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Accounting for Usage Revenue

Generating usage revenue is very similar to generating labor revenue. Oracle Projects generates usage revenue and, if you like, borrowed and lent usage revenue.

Oracle Projects uses the Usage Revenue Account function to calculate revenue you earn for labor items. The resulting usage revenue is awarded to either a project-managing organization, or a non-labor resource's owning organization; this usage revenue does not include borrowed and lent labor revenue.

The Usage Revenue Borrowed Account and Usage Revenue Lent Account functions allow you to record revenue in both a project-managing organization and in a non-labor resource's owning organization (when these two organizations are different).

The organization to which you award revenue (using the Usage Revenue Account function) becomes the lending organization; Oracle Projects uses the Usage Revenue Lent Account transactions to debit a revenue account of the lending organization.

The organization to which you do not award revenue (using the Usage Revenue Account function) becomes the borrowing organization; Oracle Projects uses the usage Revenue Borrowed Account transactions to credit a revenue account of the borrowing organization

When you run the PRC: Generate Draft Revenue process, Oracle Projects compares the project-managing organization and the non-labor resource's owning organization to determine whether to use the Usage Revenue Borrowed Account and Usage Revenue Lent Account functions when it calculates usage revenue you earn.

If the project-managing organization is the same as the non-labor resource's owning organization, Oracle Projects uses only the Usage Revenue Account function to credit a revenue account; the Usage Revenue Borrowed Account and Usage Revenue Lent Account functions are not necessary.

If the project-managing organization is not the same as the non-labor resource's owning organization, Oracle Projects first ensures that you have enabled the Usage Revenue Borrowed Account and Usage Revenue Lent Account functions, and then uses them to create revenue credit and debit entries for borrowed and lent usage revenue. The borrowed and lent entries are in addition to the usage revenue credits Oracle Projects creates using the Usage Revenue Account transactions. If you do not want to record borrowed and lent usage revenue entries, do not implement the Usage Revenue Borrowed Account and Usage Revenue Lent Account functions.

The Usage Revenue Borrowed Account and Usage Revenue Lent Account functions are distinct from the Usage Revenue Account function to allow you to separate borrowed and lent usage revenue into as many different accounts as you separate usage revenue.

Usage Revenue Account Function

When you run the PRC: Generate Draft Revenue process, Oracle Projects uses the Usage Revenue Account transactions to credit a revenue account for usage items.

The Usage Revenue Account function consists of the following transactions:

If your business does not distinguish usage revenue earned between private and public projects, you can enable the All Usage Revenue transaction.

Fremont always awards usage revenue to the resource-owning organization, and awards usage revenue to the project-managing organization using borrowed and lent revenue accounts. Since Fremont does not distinguish revenue earned between private and public projects, it enables just the All Usage Revenue transaction.
Fremont Corporation uses three revenue accounts to record usage revenue, depending upon the expenditure type:
· Computer Fee Revenue (4200)
· Vehicle and Equipment Revenue (4201)
· Misc. Asset Revenue (4202)
To implement the Usage Revenue Account function, Fremont defines a rule to determine the revenue account for usage revenue.
Fremont defines a lookup set to map expenditure types to the appropriate revenue account. Fremont uses the lookup set to define the revenue account rule.
Fremont uses existing rules to supply values for the Company and Cost Center segments of its Accounting Flexfield.
Define a Lookup Set:
Name Usage to Revenue
Description Map the expenditure type for usage items to the appropriate revenue account
Segment Value Lookups
Intermediate Value (Expenditure Type) Segment Value (Account Code)
Computer Services 4200
Vehicle 4201
Field Equipment 4201
Other Asset 4202
Define a Rule to Determine Account Segment Value:
Name Usage Revenue
Description Map usage items to revenue accounts using the usage expenditure type
Intermediate Value Source Parameter
Parameter Name Expenditure Type
Segment Value Source Segment Value Lookup Set
Lookup Set Usage to Revenue
Enable the All Usage Revenue Transaction and Assign Rules:
Function Name: Usage Revenue Account
Transaction Name: All Usage Revenue
Segment Rule Pairings
Number Segment Name Rule Name
0 Company Resource Company
1 Cost Center Resource Cost Center
2 Account Usage Revenue

Usage Revenue Borrowed Account Function

Oracle Projects uses the Usage Revenue Borrowed Account transactions to credit a revenue account of either the project-managing organization or the non-labor resource's owning organization (depending upon the organization to which you award revenue using the Usage Revenue Account function).

The Usage Revenue Borrowed Account function consists of the following transactions:

Fremont enables only the All Usage Borrowed Account transaction since it does not separate revenue totals between private and public projects.
Fremont Corporation uses one revenue account to record borrowed and lent usage revenue:
· Usage Borrowed and Lent (4210)
To implement the Usage Revenue Borrowed Account function, Fremont defines a rule to supply an account code for the Account segment of its Accounting Flexfield.
Fremont uses existing rules to supply values for the Company and Cost Center segments of its Accounting Flexfield.
Define a Rule to Determine Account Segment Value:
Name Usage Borrowed and Lent
Description Usage borrowed and lent account
Intermediate Value Source Constant
Constant 4210
Segment Value Source Intermediate Value
Enable the All Usage Borrowed Transaction and Assign Rules:
Function Name: Usage Revenue Borrowed Account
Transaction Name: All Usage Borrowed
Segment Rule Pairings
Number Segment Name Rule Name
0 Company Project Company
1 Cost Center Project Cost Center
2 Account Usage Borrowed and Lent

Usage Revenue Lent Account Function

Oracle Projects uses the Usage Revenue Lent Account transactions to debit a revenue account of either the project-managing organization or the non-labor resource's owning organization (depending upon the organization to which you award revenue using the Usage Revenue Account function).

The Usage Revenue Lent Account function consists of the following transactions:

Fremont Corporation implements the Usage Revenue Lent Account function using the rule it defined for the Usage Revenue Borrowed Account function.
Fremont enables only the All Usage Lent transaction since it does not separate revenue totals between private and public projects.
Enable the All Usage Lent Transaction and Assign Rules:
Function Name: Usage Revenue Lent Account
Transaction Name: All Usage Lent
Segment Rule Pairings
Number Segment Name Rule Name
0 Company Resource Company
1 Cost Center Resource Cost Center
2 Account Usage Borrowed and Lent

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