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assemble their ASC 606 / IFRS 15 Adoption Opening Retrospective Sub Ledger Balances in that
ASC 606 /IFRS 15 Adoption additional secondary Ledger.
•
Use Oracle’s cutover utility to point the new ASC 606 / IFRS 15 fully populated sub ledger to
the original corporate ledger, and turn off the deferred revenue systems for that ledger.
•
If you need deferred revenue after the cut over date, use your existing systems and
Subledger Accounting to populate a non-Corporate ledger.
•
Be sure to get an ASC 606 / IFRS 15 (not an ASC 605 / IAS 18) articulation of your client’s
main revenue use cases that they have validated with an accounting advisor, tabulate them
in “review at inception” mode (a phrase from the standard) and analyze that table in terms of
the data needed to identify and process them.
o
Ensure that your client with every use case documents, inception-, billing-, and
satisfaction event (revenue) triggers, standalone selling or estimated selling prices
and the related pricing policies, contract revisions, and the expected accounting
entries throughout the life cycle of the accounting contract.
o
When you have obtained the use case data, set the product up in a Cloud pod
reflecting the client’s standard business environment (customers, items,
accounting, enterprise structure etc.).
o
Then create a first draft set of rules in Revenue Management to automatically
identify and create accounting contracts and performance obligations and to
account for contract liabilities, contract assets, and revenue.
o
Import the oldest relevant data (typically on a period-by-period basis such as
January 2016, February 2016 etc.), test the rules, and review the results in an
Enterprise Performance Tool (EPM) such as Oracle Planning and Budgeting
Cloud, or Oracle Hyperion Essbase. If your client doesn’t like the results, discard
the contracts, revise the rules, and try again. Save each iteration in EPM. When
the results are validated by your client as giving the appropriate outcome, save the
results in EPM, and book the transaction output in the additional secondary ledger,
and import more source data for subsequent periods.
•
Your client can use the EPM data to plan and budget next year’s revenue, to validate your
Governance, Risk and Compliance around the new standard, and perhaps, in the client’s
external reporting.
•
The data that is posting to the additional secondary ledger will support a revised
“retrospective” opening balance sheet on cutover day. It will become subledger data to your
regular ledger on that date. Oracle provides a cutover utility that will support your adoption
journal entry, and replace the old-rules deferred revenue processes you will stop using.
For additional information on Revenue Management, utilize the Release 13 Readiness portal at the
Oracle Cloud website.
Key considerations specific to Oracle PPM Cloud Service
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Organizational Design
o
From a financial perspective identify and map the requirement for accounting,
reporting, planning, cost collection and revenue generation functions to the
appropriate Business Unit, Project Unit, Project Owning Organization and
Expenditure Organization. This key consideration should be reviewed alongside
the Financials Chart of Accounts design.
o
A project unit defines a set of rules and options for creating and managing the
nonfinancial aspects of projects, such as project definition, scheduling, and
reporting. You can define one or more project units based on how granular you
want to separate processing options, reference data, security, and other controls.
The list of project units can be different and independent from the list of business