About the Production + profit matching principle [AX 2012]

Updated: January 31, 2012

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.

Profit and loss.

License code

Configuration code

Project II

Work in process

Transaction type

Project type

Statement type

Fee

Fixed-price

Profit and loss

In the Project groups form, on the Estimate FastTab, select Production + profit in the Matching principle field.

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.


Announcements: To see known issues and recent fixes, use Issue search in Microsoft Dynamics Lifecycle Services (LCS).

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