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Overview of long-term and short-term reclassification

Zuora

Overview of long-term and short-term reclassification

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In Zuora Revenue, when revenue is recognized for the Contract Liability account, there is a provision to reclassify the revenue to both the long-term and short-term accounts. This provisioning process is referred to as long-term and short-term reclassification (LT/ST Reclass) in Zuora Revenue. The main purpose of performing LT/ST reclassification is to reclassify the revenue to be recognized in both long term and short term to understand the revenue position of your organization.

Configuration overview

The LT/ST reclassification functionality in Zuora Revenue is driven by profiles and primarily works based on the specified profile values. Navigate to Setups > Application > Profiles and use the following profiles to configure the LT/ST reclassification functionality:

  • LT_ACCT_MONTHS
    Use this profile to specify the number of months that are to be considered for the LT/ST reclassification process. For example, if this profile is set to 12, 12 months after the current open period will be considered as long-term periods. If the current open period is January 2019, the long-term periods will start from February 2020 until the revenue end date.

  • LT/ST_PROCESS_FOR_RC_CA_STATUS
    Use this profile to specify whether the revenue contract in CA position should participate in the LT/ST reclassification process. If this profile is set to Yes, LT/ST schedules can be booked for the revenue contract in CA position. Otherwise, the revenue contract in CA position will not participate in the LT/ST reclassification process.

In addition to profile configuration, for the LT/ST reclassification functionality to work, the following configurations are required in the system:

  • Setups > Application > Revenue Books
    LT/ST reclassification is enabled for the revenue book. As shown in the following graphic, set the LTST Enabled column to Yes for the appropriate revenue book.

    revenue-book-setup.png

The LTST Enabled radio button must be configured to No if you do not wish to use the LT/ST process. From 37.014.00.00 release onwards, the system will automatically calculate the LT/ST if this radio button is enabled. 

  • Setups > Application > Accounting Setup > Account Type
    The long-term CL and long-term CA accounting types are defined in the system. The following graphic shows an example of the accounting setup.

    accounting-setup.png

  • Setups > Security > Roles

    In the Role Privileges tab, the role of the user who will start the RevPro3.0 LT/ST Reclass process has full access to the LT/ST Reclass sub-menu as shown in the following graphic.

    role-access-setup.png

    In the Assign Jobs tab, the role of the user has access to the RevPro3.0 LT/ST Reclass jobs as shown in the following graphic.

    role-access-jobs.png

Transaction input requirements

For LT/ST schedules to be created for eligible transaction lines, make sure the following fields are populated appropriately for the transaction lines that will participate in the LT/ST reclassification:

  • Company Code

  • SOB Id

Related articles

For information about how to start the reclassification process in the UI, see Start LT/ST reclassification process.

For information about the processing logic and examples, see LT/ST reclassification processing logic.