In this post I would like to address a certain aspect of how Oracle Fusion Project Portfolio Management (PPM) handles Unbilled Receivables (UBR) and Unearned Revenue (UER) in ledger currency.
I would like to draw attention to that fact that it requires careful review to avoid discrepancies, especially when foreign currency contracts are involved and there are exchange rate fluctuations between Invoice generation and Revenue recognition.
Currency Conversion Mechanics in Oracle Fusion PPM
Oracle Fusion PPM supports transactions in multiple currencies, but the interaction between project currencies, billing currencies, and ledger currencies introduces complexity. The system allows users to define project/project functional currency (used for internal reporting), and ledger currency (primary accounting currency). Conflicts arise when conversion rate attributes differ across these layers, as the system prioritizes project functional currency settings over others. For example, if a project functional currency uses spot rates while the ledger currency uses corporate rates, mismatches in UBR/UER valuations will occur during period-end reconciliation.
Foreign currency contracts compound this issue. When generating invoices and recognizing revenue, Oracle Fusion applies exchange rates based on invoice dates for billing amounts and transaction dates (event completion dates) for revenue amounts. If the exchange rate fluctuates between these dates, the ledger currency values of UBR (derived from revenue) and UER (derived from invoices) will diverge. A contract invoiced on January 1 at a certain exchange Rate but recognized as revenue on April 15 at another exchange rate creates a discrepancy between UER and UBR.
Illustrative Example :
UBR & UER are Zero in Entered Currency (USD), but have pending balance in Ledger Currency (CAD).
This appears to be how the product is designed to function.
What can we do ?
After much thought (& arguments with Oracle Support confirming Product cannot fix this), I have come with a couple of ways to tackle this situation.
And am happy to get the good opportunity to implement a solution successfully with consistent real world results (over the past 2 years).
Do reach out to me in case you would like to discuss about the solution.
PS: I am working on a tool to identify the financial impact of this situation in $/£/¢/€/¥ terms. Am pretty sure that it would a interesting numeric to evaluate.