This document will continue to evolve as existing sections change and new information is added. All updates are logged below, with the most recent updates at the top.
05 APR 2017
New feature delivered in Update 4 (April), which will also be included in the May Quarterly update.
05 DEC 2016
Initial Document Creation
Oracle Revenue Management Cloud is a centralized, automated revenue management solution that enables you to address the ASC 606 and IFRS 15 accounting standard “Revenue from Contracts with Customers”. The solution provides a configurable framework to automate the identification and creation of customer contracts and performance obligations, and their valuations, and resulting accounting entries, with the ability to recognize revenue over time or at a point in time. The solution also provides an option to calculate or load and manage standalone selling prices.
Ensure compliance with ASC 606 and IFRS 15 by deploying a uniform, centralized, and comprehensive view of contracts with customers, unifying the details tracked in a variety of order management, retail point of sales, and billing systems. Automatically identify and generate customer contracts and performance obligations in Revenue Management based on data from multiple source systems.
- Integrate with your existing sales cycle applications:
- Revenue Management imports, processes, and stores data related to the sales cycle. For example, orders, contracts, receivables data, point of sale data, projects, shipping, traffic, and other fulfillment data (satisfaction events).
- The product integrates with:
- Oracle Financials Cloud
- Oracle E-Business Suite
- Third party applications
- Revenue Management centrally processes and manages data from the various source systems.
Enable enterprises to easily integrate sales cycle data from a variety of source systems with Revenue Management.
Calculate observed standalone selling prices automatically by importing pools of historic standalone sales, categorized by the way your organization stratifies the data for the purpose of pricing. Review the system calculated values, make necessary changes, recalculate, and establish or approve the observed standalone selling prices.
Upload standalone or estimated selling prices and manage existing standalone selling prices in bulk using spreadsheets.
Revenue Management uses the standalone selling prices to automatically apply relative allocation of the transaction price across performance obligations within accounting contracts.
Ensure compliance with the new accounting standards ASC 606 and IFRS 15 through the centralized Revenue Management repository that stores imported and processed sales cycle data. Revenue Management analyzes the data, and provides user-configurable contract identification and performance obligation identification rule engines for the system to automatically:
- Identify and create performance obligations and accounting contracts.
- Determine the transaction price for each accounting contract.
- Allocate the transaction price, using a relative allocation based on standalone selling prices, across performance obligations in an accounting contract.
- Recognize revenue when each performance obligation is satisfied either at a point in time or over time, based on revenue satisfaction plans, business events, or satisfaction events.
- Recognize revenue independent of billing.
- Automatically accrue contract liabilities and contract assets.
Automatically generate and post accounting entries to the contract asset, contract liability, revenue, discount and clearing accounts for customer contracts by evaluating the performance obligation satisfaction status and billing information of the customer contract.
Automatically create performance obligations in a customer contract that are implied in nature but not captured in any upstream application as a source document line. Define implied performance obligation rules to address this requirement.
Handle variable consideration estimate corrections or contract modifications for existing frozen accounting contracts through improved File Based Data Import (FBDI) capabilities.
You now have more flexibility to perform accounting contract updates such as:
- if you estimated variable consideration at contract inception based on product selection, you can revise the estimate by adding a replacement product
- if you negotiated with a customer to modify a contract, you can add a new line item to the contract
The line item can be added to an existing frozen contract using the Revenue Basis Import FBDI, in one of two ways:
- Add as another promised detail to a performance obligation by setting the flag 'Add to Existing Contract' to ‘Yes’ and selecting “ADD TO PO” in the “Action code for adding new line to existing contract” field
- Add as an additional performance obligation by setting the flag 'Add to Existing Contract' to ‘Yes’ and selecting “CREATE NEW PO” in the “Action code for adding new line to existing contract” field
Proactively contrast and compare sales cycle data between existing accounting standards and various proposals for compliance with the new accounting standard during the transition period until the new accounting standard for Revenue from Contracts with Customers comes into effect.
Accounting trial balances form an excellent point of comparison between the latest iteration of a compliance proposal, and previous proposals for ASC 605 and IAS 18 old rules accounting.
Oracle recommends that you compare the results of your current accounting (ASC605 and IAS 18) to each accounting iteration generated in Revenue Management (based on ASC 606 and IFRS 15) in an enterprise performance tool, such as Oracle Essbase, Oracle Planning and Budgeting Cloud, or Oracle Hyperion Planning.
Revenue Management is engineered to address ASC 606 and IFRS 15 so you can:
- Do what-if iterative studies of how you might implement the new rules such as the impact of different definitions of contracts and performance obligations, different pricing paradigms, different satisfaction criteria, and so forth.
- If you do not like the results, you can perform iterative modeling by discarding the processed contracts, reconfiguring your rules, and running the processes again to create accounting contracts. The imported data remains available for the next iteration.
- Oracle ensures that default accounting will not corrupt your old rules accounting in your general ledger but will instead post to a secondary ledger from which you can extract data to populate into an enterprise performance tool.
- Once you have completed the modeling stage, you can use that secondary ledger normally. When the adoption date comes, the new accounting rules, as proven, can be directed to your primary ledger for on-going use.
Focus your efforts only on customer contracts of significance, and contracts with exceptions to be resolved by utilizing the Revenue Management work area.
The centralized work area contains three tabs:
- The Pending Review tab lists customer contracts with a total transaction price over a certain threshold amount (significant value contracts).
- The Pending Allocation tab lists customer contracts where the standalone selling price or estimated selling price has not been established and therefore, the transaction price cannot be allocated across performance obligations.
- The Pending Revenue Recognition tab lists customer contracts awaiting the appropriate data to recognize the revenue.
Enable Revenue Management to automatically calculate standalone selling prices to also view standalone selling prices that are pending establishment.
Actionable information is pushed to the work area, eliminating the need for you to run multiple queries or search for data; you will know exactly how to prioritize your workload the moment you log into Revenue Management.
Use the Revenue Contract Account Activity report in Revenue Management to review account balances by accounting contract and performance obligation to support audit processes and perform detailed analysis of various accounts.
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