Oracle Receivables – Accounting Rules

Oracle Receivables – Accounting Rules

Accounting rules is defined to create revenue recognition schedules for the invoices. Accounting rules determine the number of periods and percentage of total revenue to record in each accounting period. This Accounting rules can be used with transactions that is to be imported into Receivables using AutoInvoice and with invoices that is created manually in the Transaction windows. Unlimited number of accounting rules can be defined, based on the business needs.

Prerequisites:

Period Types should have been defined.

Defining Accounting Rules:

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India Local Receivables Responsibility > Oracle Receivables > Setup > Transactions > Accounting Rules

Name: Enter a Name for the Accounting rule.

Description: Enter a Description for the Accounting Rule.

Type: There are 4 Accounting Rule types:

1. Fixed Schedule – This type prorates 100% evenly across the Number of Periods specified.

2. Variable Schedule – This type allows to later specify, during invoice data entry, the number of periods over which is to recognize revenue.

3. Daily Revenue Rate, All Periods – This type will use a daily revenue rate to calculate the precise amount of revenue for all periods whether it is full or partial. Use accounting rules of this type to meet strict revenue accounting standards which require accurate revenue recognition on a per-day basis. Daily Revenue Rate = Total Revenue / Total Number of Days across all periods

4. Daily Revenue Rate, Partial Periods – This type is a hybrid between Fixed Schedule and Daily Revenue Rate, All Periods. It will use a daily revenue rate to calculate the precise amount of revenue for the partial periods in the schedule, then prorate the revenue evenly across the full periods.

(Partial Period is when the invoice exists for only part of the period as opposed to all days within the period.)

Period: Enter the Period to use for accounting rule schedule, which is defined in General Ledger.

Number of Periods: Enter the number of periods this accounting rule to recognize revenue across.

If this accounting rule type is 'Accounting, Fixed Duration,' enter the Number of Periods to use for accounting rule schedule. Ex: if period of 'Weekly' is defined and number of period is defined as'3', then Receivables creates a rule schedule for three weekly periods.

Deferred Revenue: If recognizing revenue to be delayed, then enable this check box. When checked, invoices using this rule will have its revenue deferred to an unearned revenue account, and the Revenue Accounting Management (RAM) wizard to recognize the revenue to be used.

Schedule Block: 

Define revenue recognition schedule for this accounting rule. Enter the percentages of revenue to recognize within each period of your accounting rule. If this accounting rule type is 'Accounting, Fixed Duration,' Specific Date to be selected, enter specific dates for each period of the revenue recognition schedule for this rule.