**Scope**

What is the formula used to calculate MRR and ARR in RevRec?

Types of examples of MRR and ARR calculation in RevRec?

**Solution**

RevRec calculates MRR using the following formula.

MRR = ([Sale Price] / [Duration (days)]) * (365 / 12)

ARR = ([Sale Price] / [Duration (days)]) * 365

First, find the [Duration (days)] using [Service Start Date] and [Service End Date].

Calculate the [Daily Selling Price] for the subscription/recurring Item by dividing [Sale Price] by [Duration (days)]

MRR = Daily Selling Price x 365 /12

ARR = Daily Selling Price x 365

See below for some sample calculations that explain different scenarios.

MRR/ARR Active Periods

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**