Revenue run leaves a booking out, or recognises nothing: the trigger, stages or thresholds are not met

You prepared a revenue run (or the monthly rule drafted one) and a booking or member offer is missing, sits at 0%, or the whole run recognises nothing. The run is doing what the books' revenue policy tells it to; this article explains which condition is still open.

What you see

On the Revenue run page:

• The Bookings and member offers card is empty: "No booking or member offer of these books has a With-the-unit charge, billing or capitalised brokerage yet."
• The Left out card lists "The policy recognises revenue on billing: demands already posted it", or "<project>: the cost method needs a cost budget (Project > Settings > Budget cost)" once per booking of that project.
• A line stays at 0% with a note under Progress:
  • "Cancelled" (the booking is cancelled);
  • "Waiting for: <trigger>", for example "Waiting for: possession handed over";
  • "No occupation certificate on or before the trigger date";
  • on a member offer: "Offer <status>" (for example "Offer draft"), "No unit allotted", "An allotted unit has no booking yet", or "Unit <no>: <note>" repeating the note of the booking on that unit;
  • under an over-time method: "N of M stages achieved", "No construction stages with a share", "cost incurred <amount> of <amount>" or "Budget is nil";
  • under the Guidance Note: "Guidance Note: a cost budget is needed to test the cost-incurred threshold", "Guidance Note: cost incurred N% is below M%", "Guidance Note: area sold N% is below M%" or "Guidance Note: realised <amount> is below N% of the price". Amounts in these notes are plain figures without the ₹ sign (for example "cost incurred 1875000.00 of 75000000.00"), and percentages carry two decimals ("is below 25.00%").
• The Journals card reads "Posted when the run is posted." on a draft, or "Nothing changed, so nothing was posted." on a posted run that moved nothing.
• An amber warning "Expected loss: the cost share exceeds the price on <booking> (cost <amount> against <amount>)." ending "The policy only flags it: the CA books the provision by hand.", or, when the policy provides for it, ", provision to date <amount>). The unrecognised loss is provided by this run (Dr 5410 / Cr 2640)." The amounts are shown with Indian grouping and no ₹ sign.

Elsewhere:

• Project performance flags each project with a green Guidance Note thresholds met, or amber with the reason or Guidance Note thresholds not met, and a red Expected loss: <booking> (cost <amount> > <amount>).
• Contract balances reads "No contract balances in these books for the period." and Remaining obligation reads "Nothing outstanding: every booked price in these books is recognised, or nothing is booked yet."
• The finance notification from the Monthly revenue run (system) rule reads "Revenue run <no> drafted in <books>: <amount> to recognise", with "Period end <date>; <n> subjects skipped. Open Accounting > Revenue runs to review and post." An amount of ₹0 or a skipped count means one of the conditions below.

Why it happens

Revenue on a unit is recognised as control of the unit passes to the buyer, which is a judgement the CA records once in the books' Revenue policy. The run then measures each booking against that policy. Until the evidence is in the books, it recognises nothing for that booking; this is deliberate, so revenue is never booked ahead of what an auditor can see.

• What counts as a subject. The run looks at every booking on a project whose promoter is the books' company, and every offer to an allottee on those projects. A subject gets a line only when it has a price: charges treated With the unit in the books' component mappings, deferred billing, capitalised brokerage, or a line in an earlier posted run. No such charge, no line.
• Revenue on billing. Under the Revenue on billing framework every demand is revenue when it is issued, so the run has nothing to add and leaves the whole books out.
• Point in time. A booking is at 0% until the policy's Recognise on event (possession offered, handed over, deemed handed over, or conveyance registered) has a date on or before the period end, and, with Occupation certificate required on, the tower's (or project's) OC is dated on or before that event. A member offer follows the bookings of the units it allots: every allotted unit must have an active booking that has passed the trigger.
• Over time (stages achieved). Progress is the share of the construction stages completed by the period end, using the tower's own stages when it has any. Stages with no Share of total give no progress.
• Over time (cost incurred). Progress is cost incurred against the project's cost budget in force. Without a budget the bookings are left out; with a nil budget they stay at 0%.
• AS (Guidance Note 2012). With an over-time method, no revenue is recognised on a project until construction cost incurred reaches the Cost incurred at least (%) of the construction budget (excluding land) and the area of Saleable units under active bookings reaches Area sold at least (%) of the Saleable area; and on a booking until the money received against its demands reaches Realised per contract at least (%) of its price. Defaults are 25%, 25% and 10%.
• Expected loss. When a booking's share of the project cost exceeds its price, the contract is onerous. The run flags it, and provides for the loss only when the policy's Onerous contracts setting says to.
• Empty reports. Contract balances and Remaining obligation are built from posted runs. Until a run with lines is posted, they have nothing to show.

How to fix it

Preparing and recomputing a run needs the Create permission on Revenue Recognition; posting it and changing the policy need the Approve permission on Revenue Recognition (the CA or Finance Lead).

1. Read the note on the line or in Left out; it names the open condition.
2. No subjects at all: check that the project's promoter company is the company of these books (Edit project), that bookings exist, and that the sale charges are mapped with the treatment With the unit under Component mappings (the Edit permission on Chart of Accounts).
3. "Waiting for: <trigger>": record the possession date on the booking's possession card on the Booking overview (see Record the occupation certificate and hand over a unit). The date must be on or before the run's period end.
4. "No occupation certificate on or before the trigger date": record the OC date on the tower (Structure) or on the project (Project settings), dated on or before the possession event.
5. Member offer notes: issue the offer, allot its units, and book each allotted unit for the allottee; then the offer follows those bookings.
6. Stage progress: give the stages a Share of total and mark them Completed with their dates on Construction Stages (the Edit permission on Construction Stages).
7. Cost progress and the Guidance Note cost test: add a project-wide budget on the project's Budget Cost tab (the Edit permission on Revenue Recognition), and post the construction cost vouchers to the project so the cost incurred is counted.
8. Guidance Note area or realisation test: nothing to fix; the project or booking starts recognising once enough area is booked or enough money received. If the thresholds do not reflect the CA's judgement, the CA adds a policy from a later date with different percentages.
9. Expected loss: check the cost budget and the booking's price. When the policy only flags the loss, the CA books the provision with a journal.
10. Click Recompute on the draft run to pick up the changes, review, then Post run.

Related

• Revenue run
• Revenue runs
• Revenue policy
• Project performance
• Contract balances
• Remaining obligation
• Component mappings
• Budget Cost
• Construction Stages
• Booking overview
• Record the occupation certificate and hand over a unit
• Revenue recognition: policy, point in time vs over time, and revenue runs
• Possession: offer, handover, conveyance and the occupation certificate
• The cost method needs a cost budget