Wednesday Feb 04, 2015

Separating Billing and Revenue in Support of the New Revenue Accounting Standard

The Financial Accounting Standards Board (FASB) and the International Accounting Standards Board (IASB) issued new revenue accounting standards in May 2014 with an effective date of 2017. PeopleSoft FSCM Update Image 10 includes enhancements to PeopleSoft Contracts and Project Costing to support customers in their transition to the new accounting standards.

Separating Billing and Revenue

Enhancements provide customers the option of defining prices for revenue separate from prices used for billing. With new Contracts functionality, customers can identify a total contract price for revenue and for billing and then allocate that price across contract line items. The price assigned to a contract line for revenue recognition may be different than the price of the line item for billing. In Project Costing, new revenue rate sets can identify rates and markups for revenue recognition that are different from the rates and markups used for billing and the related contract line limit for revenue recognition may be different from the billing limit. In addition, new attributes were added to the contract enabling customers to identify prime contracts from subcontracts and at the contract line level a new bundling attribute was added allowing customers to group related contract lines.

Exhibit 1: Separating Billing and Revenue on a Contract


The new revenue pricing functionality is additive. At the contract level, customers define if prices for billing and revenue should be maintained separately. Contracts that do not need separating pricing for revenue can continue using a single amount for both billing and revenue. Other PeopleSoft modules with existing automation to create contracts and recognize revenue, such as Pay/Bill Management and Grants, have the option of using the new functionality in the PeopleSoft Contracts and Projects modules.

Exhibit 2: Contract General Page

May Be Applied to Existing Contracts

After applying new functionality, most existing contracts will be identified as not having separate prices for billing and revenue as this was the case under prior versions. However, we expect customers will be reviewing their existing contract base for impact over a period of time and that some existing contracts will need to separately define revenue while others may not. The new functionality allows customers to update existing contracts to take advantage of new pricing functionality as that analysis occurs. Other contracts that are still being analyzed for impact can continue functioning as they did under prior versions until their review is complete.

Exhibit 3: New Revenue Allocation Page

Additional Information

For additional detail on the project and the enhancements included in PeopleSoft FSCM Update Image 10, customers can review the Oracle PeopleSoft Red Paper ‘Separating Revenue from Billing’ under My Oracle Support.

Monday Jul 30, 2012

IASB and FASB Agree on Lease Accounting Approach

Almost a year after their decision to re-expose proposals for a common leasing standard, the International Accounting Standards Board (IASB) and the Financial Accounting Standards Board (FASB) have reached a key decision regarding the recognition of lease expenses. At their June 13, 2012 meeting, the IASB and FASB agreed that leases over 12 months should be recognized on the balance sheet, while leases with terms under 12 months should be treated similar to current operating leases.

With that major decision in place, the timeline for issuance of the final standard seems to be a bit more stabilized. The IASB and FASB expect to publish the second exposure draft in the fourth quarter of this year, and issue the final lease accounting guidance late in 2013. It is anticipated that the new lease accounting standard will be effective in 2017, with retroactive reporting beginning in 2015.

Oracle remains committed to helping customers transition to the new lease accounting standard. The Applications Unlimited teams continue to work closely together to monitor the convergence project and analyze the impact to our products so that we can design and build consistent solutions.

We anticipate that the new lease accounting rules will introduce functional overlap between the two products primarily impacted by the lease convergence – PeopleSoft Asset Management and Real Estate Management, both part of the PeopleSoft Asset Lifecycle Management (ALM) suite of products. PeopleSoft plans to evaluate the lease administration features and functions of each product to deliver a foundational framework for the new capabilities the final accounting standard will require.

We invite customers to participate in providing feedback on our design enhancements for lease accounting. If you are interested, please send an email to or For more information on the June 2012 IASB and FASB meeting, see the press release here.

Tuesday Aug 02, 2011

IASB and FASB to re-expose proposal on upcoming lease accounting changes

On July 21, the International Accounting Standards Board (IASB) and the US-based Financial Accounting Standards Board (FASB) announced they would re-expose their revised proposals for a common leasing standard. This standard is being developed as a joint convergence project for IAS 17/ASC 840 (formerly FAS 13).

While re-exposure for the Boards can be somewhat atypical, the decision to do so in this case was not surprising considering the vast scope of the proposed changes. In a sense, introducing a new comment period seemed unavoidable as there have been significant revisions to the initial exposure draft since it was first published back in August 2010.

What does this mean in terms of timing? A revised exposure draft is expected in the fourth quarter of 2011, with the final standard sometime around mid-2012.  From an adoption standpoint, there is no official effective date (as of yet), however the Boards have previously communicated that it likely would not be any earlier than 2014. There’s a good chance that their decision to re-expose may push that out even further, although that is purely speculation at this point.

Some of the causes for the delays have been a much larger than expected number of responses, significant concern over the cost of reassessing all leases, and comments that the complexity of measurement could spiral to unsustainable levels. The biggest gray area, however, centers on the lessor accounting model. The original overarching goal was to have a single lease standard for both lessee and lessor accounting. The Boards have been discussing whether to have one or two lessor accounting models – the FASB has been leaning towards two (as proposed in the exposure draft), while the IASB seems to prefer a single model. It’s possible that this difference of opinion could result in the Boards breaking down the lease standard, which may allow them to issue the lessee accounting standard (somewhat on time), while delaying the lessor accounting standard to an unknown future date.

So what does all this mean for PeopleSoft customers? As always, Oracle has been monitoring the development of the new standards and our Applications Unlimited and Fusion Development teams have been working closely together to analyze the changes and craft a consistent solution. We are also providing feedback to the Boards from a software vendor perspective to ensure they allow the industry a reasonable timeframe to accommodate the new standards, as well as provide customers enough of a window for implementation and conversion.

From a product perspective, the lease accounting changes primarily impact the PeopleSoft Asset Management and Real Estate Management products, part of the PeopleSoft Asset Lifecycle Management (ALM) suite. The new standards introduce significant functional overlap between our products, which is good in that it will allow us to better leverage our shared feature set (and vast integrations across the FSCM environment) as we add new capabilities.

We invite customers to participate in providing feedback on our design enhancements for lease accounting. If you are interested, please send an email to or Stay tuned, as we will continue to comment as more developments arise.


This blog is dedicated to topics focused on PeopleSoft Applications, including Human Capital Management, Financials, Enterprise Service Automation, Asset Lifecycle Management, Procurement, Supply Chain and Customer Relationship Management.

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