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ASC 606/IFRS 15 & Oracle’s Revenue Management Cloud Service (RMCS)

Posted on June 11th, 2017 by Sanjit Anand ||Email This Post Email This Post

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As we know , the entire accounting approach to revenue recognition is undergoing a wholesale re-write. Rather than relying on using a deferred revenue account, you will need to identify and account for performance obligations.


Revenue recognition is taking a more scenario and rules based approach to what can be recognised and more importantly when.

as we know ASC606 , there is introduction of the following 5 Steps to Recognising Revenue:

  1. Identify the contracts with the customer
  2. Identify the separate performance obligations
  3. Determine the contract price
  4. Allocate the transaction price
  5. Recognise revenue when a performance obligation is satisf ed

Whatever ERP you run, whether it is Oracle or not, you need to consider the impact of this accounting regulation on your business.


Oracle’s Revenue Management Cloud Service is the way forward.

This is a centralized, automated revenue management solution that enables you to address the ASC 606 and IFRS 15 accounting standard Revenue from Contracts with Customers.

Oracle’s Revenue Management Cloud service can be integrated with your existing ERP, whether it’s Oracle or not, to address the requirements of IFRS 15.

  • Comply – Adhere to the IFRS 15 core principles
  • Audit -Provide complete and accurate access to revenue
  • Automate -Automate revenue calculations based on the new accounting standard
  • Integrate -Integrate with your existing ERP and third party system

An application that enables you to manage customer contracts and performance obligations easily to help you address the mandates of the new accounting guidance.

Is part of Oracle Enterprise Resource Planning Cloud and has the capability to co-exist with any source application, say Oracle EBS.

Robust integration is available with third party applications, say Oracle EBS.


Once of the critical area in new Accounting standard is Disclosure Management .

You will need to either recalculate your fnancial statements for the last two years, or disclose in the year of go-live the impact of the new standard.
Oracle’s Revenue Management Cloud Service can help here too to Integrate with your BI or Hyprion .

Revenue Management Cloud Services Coexistence with Oracle E-Business Suite

Oracle Revenue Management Cloud is an automated and a centralized, revenue management product that addresses ASC 606 and IFRS 15.

Oracle Revenue Management Cloud Service lets you to apply the five steps of core principle of ASC 606 and IFRS 15 requirements:

clasical steps ASC 606

The product provides a framework to automate the creation of customer contracts and performance obligations as per IFRS 15, their valuations and resulting accounting entries, and enables to recognize the revenue over time or at a point in time with these key Features.

  • Contracts and Performance Obligations
    • Rules based Automation
    • Flexible Configurations
  • Revenue Allocations
    • Simplified Revenue Accounting
    • Compliant Allocations as per Standards
  • Satisfaction Schedules
    • Point in time and over time
    • Independent Billing
  • Recognition
    • Liabilities Accrual and Assets recognition
    • Income Statement on transfer to customer on performance obligation met

Most of companies must comply with the new ASC 606 and IFRS 15 accounting standard for fiscal years that begin on or after January 1, 2018.

In its last and greatest release of Oracle Revenue Management Cloud R12 includes a coexistence solution with Oracle EBS.

Oracle E-Business Suite (EBS) products use the coexistence solution for integration with Revenue Management to bring in source document revenue lines from upstream sales cycle systems. Beacuse of these co-existance model , Reference data, such as customers and inventory items, are synchronized between EBS and Revenue Management seemlessly .



The coexistence feature enables you to deploy a uniform, centralized and comprehensive view of contracts with customers, unifying the details tracked in a variety of order management, retail point of sales, and billing systems.

The Revenue Management Cloud Service (ORMCS) is a Software-as-a-Service (Saas)-based too, sold on a per user per month basis

As per Documentation , following 6 steps will ensure automated, efficient compliance with ASC 606 and IFRS 15 without impacting your existing sales processes in EBS:

  1. Extract Data from EBS : Extract data related to the sales cycle.
    • For example, orders, contracts, receivable data, point of sale data, projects, shipping, traffic, and other fulfillment data.
  2. Import Revenue Basis Data and Billing Data: Import revenue and billing data into Revenue Management using predefined File-Based Data Import (FBDI) templates for Revenue Basis and Billing data.
  3. Validate and Correct Customer Contract Source Data: Integrated programs in RMCS validates the imported lines, transforms master data, and assigns the transaction period to the imported lines.
  4. Ensure compliance with the new accounting standards ASC 606 and IFRS 15: Revenue Management analyzes the data in centralized repository that stores imported and processed sales cycle data, and provides user-configurable contract identification and performance identification rule engines for the system to automatically run the 5 steps of the core principle of ASC 606 and IFRS 15 requirements illustrated above.
  5. Compare sales cycle data: Perform what-if iterative studies of how you might implement the new rules, such as the impact of different definitions of contracts and performance obligations, different pricing paradigms, different satisfaction criteria, and so forth.
    • Oracle recommends that you compare the results of your current accounting (ASC 605 and IAS 18) to each accounting iteration generated in Revenue Management (based on ASC 606 and IFRS 15) in an enterprise performance tool,
  6. Create Accounting in EBS GL: The Subledger Accounting rules engine in RMCS provides out-of-the-box seeded accounting events to address the need for creating contract assets and contract liabilities at initial performance, as well as reflecting the appropriate accounting once a performance obligation is billed.

This is how best we can undersood Revenue Process with Oracle Revenue Management Cloud.

Revenue Process

Untill , next post , bye.

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