How the schedule is built
Each contract is billed in full on its billing date (the start date if you leave it blank). Revenue is recognized straight-line over the service period, by day or by equal calendar months. For every month the tool computes opening balance plus billings less revenue, and sums the contracts. The contract liability at the balance sheet date is computed contract by contract so an unbilled contract is not netted against a prepaid one, in line with the ASC 606 presentation of a single net asset or liability per contract.
When to use it
Use it to recompute a SaaS, membership, maintenance or tuition-type deferred revenue balance: tie the schedule's balance to the ledger, look at the contracts with the largest unrecognized amount, and test cutoff for contracts that start or end near year-end. The current portion supports the classification on the balance sheet, and the rollforward supports the ASC 606 disclosures about contract balances and revenue recognized from the opening balance.
Limits
It is straight-line only, and straight-line is appropriate only when the pattern of transfer is even. It does not test whether a contract exists, whether the performance obligations are distinct, or whether the price is right. Enter the contract amount that has been allocated to the service period, net of anything allocated to other performance obligations.
Illustrative figures only. Check the result against your firm's methodology before relying on it.
Common questions
What is a deferred revenue waterfall?
A schedule that takes each contract’s billings and recognizes the revenue over the service period, showing month by month the opening balance, billings, revenue recognized and closing deferred revenue. It lets you tie the contract liability on the balance sheet to the contracts behind it and see when the balance will turn into revenue.
What does ASC 606 call deferred revenue?
A contract liability: the entity’s obligation to transfer goods or services for which it has received consideration, or the amount is due, from the customer. A contract asset is the reverse for revenue recognized ahead of an unconditional right to payment. Each contract is presented as a single net contract asset or liability.
Should revenue be recognized by day or by month?
Whichever matches how the entity transfers the service. A subscription that is delivered continuously is often recognized ratably by day; some entities use a monthly convention with a mid-month or full-month rule. This tool offers by-day and equal-per-calendar-month patterns and does not choose for you. Check the policy in the revenue note.
How do I split the contract liability between current and noncurrent?
Classify the portion that will be recognized as revenue within the operating cycle, usually twelve months from the balance sheet date, as current. The tool does this for each contract: the lesser of its balance and the revenue scheduled over the next twelve months.
What does this not handle?
Usage-based fees, multiple performance obligations, contract modifications, refunds and credits, variable consideration, and billings in installments (it assumes the full amount is billed on one date). Build those into the contract lines first, or work them in your own schedule.
Runs in your browser. The figures you type are not sent to CORAA or stored. Check the result against your firm's methodology before relying on it.