ZAB Prospective Merge

What is it?

ZAB Prospective Merge is used to perform a prospective merge when a Revenue Arrangement (RA) has ZAB Revenue Details as the source record(s). See Understanding Prospective Merge for more information about prospective merge.

Revenue Elements with ZAB Revenue Detail source records are not compatible with NetSuite's native prospective merge process. 
If the source records are ZAB Revenue Details, you must use ZAB Prospective Merge RA's suitelet to perform a prospective merge.

Use the tables below to compare the functionality and compatibility of ZAB Prospective Merge to the native merge processes. 

Compare to native Prospective Merge

For more information about NetSuite Prospective Merge visit Oracle's Help Center.

Compare to native Retrospective merge

For more information about NetSuite Retrospective Merge visit Oracle's Help Center.

When to use it?

When prospective merge is deemed necessary to support revenue requirements AND the Revenue Element source records on the Arrangement are ZAB Revenue Details, then ZAB Prospective Merge must be used. 

Prospective Merge supports ASC606 revenue requirements where "the remaining goods or services are distinct from the goods or services transferred on or before the date of the contract modification."

Common use cases that may meet this criteria are: 

• Product swap
  • Customer purchases Product A and later decides to swap out Product A for Product B before the end of the contract.

• Upsell / Upgrade
  • Customer purchases the Bronze Bundle and upgrades to a higher-level Silver Bundle before the end of the contract.  

In either of these scenarios, if the Product change occurs after revenue recognition has begun, prospective merge may be applicable. Each business (and their auditors) must evaluate if prospective merge is required for material transactions. 

How does it work?

ZAB Prospective Merge is processed through a custom suitelet. Access the suitelet by navigating to Transactions > ZoneBilling > ZAB Prospective Merge RA's.

What is eligible to show up here? 

When a Revenue Arrangement is processed through the ZAB Prospective Merge suitelet, the source Revenue Detail(s) are modified, and new Revenue Detail(s) are created to reflect the following: 

• Effective Start Date
  • Set on the new Revenue Detail.
    • A revenue adjustment ZAB Charge is created with the negative of the amount recognized. Combined with all other charges for this performance obligation, the new Revenue Detail represents only the amount remaining to recognize.
• Effective End Date 
  • Set on the existing Revenue Detail.
  • A revenue adjustment ZAB Charge is created to represent the amount recognized through the effective end date and is the only Charge remaining related to the existing Revenue Detail.
• Amount recognized
• Amount remaining to recognize

When the Update Revenue Arrangements is next processed, Revenue Elements are modified and created based on the newly created or updated Revenue Details. 

The existing element's End Date is set to match the source Revenue Detail's effective end date, and the Sales Amount and Discounted Sales Amount are set to equal the source amount. This effectively terminates the original revenue contract as of the effective end date based on what amounts have already been recognized. 

A new Element is created with the new Revenue Detail as the source. The element Start Date is set based on the source effective start date, and the Sales Amount and Discounted Sales Amount are set to equal the source amount.

The new Element is also put on a new Revenue Arrangement to represent the new revenue contract, which includes any remaining amount of revenue to be recognized from the original element, plus any of the net new changes as of the effective start date. Where applicable, allocations will also run. 

Limitations

Consider the following limitations when configuring for prospective merge scenarios. 

ZAB Prospective Merge is not compatible with:

• Native transaction source records
  • Revenue Arrangement must not have any Revenue Elements with source records other than a ZAB Revenue Detail.
• ZAB Custom Revenue Events
  • Revenue Details with custom events (ZAB Amount Based, ZAB Quantity Based, ZAB Percent Complete)
• Stand-alone discount items - how this is configured for billing and considerations for revenue.

Revenue Element Mapping Restrictions

Due to native NetSuite/ARM restrictions or to avoid overwriting native ZoneBilling functionality, mapping to any of the following Revenue Element fields is not supported (or permitted?).

• Created by ZoneBilling
• Create Revenue Plans On
• Original Start Date
• Original End Date
• Revenue Detail
• Line ID
• Customer
• Subsidiary
• Allocation Amount
• Return of Element
• Residual Discounted Sales Amount
• Original Change Order Discount Amount
• Effective Start Date
• Effective End Date
• Sales Amount
• Discounted Sales Amount

Check out Testing ZAB Prospective Merge for steps to properly test a prospective merge scenario.