Additional Setup for Cost Amortization

You can amortize costs in the same ways that you recognize revenue:

• Directly against source records. This is the original recognition method supported by Revenue Management. It enables you to comply with legislation such as ASC 605.
• Against revenue contracts which are linked, via performance obligations, to source records. This is known as using multiple-element arrangements. It enables you to comply with legislation such as ASC 606 and IFRS 15.

Setup to Amortize Costs directly against Source Records

The setup required for cost amortization is as described in Setting up Revenue Management, but with the following adjustments:

• Settings records must include Cost as a selected value type, and all mandatory fields must be completed. Mandatory fields typically include Balance Sheet GLA (Cost) and Income Statement GLA (Cost), and any fields that Revenue Management requires to perform its calculations such as Total Cost.
• Templates must specify a Cost Basis and must be linked to a settings record where Cost is a selected value type. A template's configuration will affect which fields are mandatory on the associated settings record.

Setup to Amortize Costs against Revenue Contracts

After completing the setup to amortize costs directly against source records (above), follow the instructions in Additional Setup for using Multiple-Element Arrangements.

Note:

We recommend you use the Create Setup for Using Revenue Contracts feature in Feature Console to automatically create the settings and templates required for revenue contracts and performance obligations.