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<ManualTopic ID="/baanerp/tp/onlinemanual/000342" xml:lang="en">
	<Header>
		<Title xmlns:ssa="http://www.ssaglobal.com" xmlns:HTML="http://www.w3.org/TR/REC-html40">Earned Revenue Factor Method</Title>
		<Keyword><Level1>Earned Revenue Factor</Level1>
		</Keyword>
	</Header>
	<AimSection><Paragraph>Select this method to recognize revenue by multiplying cost with an earned revenue factor. The earned revenue factor can be manually entered or can be calculated. The calculated ERF is based on the contract amount and the aggregated bottom up budget.</Paragraph>
	</AimSection>
	<GeneralSection><Paragraph><GUIRef href="" role="manual">When to use this method</GUIRef>
		</Paragraph>
		<Paragraph>This method can be used for projects that have the contract type set to <GUIRef href="" role="manual">Fixed Price</GUIRef> and use cost reimbursement as a base to recognize revenue thus achieving a <GUIRef href="" role="manual">Cost Plus</GUIRef> scenario within a fixed price contract.</Paragraph>
		<Paragraph><GUIRef href="" role="manual">Calculation of revenue recognized</GUIRef>
		</Paragraph>
		<Paragraph><Emphasis>Revenue Recognized = Cost for current period x Earned Revenue Factor</Emphasis>
		</Paragraph>
		<Paragraph>You can manually enter the earned revenue factor or click <GUIRef href="" role="manual">Calculate ERF</GUIRef> to get the calculated value. SSA ERP calculates the factor using the following formula:</Paragraph>
		<Paragraph><Emphasis>ERF = Project Contract Amount/Total Budgeted Costs</Emphasis>
		</Paragraph>
		<Note><SectionTitle>Note</SectionTitle>
			<Paragraph>The contract amount is the aggregation of sub amounts by business partners. For projects with <GUIRef href="" role="manual">Unit Rate</GUIRef> invoicing method, the ceiling amount is considered as the contract amount.</Paragraph>
		</Note>
		<Paragraph><GUIRef href="" role="manual">Levels at which it can be recognized</GUIRef>:</Paragraph>
		<List><ListItem>Project</ListItem>
			<ListItem>Extension</ListItem>
			<ListItem>Element</ListItem>
			<ListItem>Activity</ListItem>
		</List>
		<Paragraph><GUIRef href="" role="manual">Constraints</GUIRef>
		</Paragraph>
		<Paragraph>To calculate ERF, the project status has to be <GUIRef href="" role="manual">Active</GUIRef>, because the total budgeted cost calculated using the build cost control process is known only for active projects.</Paragraph>
	</GeneralSection>
	<RelatedTopics><SectionTitle>Related topics</SectionTitle>
		<RelTopic><Link href="/baanerp/tp/onlinemanual/000337" role="manual">Revenue Recognition (RR) and Cost of Goods Sold (COGS)</Link>
		</RelTopic>
	</RelatedTopics>
</ManualTopic>
