RORD line is collected for $300. The release of the RORD line follows the POB ratable method of the SO line.
|
Line ID |
Transaction Type |
Ext. Sell Price |
Allocatable |
Start Date |
End Date |
Deferred |
Released |
Period ID |
|---|---|---|---|---|---|---|---|---|
1.1 | RORD | -300 | -300 | 12/1/2020 | 12/31/2020 | 0 | -300 | 202002 |
A contra entry will be created for $300, which equals Net Billed Amount ($12000) minus Net Sell Price ($12000-300). The accounting entries are as follows:
|
Account type | Dr |
Cr |
Period ID |
|---|---|---|---|
|
Contract Liability |
300 |
202002 | |
|
Contra AR |
300 |
202002 | |
|
Contract Liability |
300 |
202002 | |
|
Revenue |
300 |
202002 |
Then, the CM-C line is collected in the Mar-2020 period.
|
Line ID |
Transaction Type |
Ext. Sell Price |
Allocatable |
Start Date |
End Date |
Deferred |
Released |
Period ID |
|---|---|---|---|---|---|---|---|---|
1.1 | CM-C | -1200 | -1200 | 12/1/2020 | 12/31/2020 | 0 | -1200 | 202003 |
After the CM-C line is processed, a portion of the CM-C amount is converted to CM-RO amount. The converted amount equals the RORD amount, which is $300 in this example.
|
Account type |
Dr |
Cr |
Period ID |
Note |
|---|---|---|---|---|
Contract Liability | 1200 | 202003 | CM-C initia entry | |
Contra AR | 300 | 202003 | Contra reversal | |
Contract Liability | 300 | 202003 | Contra reversal | |
Contract Liability | 900 | 202003 | Invoice reversal | |
Revenue | 900 | 202003 | Invoice reversal | |
Contract Liability | 900 | 202003 | Unbilled recognize | |
Revenue | 900 | 202003 | Unbilled recognize |