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Performance obligation

Configure performance obligations (POBs) in Recurly RevRec, including recognition rules, POB rules, and revenue forecasting for ASC 606 and IFRS 15 compliance.

Performance obligations are the second step of ASC 606 / IFRS 15 compliance in Recurly RevRec. Define each obligation, set up its recognition method, and establish the rules that link it to your transactions — so revenue recognizes accurately and consistently every time.
Available as part of Recurly RevRec
1Adding POBs 2Adding POB rules 3POB forecasting

Adding POBs

1

Navigate to POB

Go to Rules → POB.

2

Add a new POB

Select the "+" button to add a new performance obligation.

3

Name the POB

Enter a unique name for the performance obligation.

4

Set the active date

Provide the active date for the new POB.

5

Select the waterfall type

Choose the appropriate Waterfall Type (WF Type) from the dropdown.

PointInTime

Performance obligations are recognized at a single point in time.

OverTime

Performance obligations are recognized over the contract period.

OverTime Slide

Recognized over the contract period, with a delayed release date that extends revenue recognition.

OverTime Condense

Recognized based on the release date, with recognition adjusted according to event timing.

Manual

Revenue is realized based on manual input.

6

Choose the accounting method

Select the accounting method for the new POB from the dropdown options.

Daily

Revenue is recognized daily, based on the number of days in the contract.

FixedMonthly

Revenue is calculated in fixed amounts based on the number of months in the contract, with adjustments for the start date.

PartialMonthly

Revenue is calculated partially for the first and last months of the contract, with equal recognition for the remaining months.

Annually

Revenue is calculated annually.

7

Select the ratable method

Choose the ratable method from the dropdown options.

Sales Order Ratable

Revenue is amortized on a prorated basis, with catch-up applied in the current open period.

Sales Order Dates

Revenue is scheduled based on the start and end dates of the sales order lines.

Billing Dates

Revenue is scheduled based on the start and end dates of the billing or invoice.

After completing steps 1–6, save your changes. Your POB should look like this:

8

Choose how date changes affect the waterfall

Select how a date change in a contract affects the revenue waterfall.

  • Default (Blank): The waterfall remains unchanged.
  • Cumulative Date Change: The entire waterfall is recalculated, considering both past and future payments, so the total amount is distributed accurately based on the new dates.
  • Prospective Date Change: Only future payments are adjusted to reflect the new dates. Past payments remain unaffected.
9

Open Revenue Release

In the POB configuration screen, locate the Revenue Release section.

10

Add a release event

Select the "+" button in the Revenue Release section to add a new release event.

  1. Select the desired event from the dropdown menu.
  2. Enter the percentage of revenue release applicable for this event.
NoteYou can add multiple release events to a single POB, which lets you recognize revenue accurately across different events and their corresponding release percentages. If the release event selected is Upon Booking or Upon Billing, the percentage must always be 100 — you can't combine multiple release events with either of these.
11

Save

Save all changes.

Adding POB rules

You can access POB rules using one of two methods:

  1. Go to the Rules section in the navigation menu.
  2. Select "Rules" under the Performance Obligation menu.
NoteYou can view a POB's rules by opening the POB and scrolling to the bottom of the page, but you won't find an edit or add rule option there. Use one of the two methods above to make changes.

Once you're in the Rules section, follow these steps to add a POB rule:

1

Start a new rule

Select the "+" icon under the Rules section.

2

Select the POB

Select the specific POB the rule should apply to.

3

Define the attribute

Define the attribute value used for recognizing the POB — for example, "Item." If the value you need isn't available, select the window-shaped button, choose the attribute from the window that appears, then select "Save." In this example, "Account Code" is used as the attribute for POB recognition.

4

Enter the attribute value

Once you've determined the attribute, enter the value that describes the POB and adjust the active date as needed.

5

Save

Select the Save icon to save the rule.

  • Avoid editing the default POBs, such as "Material right" and "Manual journal."
  • Multiple release events can be associated with a single POB, but the total release percentage must equal 100%.
  • Every POB requires an assigned rule to function properly.
  • You can change the hierarchy of POB rules by dragging and rearranging them using the drag icon.
  • Remember to save any changes you make to rules or hierarchy.
  • To delete a POB rule, select the rule and select the Delete icon, then select Save to confirm the deletion.

POB forecasting

In most cases, revenue is recognized on the date a contract is booked or billed. For some contracts, though, revenue recognition is delayed until a specific external event occurs.

Forecast Management lets you forecast revenue based on both external events and billing dates. Even if the exact date of an external event — like a product release — is unknown, you can still factor it into your forecast by assuming it happens by the contract end date. This lets you plan revenue around a predictable contract end date.

Configuring forecasting for a POB

1

Navigate to the POB

Go to the POB you want to configure.

2

Open Forecast

Select Forecast to land on the forecast page.

3

Select the waterfall type

Choose the waterfall type for the forecast: Point in Time, OverTime, OverTime Slide, or OverTime Condense.

4

Set the forecast percentage

Enter the percentage of revenue to forecast based on this rule. The forecast release can never total more than 100% at any given point.

5

Choose the forecast date

Select the "forecast on" date — the date revenue should be forecasted against. Options include Book Date, Start Date, End Date, and Delivery Date.

6

Set the forecast window

Enter the number of days for the forecast to start or end, using the Start Day and End Day fields. For example, if "forecast on" is Book Date and you enter 30 as the start day, the system creates the forecast at Book Date + 30 days.