Cadence, Ramp Deals & Discounts
Cadence, Ramp Deals & Discounts
Cadence, Ramp Deals & Discounts in GAAPx manages the operational and accounting complexities of multi-year enterprise contracts with escalating commitments, free service periods, and contractual discounts.
:::info SCREENSHOT PLACEHOLDER: Multi-Year Ramp Schedule Builder
Location in App: App > Contracts > [Contract ID] > Ramp Schedule
Visual Description: Ramp contract view showing Year 1 ($50k), Year 2 ($100k), and Year 3 ($150k) with revenue smoothing curve.
Recommended Dimensions: 1200 x 675
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Accounting for Ramp Deals under ASC 606
In a multi-year ramp deal where pricing increases annually for identical services (e.g. Year 1 = $50,000, Year 2 = $100,000, Year 3 = $150,000; Total = $300,000):
- Billing Subledger: Invoices $50k in Y1, $100k in Y2, and $150k in Y3 on scheduled invoice dates.
- Revenue Subledger: Under ASC 606-10-32-28, revenue is recognized straight-line at $100,000 per year ($8,333.33/month) across all 36 months, generating an Unbilled Contract Asset in Year 1 that amortizes down in Year 3.
Discount Types & Allocation
- Contract-Wide Percentage Discount: Proportionately allocated across all performance obligations based on relative standalone selling prices.
- Item-Specific Discount: Assigned strictly to a specific line item (e.g. 50% discount on initial implementation services).
- Future Service Credits: Tracked as contract liabilities until drawn down by usage.