ANS-1292 · REVENUE RECOGNITION
How to Configure Items for Residual Value (VSOE) in NetSuite ARM
Properly setting item record allocation types and fair value pricing is crucial for accurate revenue recognition in multi-element arrangements.
Short answer
To support residual value under VSOE in NetSuite's Advanced Revenue Management, configure item records with 'Software' allocation type and appropriate 'Default as Delivered' settings. Additionally, ensure the 'Is VSOE Price?' checkbox on the Fair Value Price record is correctly set for License and Maintenance items.
Scenario
Organizations utilizing NetSuite's Advanced Revenue Management (ARM) module often need to account for residual value under Vendor Specific Objective Evidence (VSOE) in multi-element arrangements. Incorrect item record configurations can lead to inaccurate revenue recognition for licenses and maintenance components.
Solution
To support residual value for multi-element deals using NetSuite's Advanced Revenue Management module, items must be configured as follows:
For License items:
- Allocation Type = Software
- Default as Delivered = Checked
For Maintenance items:
- Allocation Type = Software
- Default as Delivered = Unchecked
Additionally, the 'Is VSOE Price?' checkbox on the Fair Value Price record must be configured. This record can be accessed via Revenue > Setup > Fair Value Price Lists.
For Maintenance items, the 'Is VSOE Price?' checkbox must be checked.
For License items, the 'Is VSOE Price?' checkbox must be unchecked.
Expert NetSuite Support
Need help with this NetSuite issue?
Revenue Recognition consulting and configuration support