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Excel formula for subscription revenue recognition

C. Baylis's Profile

accrued revenue vs deferred revenue calculation in ExcelI am building an excel spreadsheet to recognize subscription revenue (including annual renewals) for use in a forecast model.  Our subscriptions are generally annual, and are at various points throughout the month and the year (ie not just on the first day of the month).  Does anyone have an excel formula they would like to share with me?  I am fairly excel-friendly but am hoping to not have to recreate the wheel.  Thank you very much.

 

Answers

Robert Honeyman
Title: CFO
Company: Advanced Predictive Analytics
(CFO, Advanced Predictive Analytics) |

You must be talking about forecasting accretion of revenue for contracts sitting in deferred revenue on your balance sheet. The approach I used was to create a three-tabbed spreadsheet with the following tabs:

Amortization Schedule
Reconciliation
Cumulative Amortization

The amortization schedule yields period revenue. Reconciliation yields balance sheet deferred revenue. Cumulative amortization controls for ensuring things zero out properly.

Columns in the amortization schedule should include start date, end date, as well as the amount. You're probably better off calculating a daily amortization, since that eases the computational complexities of the starting month and ending month. Other than that, it's pretty straight-forward.

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