Finance · Module
Revenue Recognition
Contracts, performance obligations, schedules and deferrals posted to the books
Revenue Recognition is a planned W4 add-on that builds revenue contracts from subscriptions, signed contracts and orders, allocates price across performance obligations and posts schedules to Accounts. Accounting standards are marked verify.
Revenue by schedule, not by hand
Subscription and project businesses often recognise revenue in spreadsheets for their auditors. Revenue Recognition, planned for Year 3 (W4), builds that into the books. Revenue contracts are created from Billing subscriptions, signed CLM contracts in Legal and sales orders, with combination rules for related contracts.
Obligations, SSP and allocation
Each product carries revenue attributes that drive a performance obligation template: ratable, point in time, milestone or usage-based. Standalone selling price (SSP) tables are kept by product, segment, currency and effective date, with ranges and evidence notes. The transaction price, including discounts, is allocated across obligations on relative SSP, and variable consideration estimates carry constraint notes. Applicable standards (Ind AS, IFRS, US GAAP) are marked verify; confirm treatment with your auditors.
Schedules and postings
Each obligation gets a period schedule and recognition events such as delivery, milestone acceptance or usage. Postings for deferred revenue, unbilled receivables or contract assets and revenue by period go to Accounts through posting rules. Contract modifications are treated prospectively, by cumulative catch-up or as a separate contract, according to the rule a human selects with approval. The revenue run is a task on the close checklist; it locks after running and can be re-run with reversal.
A revenue waterfall and remaining performance obligations (RPO) show recognised versus deferred amounts. At GA, multi-book recognition runs parallel schedules per book where policies differ, and disclosures cover disaggregation of revenue, contract balances and RPO timing bands. Capitalised costs to obtain contracts, linked to CRM commissions, are planned later (W5).
AI that drafts, people who decide
For non-standard contracts, the Revenue Accounting Assistant proposes obligations and schedules with clause citations from the CLM contract. An accountant approves. For modifications, AI lists the facts relevant to each option but never selects the treatment.
Features
What Revenue Recognition includes
Revenue contracts
Created from Billing subscriptions, signed CLM contracts and sales orders, with combination rules.
Performance obligations
Templates per product: ratable, point in time, milestone or usage-based.
SSP management
SSP tables by product, segment, currency and effective date, with ranges and evidence notes.
Allocation
Relative SSP allocation of transaction price including discounts, with variable consideration notes.
Revenue schedules
Period schedules per obligation driven by delivery, milestone acceptance or usage events.
Postings
Deferred revenue, unbilled receivable or contract asset and revenue by period, posted through posting rules.
Contract modifications
Prospective, cumulative catch-up or separate-contract treatment per human-selected rule with approval.
Revenue waterfall and RPO
Recognised versus deferred roll-forward and remaining performance obligations.
Close integration
Revenue run as a close checklist task, locked after running, re-runnable with reversal.
Multi-book and disclosures
Parallel recognition per book and disclosures for disaggregation, contract balances and RPO bands (verify).
Workflow
Signed contract to revenue schedule
- 1
A contract is signed in CLM or a subscription starts in Billing.
- 2
A revenue contract is created with obligations from product templates.
- 3
Price is allocated on relative SSP.
- 4
Schedules are generated and reviewed.
- 5
The monthly revenue run posts to Accounts during close.
AI
AI skills and Digital Employees
Obligation and schedule drafts
For non-standard contracts, proposes obligations and schedules with CLM clause citations for accountant approval.
Modification guidance
Lists the facts relevant to each treatment option without selecting one.
SSP evidence summary
Summarises historical pricing statistics as a draft evidence note.
Digital Employees that use this module
They act through the same governed Actions as people; risky steps wait for approval.
Frequently asked questions
Which standards does it follow?
The model supports Ind AS, IFRS and US GAAP style recognition, but requirements are marked verify. Confirm treatment with your auditors.
Does AI decide how to treat a modification?
No. It lists relevant facts; a human selects the treatment and it needs approval.
Where do contracts come from?
From Billing subscriptions, signed contracts in Legal's CLM and sales orders.
See Revenue Recognition in your workflow
Tell us about your team and the outcomes you want. We will walk you through the apps, the Digital Employees and the plan for your industry.