This case is part of the revenue allocation corrections guide, which covers the inventory before a revenue tool migration. Here we follow one hard case from signature to the reconciled close.
The case in one paragraph
A fictional 180-person B2B software company signs a 12-month subscription with an implementation project for $120,000. Three months in, the customer adds a training service for $15,000, well under the $20,000 the company normally charges for it on its own. Is that a new contract, or a change to the old one? The answer changes how $87,000 of remaining revenue is spread, and the records that capture the answer are the evidence. Nothing here is a real customer, contract or completed deal, and none of it is accounting advice.
Two rules frame the case. The U.S. standard fixes the split between deliverables when the deal is signed, weighting each by what it would sell for alone. The international standard says an add-on counts as its own agreement only if it is a separate service sold at its usual price (paragraph 20); if not, and what remains to be delivered is separate from what was already delivered, the old agreement is treated as ended and a new one begins with the unearned amount (paragraph 21(a)).
Step by step, from signature to reconciled close
Step 1, month 1: the original allocation. The contract is signed for $120,000. Using the company's stand-alone selling price table, the revenue accountant allocates $96,000 to the subscription and $24,000 to implementation. Records: the contract schedule, the SSP table in force that month, calculation version 1.
Step 2, month 3 close: delivery so far. Implementation is complete and 3 of 12 subscription months have been delivered, so $48,000 is recognized ($24,000 plus $24,000). That leaves $72,000 of subscription revenue still to come. Records: recognition schedule, journal entries.
Step 3, month 4: the exception arrives. The customer signs an amendment adding training for $15,000. Its stand-alone selling price is $20,000. Sales attaches a note explaining the discount. Nothing in the revenue tool has changed yet. Records: signed amendment, sales note.
Step 4, month 4 review: the judgment. The head of revenue accounting tests the amendment. The price is below stand-alone value, so it is not a separate contract under paragraph 20. The remaining subscription months and training are distinct from what was already delivered, so paragraph 21(a) applies: the remaining consideration, $72,000 plus $15,000, or $87,000, is reallocated. IFRS 15 also says a list price is not presumed to be the stand-alone selling price, so the memo records where the $20,000 came from. Records: adjustment memo citing the judgment.
Step 5, month 4: version 2 and approval. Remaining stand-alone values are $80,000 for nine subscription months and $20,000 for training. The $87,000 splits $69,600 to the subscription and $17,400 to training. The controller approves. Records: calculation version 2, approval.
Step 6, month 5 close: the check. The new schedule runs, and the totals reconcile: $48,000 recognized before plus $87,000 after equals $135,000, the original $120,000 plus the $15,000 amendment. Records: journal entries, reconciliation.
Who decided what, and what each decision left behind
| Decision | Who made it | Record it left | Lost if missing |
|---|---|---|---|
| Original split of $120,000 | Revenue accountant | Calculation version 1, SSP table | The baseline every later step depends on |
| Accept the $15,000 training add-on | Sales, with the customer | Signed amendment, discount note | Why the price sat below stand-alone value |
| Not a separate contract | Head of revenue accounting | Adjustment memo | Which branch of the standard was chosen |
| Source of the $20,000 SSP | Head of revenue accounting | Memo with SSP table reference | Whether the stand-alone value was supportable |
| Reallocate $87,000 | Revenue accountant | Calculation version 2 | The new split of $69,600 and $17,400 |
| Approve the change | Controller | Sign-off on version 2 | Evidence the judgment was reviewed |
| Totals tie to $135,000 | Close team | Reconciliation | Proof nothing was double counted |
Software can split the story in two. When NetSuite applies a change going forward, it shuts the first arrangement, locks it and opens a second one holding what is left. Version 1 and version 2 then live in separate places, and the case can be followed only while both survive with a pointer between them. The system map for these records follows those joins.
NetSuiteWhy the month 4 sequence is the valuable part
Steps 1, 2 and 6 are routine: any ledger shows a split, a recognition run and a reconciled total. Steps 3 to 5 are rare. They contain a trigger, a choice between two treatments, a documented reason, a named reviewer and a result that can be checked against the numbers. That is the shape of a labeled decision, and it is what an AI developer cannot rebuild from balances. A company with several years of such cases, each with its memo and versions intact, holds something closer to worked examples than to transaction data. The same idea, applied to purchasing, appears in procurement approvals and exception workflows.
Recognizing similar cases at a client
Listen for these during an ordinary systems conversation. None needs a document to answer.
- Mid-term add-ons are common. Customers add seats, support tiers, training or services after signing, and the revenue team has a standard memo for it.
- SSP tables are versioned. The team can say which table applied in a given month, rather than having overwritten it.
- Memos sit next to versions. Adjustment memos are attached in the revenue tool or filed by contract ID, not scattered across personal drives.
- A controller signs each change. Approvals have a name and a date.
- A migration is coming. A new revenue tool or ERP means superseded versions are at risk, which the hub inventory addresses.
If you hear three or more, ask the head of revenue accounting roughly how many modified contracts a year the company handles and how far back memos go. Keep it to counts; assessing finance workflows without sharing sensitive records shows how. Implementation partners who see these patterns during projects can start from the software implementation partners page. If data is being valued in a transaction rather than licensed, purchase price allocation for data is the closer topic.
The company needs 50+ full-time employees at peak (contractors excluded), a documented operating history, rights to license the records and an authorized contact. Companies in the U.S., Canada and the EU qualify, as do companies in the UK, Australia, New Zealand, India, Singapore, South Africa, Latin America, the UAE and Saudi Arabia when at least 90% of the data is in English. Customer contracts carry confidentiality terms, so counsel and the CFO advise on what could be discussed, and the CEO authorizes the discussion; the decision tree on who can license these records covers who to introduce. Unknown until SourceX reviews it: buyer interest, the rights review result and any terms. Partners sign the Channel Partner Agreement first, and attribution goes to the first valid introduction within the 90-day window, credited when the company submits a verified application.
Next step
Refer a company. Earn up to $100,000. Default reward: 25% of Actual Supplier Payout, capped at $100,000 cumulatively per referred company. Eligibility and payment conditions apply, and a signed Schedule A or addendum can differ. A lead, meeting or signature alone does not trigger payment.
If a client's revenue team can still pair each modified contract with its memo, both calculation versions and an approval, register as a partner, check the company against who qualifies and read the program terms before you introduce the CEO.