The document discusses daily revenue recognition options in Oracle Receivables, focusing on the features, configuration, and challenges related to implementing these options. It outlines GAAP revenue recognition criteria and compares daily revenue calculations for both full and partial periods, highlighting the benefits of reduced manual entries and improved compliance. The session aims to provide detailed insights into scenarios and methodologies for effective revenue accounting within Oracle EBS.

1. Record Revenue @ Daily Rate
[A Deep Dive into Daily Revenue Recognition
Options in Oracle Receivables]
Presenter:
Anil Madhireddy
VeriSign Inc
Key Contributors:
Rajendra Sathe
Gautam Ramakrishna
VeriSign Inc

2. About Us
• VeriSign Inc (NASDAQ: VRSN) is the trusted provider of Internet
infrastructure services for the networked world. VeriSign brings Trust
to the Internet with domain name and authentication services allowing
companies and consumers all over the world engaged in trusted
communications and commerce
• Anil Madhireddy is Manager – Business Systems Analysis & solution
architect for the Daily Revenue solution @ VeriSign.
• Rajendra Sathe is the Lead Business Analyst on the Daily Revenue
project @ VeriSign & a key contributor
• Gautam Ramakrishna is a Senior Developer @ VeriSign & the
technical architect who helped design APIs for the Deferred Revenue
solution & also co-authored the whitepaper on this topic.

3. Agenda / Session Objectives
Deep dive into Daily Rate Revenue Recognition features
in Oracle EBS & expected functionality
Understand the two variants of Daily Revenue
Recognition rules offered by Oracle AR
Learn the detailed configuration required to implement
Daily Revenue Recognition
Drilldown on Daily Revenue scenarios with case study
discussions
Quick Overview of Revenue Accounting Form
Challenges that implementers need to prepare for &
patching required

4. Revenue Recognition - What GAAP says!
• Revenue Recognition is different from Invoice Presentment
– Revenue should not be recognized until it is
realized or realizable and earned (SAB 101)
• When Revenue is considered to have been earned?
– When the entity has substantially accomplished what it must do to
be entitled to the benefits represented by the revenues (SAB 101)
• Revenue Recognition criteria (all needs to be met)
– Persuasive evidence of an arrangement exists,
– Delivery has occurred or services have been rendered,
– The seller's price to the buyer is fixed or determinable, and
– Collectibility is reasonably assured.

5. Revenue Recognition: Timing Options

6. Revenue Recognition: Calculation Options

7. Daily Revenue – Flavors
• Daily Revenue Rate, All Periods
• Delivers the most precise revenue recognition schedule
possible
• Revenue for all months calculated at Daily Rate
• Revenue Amount = [# of days in the period / Total # of days] *
Total Revenue Amount
• Daily Revenue Rate, Partial Periods
• Delivers the most precise revenue recognition schedule for the
partial periods – first and last period
• Revenue for partial periods calculated at Daily Rate
• First & Last Period:
– Revenue Amount = [# of days in the period / Total # of
days] * Total Revenue Amount
• Remaining Period:
– Remaining Revenue evenly spread on remaining periods

8. Revenue Calculations – Daily Rules vs. Standard Rules

9. Accounting Rule Types

10. Setup – Accounting Rule – Daily / All Periods
NAV: Receivables -> Setup -> Accounting Rule

11. Setup – Accounting Rule – Daily / Partial Periods
NAV: Receivables -> Setup -> Accounting Rule

12. Transaction with Daily All Periods Rule
NAV: Receivables -> Transactions -> Transaction

13. Transaction with Daily Partial Periods Rule
NAV: Receivables -> Transactions -> Transaction

14. Daily Revenue Scenarios

15. S1 – Rule Start Date & Duration Known
• Daily [Non-Deferred] Revenue Recognition Rules
apply
Daily All Periods or Daily Partial Periods
• Start Date Scenarios
a) Rule Start Date in the Past
Revenue Recognition begin in current period - AR will catch
up revenue for the past periods in the current period
(assuming the prior periods are closed)
b) Rule Start Date in the current period
Revenue Recognition begins in the current period (standard
scenario)
c) Rule Start Date in the future period
Revenue Recognition happens on the given future date

16. S2 – Rule Start Unknown & Duration Known
• Use Deferred Revenue Recognition Rules
Daily All Periods / Daily Partial Periods
Check Deferred Revenue checkbox
• Alternatively, Use Revenue Contingencies
• Time Based (Refund Policy)
• Event Based (Customer Acceptance, Cash Payment)
• Use Revenue Accounting Form
Manually Trigger revenue using Revenue Accounting Form
Use original GL Date on Invoice or Provide new GL date at
the time of triggering revenue
• Revenue Accounting API
Automated way of triggering revenue [Details in Appendix B
of White Paper]

17. Revenue Accounting Form
[Find Transactions]
NAV: Receivables -> Control -> Accounting -> Revenue Accounting

18. Revenue Accounting Form
[Manage Revenue]

19. Revenue Accounting Form
[Schedule Revenue]

20. Revenue Accounting Form
[Enter Amount / GL Date]

21. Revenue Accounting Form
[Review & Save]

22. S3 – Rule Start Date Known & Duration Unknown
S4 – Rule Start Date Unknown & Duration Unknown
• Revenue Accounting Form doesn’t deliver
functionality to meet this scenarios
• Standard usage of Revenue Accounting API
also doesn’t permit changing of duration of
accounting rule assigned to the Invoice
• Workaround
Use 1 Mo period deferred accounting rule for all
transactions where duration is unknown
Use Revenue Accounting API and use custom logic
to determine revenue amount per period
Details in Appendix A of White Paper

23. Daily Rate Revenue - Benefits
• More precise calculation of Revenue
• Eliminates manual entries to adjust revenue entries in
GL to be GAAP compliant
• Fulfills the stringent accounting standards introduced
by the US GAAP and the Sarbanes-Oxley Act for
recognizing revenue
• Since Daily Rate Rules are variable duration rules,
they help in reduction of accounting rules
• Daily Rate Rule may lead to SKU reduction
• Flexibility to chose from All Periods or Partial Period
application of Daily Rate Rules

25. References:
• Record Revenue @ Daily Rate [Whitepaper]
– Appendix A & B provide case studies & technical details on
Revenue Accounting API
• Complying with SOP 97-2: Utilizing Daily Revenue
Recognition in Oracle EBS 11.5.10 and Beyond
– By Mike Ivers
• Revenue Management Enhancement: Daily Revenue
[Metalink Note: ID 401000.1]
• For COGS Deferrals: EBS Cost Management Data
Flow in Sub Ledger Accounting & Deferring COGS
– By Dharmalingam Kandampalayam (Dharma)

26. Q&A
•
Please remember to complete the Survey Form!
• Contact:
Anil Madhireddy
http://www.linkedin.com/pub/anil-madhireddy/4/21a/15b