RORD release based on POB ratable method
A scenario that explains RORD and CM-RO accounting entries
In this scenario, the current open period is Jan-2020. Both the SO line and the invoice line are collected in Zuora Revenue in January 2020. The system settings are as follows:
-
The POB ratable method is Contract Ratable and the accounting method is Partially Monthly.
-
The INVOICE_CONTRACT_RATABLE profile is set to Y, which means the invoice revenue follows the contract ratable method.
The revenue has been 50% released in January 2020.
|
Line ID |
Transaction Type |
Ext. Sell Price |
Allocatable |
Start Date |
End Date |
Deferred |
Released |
Period ID |
|---|---|---|---|---|---|---|---|---|
|
1.1 |
SO |
12000 |
12000 |
1/1/2020 |
12/31/2020 |
6000 |
6000 |
202001 |
|
1.1 |
INV |
12000 |
12000 |
1/1/2020 |
12/31/2020 |
6000 |
6000 |
202001 |
The accounting entries will be created as follows:
|
Account type |
Dr |
Cr |
Period ID |
|---|---|---|---|
|
Contract Liability |
12000 |
202001 | |
|
Contract Liability |
1000 |
202001 | |
|
Revenue |
1000 |
202001 | |
|
Contract Liability |
1000 |
202002 | |
|
Revenue |
1000 |
202002 | |
|
Contract Liability |
1000 |
202003 | |
|
Revenue |
1000 |
202003 | |
|
Contract Liability |
1000 |
202004 | |
|
Revenue |
1000 |
202004 | |
|
Contract Liability |
1000 |
202005 | |
|
Revenue |
1000 |
202005 | |
|
Contract Liability |
1000 |
202006 | |
|
Revenue |
1000 |
202006 |
In the Jul-2020 period, RORD line is collected. The RORD revenue will not be released because there is no revenue schedule in the RORD periods.
|
Line ID |
Transaction Type |
Ext. Sell Price |
Allocatable |
Start Date |
End Date |
Deferred |
Released |
Period ID |
|---|---|---|---|---|---|---|---|---|
1.1 | RORD | -6000 | -6000 | 7/1/2020 | 12/31/2020 | -6000 | 0 | 202007 |
A contra entry is created for $6000 in the Jul-2020 period, which equals Net Billed Amount ($12000) minus Net Sell Price ($6000). The accounting entries are as follows:
|
Account type |
Dr |
Cr |
Period ID |
|---|---|---|---|
Contract Liability | 6000 | 202007 | |
Contra AR | 6000 | 202007 |
When the remaining 50% of the revenue is released in the Jul-2020 period, the following accounting entries are created:
|
Account type |
Dr |
Cr |
Period ID |
|---|---|---|---|
Contract Liability | 1000 | 202007 | |
Revenue | 1000 | 202007 | |
Contract Liability | 1000 | 202007 | |
Revenue | 1000 | 202007 | |
Contra Liability | 6000 | 202007 | |
Contra AR | 6000 | 202007 | |
Contract Liability | 100 | 202008 | |
Revenue | 1000 | 202008 | |
Contract Liability | 1000 | 202008 | |
Revenue | 1000 | 202008 | |
Contract Liability | 1000 | 202009 | |
Revenue | 1000 | 202009 | |
Contract Liability | 1000 | 202009 | |
Revenue | 1000 | 202009 | |
Contract Liability | 1000 | 202010 | |
Revenue | 1000 | 202010 | |
Contract Liability | 1000 | 202010 | |
Revenue | 1000 | 202010 | |
Contract Liability | 1000 | 202011 | |
Revenue | 1000 | 202011 | |
Contract Liability | 1000 | 202011 | |
Revenue | 1000 | 202011 | |
Contract Liability | 1000 | 202012 | |
Revenue | 1000 | 202012 | |
Contract Liability | 1000 | 202012 | |
Revenue | 1000 | 202012 |