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Restricting the recognition of Revenue after extension

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edited Jun 15, 2020 10:49AM in Revenue Management 1 comment

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Summary: Looking for restricting the recognition of revenue at the time of extension

Hi,

We had a scenario which is given below:

$1,000,000 of implementation revenue is being amortized evenly over 5 year life of the contract, amortizing $200k per year.  After year 3 the net value is $400,000 that is unamortized.  The contract is extended 2 more years changing the remaining life to 4 years. The Remaining $400K should be split into 4 years only.That means only $100K should be recognized every year now for the next 4 years.

 

The Scenario we are doing through FBDI templates.Can it be possible to bring it?If yes, then please share your thoughts on this.

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