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Phase 1: Percent spent= 5000/75000 = 6.666%
Revenue = 0.0666*100000 = 6666.67 USD
Phase 2: Percent spent = 25000/75000 = 33.33%
Accumulated Revenue = 33333.33 USD, Period Revenue amount = 26666.67 USD
Phase 3: Percent Spent = 35000/75000 = 46.67%
Accumulated revenue = 46666.67 USD, Period Revenue amount = 13333.34 USD
Phase 4: Percent Spent = 75000/75000 = 100%
Accumulated revenue = 100000 USD, Period Revenue amount = 53333.33 USD
Derivation of revenue amounts are correct, Dina provided the detail values with calculation breakups
Adding funding to it, i guess the funding would be cost. ie., funding for 75000/-
With that assumption am i right to derive the following revenue schedules which system would generate. Also, please help with the revenue amount that will be generated in the final schedule.
End of phase1: Funding Balance=70,000 Versus Periodic Rev=6666.67=>rev. generated for 6666.67
End of phase2: Funding Balance=45,000 Versus Periodic Rev=26666.67=>rev.generated for 26666.67
End of phase3: Funding Balance=10,000 Versus Periodic Rev=13333.34=>rev. generated for 10,000
End of phase4: Funding Balance=-65,000 Versus Periodic Rev=53333.333=>rev. generated for ?
My previous response was based on the assumption that you have baselined the fund amount equal to the agreement amount. The revenue budget would also be 100,000, since revenue budget could be baselined only if it equal the fund allocated to that project.
If you fund only 70,000, the revenue recognition at each step will be 0.7 of the values I have mentioned.
The sysem multiply the percent spent by the value of revenue budget, i.e. the allocated fund.
As mentioned in YOUR calculations, does the system take the accumulated cost at each milstone and generate the accumlated revenue ...
Is is not pssible for the system to take cost without accumlating it - individulally?
The system is summarizing all costs of the entire project and divide that amount by the total value of the approved cost budget.
The result is the percent spent.
This method is not tracking milestones completed, only cost spent.
i guess i messed it up a bit ...
my question was on percent complete method, where the event rev. and existing rev. are taken out at every percent complete revenue calculation
why is it so.
if i consider my Tt. rev as 100 then percent complete goes this way..
event rev.=25; percent complt=5% ---> rev=0.05(100-25)-0 = 3.75
event rev=0; percent complt=10%------>rev=0.10(100-0)-3.75 =6.25
event rev=20;percent complt=20%----->rev=0.20(100-20)-6.25 =9.75
As per oracle, why the event rev. and previous revenue is taken out at every revenue recognition ?
ideally, it shud be..
5%(100) = 5
10%(100) = 10
so and so far..