QAD Revenue Recognition Solution

QAD 2017 Enterprise Edition > User Guides > Revenue Recognition > Introduction > QAD Revenue Recognition Solution

The revenue recognition solution is split into two parts. Standard revenue recognition functionality decouples invoice and revenue, so that you can recognize revenue at the point where transfer of control of goods or services takes place. Standard revenue recognition functionality enables you to:

• Define revenue recognition contracts complete with performance obligations.

• Define and work with accrued and deferred revenue accounts. You must create deferred recognition daybooks to enable you to track journal entries and postings to handle the deferral and recognition of revenue.

• Define revenue recognition rules and link them to the performance obligations attached to revenue contracts. This step enables you to automate revenue recognition journal entries based on the following recognition rules:

• Acceptance - A performance obligation requires a form of acceptance such as proof of delivery.

• Payment - Revenue is not recognized until payment has been received.

• Time-based - A performance obligation can be marked as fulfilled after a set time period after goods or services have been shipped or invoiced.

• Periodic - Revenue is recognized monthly or periodically, such as for warranties or maintenance contracts.

• Custom Periodic - Revenue recognition is subject to special considerations. For example, revenue amounts might be split unevenly across financial periods.

Advanced revenue recognition functionality is based on ASC 606 and IFRS 15. The functionality additionally allows you to:

• Create revenue recognition rules based on the percent complete of the project or progress to completion.

• Allocate discounts equally.

• Use ongoing estimates during a contract.

• Provide detailed reporting and disclosure in accounts.

Important: A separate license is required for advanced ASC 606 and IFRS 15 requirements.