Restricting the recognition of Revenue after extension
Summary: Looking for restricting the recognition of revenue at the time of extension
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.