What is the formula used to calculate MRR and ARR in RevRec?
Types of examples of MRR and ARR calculation in RevRec?
RevRec calculates MRR using the following formula.
MRR = ([Sale Price] / [Duration (days)]) * (365 / 12)
ARR = ([Sale Price] / [Duration (days)]) * 365
See below for some sample calculations that explain different scenarios.
MRR/ARR active period is established using [Service Start Date] & [Service End Date]. Although it is a pretty straightforward calculation there are some edge cases that need a closer look. Below we have tried to show several examples (including simple and edge cases) so that our users know exactly how active periods are established.
Related Articles and Documentation