Deferred Revenue
Deferred revenue is a liability that is created when money is received by your association for goods and services that are not yet provided. Revenue is recognized, and then the deferred revenue liability is eliminated when the services are provided. In Nimble AMS, deferred revenue is recorded for products that are related to a Deferred Revenue Method record. A deferred revenue method sets the type of revenue that will be deferred (membership, event, etc.) and the GL account where the deferred revenue will be recorded.
By default, Nimble AMS supports deferred revenue for memberships, event registrations, and subscriptions. However, with development effort, custom deferred schedule calculators can be created for any product type.
Deferred revenue is defined on each product via the Deferred Revenue Method field, allowing great flexibility regarding what revenue is deferred and what is not deferred. For example, your Membership Dues product can be deferred, while the Membership Join Fee product can be recognized immediately.
The recognition of deferred revenue occurs automatically via a scheduled nightly job. The job recognizes the revenue based on the deferred schedules that have a Deferred Balance greater than zero and a matching Next Recognition Date.
Occasionally, you will see additional transactions noted throughout Deferred Revenue schedules. This is likely to happen because, for example, 6 months into the schedule, the Recognized Amount noted in the data does not equal half of the Deferred Amount. Additional transaction(s) can be inserted to ensure that the payments are caught up to where the data Indicates they should be. Any non-standard payments at the end of the term are there for the same purpose.
Deferred Revenue Methods
In Nimble AMS, staff need to set up a deferred revenue method and attach it to a product in order to record revenue in a deferred GL account until the recognition date occurs. A deferred revenue method can be configured for membership, registration, or subscription revenue. (Learn More)
Deferred Schedules
In Nimble AMS, deferred schedules are used to track and manage the automatic recognition of your deferred revenue. If your association is using deferred revenue in Nimble AMS, deferred schedules are created automatically for orders that include products with a deferred revenue method.
Set a Product To Be Deferred
Staff can set an existing product to have its revenue deferred by adding a deferred revenue method to the product. The deferred revenue method records the product revenue in a deferred GL account until the recognition date(s) occurs.
Set the Deferred Revenue Recognition
The Deferred Revenue Recognition sets whether the deferred revenue is tracked in Detail or Summarized format. To set the Deferred Revenue Recognition:
Set the Recognize Deferred Revenue Scheduled Job
For associations using deferred revenue, administrators can set the scheduled job for recognizing deferred revenue. The job runs nightly at 1:00 a.m.
About FASB Regulations and Using New Deferred Revenue Functionality
Nimble AMS has made enhancements to the revenue recognition engine that allow your association to have much greater flexibility around revenue recognition. This flexibility empowers associations to set up revenue recognition in compliance with updated FASB regulations.