In this blog guide, you will learn about Auto-Expansion of Kit Items in NetSuite and the revenue element fields that are specific to the kits.

The main sections covered are as follows:

I suggest you watch the video. It’s easier to understand if you are a visual/audio learner. The content below is the same as the video. It’s for those who learn by reading.

 

Kit with Auto-Expansion

Kit/Package item types include an Auto-Expansion for Revenue Management option. When this box is checked or enabled, the kit component items control the following:

Auto-expansion for revenue management kit components
Auto-Expansion for Revenue Management

The following are what you need to know when it comes to Auto-Expansion of Kit Items.

  • When you sell a kit item with auto-expansion, revenue elements are created for the parent kit item and each kit component item.
  • The revenue element for the parent kit item includes the sales amount, but it has no fair value amount.
  • The revenue elements for the kit component items have only fair value amounts and no sales amounts.
  • The element for the parent kit item is always grouped with the elements for the kit component items in the same revenue arrangement.
  • An error will occur if you attempt a merge that splits the revenue elements of a kit into separate revenue arrangements.
  • The elements of a kit item participate in revenue allocation using the fair values of the kit component elements.
Auto-expansion for revenue kit components elements
Auto-Expansion for Revenue Management component kit
  • Since the parent kit element has zero fair value, its carve out is 100%.
Auto-expansion for revenue management kit components fair value price list
Parent kit element has zero fair value, its carve out is 100%

 

Allocating Revenue for Kit Items

When auto-expansion is on as seen in the screenshot, set the Allocation Type of the parent kit to Normal or Software.

  • For purposes of fair value formulas, kit component items inherit their parent kit item’s revenue allocation group.
Screenshot of Auto-expansion for revenue management
On auto – expansion, check the auto-expansion for revenue management box

At least one kit component item must also have the Allocation Type set to Normal or Software.

  • For purposes of fair value formulas, kit component items inherit their parent kit item’s revenue allocation group.
Screenshot of Auto-expansion for revenue management on allocating revenue for kit items
At least one kit component item must also have the Allocation Type set to Normal or Software

If the parent kit item has the Allocation Type set to Exclude, clear the Auto-Expansion for Revenue Management box.

  • Revenue recognition plans are created based on the revenue recognition rules and Create Revenue Plans On values of the kit component elements. No revenue plans are created for the parent kit element.
Screenshot of Auto-expansion for revenue management in allocating revenue kit items
If the parent kit item has the Allocation Type set to Exclude, clear the Auto-Expansion for Revenue Management box

 

Nested Kit

A nested kit occurs when one of the kit component items is also a kit.

As seen in the screenshot below, you will learn the following:

  • When a revenue arrangement includes a nested kit, only the top-level parent includes a sales amount.
  • None of the elements for the kit type items, whether the top parent or an intermediate parent, have fair value. Thus, no revenue is allocated to them.
Screenshot of nested kit
Nested kit occurs when one of the kit component items is also a kit

 

Revenue Element Fields

These are the two fields in the revenue element that are specific to kits.

  • Is Kit Item
    • Set to Yes for the parent kit element when auto-expansion is on.
    • Should be empty for all other elements.
  • Parent Kit Element
    • Field for kit component elements.
    • It contains a link to the parent kit revenue element.

 
Summary
To recap, click on the sections of this blog below.

 

watch video in youtube

 

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