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Last Updated: 2023-06-23
Example: Create Accounting Using Blended Rates for Foreign Currency Customer Contracts

Example: Create Accounting Using Blended Rates for Foreign Currency Customer Contracts

This example illustrates how to create revenue recognition accounting using blended rates for foreign currency customer contracts. This method only applies to foreign currency revenue recognition schedules and accounting created before September 10, 2022.
You have a customer that operates in Canadian Dollar (CAD), but your company reports in United States Dollar (USD). You need to create:
  • A customer contract with a
    Fixed Amount
     line type of 3,000 CAD and a
    Deferred
     revenue treatment.
  • A billing schedule using a
    Spread Even
     billing method and 3 installments.
  • A revenue recognition schedule using a
    Number of Days
     revenue recognition method and 3 installments.
  • A customer invoice for the billing installments.
  • Revenue recognition accounting for the revenue recognition installments.
Configure these business processes and security policies in the Customer Contracts and Project Billing functional areas:
  • Billing Schedule Event
  • Customer Contract Event
  • Customer Invoice Event
  • Revenue Recognition Installment Event
  • Revenue Recognition Schedule Event
Security: These domains in the Customer Contracts and Project Billing functional areas:
  • Process: Billing Schedule - Core
  • Process: Revenue Schedule - Core
  1. Access the
    Create Customer Contract
     task.
  2. In the
    Contract Information
     section, select:
    Field
    Value
    Company
    500.1 Global Modern Services, Inc. (USA)
    Customer
    Bluestar Corporation
    Contract Type
    Grid Form
  3. Click
    OK
    .
  4. In the
    Contract Information
     section, select:
    Field
    Value
    Currency
    CAD
    Effective Date
    01/01/2020
  5. In the
    Contract Amounts and Balances
     section, enter
    3,000
     in the
    Contract Amount
     field.
  6. In the
    Line Details
     section on the
    Goods and Services
     tab, add a row and enter:
    Field
    Value
    Revenue Category
    Product
    Line Type
    Fixed Amount
    Contract Line Amount
    3,000
  7. In the
    Revenue and Billing
     section on the
    Goods and Services
     tab, select
    Deferred
     from the
    Revenue Treatment
     prompt.
  8. Click
    Submit
    .
  9. Access the customer contract for Bluestar Corporation.
  10. From the related actions menu, select
    Customer Contract
    Create Billing Schedule
    .
  11. Click
    OK
    .
  12. In the
    Generate Installment Information
     section, select:
    Field
    Value
    Billing Method
    Spread Even
    Billing Frequency
    Monthly
    From Date
    01/01/2020
    Number of Installments
    3
  13. In the
    Invoice Date Options
     section, select the
    Use From Date
     option.
  14. In the
    Add Lines
     grid, select the
    Add
     check box for the contract line you created.
  15. Click
    Save and Continue
    .
  16. Click
    Generate Installments
    .
  17. Click
    OK
    .
  18. Click
    Submit
    .
  19. Expand the
    Billing Schedule Information
     section to view these installments that Workday creates on the billing schedule:
    Status
    Invoice Date
    Due Date
    From Date
    To Date
    Total Amount
    Line
    Amount
    Available
    01/01/2020
    01/31/2020
    01/01/2020
    01/31/2020
    1,000
    Product (Line 1)
    1,000
    Available
    02/01/2020
    03/02/2020
    02/01/2020
    02/29/2020
    1,000
    Product (Line 1)
    1,000
    Available
    03/01/2020
    03/31/2020
    03/01/2020
    03/31/2020
    1,000
    Product (Line 1)
    1,000
  20. Click
    OK
    .
  21. Click
    Done
    .
  22. Access the customer contract for Bluestar Corporation.
  23. From the related actions menu, select
    Customer Contract
    Create Revenue Recognition Schedule
    .
  24. Click
    OK
    .
  25. In the
    Generate Installment Information
     section, select:
    Field
    Value
    Revenue Recognition Method
    Number of Days
    From Date
    01/01/2020
    Number of Installments
    3
  26. Click
    Save and Continue
    .
  27. Click
    Generate Installments
    .
  28. Click
    OK
    .
  29. Click
    Submit
    .
  30. Expand the
    Revenue Recognition Schedule Information
     section to view these installments that Workday creates on the revenue recognition schedule:
    Status
    Installment Date
    From Date
    To Date
    Total Amount
    Currency
    Line
    Revenue Category
    From Date
    To Date
    Revenue Amount
    Currency Rate
    Amount in Base Currency
    Available
    01/31/2020
    01/01/2020
    01/31/2020
    1,021.98
    CAD
    Product (Line 1)
    Product
    01/01/2020
    01/31/2020
    1,021.98
    0.861338
    880.27
    Available
    02/29/2020
    02/01/2020
    02/29/2020
    956.04
    CAD
    Product (Line 1)
    Product
    02/01/2020
    02/29/2020
    956.04
    0.861334
    823.47
    Available
    03/31/2020
    03/01/2020
    03/31/2020
    1,021.98
    CAD
    Product (Line 1)
    Product
    03/01/2020
    03/31/2020
    1,021.98
    0.861338
    880.27
    When you create a revenue recognition schedule before invoicing, the installments temporarily use the effective date on the customer contract to determine the currency rate. Workday also uses the effective date on the customer contract for the
    Amount in Base Currency
     calculation. Workday calculates the
    Amount in Base Currency
     by multiplying the
    Revenue Amount
     by the
    Currency Rate
    .
  31. Click
    OK
    .
  32. Click
    Done
    .
  33. Access the billing schedule for Bluestar Corporation.
  34. From the related actions menu of an installment, select
    Billing Installment
    Create Customer Invoice
    .
  35. Click
    OK
    .
  36. Click
    Refresh
     until Workday generates the customer invoice.
  37. From the related actions menu of the customer invoice drill-down, select
    Accounting
    View Accounting
    .
  38. On the
    Journal Lines
     tab, view these journal lines that Workday creates on the operational journal:
    Ledger Account
    Debit Amount
    Credit Amount
    Currency
    Currency Rate
    Ledger Debit Amount
    Ledger Credit Amount
    Ledger Currency
    Accounts Receivable
    1,088.75
    CAD
    0.861334
    937.77
    USD
    Taxes Payable
    88.75
    CAD
    0.861334
    76.44
    USD
    Deferred Revenue
    1,000
    CAD
    0.861334
    861.33
    USD
    Workday updates the revenue recognition installments with the currency rate from the customer invoice. This method ensures that your billing and revenue recognition balances remain reconciled.
  39. Access the revenue recognition schedule for Bluestar Corporation.
  40. From the related actions menu of an installment, select
    Revenue Recognition Installment
    Create Revenue Recognition Accounting
    .
  41. Select the
    Revenue Recognition Installments
     check box.
  42. Click
    OK
    .
  43. Click
    Refresh
     until Workday generates the revenue recognition accounting.
  44. Click the drill-down in the
    Journal
     column to view these journal lines that Workday creates on the operational journal:
    Ledger Account
    Debit Amount
    Credit Amount
    Currency
    Currency Rate
    Ledger Debit Amount
    Ledger Credit Amount
    Ledger Currency
    Deferred Revenue
    1,021.98
    CAD
    0.861328
    880.26
    USD
    Revenue
    1,021.98
    CAD
    0.861328
    880.26
    USD
    Workday determines the
    Currency Rate
     by dividing the
    Ledger Debit Amount
     by the
    Debit Amount
    .
You can view reconciled foreign currency billing and revenue balances at the end of the period.