for JD Edwards
Financial standards outline when you can recognize revenue for the exact amounts you bill to customers. FASB/IASB requirements state that you cannot recognize revenue for billed amounts, or cost of goods sold amounts, until a performance obligation to that customer has been fully satisfied.
Since performance obligations can be satisfied in different ways and times (depending on the industry and service provided), keeping track of revenue and profit recognition can encompass various moving parts. Within the user community, Oracle JD Edwards can help your organization remain in compliance with these requirements.
Revenue Recognition for JD Edwards
Revenue recognition is invoice driven. This means any module within JD Edwards that initiates an invoice can be susceptible to the revenue recognition process. Profit recognition is based on the job itself, and the cost of said job, with drivers reliant on the job master. The modules that “feed into” either process, with the exception of initial setup, remain visually untouched and susceptible to falling out of FASB/IASB requirements.
Within JD Edwards, here are the modules/functions that are more at risk:
Sales Order Processing
Retail/Estate Management Systems
We can assist with revenue recognition setup requirements
In the past within the JD Edwards platform, revenue was recognized at the time the invoice was created, and therefore out of compliance. This can be a problem for organizations who haven’t taken the steps to make the proper updates within their platform (especially for those operating on versions 9.1 and older). Smartbridge has extensive experience in doing so for enterprise-level organizations, and can prevent your organization from falling victim to various liabilities.
Implementing Revenue Recognition
Implementing revenue recognition involves specific integrations within internal controls and taxes:
- Updating internal controls: Internal controls will require updating, if not a complete overhaul, to reflect changes in accounting policies and procedures.
- Developing new processes: Processes may need to be developed or updated to incorporate new management judgement.
- System updating: Systems may need updating to capture new data used for accounting and additional disclosures.
- Updating documents: Revenue recognition processes and policy documentation will require updating.
- Transfer price evaluation: Multinational entities should evaluate whether the new standard will have impact on transferring price.
Explore our video series on revenue recognition for JD Edwards:
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