What is it?
Prospective Merge is a term used to describe a NetSuite revenue process where an existing Revenue Arrangement (RA) is terminated and a new arrangement is created with the remaining (residual) revenue balance to represent the new contracted obligation.
A contract modification is often described as an amendment or change order. Common modifications include: upsell, downsell, product swap, or any other change in scope or price of an existing contract. Revenue requirements for modifications vary by use case. Prospective Merge is designed for ASC606 compliance where modifications require the accounting to be treated as a new contract, terminating the old.