The three year contract was a great first year

# Self-authored for the EML case corpus (no external origin). A sales team signs
# a three-year service contract worth 3000, the full amount is booked as this
# year's revenue, and the year closes with a record profit. Which year the
# service is actually delivered in is computed below.
#
# The books are careful. The contract is real and signed; the 3000 is the real
# contract value; the costs of serving it are real and recorded when spent; and
# the intent is exactly 'how well did the business do this year'.
#
# The service is delivered a third each year for three years, so the revenue
# belongs a third to each year - booking it all in year one makes year one a
# triumph and years two and three, in which the same work is done, losses.

3000 => contract_value
3 => contract_years
900 => cost_to_serve_each_year

contract_value => revenue_booked_year_one
0 => revenue_booked_year_two
revenue_booked_year_one - cost_to_serve_each_year => reported_profit_year_one
revenue_booked_year_two - cost_to_serve_each_year => reported_profit_year_two
int(contract_value / contract_years) => revenue_earned_each_year
revenue_earned_each_year - cost_to_serve_each_year => true_profit_each_year
reported_profit_year_one - true_profit_each_year => year_one_overstatement
int(year_one_overstatement * 10000 / true_profit_each_year) => overstatement_per_myriad_of_true_profit

"contract value                  : " + str(contract_value) + " over " + str(contract_years) + " years" ^0
"cost to serve, each year        : " + str(cost_to_serve_each_year) ^0
"" ^0
"booked at signing, year one     : revenue " + str(revenue_booked_year_one) + ", profit " + str(reported_profit_year_one) ^0
"booked at signing, year two     : revenue " + str(revenue_booked_year_two) + ", profit " + str(reported_profit_year_two) ^0
"booked at signing, year three   : revenue " + str(revenue_booked_year_two) + ", profit " + str(reported_profit_year_two) ^0
"" ^0
"earned as delivered, each year  : revenue " + str(revenue_earned_each_year) + ", profit " + str(true_profit_each_year) ^0
"year one overstatement          : " + str(year_one_overstatement) + ", " + str(overstatement_per_myriad_of_true_profit) + " per ten thousand of the true profit" ^0
"" ^0

# ---- what the books verified ----

"the year-one books" ^0
"  contract : real and signed" ^0
"  value : the real " + str(contract_value) ^0
"  costs : real, recorded when spent" ^0
"  intent : how well did the business do this year" ^0
"  fictitious entries : 0" ^0
"  verdict : RECORD PROFIT OF 2100" ^0
"" ^0
"  booking a real contract at its real value with real costs" ^0
"  is the part done right here, and it is why nothing on the" ^0
"  page is invented" ^0
"" ^0

# ---- which year the service is delivered in ----

"recognition" ^0
"  what was earned in year one : a third of the service," ^0
"    " + str(revenue_earned_each_year) ^0
"  what was booked in year one : all of it, " + str(revenue_booked_year_one) ^0
"  what years two and three deliver : the same work, " + str(cost_to_serve_each_year) + " of" ^0
"    cost each, with " + str(revenue_booked_year_two) + " of revenue left to set against it" ^0
"  so the three years read : " + str(reported_profit_year_one) + ", " + str(reported_profit_year_two) + ", " + str(reported_profit_year_two) ^0
"  and the three years were : " + str(true_profit_each_year) + ", " + str(true_profit_each_year) + ", " + str(true_profit_each_year) ^0
"" ^0

# ---- what the business got ----

"the consequences" ^0
"  bonuses paid on : " + str(reported_profit_year_one) ^0
"  profit actually made in year one : " + str(true_profit_each_year) ^0
"  is the contract fake : no" ^0
"  is the timing the business's : no; the revenue was moved" ^0
"    from the years that earn it to the year that signed it" ^0
"" ^0

# ---- null control ----

# The same contract recognised as the service is delivered - a third a year -
# so each year's revenue sits beside that year's cost.
2100 => nc_year_one_profit_booked_at_signing
100 => nc_year_one_profit_recognised_as_delivered
2000 => nc_overstatement_recognition_removes

"null control - recognise revenue as the service is delivered" ^0
"  year-one profit, booked at signing : " + str(nc_year_one_profit_booked_at_signing) ^0
"  year-one profit, recognised as delivered : " + str(nc_year_one_profit_recognised_as_delivered) ^0
"  overstatement recognition removes : " + str(nc_overstatement_recognition_removes) ^0
"  no contract and no cost changed; the revenue stopped" ^0
"  arriving three years before the work" ^0
"" ^0

# ---- the rule ----

"what booking a real contract at signing guarantees" ^0
"  the revenue is real money the customer will pay : exactly," ^0
"    signed contract, real value" ^0
"  the year earned that revenue : not addressed; the service" ^0
"    is delivered over " + str(contract_years) + " years, so year one earned " + str(revenue_earned_each_year) + " and was" ^0
"    credited " + str(revenue_booked_year_one) + ", overstated " + str(overstatement_per_myriad_of_true_profit) + " per ten thousand" ^0
"" ^0

"revenue is earned when the work is done and booked when someone writes it" ^0
"down, and a year's result is a claim about the first; writing three years of" ^0
"earning into one year makes that year a triumph out of the other two's work" ^0
"" ^0

"A real contract, a real " + str(contract_value) + ", real costs - nothing invented. But the service is" ^0
"delivered over " + str(contract_years) + " years and the revenue was booked in one, so year one reports" ^0
"" + str(reported_profit_year_one) + " where it earned " + str(true_profit_each_year) + " and years two and three report " + str(reported_profit_year_two) + " each for" ^0
"the same work, until revenue is recognised as the service is delivered." ^0

contract_value = 3000
contract_years = 3
cost_to_serve_each_year = 900
revenue_booked_year_one = contract_value
revenue_booked_year_two = 0
reported_profit_year_one = revenue_booked_year_one - cost_to_serve_each_year
reported_profit_year_two = revenue_booked_year_two - cost_to_serve_each_year
revenue_earned_each_year = int(contract_value / contract_years)
true_profit_each_year = revenue_earned_each_year - cost_to_serve_each_year
year_one_overstatement = reported_profit_year_one - true_profit_each_year
overstatement_per_myriad_of_true_profit = int(year_one_overstatement * 10000 / true_profit_each_year)
print("contract value                  : " + str(contract_value) + " over " + str(contract_years) + " years")
print("cost to serve, each year        : " + str(cost_to_serve_each_year))
print("")
print("booked at signing, year one     : revenue " + str(revenue_booked_year_one) + ", profit " + str(reported_profit_year_one))
print("booked at signing, year two     : revenue " + str(revenue_booked_year_two) + ", profit " + str(reported_profit_year_two))
print("booked at signing, year three   : revenue " + str(revenue_booked_year_two) + ", profit " + str(reported_profit_year_two))
print("")
print("earned as delivered, each year  : revenue " + str(revenue_earned_each_year) + ", profit " + str(true_profit_each_year))
print("year one overstatement          : " + str(year_one_overstatement) + ", " + str(overstatement_per_myriad_of_true_profit) + " per ten thousand of the true profit")
print("")
print("the year-one books")
print("  contract : real and signed")
print("  value : the real " + str(contract_value))
print("  costs : real, recorded when spent")
print("  intent : how well did the business do this year")
print("  fictitious entries : 0")
print("  verdict : RECORD PROFIT OF 2100")
print("")
print("  booking a real contract at its real value with real costs")
print("  is the part done right here, and it is why nothing on the")
print("  page is invented")
print("")
print("recognition")
print("  what was earned in year one : a third of the service,")
print("    " + str(revenue_earned_each_year))
print("  what was booked in year one : all of it, " + str(revenue_booked_year_one))
print("  what years two and three deliver : the same work, " + str(cost_to_serve_each_year) + " of")
print("    cost each, with " + str(revenue_booked_year_two) + " of revenue left to set against it")
print("  so the three years read : " + str(reported_profit_year_one) + ", " + str(reported_profit_year_two) + ", " + str(reported_profit_year_two))
print("  and the three years were : " + str(true_profit_each_year) + ", " + str(true_profit_each_year) + ", " + str(true_profit_each_year))
print("")
print("the consequences")
print("  bonuses paid on : " + str(reported_profit_year_one))
print("  profit actually made in year one : " + str(true_profit_each_year))
print("  is the contract fake : no")
print("  is the timing the business's : no; the revenue was moved")
print("    from the years that earn it to the year that signed it")
print("")
nc_year_one_profit_booked_at_signing = 2100
nc_year_one_profit_recognised_as_delivered = 100
nc_overstatement_recognition_removes = 2000
print("null control - recognise revenue as the service is delivered")
print("  year-one profit, booked at signing : " + str(nc_year_one_profit_booked_at_signing))
print("  year-one profit, recognised as delivered : " + str(nc_year_one_profit_recognised_as_delivered))
print("  overstatement recognition removes : " + str(nc_overstatement_recognition_removes))
print("  no contract and no cost changed; the revenue stopped")
print("  arriving three years before the work")
print("")
print("what booking a real contract at signing guarantees")
print("  the revenue is real money the customer will pay : exactly,")
print("    signed contract, real value")
print("  the year earned that revenue : not addressed; the service")
print("    is delivered over " + str(contract_years) + " years, so year one earned " + str(revenue_earned_each_year) + " and was")
print("    credited " + str(revenue_booked_year_one) + ", overstated " + str(overstatement_per_myriad_of_true_profit) + " per ten thousand")
print("")
print("revenue is earned when the work is done and booked when someone writes it")
print("down, and a year's result is a claim about the first; writing three years of")
print("earning into one year makes that year a triumph out of the other two's work")
print("")
print("A real contract, a real " + str(contract_value) + ", real costs - nothing invented. But the service is")
print("delivered over " + str(contract_years) + " years and the revenue was booked in one, so year one reports")
print("" + str(reported_profit_year_one) + " where it earned " + str(true_profit_each_year) + " and years two and three report " + str(reported_profit_year_two) + " each for")
print("the same work, until revenue is recognised as the service is delivered.")

contract value                  : 3000 over 3 years
cost to serve, each year        : 900

booked at signing, year one     : revenue 3000, profit 2100
booked at signing, year two     : revenue 0, profit -900
booked at signing, year three   : revenue 0, profit -900

earned as delivered, each year  : revenue 1000, profit 100
year one overstatement          : 2000, 200000 per ten thousand of the true profit

the year-one books
  contract : real and signed
  value : the real 3000
  costs : real, recorded when spent
  intent : how well did the business do this year
  fictitious entries : 0
  verdict : RECORD PROFIT OF 2100

  booking a real contract at its real value with real costs
  is the part done right here, and it is why nothing on the
  page is invented

recognition
  what was earned in year one : a third of the service,
    1000
  what was booked in year one : all of it, 3000
  what years two and three deliver : the same work, 900 of
    cost each, with 0 of revenue left to set against it
  so the three years read : 2100, -900, -900
  and the three years were : 100, 100, 100

the consequences
  bonuses paid on : 2100
  profit actually made in year one : 100
  is the contract fake : no
  is the timing the business's : no; the revenue was moved
    from the years that earn it to the year that signed it

null control - recognise revenue as the service is delivered
  year-one profit, booked at signing : 2100
  year-one profit, recognised as delivered : 100
  overstatement recognition removes : 2000
  no contract and no cost changed; the revenue stopped
  arriving three years before the work

what booking a real contract at signing guarantees
  the revenue is real money the customer will pay : exactly,
    signed contract, real value
  the year earned that revenue : not addressed; the service
    is delivered over 3 years, so year one earned 1000 and was
    credited 3000, overstated 200000 per ten thousand

revenue is earned when the work is done and booked when someone writes it
down, and a year's result is a claim about the first; writing three years of
earning into one year makes that year a triumph out of the other two's work

A real contract, a real 3000, real costs - nothing invented. But the service is
delivered over 3 years and the revenue was booked in one, so year one reports
2100 where it earned 100 and years two and three report -900 each for
the same work, until revenue is recognised as the service is delivered.

Trace event types