Changing the Revenue Recognition End Date

The deferred revenue recognition period for the straight-line (daily) method can be affected by a periodic balance change or a change to the current purchased item end time.

When the straight-line (daily) method is used to recognize deferred revenue, the revenue recognition start date and end date are determined by the following rules:
  • The revenue recognition start date is the event time.
  • If the charge is used to pay for a non-liability asset, meaning the product offer has a GL target grant and the granted asset is not a liability asset, then the revenue recognition end date is the validity end time of the asset. The end time of the asset is the end time of a simple balance or the period end time of a periodic balance.
  • If the charge is not used to pay for an asset, meaning the product offer does not have a GL Target Grant and the event type is recurring, then the revenue recognition end date is the end time of the recurring cycle.
When the following events occur, the revenue recognition end date used for straight-line (daily) revenue recognition is updated and the revenue recognition rate is recalculated:
  • Cancel Event — When an offer is canceled immediately, any remaining deferred revenue associated with the offer is recognized immediately. The accelerated revenue recognition is applicable to the straight-line (daily) method only. The remaining deferred revenue under the consumption-based method is recognized when the asset is forfeited, either by a balance expiration or a cancel forfeiture.

    If the offer is not canceled immediately, then the cancel end time (when the offer becomes inactive) is the end date of any revenue recognition periods associated with the last recurring cycle of the offer.

  • PeriodTermination Event — When a period is terminated early, any remaining deferred revenue associated with the terminated period is recognized immediately.
  • PeriodEndTimeChange Event — When the end time of a period is changed, the end date of any revenue recognition periods associated with the changed period is updated, and the revenue recognition rate is recalculated.
  • Resume Event — When resuming an offer from the pause mode, this might extend the end date of the current purchased item cycle, and the daily revenue recognition rate is recalculated.

Accelerated recognition of deferred revenue cannot be performed if the identified deferred revenue has been blended with deferred revenue from other offers or periods.