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Re: Rev Rec calculation for an annual Rate Plans Charge

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Zuora Staff

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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Zuora Staff

Re: Rev Rec calculation for an annual Rate Plans Charge

For an annual charge amount = $100 we have :

 

RevenueSchedule100.jpg

 

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 :

RecognitionRules.jpg

 

 

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:

 

RevRec.jpg



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1 REPLY 1
Zuora Staff

Re: Rev Rec calculation for an annual Rate Plans Charge

For an annual charge amount = $100 we have :

 

RevenueSchedule100.jpg

 

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 :

RecognitionRules.jpg

 

 

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:

 

RevRec.jpg



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Help others find answers faster by accepting my post as a solution √

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