- Phased revenue recognition in the contract
- Standard doc topics (how to find, how to create,
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- main tab, project structure
- Allocate overheads buttons for Amount (Overheads) distribution.
- Fill current recognition buttons: by Invoiced, by Progress, by Expenses.
- if Project is not marked as Advanced Project Planning, then old Phased revenue recognition mode will be applied (with no project structure and recognition by expenses).
Phased revenue recognition, in line with IFRS 15, is primarily widely applied to in contracting for long-term contracts, projects such as construction projects works that extend over an extended period, like building a villa over 12 several months. Under this approachmethod, revenue and costs are recognized progressively based on the stage of completion of the contract's completion stage , rather than solely upon at the time of invoicing. While partial revenue can be Any revenue recognized before invoicing is recorded as a contract asset , it cannot be classified and not as receivables until all the related contractual obligations are met. Only then can satisfied and an invoice be is issued and recognized.
This method is not exclusive to construction companies; it also applies to service providers with long-term contracts. Instead of recognizing revenue and costs only upon invoicing, this approach allows revenue to be recorded in alignment with the contract's progress, capturing different phases of completion.
To set up phased revenue recognition, you need to:
- Go to Administration > General Settings > Enable Phased Revenue Recognition.
- https://portal.firstbit.ae/~tQSEK
This ensures that project revenues are aligned with the actual progress of work performed.
Administration → General Settings → Phased Revenue Recognition.
- Access the specific contract > Terms tab > activate Phased Revenue Recognition
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