ANS-1603 · REVENUE RECOGNITION
How to Adjust Deferred Revenue GL Accounts for VSOE in NetSuite?
This guide explains the necessary journal entry to reclassify deferred revenue balances between different General Ledger accounts in NetSuite.
Short answer
Yes, it is possible to adjust deferred revenue GL accounts. This typically involves a journal entry to reclassify the deferred revenue balance. For instance, to move a $2 balance, debit 'Deferred Revenue GL Account A' and credit 'Deferred Revenue GL Account B' to ensure accurate financial reporting and VSOE compliance.
Scenario
Organizations utilizing NetSuite's revenue recognition features, particularly with VSOE (Vendor Specific Objective Evidence), may encounter situations requiring adjustments to deferred revenue balances. This often arises when revenue commitments and invoices lead to deferred revenue being recorded in an incorrect or suboptimal General Ledger account, necessitating a reclassification.
Solution
To reclassify deferred revenue between General Ledger accounts, a journal entry is required. This entry will debit the GL account from which the deferred revenue is being moved and credit the GL account to which it is being transferred. For example, to adjust a $2 deferred revenue balance:
Dr $2 Deferred Revenue GL Account A Cr $2 Deferred Revenue GL Account BThis transaction ensures that the deferred revenue is accurately reflected in the desired GL account for proper financial reporting and VSOE compliance.
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