Issue/Symptom/Question

Where does the Revenue Recognition "Earned" amount pull from? The amount does not agree with my contract amount. 

Applies To

PENTA for Windows

Project Management > Inquiries > Project Review & Forecast Entry

Resolution/Fix/Answer

Earned Revenue is calculated based on the Revenue Recognition method set up for the line item type in the Job Information window. The Revenue Recognition method on this example job is Earned = (Actual/Proj)* Contract. This is calculated as: Actual Costs to Date divided by Projected Cost (or Forecast At Completion) then multiplied by Contract Amount. 

Reviewing the Project Review & Forecast Entry window for the job, the amounts calculated are:

Actual Costs =  435,836.51

Projected Cost = 436,000.00

Contract Amount = 531,214.00

435,836.51/436,000 = 99.96%

.9996*531214 = 531,014.80

If no Forecast has been made for the job, when Revenue Recognition is processed, PENTA calculates a Forecast. Review this article for information on this process - Revenue Recognition based on Job to Date Cost / Projected Cost at Complete when no forecast cost exists