Percent complete is over 100% after revenue recognition
In the Revenue Recognition Wizard, how is it possible to have an engagement show a percent complete that is over 100%? |
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With a Not-To-Exceed (NTE) engagement it is possible to perform an initial revenue recognition that will result in the engagement being considered 100% complete. If the following occurs while the engagement is under the NTE cap, Projector will then allow (but does not recommend) a subsequent revenue recognition against the engagement where the "Recognizing Additional Revenue Of" option is used. For example, you may have $1000 in system revenue on an NTE engagement and you perform revenue recognition saying the engagement is 100% complete. Later, an additional hour of work is performed and revenue recognition is done again recognizing additional revenue of $100. 100 is 10% of the 1000 previously recognized and Projector will now show the engagement as 110% complete. Projector doesn't generally recommend revenue recognition on an NTE engagement, but it is useful in cases where a project may have 60% of its time budget consumed, but only 40% of the work is actually done. You can use revenue recognition to adjust system revenue during the project length. In this example, you may want to recognize 40% of revenue on the time cards representing 60% of the time budget so as to not overstate revenue. |  |
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