Drag and Drop Question You have implemented Dynamics 365 Finance. You must configure revenue recognition to handle deferring revenue and revenue reallocation. You need to configure the posting…

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Explanation

Dynamics 365 Finance - Revenue Recognition Posting Profiles

Context

In Dynamics 365 Finance, the Revenue Recognition posting profiles define which ledger accounts receive entries for specific revenue events. The question presents two scenarios that require different profiles.

The Two Scenarios and Their Correct Profiles

Scenario 1: Deferring Revenue → Deferred Revenue

When a product or service cannot be recognized immediately (e.g., a multi-element arrangement or subscription), the revenue must be held in a liability account until the performance obligation is satisfied.

• The Deferred Revenue posting profile points to that liability account.
• Without it, revenue would hit the P&L prematurely, violating ASC 606 / IFRS 15.
• This is the foundational profile for any deferral setup.

Scenario 2: Revenue Reallocation → Partial Invoice Revenue Clearing

Revenue reallocation happens when a new line item is added to a sales order after an invoice has already been posted. The system must redistribute the transaction price across all performance obligations.

• The Partial Invoice Revenue Clearing profile provides the temporary clearing account the system uses to net out the previously recognized revenue and post the corrected amounts.
• It bridges the gap between the already-invoiced amount and the newly reallocated revenue figures.

Why "Deferred Cost of Goods Sold" Is Not Used Here

This is the most common misconception. Deferred COGS is relevant when you need to defer the cost side to match deferred revenue (matching principle). However:

• The question asks specifically about revenue deferral and revenue reallocation posting profiles.
• Deferred COGS is a companion profile configured separately - it does not answer either scenario asked here.

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