MEA allocations—Contracts

You can execute the MEA allocation process multiple times during the contract term, with each MEA allocation having its own specific effective date so that balances posted prior to the effective date are not affected. The revenue schedules will schedule the net difference between MEA allocations according to the type of adjustment selected.

Before you can create an MEA allocation

The following criteria must be met before you can create an MEA allocation for a contract:

• The contract must contain at least two contract lines that will participate in the MEA.
• Contract lines must use a billing method other than "Project time and materials" or "Project materials".
• Contract lines based on percent complete must have the same exchange rate.
• All items that you want to include in a specific MEA must have an active MEA price list entry record in the same currency in the same MEA price list. The exception to this is that items that will only be used for Discount/Credit contract lines do not need an MEA price list entry.
• The MEA must include at least one item that has a fair value price based on an amount or price range. If all items in the MEA are priced as percentages, Intacct will display an error.
• The contract must specify the applicable MEA price list in the contract header.
• If you are including a Debook contract line in the MEA, you must also include a corresponding Sale contract line for the same item that when combined with the Debook line will result in an extended transaction value equal to or greater than zero.
• If you are including a Discount/Credit contract line in the MEA, you can optionally associate the discount line with the other applicable contract lines in order to distribute the discount.
• Optionally, edit items to select Default bundle so that the items are automatically included in the default bundle when you create an MEA allocation that includes that item.

Allocate MEA revenue at the beginning of the contract

If there's only one contract line when the contract starts, you do not need to create an MEA allocation until you add another contract line. When you add on to the contract, use the contract line start date of the add-on line as the first MEA Effective date.

As the MEA allocation process changes the revenue amount to be recognized, the process recreates the revenue schedules for the selected journals and overwrites any manual edits made to the schedules prior to the allocation.

To allocate MEA revenue at the beginning of the contract:

1. Open the applicable contract in Edit mode.
2. If necessary, add the contract lines that make up the multiple element arrangement to the contract. Learn how to add a contract line.
3. In the Contracts page, select the MEA allocations tab.
4. Select Add.

   The Contract MEA Allocation Scheme page appears.

5. In the Name field, enter a unique identifier for the allocation. For example, "First allocation".
6. Optionally, type a description of the allocation in the Description field.
7. Use the calendar tool to select the Effective date for the allocation.
8. Use the dropdown list to select the desired Adjustment type. All MEA allocation schemes applied to a particular revenue journal for a contract require the same Adjustment type. For example, if you select "One-time" as the Adjustment type for the first MEA allocation applied to Journal 1, then all subsequent MEA allocations applied to Journal 1 require that the Adjustment type be "One-time".
9. Indicate whether the allocation should apply to Journal 1 and/or Journal 2.
Your Contracts configuration may use one or two sets of revenue journals. The field labels for Journal 1 and Journal 2 will display the journal symbols selected in the Configure Contracts page for Revenue journal 1 and Revenue journal 2.
10. In the Bundles section, enter the same numeric value in the Bundle no. column next to each applicable contract line. For example, type 1 to include the corresponding line in bundle 1. It doesn't matter what number you use to group the lines, you just need to enter the same number for lines that should be in the same MEA.
    If an item has the Default bundle checkbox selected in the Item Information page, the system will automatically assign the item a value of 1 when you create the first allocation and in subsequent reallocations.
11. If the MEA includes a discount/credit contract line and you want to link the discount to other contract lines, optionally select the Distribute link in the far-right column next to the applicable discount contract line. Learn more about distributing a discount.
12. Select Preview MEA.

    Intacct displays the allocation in the MEA allocation - Preview section.

13. If you are not satisfied with the automatically calculated MEA amounts, enter your own values in the applicable MEA amount fields.

    In order to save an MEA allocation, the total MEA amount must equal the total extended transaction value. All Sale contract lines in a bundle must have MEA amounts equal to or greater than zero, all Debook lines must have MEA amounts less than zero, and all Discount/Credit lines must have MEA amounts equal to zero.

14. Do one of the following:
    • To accept the allocation, select Apply MEA & Save. Intacct adjusts the applicable revenue schedules to accommodate the new allocation.
    • If you do not want the allocation, select Cancel.

Reallocate MEA revenue during the contract term

There are many reasons when you may need to reallocate an MEA during the contract term. Some examples are:

• You add one or more contract lines to the contract that were not part of the original MEA but should be considered as part of the MEA.
• You need to make a negative adjustment to one or more contract lines in the MEA.

Note the following expected behavior when reallocating MEA allocations:

• When you create a new MEA allocation, Intacct inactivates any existing MEA allocation scheme for the journals selected in the new MEA allocation according to the Effective date of the new allocation.
• The new MEA allocation does not affect any previously posted revenue in the revenue schedules—it only affects the schedule as of the new MEA allocation's Effective date. If you want the new allocation to apply to previously posted revenue, clear the applicable MEA allocations. See Clear contract MEA allocations for details.
• There will be one MEA allocation in effect per associated journal per Effective date. If you create two MEA allocations for the same journal with the same Effective date, the MEA allocation last created will be the effective MEA allocation.
• If a contract line does not have a bundle assignment within the MEA allocation, Sage Intacct assumes it is excluded from the bundle and that the contract line's total revenue schedule amount will be equal to its billing schedule amount.  See Exclude a contract line from an MEA allocation.
• If you add on to a contract that has an existing MEA allocation and you want to include the add-on line in the MEA, create a new MEA allocation with an Effective date equal to the add-on contract line's start date.

• As the MEA allocation process changes the revenue amount to be recognized, the process recreates the revenue schedules for the selected journals and overwrites any manual edits made to the schedules prior to the MEA allocation.

• You may experience system performance issues with MEA allocations that contain a large number of contract lines. The recommended limit for a year-long contract is 50 contract lines in one MEA allocation. If your needs exceed this limit, contact your Sage Intacct account manager.

To reallocate MEA revenue during the contract term:

1. Post any open revenue scheduled before the new MEA allocation effective date.
2. Open the applicable contract in Edit mode.
3. Select the MEA allocations tab.
4. Select Add.

   The Contract MEA Allocation Scheme page appears.

5. In the Name field, enter a unique identifier for the allocation. For example, "Second allocation".
6. Optionally, enter a description of the allocation in the Description field.
7. Use the calendar tool to select the Effective date for the allocation. The scheduled amounts in the revenue schedules associated with each contract line in the bundle will change as of this effective date.
8. Use the dropdown list to select the desired Adjustment type. You must select the same Adjustment type used for the first allocation for the selected revenue journal.

   See About allocation adjustment types for examples.

9. Indicate whether the allocation should apply to Journal 1 and/or Journal 2.
   Your Contracts configuration may use one or two sets of revenue journals. The field labels for Journal 1 and Journal 2 will display the journal symbols selected in the Configure Contracts page for Revenue journal 1 and Revenue journal 2.
10. In the Bundles section, enter the same numeric value in the Bundle no. column next to each contract line that you want to include in the MEA allocation. For example, type 1 to include the corresponding line in bundle 1. It doesn't matter what number you use to group the lines, you just need to enter the same number for lines that should be in the same MEA allocation.
    If an item has the Default bundle checkbox selected in the Item Information page, the system will automatically assign the item a value of 1 when you create the first allocation and in subsequent reallocations.
11. If the MEA includes a discount/credit contract line and you want to link the discount to other contract lines, optionally select the Distribute link in the far-right column next to the applicable discount contract line. Learn more about distributing a discount.
12. Select Preview MEA.

    Intacct displays the new allocation in the MEA allocation - Preview section.

13. If you are not satisfied with the automatically calculated MEA amounts, select in the applicable MEA amount fields and input your own values.

    In order to save an MEA allocation, the total MEA amount must equal the total extended transaction value. All Sale contract lines in a bundle must have MEA amounts equal to or greater than zero, all Debook lines must have MEA amounts less than zero, and all Discount/Credit lines must have MEA amounts equal to zero.

14. Do one of the following:
    • To accept the allocation, select Apply MEA & Save. Intacct adjusts the applicable revenue schedules to accommodate the new allocation.
    • If you do not want the allocation, select Cancel.

Exclude a contract line from an MEA allocation

If you previously included a particular contract line in one or more MEA allocations, but now for whatever reason you no longer wish that contract line to participate in the MEA, you can exclude that contract line from subsequent allocations.

To exclude a contract line from an MEA allocation, leave the Bundle no. identifier for the applicable contract line blank when you create a new MEA allocation.

In the following example, say we need to cancel contract line no. 3, which is participating in an MEA allocation. We create a new MEA allocation and exclude it:

When you apply the MEA allocation where the line is excluded, Intacct resets the removed contract line's revenue schedule amount to the total billing schedule amount. Any amounts posted prior to the new MEA allocation's effective date in all associated revenue schedules remain posted. Intacct will adjust all revenue schedules associated with the prior MEA allocation with the net difference between the total revenue schedule amount and any previously posted allocated revenue schedule amount according to the Adjustment type (One time or Distributed) that you selected in the new MEA allocation.

Include a completed contract line in an MEA allocation

You can include a contract line with a completed revenue schedule in a subsequent MEA allocation effective after the contract line's revenue schedule ended. In this scenario, the system auto-posts an adjustment entry that reverses the previously recognized revenue amount for the ended line and creates a scheduled entry for the newly allocated amount. Both adjustment entries are dated with the applicable MEA allocation's Effective date. See Example 5 in MEA allocation examples for details.

Note the following expected behavior:

• If there are open periods of revenue in a revenue schedule that will end before the subsequent MEA allocation Effective date, you must post the revenue prior to creating the MEA allocation.
• You cannot clear the reversing adjustment entry that resulted from the MEA allocation process from the completed contract line because it is tied to the MEA allocation. If you want to clear the reversing adjustment, clear the MEA allocation.
• The posting date for the newly allocated revenue amount for the completed contract line must be on or after the MEA Effective date.
• You can edit the completed contract line's revenue schedule manually to change the posting date for the newly allocated revenue amount or divide it into multiple revenue periods. However, the system will override any edits if you create another MEA allocation.

Percentage of completion revenue in MEA allocations

You can include percent complete contract lines in MEA allocations when the base currency and contract currency are the same. Note the following expected behavior:

• The Step revenue option in revenue templates is not supported in MEA allocations. Use a percent complete revenue template where Step revenue is not selected for percent complete contract lines that will participate in MEA allocations.
• After you post percent complete revenue that is included in an MEA allocation, you cannot clear the first MEA allocation. In this scenario, clear the posted percent complete revenue and then clear the MEA allocation. If the percent complete contract lines participate in a second MEA allocation, you will not be able to clear the MEA allocation. In this scenario, see Reset revenue when you cannot clear an MEA allocation.

Quantity-based revenue in MEA allocations

See MEAs and quantity-based revenue recognition.

View an MEA allocation

The Contract MEA Allocation Schemes list page displays all MEA reallocation records associated with the contract from which you accessed the list. It displays the allocation Effective date, to which journals the allocation applies, and whether or not the allocation record is active.

To view an MEA allocation:

1. Open the applicable contract. It doesn't matter if you open it in View or Edit mode.
2. Select More Actions and select MEA allocations.

   The Contract MEA Allocation Schemes list appears in a separate browser window. The list displays all MEA allocation records associated with the contract.

3. Select View next to the desired MEA allocation record.

   The Contract MEA Allocation Scheme page appears and displays the allocation.

Field descriptions

Depending on your Contracts configuration, you may use one or two sets of journals. If you are use one, you will see either Journal 1 or Journal 2. If you are using two, you will see both Journal 1 and Journal 2.

MEA allocations field descriptions

Field	Description
Name	The identifier for the allocation. Each MEA allocation associated with a contract must have a unique identifier within the contract. You can use the same name in a different contract.
Description	Any meaningful text about the MEA allocation.
Effective date	The date the MEA allocation became active. The Effective date must fall on or after the latest contract line Start date and before the earliest revenue template End date of all contract lines included in the bundle. The scheduled amounts in the revenue schedules associated with each contract line in the bundle will change as of this effective date. Previously posted revenue in the schedules is not affected by the new allocation.
Fair value price effective as of the	Specifies the date Sage Intacct will use to determine the effective fair value to use for a contract line in an MEA allocation scheme. Displays one of the following: Contract line start date MEA allocation effective date This date preference is defined in the Configure Revenue Management page.
Adjustment type	Options are: Distributed: Intacct schedules the net difference between any prior posted periods and the current allocated scheduled amount evenly across the remaining revenue schedule. One time: Intacct schedules the net difference between any prior posted periods and the current allocated scheduled amount to be recognized in the month of the applicable MEA allocation Effective date. This can result in a positive or negative posted amount. All MEA allocation schemes applied to a particular revenue journal require the same Adjustment type. For example, if you select "One-time" as the Adjustment type for the first MEA allocation applied to Journal 1, then all subsequent MEA allocations applied to Journal 1 require that the Adjustment type be "One-time". See About allocation adjustment types for examples.
Apply to Journal 1 and Apply to Journal 2	Indicate one or both journals to which to apply the new MEA allocation. Your Contracts configuration may use one or two sets of revenue journals. The field labels for Journal 1 and Journal 2 will display the journal symbols selected in the Configure Contracts page for Revenue journal 1 and Revenue journal 2.
If there is open revenue scheduled before the MEA effective date	Options are: Post the revenue on the scheduled posting date: Intacct automatically posts the open revenue using the scheduled posting date when you save the new MEA allocation. The revenue amount remains as scheduled. Change the scheduled posting date to equal the MEA effective date: Intacct includes the open revenue in the new MEA allocation and changes the scheduled posting date to the MEA effective date when you save the new MEA allocation. For example, if there's open revenue scheduled to post on September 30 and the new MEA allocation date is October 3, Intacct changes the scheduled posting date for the open revenue to October 3. The revenue amount that was rescheduled is now different as it is part of the new MEA allocation. If a contract line is on hold or is undelivered, Intacct reschedules the applicable revenue amounts to post on the new MEA effective date when you save a new MEA allocation. It will do this even if you chose the Post the revenue on the scheduled posting date option. This field defaults to the option defined for this field in the Configure Contracts page.
Contract	Displays the unique identifier for the contract associated with the MEA allocation.
Customer	The customer associated with the contract.

Bundles section

Bundles section field descriptions

Field	Description
Line no	The contract line number associated with the item.
Line type	The Line type differentiates negative and positive value contract lines. Lines types are as follows: Debook: has a negative Quantity and a positive Rate, which results in a negative Flat/Fixed amount; or has a negative Quantity and 0.00 Flat/Fixed amount. A Debook line that is included in an MEA will then have a negative fair value that will be included in the MEA calculation. The contract line reallocates to a negative revenue amount and has a revenue schedule. Quantity-based revenue templates are not supported for use with Debook lines in MEAs. Discount/Credit: has a positive Quantity and a negative Flat/Fixed amount. A Discount/Credit line that is included in an MEA automatically reallocates to 0.00 and has no revenue schedule. A Discount/Credit line that is not included in an MEA will have a revenue schedule. Sale: has a positive Flat/Fixed amount. Both Debook and Discount/Credit contract lines will appear with negative amounts on invoices and the amounts will appear in the Available credits link on the Receive payments page in Accounts Receivable. The only difference between the two negative line types is how they are treated in an MEA.
Item	The item ID associated with the item. Kit item contract lines will not appear in the Bundles section. Kit item contract lines cannot be included in MEA allocations.
Item name	The name of the item.
GL posting date	The associated contract line's GL posting date.
Journal 1 start date and Journal 2 start date	The revenue template start date for the applicable journal.
Journal 1 end date and Journal 2 end date	The revenue template end date for the applicable journal.
Previous bundle ID for journal 1 and Previous bundle ID for journal 2	Indicates a bundle identifier for each contract line that was included in the last effective allocation for each revenue journal. These fields will be blank if: This is the first MEA allocation for the contract The corresponding contract line was not included in the last effective allocation associated with the applicable journal (for example, it is an add-on)
Bundle no.	Enter a numeric value to group contract lines into bundles for MEA allocation. For example, type 1 to include the corresponding item in bundle 1. It doesn't matter what number you use to group the items, you just need to enter the same number for items in the same bundle. This field will accept a maximum of four characters. Use a different number to group other items into an additional MEA. Leave this field blank for contract lines that are not part of any MEAs. Values may appear by default in this field if: The item has Default bundle set to true in the Item Information page. A 1 will automatically appear in the Bundle no. field to indicate the item should be included in the default bundle. This default value will override any previous bundle ID assignment in previous allocations. The item was included in the previous allocation for the journals selected in the MEA allocation header.
Distribute discount	Select the Distribute link in this column next to the applicable discount or credit contract line in order to distribute the discount amount only to one or more specific contract lines. If you do not distribute the discount, the system will allocate the discount amount across all contract lines included in the bundle. Learn more about distributing a discount.

MEA allocation - Preview section

MEA allocation - preview section field descriptions

Field	Description
Bundle no	The bundle identifier for the corresponding item.
Line no	The contract line number for the corresponding item.
Item	The item ID of the corresponding contract line.
Rate	If the Rate field is populated on the corresponding contract line, the system displays either the rate value or the discounted rate here. The discounted rate is a combination of the Rate value and Discount value if both are populated on the contract line. For example, if the Rate on the contract line is 5.00 and the Discount is 10%, the Rate field here displays 4.5. For Project time contract lines, the Rate is the Blended rate and Quantity is the number of estimated Hours.
Quantity and Multiplier	If the Quantity and/or Multiplier fields are populated on the corresponding contract line, Intacct displays those values here. Intacct uses any values in these fields in the Ext fair value price calculation. For Project time contract lines, the Quantity is the number of estimated hours.
Include with every invoice	Include with every invoice. This field is only applicable if the contract line's Flat/Fixed amount frequency field is set to "Include with every invoice". Displays the number of billing periods within the contract line start and end date. Intacct uses the value in this field to calculate the Ext txn value and Ext fair value price for the contract line, as applicable.
Ext txn value	Extended transaction value. The total value of the contract line that's not associated with usage. May display one of the following: The product of Rate x Quantity x Multiplier x # of Include with every invoice periods The Flat/Fixed amount The product of the Flat/Fixed amount x # of Include with every invoice periods
Fair value price	The effective fair value price for the item recorded in the MEA price list selected on the contract. If the item is priced as "No fair value", this field displays -- .
Ext fair value price	Extended fair value price. If the fair value is priced as an amount or price range, this field equals the fair value price multiplied by the quantity and/or the number of Include with every invoice periods for the corresponding item. If the fair value is priced as a percentage, this field equals the fair value price (percentage) multiplied by the sum of either the extended fair value prices or extended contract line prices associated with all items in the arrangement that are in the fair value category(ies) associated with this item's fair value price. If the item is priced as "No fair value", this field displays 0.00 .
MEA percent	The percent by which the revenue will allocated to the corresponding item. MEA allocation % = Extended fair value price for the contract line / Total extended fair value price for all contract lines in the MEA. If at least one item is priced as "No fair value", this field displays 0.00000 for all items in the bundle.
MEA amount	MEA amount = Total extended contract price for all bundled contract lines × (Extended fair value of contract line / Total extended fair value for all bundled contract lines) If at least one item is priced as "No fair value", the MEA amount is calculated using the Residual method. If you are not satisfied with the automatically calculated MEA amounts, you can override the MEA amounts and input your own values. Note the following when manually editing MEA amounts: The MEA amount total must equal the Extended transaction total in order to apply the MEA allocation. A Sale line can have an MEA amount of 0.00 or greater. A Debook line can only have an MEA amount that is less than 0.00. Learn more about overriding MEA amounts.
MEA base amount	The MEA amount expressed in your company's base currency. This field is only applicable to multi-currency companies.
Computation memo	Displays information when: the item is priced as a price range based on percentage the item is priced as a percentage the item is priced as "No fair value"