Subscription accrual example [AX 2012]

Updated: November 26, 2010

Applies To: Microsoft Dynamics AX 2012 R3, Microsoft Dynamics AX 2012 R2, Microsoft Dynamics AX 2012 Feature Pack, Microsoft Dynamics AX 2012

In the following example, you can see how accrued revenue is posted.

You have created a subscription with a period code Quarterly and an accrual period code Monthly. The sales price for the subscription is EUR 9,000. You create a fee transaction that you invoice. The following table shows the voucher for the fee transaction.

Date

Amount (EUR)

Posting type*

Account type

September 8, 2004

9,000

Customer balance

Balance

September 8, 2004

-9,000

Invoiced revenue

Profit and loss

September 8, 2004

9,000

Accrued revenue - subscription

Profit and loss

September 8, 2004

-9,000

WIP - subscription

Balance

*For more information about the posting types, see Ledger posting setup (form).

Depending on the parameter settings, the monthly amount to be accrued is EUR 3,000, one-third of the quarterly subscription fee. For more information about how parameter settings can influence the monthly amount, see the example in About the accrued amount.

When you accrue this amount, it is debited from the WIP - subscription account and credited to the Accrued revenue - subscription account, as shown in the following table.

Date

Amount (EUR)

Posting type

Account type descriptor

October 31, 2004

3,000

WIP - subscription

Balance

October 31, 2004

-3,000

Accrued revenue - subscription

Profit and loss

Your customer decides to change to another subscription. You issue a credit note to the customer. However, you have already accrued one of the monthly periods for the quarterly subscription. Therefore, you must reverse the accrued amount.

The Reverse accruals on crediting option in the Subscription parameters form is set to Manual. Therefore, you must manually reverse the accrued periods. For more information about this option, see Subscription parameters (form).

To reverse the accrued period manually, you select the Reverse accrued revenue check box in the Accrue subscription revenue form, and post the transaction.

Two transactions are added to the voucher for the subscription transaction, as shown in the following table.

Voucher

Date

Amount (EUR)

Posting type

Account type descriptor

170760_091

November 7, 2004

3,000

Accrued revenue - subscription

Profit and loss

170760_091

November 7, 2004

-3,000

WIP - subscription

Balance

The WIP - subscription account is credited with EUR 3,000, and the Accrued revenue - subscription account is debited with EUR 3,000.


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