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Hello,

We have an issue with revenue caiptalization. If we start a project, costs begin to arise, but revenues only later. So in the first months, we have only costs incurred, but no revenues. If I try to run periodical capitalization, the system throws an error message: “There are no voucher rows in current voucher”.

This being an error message, we cannot proceed to the next step for revenue recognition, and the whole process stops. Is there a setting to solve this problem?

Currently, we are applying a workaround making a manual entry of value 0 and quantity 0,01 for an open project for the current period, and then it works. But this solution is quite unprofessional and this way the settlement process is not so smooth.

Details:

IFS 8

Periodical posting method

Project type:Capitalize Revenue

Rev. Rec. method:POC Income first

POC method:Actual cost

Revision accounting:catch up

 

Any help would be appreciated.

Thanks.

 

Hi, 

In your version, the IFS project management area and GL Rev Rec / Capitalization process use different definitions of cost.  What I mean by this is that from a project management perspective, inventory (asset account) is considered as a cost.  However, from a pure finance (GL / REV REC) perspective the inventory posted to an asset account is not cost. It does not become capitalized, as it is already on the balance sheet.  - Continuing this same idea from a rev rec perspective inventory (asset account) is not cost  - your POC based on actual cost is 0 as you have no cost (no expense accounts being used).   

 

If you get true cost on the project (expense accounts) that expense is capitalized, and rev rec will run. 

 

Two common options. Get the project inventory to flow to expense accounts either issue the material, or configure posting control to post to expense accounts rather than inventor for projects / M1. 

Or change the rev rec process to use manual POC and enter the POC as calculated by your definition of actual cost.  

APS 10, added new options such that you can mark the inventory account to be considered as a cost in REV REC. 

 

Best regards, 

Thomas

Hello Thomas,

 

thanks for your response! I was on holiday last week, so I couldn’t react earlier.

Actually, we don’t use inventory for projects as our M1 postings for WIP go to accounts classified as cost. On the other hand, as I mentioned in my post, we use a workaround posting fake figures to project related revenue accounts (actually zero revenues and 0,01 quantity), and as soon as IFS perceives these postings, it will work fine. Therefore I think IFS doesn’t have problems with our cost postings when calculating POC. 

Moreover we don’t use capitalization of costs (as I understand your assumption), only capitalization of revenues applying POC based on actual costs.

 

I hope this way it is clearer what my problem is.

Another hint: If there are neither costs, nor revenues for a period, then IFS doesn’t throw this error message either, but creates a revenue capitalization posting of zero value.

 

Regards,

RGS

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