Revenue Allocation for One-Time and Recurring Subscription Lines
This topic applies whether you check the Create Revenue Elements for Subscription Revisions accounting preference, unless specified otherwise. .
You must enable the Advanced Revenue Management (Revenue Allocation) feature to use revenue allocation.
Revenue elements for one-time and recurring subscription lines include an Alternate Quantity field for revenue allocation. The alternate quantity is calculated by multiplying the subscription line item quantity by the recurrence frequency, the number of charges over the subscription term.
Example:
Consider example A has a 6-year term, annual recurrence, and a quantity of 2, resulting in an alternate quantity of 12. Example B has a 3-year term, monthly recurrence, and a quantity of 5, resulting in an alternate quantity of 180.
|
|
Example A |
Example B |
|---|---|---|
|
Term |
6 years |
3 years |
|
Recurrence Frequency |
Annually |
Monthly |
|
Term x Recurrence Frequency |
6 year term ×1 charge per year =6 |
3 year term ×12 charges per year =36 |
|
Quantity |
2 |
5 |
|
Alternate Quantity |
2 ×6 =12 |
5 ×36 =180 |
The fair value price record requires the correct values for Units Type and Units to support the allocation. When you enter a value in Alternate Quantity and other alternate fields, the {quantity} field in fair value formulas uses the alternate quantity. Units Type and Units are displayed on the fair value price record only when the Multiple Units of Measure feature is enabled. For information, see Multiple Units of Measure.
Alternate Quantity Computation for Activation Revenue Arrangement When the Billing Schedule Starts Mid-Month
The following example shows how the Alternate Quantity is computed for the activation revenue arrangement with a mid-month billing schedule and proration for subscription start and end dates:
-
Start Date 8/1/2019
-
End Date 11/30/2019
-
Recurrence Date 8/16/2019
With the recurrence start date preference enabled, the billing account's invoice periods affect the subscription's recurrence pattern.
The billing account affects the alternate quantity because the charge and rating periods don't align with the start date, resulting in a recurrence start date of 8/16/2019 for the subscription. The first and last charge periods are prorated, as shown in the following table:
|
Rating Periods |
Start Date |
End Date |
Days |
Daily Quantity |
|---|---|---|---|---|
|
7/16/2019 |
8/15/2019 |
31 |
10 |
0.322581 |
|
8/16/2019 |
9/15/2019 |
31 |
10 |
0.322581 |
|
9/16/2019 |
10/15/2019 |
30 |
10 |
0.333333 |
|
10/16/2019 |
11/15/2019 |
31 |
10 |
0.322581 |
|
11/16/2019 |
12/15/2019 |
30 |
10 |
0.333333 |
|
Charge Periods |
|
|
|
|
|
8/1/2019 |
8/15/2019 |
15 |
4.8387097 |
|
|
8/16/2019 |
9/15/2019 |
31 |
10 |
|
|
9/16/2019 |
10/15/2019 |
30 |
10 |
|
|
10/16/2019 |
11/15/2019 |
31 |
10 |
|
|
11/16/2019 |
11/30/2019 |
15 |
5 |
|
|
|
|
|
39.8387097 |
|