About the Production + profit matching principle
Important
This content is archived and is not being updated. For the latest documentation, see Microsoft Dynamics 365 product documentation. For the latest release plans, see Dynamics 365 and Microsoft Power Platform release plans.
Applies To: Microsoft Dynamics AX 2012 R3, Microsoft Dynamics AX 2012 R2, Microsoft Dynamics AX 2012 Feature Pack, Microsoft Dynamics AX 2012
The Production + profit matching principle, which applies to fixed-price projects only, is used to recognize all costs on a project, plus a percentage of the total estimated profit, as the total revenue for the given period. When the Production + profit matching principle is used and the estimate is posted, the recognized revenue is split into cost and profit. The cost portion of the revenue is posted to the Accrued revenue – production account.
The following is an overview of how and where the Accrued revenue – production and Accrued revenue – profit accounts are applied and the parameter setup that is required in the Project groups form.
Account type
Profit and loss.
Availability
License code |
Configuration code |
|---|---|
Project II |
Work in process |
How the accounts are applied
Transaction type |
Project type |
Statement type |
|---|---|---|
Fee |
Fixed-price |
Profit and loss |
Parameter dependencies
In the Project groups form, on the Estimate FastTab, select Production + profit in the Matching principle field.
Actions and effects
The following table describes the effects of actions that you can perform in the Estimate form.
Action |
Effect |
|---|---|
Post estimate |
For fixed-price projects that us the completed percentage revenue recognition accounting principle, the account is credited with a fee transaction that is created when an estimate is posted. |
Reverse estimate |
For fixed-price projects that use the completed percentage revenue recognition accounting principle, the account is debited on the reversed fee transaction when the reversed estimate is posted. |
Elimination |
For fixed-price projects that use the completed contract revenue recognition accounting principle, the account is credited on the original fee transaction when the elimination is posted. |
Reverse elimination |
For fixed-price projects that use the completed contract revenue recognition accounting principle, the account is debited on the reversed fee transaction when the reversed elimination is posted. |