The sales and finance reports provided by Apple's App Store are often at an aggregated level, on a monthly basis. These reports are focused on cash payments such as the Customer Price, which is the amount that customers pay and can include taxes (like VAT) and the Developer Proceeds; or Partner Share, which is the amount that app developers receive after Apple deducts its platform fee charge (15% or 30% of price net of tax).
Apple App Store integration for RevRec is currently in early access. If not already done, contact RevRec Support to join the Early Adopter Program and enable this feature.
RevRec's App Store integration automates revenue recognition for your Apple App Store subscriptions. It syncs detailed subscription transaction data from your App Store's Subscriber report on a daily basis, and applies the revenue recognition rules based on the subscription's duration. Additionally, RevRec offers configurable functions to recognize Apple's platform fee charge based on the countries your subscriptions are sold in, and your qualification for Apple's Small Business Program.
| App Store's Sales and Finance Reports | RevRec App Store Solution |
|---|---|
| Aggregated, summary app sales data | Detailed transaction level data |
| Monthly update | Daily update |
| Cash Payments focused | Out-of-Box Revenue Recognition Solution |
| Manual process to prepare Journal Entry | Automated Journal Entry generation |
| Need to consolidate with other sales channels (E.g. Google Store, direct sale website, etc) | One revenue subledger, for all your subscriptions sales |
It is important to understand the key terms used in RevRec and how it leverages them from the App Store Reports.
| Subscriber Report Fields | RevRec Fields |
|---|---|
| Event Date | Order Date and Billing Date, and Service Start Date. |
| Subscriber ID | Customer ID. It is also concatenated with the Event Date and Subscription Name to populate Order Number and Invoice Number. |
| Customer Currency | Customer currency. |
| Subscription Apple ID | Product Code: the unique identifier of the product. |
| Subscription Name | Product Name. |
| Subscription Group ID | Product Family. |
| Standard Subscription Duration | Product Term (in months). |
| Customer Price | Sales Order amount and billing amount, for tax exclusive pricing subscriptions. |
| Customer Currency | Sales Order and Billing currency, for tax exclusive pricing subscriptions. |
| Line ID | Order Item ID. |
| Developer Proceeds | Input to calculate Platform Fee and Revenue recognition for tax inclusive pricing subscriptions. |
| Proceeds Currency | Sales Order and Billing currency, for tax inclusive pricing subscriptions. |
| Refund | If 'Yes', RevRec will create a credit note. |
Log in to your App Store Connect and retrieve the following details that are essential to connect the two applications:
You can connect your site RevRec with your App Store data, along with other subscription sales channels such as Google Play Store and Chargebee.
Only users with Admin role access can set up the AppStore integration.
Follow these steps to integrate RevRec with your App Store account:
RevRec will automatically import App Store's Subscriber data on a daily basis to generate sales order, invoice, customer and product, with a new field Channel set to Apple App Store.
Revenue and direct sale cost recognition for mobile subscriptions follow the same ASC 606/IFRS 15 guidelines.
Customer Price is the amount that Apple charges to the end user, and defined as is inclusive of any applicable taxes we collect and remit per Schedule 2 of the Paid Applications agreement per Apple's note.
Developer Proceeds is the amount that app developers would receive from Apple after Apple platform fee charge or any applicable tax.
Let's look at some examples:
| Price Type | Customer Price | Examples |
|---|---|---|
| Tax Exclusive Price (e.g. the U.S.) | Developer Proceeds + Apple's Platform Fee Charge | Example 1: Customer Price: $100 Platform Charge: $15 Developer Proceeds: $85 |
| Tax Inclusive Price (e.g. European countries) | Developer Proceeds + Apple's platform Fee charge + VAT tax | Example 2: Customer price: EURO 100 20% VAT Tax: EURO 100 / (1+20%) X 20% = EURO 16.67 Platform Charge (assuming 15%): EURO 100 / (1+20%) * 15% = EURO 12.50. Developer Proceeds: EURO 100 / (1+20%) * (1-15%) = EURO 70.83 |
For mobile subscriptions sold in countries that use tax exclusive price, RevRec recognizes the Customer Price as the total transaction price for revenue recognition, and the difference between Customer Price and Developer Proceeds, as the Apple platform fee.
With Example 1 above, RevRec recognizes $100 as total transaction price for revenue recognition and $15 as Apple Platform fee.
Contact RevRec Support to configure the country code(s) where the subscriptions are sold to apply this gross revenue approach.
For mobile subscriptions sold in countries that use tax inclusive price, RevRec will recognize the Developer Proceeds + Apple Platform fee as revenue.
See the next section for platform fee calculation.
RevRec calculates the platform fee as follows:
| Platform Fee Percentage | Platform Fee | Revenue (Tax inclusive price) |
|---|---|---|
| 15% | EURO 70.83 / (1 - 15%) X 15% = EURO 12.50 | EURO 70.83+EURO 12.50 = EURO 83.33 |
| 30% | EURO 70.83 / (1 - 30%) X 30% = EURO 30.35 | EURO 70.83+EURO30.35 = EURO 101.18 |
You can set the accounting policy for the platform fee in RevRec's expense policy configuration, to apply either point-in-time or pro-rata recognition method.
For tax exclusive price countries, RevRec requires the currency for Customer Price and Developer Proceeds to be the same for Platform fee expense calculation. RevRec will report the expense as pending if the currencies are different, and you can manually upload the translated expense into RevRec. Note that the sales orders and invoices are still processed, and only the expenses are not.
Each subscription transaction record on the Subscriber report is treated as a sales order. RevRec establishes the total transaction price on either gross or net basis and sales expense where applicable, as described above and captures the product, subscription duration, service start/end date, and applies the configured accounting rules for revenue and expense recognition.
Each transaction on the Subscriber report reflects payment activities on App Store, and is processed as an invoice.
RevRec treats renewal as a new order based on the new subscription start date. Renewal will have the same Subscriber ID.
Discount is considered to be reflected directly in the Customer Price and Developer Proceeds. As a result, there is no separate discount line item in invoice or sales order.
App Store allows for full refund when a user cancels a subscription, in which case RevRec reverses the cumulative revenue recognized and zeros out deferred revenue.
Refunds are processed as credit notes in RevRec. The refunds are recognized based on the subscription product's service start and end date, with the cumulative impact recognized in the current open period.
Refunds on subscriptions also include the reversal of platform charge. RevRec will recognize the platform charge associated with the refunds and recognize the cumulative impact for the charge in the current open period.
Users can change a subscription plan (upgrade, downgrade or crossgrade) during the active period of a subscription. A partial refund is issued for the remaining period of the existing plan and a new charge is issued for the new plan. RevRec will stop revenue recognition for the existing subscription and recognize revenue for the new plan starting at the time of plan change.