To define service contract types and their associated earned revenue basis, use the Service Contracts Maintenance Contracts/Contract menu.

For Service Contracts, the default earned revenue basis is determined by the Contract Type File Maintenance.

The system offers the following options for recognizing service contract revenue:

• Straight-line across fiscal periods
  • Revenue is recognized evenly over the life of the contract. The amount recognized equals the total contract amount (Service Contract Billings tab) divided by the number of fiscal periods.

• Apportioned by scheduled visit dates
  • Revenue is allocated over the life of the contract. The system divides the total contract amount (Service Contract Billings tab) by the number of scheduled visits (Service Contract Visits tab). That apportioned amount is assigned to the fiscal periods in which visits are scheduled.

• Apportioned by budget cost of scheduled visits
  • Revenue is recognized over the life of the contract. The system divides the total contract amount (Service Contract Billings tab) by the budgeted cost of scheduled visits (Service Contract Visits tab). Those apportioned amounts are assigned to the fiscal periods in which the visits are scheduled.

• As billed
  • Revenue is recognized when the Service Contract is invoiced.