Issue/Symptom/Question

PENTA is calculating a Loss on the Job because PENTA is set to recognize the cost immediately in a loss situation by adjusting costs (Job Type Setup)

The Job has multiple contract lines (2 are Lump Sum and 2 are Cost Plus Line Item Types)

The costcodes are mapped to the Cost Plus Line Items and NO costcodes are mapped to the Lump Sum Line Items

The Cost Plus Line Item Types are Inactive as of the Rev Rec Date

The contract amount is less than the actual cost and the remaining committed cost.  The entire contract has been billed.

Applies To

Loss Recognition

T&M or Cost Plus Job Billing

Resolution/Fix/Answer

In this situation, PENTA views the Job as Lump Sum and will find the Job Percent Complete and calculate a Projected Loss during the Revenue Recognition process. 

Projected Loss = Forecast at Complete - Contract       However, this job does not have a forecast (all costcodes are mapped to Cost Plus Line Items).  Therefore, to find the projected loss and book the loss provision entry, PENTA does the following:

Remaining Projected Costs - Contract = Projected Loss   

In this instance the Contract is what has been billed thus far for the Job.  Remaining Project Costs are used instead of Forecast at Complete because the Actual Costs are processed through the pricing schedules and Revenue is calculated that way.

Note: If Lump Sum Line Items had costcodes mapped to them, each Line Item would have had a percent complete calculated.