R12 COST-TO-COST Seeded Revenue Calculation Incorrectly Reduces Budgeted Revenue with the Amount of Manual Events
(Doc ID 1526105.1)
Last updated on OCTOBER 29, 2018
Applies to:Oracle Project Billing - Version 12.1.3 and later
Information in this document applies to any platform.
For projects using the cost-to-cost revenue accrual method, Oracle Projects uses the following formula to calculate revenue (in the project functional currency) to accrue for the revenue generation run:
CCR(RUN) = Lesser of (Remaining funding available if using hard limit) and ((AC/BC (BR-ER))- AR)
Where, for a project or task: CCR(RUN) = Cost-to-cost revenue for current run
• AC = Actual total burdened cost through PA Period on or before the accrue through date
• BC = Budgeted baseline burdened cost*
• BR = Budgeted baseline revenue*
• ER = Entered event revenue
• AR = Revenue previously accrued in PA Period on or before accrue through date
Note: *Oracle Projects uses the cost and revenue budget types that you specify on the Cost-to-Cost billing extension
Revenue = Lesser(66,666.67 ,((25,000.00/75,000.00 * (100,000.00 - 60,000.00)) - 33,333.33 ))
ER (Total Manual Events)=60,000
AR=33,333.33 (the first run of revenue POC)
Revenue = Lesser(66,666.67 , ((25000/75000*(100000-60000))-33333.33))= 19999.9997
However the formula should be:
Revenue = Lesser(66,666.67 , ((25000/75000*(100000)-60000)-33333.33))=-59999.9997
The Manual events are considered but in the current Oracle formula it is reducing the budgeted revenue, but it should be reducing the current percentage of the calculated revenue for that current run. The following is an example of how it should be calculated:
1st Run of Generate Revenue 2nd Run of Generate Revenue 3rd Run of Generate Revenue
Actual Cost 25 25 30
Budget Cost 50 50 50
Budgeted Revenue 100 100 100
Event Revenue 0 10 10
Actual Revenue 0 50 50
Scenario Expected Revenue 50 50 60
Total Revenue Explanation *1 *2 *3
Oracle Current Formula Calculation 50 -5 4
Current Oracle Total Revenue 50 55 54
Proposed Oracle Formula Calculation 50 -10 0
Proposed Oracle Total Revenue 50 50 60
*1 No Manual Revenue, and no previous revenue so the formula should just take 50% of the total revenue.
*2 No new cost, no adjustment to the budget. Only a manual revenue event and the already accrued revenue. Since their was no new spend, the percentage of revenue should still only be 50% of the budget amount (100).
*3 Additional $10 of cost, no adjustment to the budget. No new manual event and the already accrued revenue. Since we already accrued revenue of $50 and had a manual event of $10, our total revenue should only be $60.
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