Awards Management - Revenue Recognition in OFC


Overview


The article will detail the process when Sponsored Expenditures are incurred and Contract Events are processed in PPM or Contract Events are processed in PPM Contract Management

Critical Concepts


Outline of Process


These are the Journal entries involved in the Revenue Process

Examples of Diagram above

Case 1 - Cost Reimbursable Invoice

Project Number: 1018296

DateAction
02/01/2021Lab supplies purchased
02/08/2021Invoice created (including lab supplies purchased on 02/01/2021)
02/08/2021Revenue recognized in PPM
02/09/2021Cash received
03/01/2021Payment applied to Invoice

Expense Incurred - Lab supplies purchased

1.  The Expense is recorded at the item level - Department Process

     Debit:      Lab Supplies Expense

     Credit:     Account Payable

Invoice Created - Including lab supplies purchased on 02/01/2021

2.   The Receivable and Revenue are recognized when the Invoice is created - Central Office Process

a.   Receivable recorded to the Invoice level (PPM to AR)

      Debit:     A/R Federal Grants Billed

      Credit:    A/R Federal Grants Unbilled

b.   Revenue is recognized at the Expense item level (PPM to GL)

      Debit:     A/R Federal Grants Unbilled

      Credit:    Federal Grants Revenue

Cash Received

3.   The payment is received and put in the Undistributed Account before being applied to the receivable (Invoice) - Central Office Process

      Debit:     Cash

      Credit:    Undistributed Cash

Applied Payment

4.   The payment is applied to the receivable from the Undistributed Account - Central Office Process

      Debit:     A/R Federal Grants Billed

      Credit:    Undistributed Cash

Revenue Flow to the General Ledger

5.   The revenue flows to the General Ledger after it is recognized in Oracle Cloud PPM on 02/08/2021

      It can be verified by running the General Ledger Transaction Details report in Oracle

                             

 

 

 

Case 2 - Fixed Price/Milestone Invoice

Project Number: 1031203

DateAction
07/02/2020Invoice created - Per Payment Schedule stated in the agreement
07/02/2020Revenue recognized in PPM
02/22/2021Cash received
03/01/2021Payment applied to Invoice





Invoice Created 

1.   The Receivable and Revenue are recognized when the Invoice is created - Central Office Process

a.   Revenue is recognized to the Invoice level for Fixed Price/Milestone Awards (PPM to GL)

      Debit:     A/R Unbilled Private

      Credit:    Private Contracts Revenue

b.   Receivable recorded to the Invoice level (PPM to AR)

      Debit:       A/R Adv Billed Private

      Credit:      A/R Unbilled Private

Cash Received 

2.   The payment is received and put in the undistributed Account before being applied to the receivable (Invoice) - Central Office Process

      Debit:     Cash

      Credit:    Undistributed Cash

Applied Payment

3.   The payment is applied to the receivable from the Undistributed Account - Central Office Process

      Debit:     A/R Adv Billed Private

      Credit:    Undistributed Cash

 

Revenue Flow to the General Ledger

4.   The Revenue flows to the General Ledger after it is recognized in Oracle Cloud PPM on 07/02/2020- Central Office Process

It can be verified running the General Ledger report in Oracle

 

  





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