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## Rev Rec calculation for an annual Rate Plan Charge

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## Rev Rec calculation for an annual Rate Plan Charge

We expect to recognize our revenue billed upfront on yearly/annual rate plans on a monthly frequency.

We tried to recalculate the revenue and we cannot get the exact figure.

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## Re: Rev Rec calculation for an annual Rate Plans Charge

For an annual charge amount = \$100 we have : The annual (\$100.00) charge is divided by the number of days in a year in oder to have the amount recognized per day:

\$100.00 / 365 = \$0.27 ( rounded to 2 decimals ; based on the currency rounding ) per day

The total amount recognized is 365 * 0.27 = \$98.82

The remainder amount is \$100 - \$98.82 = \$1.18

The Rounding is : This remainder is divided by 365 and this 'remainder per day amount' distributed to the end of the recognition period backward.
\$1.18 / 365 < 0.01 , hence we distribute \$0.01 per day over the latest 118 days of the period: If you found my answer helpful, please give me a kudo ↑
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