diff --git a/Makefile b/Makefile
index 209016d6351..9c7468158d6 100644
--- a/Makefile
+++ b/Makefile
@@ -1,10 +1,8 @@
-VERSION_GENERATION = 2
 VERSION_MAJOR 	   = 2
 VERSION_MINOR 	   = 3
-VERSION_REVISION   = 0
+VERSION_PATCHLEVEL = 0
 VERSION_RESERVED   = 0
-PATCHLEVEL 	   = 0
-SUBLEVEL	   = 0
+EXTRAVERSION       =
 NAME 		   = Zephyr Kernel
 
 export SOURCE_DIR PROJECT MDEF_FILE KLIBC_DIR
@@ -385,10 +383,10 @@ LDFLAGS += $(call ld-option,-nostdlib)
 LDFLAGS += $(call ld-option,-static)
 LDLIBS_TOOLCHAIN ?= -lgcc
 
-KERNELVERSION = $(VERSION_GENERATION).$(VERSION_MAJOR).$(VERSION_MINOR).$(VERSION_REVISION)
+KERNELVERSION = $(VERSION_MAJOR)$(if $(VERSION_MINOR),.$(VERSION_MINOR)$(if $(VERSION_PATCHLEVEL),.$(VERSION_PATCHLEVEL)))$(VERSION_EXTRAVERSION)
 
-export VERSION_GENERATION VERSION_MAJOR VERSION_MINOR VERSION_REVISION VERSION_RESERVED
-export PATCHLEVEL SUBLEVEL KERNELRELEASE KERNELVERSION
+export VERSION_MAJOR VERSION_MINOR VERSION_PATCHLEVEL VERSION_RESERVED EXTRAVERSION
+export KERNELRELEASE KERNELVERSION
 export ARCH SRCARCH CONFIG_SHELL HOSTCC HOSTCFLAGS CROSS_COMPILE AS LD CC
 export CPP AR NM STRIP OBJCOPY OBJDUMP
 export MAKE AWK GENKSYMS INSTALLKERNEL PERL PYTHON UTS_MACHINE GENIDT
@@ -868,13 +866,12 @@ prepare: $(archprepare)  FORCE
 # KERNELRELEASE can change from a few different places, meaning version.h
 # needs to be updated, so this check is forced on all builds
 
-VERSION_GENERATION_HEX=$(shell echo "obase=16; ${VERSION_GENERATION}" | bc)
 VERSION_MAJOR_HEX=$(shell echo "obase=16; ${VERSION_MAJOR}" | bc)
 VERSION_MINOR_HEX=$(shell echo "obase=16; ${VERSION_MINOR}" | bc)
-VERSION_REVISION_HEX=$(shell echo "obase=16; ${VERSION_REVISION}" | bc)
+VERSION_PATCHLEVEL_HEX=$(shell echo "obase=16; ${VERSION_PATCHLEVEL}" | bc)
 KERNEL_FLAGS=00
 VERSION_RESERVED_HEX=00
-KERNEL_VERSION_HEX=0x$(VERSION_GENERATION_HEX)$(VERSION_MAJOR_HEX)$(VERSION_MINOR_HEX)$(VERSION_REVISION_HEX)
+KERNEL_VERSION_HEX=0x$(VERSION_MAJOR_HEX)$(VERSION_MINOR_HEX)$(VERSION_PATCHLEVEL_HEX)
 
 define filechk_version.h
        (echo "#ifndef _KERNEL_VERSION_H_"; \
@@ -883,10 +880,9 @@ define filechk_version.h
        echo -n "#define KERNELVERSION "; \
        echo "$(KERNEL_VERSION_HEX)$(KERNEL_FLAGS)$(VERSION_RESERVED_HEX)"; \
        echo "#define KERNEL_VERSION_NUMBER     $(KERNEL_VERSION_HEX)"; \
-       echo "#define KERNEL_VERSION_GENERATION $(VERSION_GENERATION)"; \
        echo "#define KERNEL_VERSION_MAJOR      $(VERSION_MAJOR)"; \
        echo "#define KERNEL_VERSION_MINOR      $(VERSION_MINOR)"; \
-       echo "#define KERNEL_VERSION_REVISION   $(VERSION_REVISION)"; \
+       echo "#define KERNEL_VERSION_PATCHLEVEL $(VERSION_PATCHLEVEL)"; \
        echo "#define KERNEL_VERSION_STRING     \"$(KERNELVERSION)\""; \
        echo; \
        echo "#endif /* _KERNEL_VERSION_H_ */";)
diff --git a/include/kernel_version.h b/include/kernel_version.h
index 2f5f1802985..fca7342ec35 100644
--- a/include/kernel_version.h
+++ b/include/kernel_version.h
@@ -35,29 +35,20 @@
 
 /*
  * The kernel version has been converted from a string to a four-byte
- * quantity that is divided into three parts.
+ * quantity that is divided into two parts.
  *
- * Part 1: The two most significant bytes are sub-divided into four nibbles,
- * representing the kernel's numeric version, w.x.y.z. These fields denote:
- *       w -- generation release number
+ * Part 1: The three most significant bytes represent the kernel's
+ * numeric version, x.y.z. These fields denote:
  *       x -- major release
  *       y -- minor release
- *       z -- servicepack release
- * Each of these elements must therefore be in the range 0 to 15, inclusive.
+ *       z -- patchlevel release
+ * Each of these elements must therefore be in the range 0 to 256, inclusive.
  *
- * Part 2: The next most significant byte is used for a variety of flags and is
- * broken down as follows:
- *     Bits 7..0 - Cleared as the are currently unused.
- *
- * Part 3: The least significant byte is reserved for future use.
+ * Part 2: The least significant byte is reserved for future use.
  */
-#define SYS_KERNEL_VER_GENERATION(ver) ((ver >> 28) & 0x0F)
 #define SYS_KERNEL_VER_MAJOR(ver) ((ver >> 24) & 0x0F)
-#define SYS_KERNEL_VER_MINOR(ver) ((ver >> 20) & 0x0F)
-#define SYS_KERNEL_VER_SERVICEPACK(ver) ((ver >> 16) & 0x0F)
-
-/* return 8-bit flags */
-#define SYS_KERNEL_VER_FLAGS(ver) ((ver >> 8) & 0xFF)
+#define SYS_KERNEL_VER_MINOR(ver) ((ver >> 16) & 0x0F)
+#define SYS_KERNEL_VER_PATCHLEVEL(ver) ((ver >> 8) & 0x0F)
 
 /* kernel version routines */