The Deferred Revenue formula caters for the varying recognition rates over time relative to the invoice period or the school semester.
The recognition formula in the subscription module calculates the deferred revenue as soon as the subscription turns into “gratis”. This is needed as subscriptions are dealt with as part of specific Contracts therefore each subscription order should not defer/recognise revenue from that point.
All product/customer combinations are entered in the sequence of matching process. The formulas simply identify which invoices are eligible for deferment of revenue based upon all the matching criteria. The deferment term is also specified to determine the recognition rate over time.
The Formula Code needs to be created first
Add a Deferred revenue formula
- In the menu expand, Base Modules > General Ledger > Other > Deferred Revenue > Maintenance and then double-clickGL Deferred R Formula Main. DSM420 Deferred Revenue Formula Maintenance panel appears.
- Enter the Company for the deferred revenue formula and click OK.
- Click Add and enter the following information for the formula.
| Field | Description |
| Sequence number | The sequence number is used to give this definition an order of priority against other deferred revenue formulas held on the system. The lower the number the higher the priority. |
| Description | A meaningful description for the formula being added. |
| Formula code | This is the deferred revenue formula code which determines the months duration and percentage at which deferred revenue is calculated. Entry of the formula code is mandatory. |
| Start period | Indicate the period from which this formula is to take effect. Key ‘0’ (Invoice period) to use the invoice period applicable to the formula code entered in the previous field. |
- Click OK. The selection panel appears.
- Enter the selection criteria for the relevant fields for new deferred revenue formula.
- Click OK to confirm. New Deferred Revenue Formula gets added.
