Deferred Revenue Management
Deferred Revenue is an advance payment recorded on the beneficiary's balance sheet as a liability account until either the administrations/services have been rendered or the products have been conveyed. In other words, deferred revenue is an advance payment received by a company. However, it is not yet revenues so cannot be reported on the income statement. Deferred revenue thus acts as a liability account since it alludes to income that has not yet been earned. However, as products and services are conveyed over time, the income is recognized and posted on the income statement.
Configuration
To configure the deferred revenues, firstly configure deferred revenue models.
For that go to the Settings menu under the module Accounting,
Accounting > Configuration > Accounting > Deferred Revenues models
Upon clicking the CREATE button, you can create new Deferred Revenue Model.
You have the following attributes for the deferred revenue model
Here one can define the Deferred Revenue Model Name.Secondly, the Depreciation method for instance the number of depreciations needs to depreciate your asset.
Prorata Temporis: If ticked, Indicates that the first depreciation entry for this asset has to be done from the asset date(purchase date)instead of the first January/Start date of fiscal year.
Revenue Account:Account used to recognize this revenue.
Deferred Revenue Account:Account used to record the deferred income.
Also one can specify Journal, Analytic Account and Analytic Tag.
Next, go to Accounting>Accounting>Deferred Revenues
Here one can manually set the original values or select related purchases.
Also set Depriciation Method and accounts related to the expense.
Via specifying every parameter in the form, one can compute the revenue. This can be done via clicking the COMPUTE REVENUE button.
One can see the revenue computed under the Revenue Board.
Via clicking the POSTED ENTERIES on top, you get navigated to a new window like below. Here you can see the journal entries in draft state for the created Deferred Revenue.
However, after confirming it, you like to modify the revenue, simply click the MODIFY REVENUE button.
One can give away the reason behind the modification and new values for the depreciations.