About the fixed-price project posting examples
Important
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Applies To: Microsoft Dynamics AX 2012 R3, Microsoft Dynamics AX 2012 R2, Microsoft Dynamics AX 2012 Feature Pack, Microsoft Dynamics AX 2012
Based on the parameters On-account invoicing, Revenue recognition accounting rule, and Matching principle in the Project groups form, transactions are posted to the General ledger in eight different ways. The posting examples in this section illustrate how transactions are posted to the General ledger with each of the eight setup combinations.
Assumptions
A company wins a fixed-price contract of USD 200,000 based on the following milestone invoicing plan (on account).
Action |
Time |
Amount |
|---|---|---|
40 percent prepayment on signature |
July |
80,000 |
25 percent on first delivery |
September |
50,000 |
35 percent on final delivery |
November |
70,000 |
The work takes place from July through November, during which the costs in the following table are consumed.
Time |
Amount |
|---|---|
July |
12,000 |
August |
30,000 |
September |
24,000 |
October |
36,000 |
November |
18,000 |
Estimates are posted each month, from July through November.
The elimination is posted in December.
Business example
| Per month | Consumption cost | Degree of completion | Invoiced on-account amount | Completed percentage | Completed percentage | Completed contract | Completed contract | ||
|---|---|---|---|---|---|---|---|---|---|
| Cost | Revenue | Cost | Revenue | ||||||
| Estimate | July | 12,000 | 10 | 80,000 | 12,000 | 20,000 | 0 | 0 | |
| Estimate | August | 30,000 | 25 | 0 | 30,000 | 50,000 | 0 | 0 | |
| Estimate | September | 24,000 | 20 | 50,000 | 24,000 | 40,000 | 0 | 0 | |
| Estimate | October | 36,000 | 30 | 0 | 36,000 | 60,000 | 0 | 0 | |
| Estimate | November | 18,000 | 15 | 70,000 | 18,000 | 30,000 | 0 | 0 | |
| Elimination | December | 0 | 0 | 0 | 0 | 0 | 120,000 | 200,000 | |
| Total | 120,000 | 100 | 200,000 | 120,000 | 200,000 | 120,000 | 200,000 | ||
Note
When the cost of hour, expenses, and items is posted in journals, it is generally posted directly to a Profit & loss account on fixed-price projects.
Ledger posting examples
Click the links in the following table to see the various posting examples.
Topic |
Revenue recognition accounting rule |
Matching principle |
On-account invoicing |
|---|---|---|---|
Completed percentage |
Sales value |
Balance |
|
Completed percentage |
Sales value |
Profit and loss |
|
Completed percentage |
Production + profit |
Balance |
|
Completed Percentage |
Production + profit |
Profit and loss |
|
Completed contract |
Sales value |
Balance |
|
Completed contract |
Sales value |
Profit and loss |
|
Completed contract |
Production + profit |
Balance |
|
Completed contract |
Production + profit |
Profit and loss |
See also
About invoicing fixed-price projects