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Revenue Recognition SAP
Revenue Recognition SAP
March 26, 2018 | Author: bladimirmp | Category:
Invoice
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Revenue
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Business Process
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Debits And Credits
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Income Statement
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SAP R/3 SD REVENUERECOGNITION BEST PRACTICE Knowledge Document Version 1.4 SAP R/3 SD REVENUE RECOGNITION - © SAP AG 07/2005. All rights reserved. BEST PRACTICE KNOWLEDGE DOCUMENT (Based on R/3 Release 4.7) Release: Version 1.4 from of July 2005 Issued by: SAP AG Neurottstraße 16 69190 Walldorf SAP AG File: RR_Best_Practice_Knowledge_Document_V1.doc Page: 2 Of: 91 Revenue Recognition - Best Practice Table of Contents Knowledge Document 1 GENERAL RECOMMENDATIONS .........................................................................6 2 DESCRIPTION OF BUSINESS AREA.....................................................................8 © SAP AG 07/2005. All rights reserved. 3 2.1 The available methods include:............................................................................................................... 8 2.2 The trigger and impact of the methods are: .......................................................................................... 8 2.3 Typical Core Business Processes using the methods are: ..................................................................... 8 2.4 Business Process Specific Information ................................................................................................... 9 IMPLEMENTING REVENUE RECOGNITION ....................................................... 10 3.1 Getting started R/3 SD Revenue Recognition...................................................................................... 10 Required releases and support packages........................................................................................................... 10 Supported processes in revenue recognition...................................................................................................... 10 Starting with customizing.................................................................................................................................. 12 3.1.1.1 Global informations ................................................................................................................... 12 3.1.1.2 Presteps...................................................................................................................................... 12 Customizing FI accounts and their settings ....................................................................................................... 14 3.1.1.3 Unbilled receivable account and deferred revenue account....................................................... 14 3.1.1.4 Revenue account........................................................................................................................ 18 SD-Customizing ................................................................................................................................................ 20 3.1.1.5 SD item-categories and their settings ........................................................................................ 20 3.1.1.6 Customizing revenue recognition type on item category level .................................................. 22 3.1.1.7 Customizing revenue recognition accrual start date .................................................................. 24 3.1.1.8 Account determination............................................................................................................... 25 4 DESCRIPTION OF CORE BUSINESS PROCESSES ........................................... 27 4.1 Standard Revenue Recognition at time of billing................................................................................ 27 General Information .......................................................................................................................................... 27 Business steps overview and process description.............................................................................................. 28 Critical functions ............................................................................................................................................... 28 Variations of the process ................................................................................................................................... 28 Additional important information...................................................................................................................... 28 4.2 Time based revenue recognition (‘A’) .................................................................................................. 29 General Information .......................................................................................................................................... 29 Business steps overview and process description.............................................................................................. 29 4.2.1.1 Process 2 – time based with VF44 as first ................................................................................. 29 4.2.1.2 Process 3 – time based with invoice as first .............................................................................. 30 Critical functions ............................................................................................................................................... 31 Variations of the process ................................................................................................................................... 31 Additional important information...................................................................................................................... 31 4.3 Service based revenue recognition (‘B’)............................................................................................... 33 General Information .......................................................................................................................................... 33 Business steps overview and process description.............................................................................................. 33 4.3.1.1 Process 4 – service based with VF44 as first............................................................................. 33 4.3.1.2 Process 5 – service based with invoice as first .......................................................................... 34 Critical functions ............................................................................................................................................... 35 Variations of the process ................................................................................................................................... 35 Additional important information...................................................................................................................... 36 4.4 SAP AG Service based revenue recognition (‘B’) contract with call off........................................................... 37 File: RR_Best_Practice_Knowledge_Document_V1.doc Page: 3 Of: 91 ........................................................................................Revenue Recognition .............................................................................. 53 4..................................................................................................................................................................9.................................................... 42 Additional important information......................................................................................................................................................................................................................................... 45 Critical functions ................................................................ 59 5 PROCESSES CURRENTLY NOT SUPPORTED ............................................................................................................................. 42 © SAP AG 07/2005...................................... 39 Additional important information.. 57 Business steps overview and process description......................................... 39 Variations of the process .....................................................................6.......................................................................... 49 Variations of the process ...........................................................7 Credit/debit memo revenue recognition with reference to preceding document (‘F’)............................................................ 47 General Information ........................6 Time based revenue recognition in credit/debit memo processing with a credit/debit memo request 43 (‘A’) General Information .......................................................................................................... 50 General Information ................10 Service based revenue recognition in return processing with reference to a contract and call off order (‘B’) ..............................................................................................................................................................................................................................6....................... 50 Business steps overview and process description.........................................................................1......................................................... 52 4..................................................................................................1.1...2 Process 14 – service based return processing with reference to an order with invoice as first............................................ 4......................................................................................................2 Process 7 – service based with invoice as first ......... 43 4.............1 Process 13 – service based return processing with reference to an order with VF44 as first............................................................................................................................................................................................ 54 4................................................................................................................................................................................................................... 57 General Information ................ 51 Additional important information......................................... 40 4................................. All rights reserved................................................ 41 Critical functions ..........................1....................................................................................... 56 Variations of the process ........................................................................................................................................ 61 SAP AG File: RR_Best_Practice_Knowledge_Document_V1..................... 44 4......................................................................................................................................1 Process 6 – service based with VF44 as first............................ 49 4................................................................................ 47 Business steps overview and process description..................................................... 42 Variations of the process ................................................................................. 56 4.......................................................................................... 57 Critical functions ...................................5 Time based and billing related revenue recognition (‘D’) .............................................................................................................................................................................................................................. 58 Variations of the process .............. 37 4................................................9............1.... 53 General Information ........... 56 Additional important information....................................................................................2 Process 10 – time based with invoice as first...1.................... 41 Business steps overview and process description.........4................................................. 48 Critical functions ...............................1 Process 9 – time based with VF44 as first ....................... 37 4..................................Best Practice Table of Contents Knowledge Document General Information ............................................................................................................................................................................................................................... 60 6 MONITORING OF THE REVENUE RECOGNITION DATA.......................................... 41 General Information ............................. 43 Business steps overview and process description................. 37 Business steps overview and process description....................... 58 Additional important information................... 46 Additional important information..............................................................................................................................................................................................................doc Page: 4 Of: 91 .......................................................................... 46 Variations of the process ........................................................................................................... 38 Critical functions .................................................................................................................................................9 Service based revenue recognition in return processing with reference to an order (‘B’) ............ 55 Critical functions ..................... 51 Critical functions ........................................................................................................................................... 53 Business steps overview and process description............... 49 Additional important information....................8 Time based or service based revenue recognition recognition in credit/debit memo processing without a credit/debit memo request (‘A’ or ‘B’).......................................................................................................................... 46 4..........................................................................................................4............... 51 Variations of the process .... ..............1............................ 76 6......................................................................................................3 Incorrect values / balances......................................... 75 6.................................................................................1 REVREC and NON-REVREC Postings ......................................... 70 VF47 Overview ....................................................................2 Translation of foreign currencies ..................................4............................... 78 6............ 85 8............................................................ 80 6.....................................................................1 Monitoring aspects.............................................................................5......................1................................................................................................................................................................................................................. 61 6................................... 75 6........................................................................................................... 70 VF47 Error categories ....5............................1 Account determination errors: .........................4 SD-Monitoring with VF47....................................................................... 89 9......................................................................................................1..............3 Cost restrictions ...... 6..............................doc Page: 5 Of: 91 ............................................................. 62 Reconcile FI and SD Values....... All rights reserved......................................................... 75 6......................................6 Lock problem......................................................................................................................1 General restrictions .... 82 7 FUNCTIONAL ENHANCEMENTS ...............................4.... 67 Selection criterias of VF45 ....5 Currency problem ..............................................................................................................5 SD Monitoring with VF48 ...VBREVx rows (SD tables)...3 SD-Monitoring with VF45............................................................. 85 8........................ 75 6................ 85 8...................Balances ..............................2 FI-Monitoring.................................Best Practice Table of Contents Knowledge Document 6................................2 Inconsistencies between VBREVK / VBREVE/ VBREVR .........................2 Lower part of the screen ................... 65 © SAP AG 07/2005............................................ 83 8 RESTRICTIONS FROM SD SIDE ................................... 76 6........................................................................................................................................................................................................................................................................................................... 81 6..................... 78 Results of VF48.................................................1................................. 75 6... 67 VF45 Overview ............................................................................................................................................................................... 88 9 OTHER RESTRICTIONS ................................................................................................... 89 9.................................. 76 6..................................................................1........................................ 64 Automatic Clearing of Accrual Accounts...................................................................................................1..........................................................................................................4................................... 89 10 IMPORTANT TO DO´S...................................4..................4 Adjustment restrictions ....... 78 VF48 selection parameter............. 68 6..................... 91 SAP AG File: RR_Best_Practice_Knowledge_Document_V1................ 78 VF48 Overview .... 62 Check Account Balances ............................1........4..........................1...................................................................................7 Assignment problem.............. 90 11 IMPORTANT NOTES ........................................................................................................................................................................................................................................................................5..........................................................................1.............................................................................................................................. 85 8............4...........2 Account restrictions ...................................................................................................................................1.....................................................................................................5 Restrictions for specific processes..................Revenue Recognition ...............3 Additional function.................................................... 70 VF47 selection criteria ....................4.1 Upper part of the screen .......4 status problem..................................................................... 86 8............................................ the setup of the function is not only an SD task. Additionally modifications have to be reviewed whether they are still in line with legal finance guidelines and regulations. the entire revenue recognition process should be approved by the responsible Head of Accounting and. SAP AG File: RR_Best_Practice_Knowledge_Document_V1. SAP always recommends the application of the latest support package. ¾ Program modifications in a revenue recognition relevant process are discouraged because they may have unexpected effects and may result in an incorrect data stream for FI. ¾ Because of the nature of the revenue recognition function. ¾ As revenue recognition provides a data stream into the financial system. it is necessary to monitor continuously (at a minimum monthly) the results by using the transaction VF45 and VF48. ¾ Furthermore. which delivers a process view of SD and FI and also by using transaction VF47. which provides a more technical view. especially the latest notes on revenue recognition. reviewed by the external auditor of the company.Best Practice 1 General recommendations Knowledge Document 1 General recommendations © SAP AG 07/2005. ¾ Revenue recognition needs to be implemented by SAP-certified SD. always implement the latest versions of the SD module. International Accounting Standards (IAS) / Financial Reporting Standards (FRS).doc Page: 6 Of: 91 . ¾ If customers want to use the revenue recognition functionality in their productive environment. ¾ To make sure that compliance with the latest requirements is possible. ¾ To implement revenue recognition in already existing processes (transfers of old data) a detailed concept creation is necessary. Any modifications made must be very closely monitored to prevent any negative impacts to the revenue recognition process.and FIConsultants. All rights reserved. SAP provides some general recommendations and best practices for customers using SAP R/3 revenue recognition in the Sales and Distribution component (SD). like Generally Accepted Accounting Principles (US-GAAP). For this request SAP offers consulting. the implementation must be subject to a pre go-live assessment to avoid a negative impact on the financial statement. the customer will have to ask explicit permission from SAP in order to use this functionality (detail information provided by note 768561 and 779366). In order to comply with the latest bookkeeping principles and current regulations. as well as the Sarbanes-Oxley Act. which is chargeable. if necessary.Revenue Recognition . This assessment is completely free of charge. In other words. In the whole document revenue recognition is set for SAP R/3 SD revenue recognition. FI consultants with experience in the area of Balance Sheet and P&L customizing have to setup the account assignment using SAP Best Practices and need to review the processes that are customized in the SD area. ¾ Also. © SAP AG 07/2005.Revenue Recognition .doc Page: 7 Of: 91 .Best Practice 1 General recommendations Knowledge Document ¾ If the revenue recognition functionality is activated once in the productive system landscape. there is a Revenue Recognition Best Practices Guide available for this industry solution. a deactivation has to be declined due to the direct impact to the accounting and the danger of data inconsistencies. All rights reserved. The comments in these documents are binding for all customers using the SAP R/3 revenue recognition functionality and the outlined recommendations have to be implemented. ¾ As IS-media solution is used. ¾ Always get the latest version of the Revenue Recognition Best Practices Guide. SAP AG File: RR_Best_Practice_Knowledge_Document_V1. The link can be found in note 779365. Best Practice 2 Description of Business Area Knowledge Document 2 Description of Business Area Many companies require that revenues are posted according to a time period. that the revenues must be realized in the posting period. SAP AG File: RR_Best_Practice_Knowledge_Document_V1. billing related (only for IS-M solution) 2. This means for example. The accounts are: deferred revenue account and unbilled receivable account. for rental contracts valid for a long time with a periodic billing plan. a service contract with a related call off order. a sales order is delivered in a totally another time period than the invoice is created and released.Revenue Recognition .3 Typical Core Business Processes using the methods are: ¾ Time based revenue recognition e. ¾ Revenue recognition impacts the Financial Accounting by the account postings and therefore two additional accounts (balance sheet accounts) have to be created in the FI module.g. in which the service was carried out. e. The R/3 system offers a flexible solution to companies using various methods of revenue recognition. All rights reserved. in which the billing document was set up. Detailed information are provided by note 777996. © SAP AG 07/2005.doc Page: 8 Of: 91 . 2. 2. where services are included and a partial billing plan is assigned.g. and not in the posting period. ¾ Service based revenue recognition e. ¾ Service based revenue recognition e.1 The available methods include: ¾ Revenue recognition at the point of billing (standard method) ¾ Time-related revenue recognition (the revenues are realized between specific set dates in equal proportions) ¾ Service-related revenue recognition (the revenues are realized on the basis of a specific event. the goods issue for a delivery) ¾ Credit/Debit memo request with reference to preceding document ¾ Service based revenue recognition.2 The trigger and impact of the methods are: ¾ Revenue recognition is set up and initialized by the Sales and Distribution (SD) processes and therefore the revenue recognition method is assigned to the item category in the customizing of the SD module.g. The revenue recognition function in the SAP R/3 system helps you to fulfil these requirements and separates the revenue recognition process from the billing process.g. 2. ¾ Revenues aren’t posted to the G/L account when releasing the invoice to accounting.doc Page: 9 Of: 91 . SAP AG File: RR_Best_Practice_Knowledge_Document_V1.Best Practice 2 Description of Business Area Knowledge Document ¾ Time based and billing related revenue recognition e.g. ¾ A function of revenue recognition is the grouping and monitoring of revenues in two additional general ledger accounts. e. ¾ With the revenue recognition run (VF44) FI documents are created and the revenues will be realized. (valid for < 46C HP 49 and 470 < HP 23) ¾ With the cancellation of the revenue recognition (VF46) the revenue recognition posting can be reversed. if revenues have been realized in error.g. © SAP AG 07/2005. but not yet taken into account in the invoice. Further in this document the term ‘revenue recognition’ refers to the use of a revenue recognition method other than the standard revenue recognition. ¾ For a background run of VF44 report ZZVF44HN (note 377318) is available. but not yet realized.4 Business Process Specific Information ¾ The revenue recognition process is included in standard SD processes and is used in most cases with the billing plan functionality. The balances on the accounts at the creation date of the cancellation are used as a basis. This is possible after the process is initialized (depending on the revenue recognition method). or have been taken into account in the invoice. This document mainly deals with the non-standard revenue recognition since only for these the special revenue recognition functionality is relevant. All rights reserved. which are: o unbilled receivables account (U/R account) o deferred revenues account (D/R account) You can see in these accounts whether revenue has been realized. The revenue recognition cancellation is not a real cancellation in the sense of a reverse posting. the invoicing has to be done before revenues may be realized.Revenue Recognition . Don’t start implementing or customizing revenue recognition. Recommended releases and support packages are (as for May 2005): 46C SP49. when you don’t have the latest support package for your SAP-release.Revenue Recognition . additional notes from note 813850 470 SP23. Also look at the “prerequisits for revenue recognition” mentioned in SAP-note 782758. SAP AG File: RR_Best_Practice_Knowledge_Document_V1. The supported processes and functions are described in the document “Best Practice for Revenue Recognition”.1 Getting started R/3 SD Revenue Recognition Required releases and support packages When you want to start with revenue recognition. it is essential to know.Best Practice 3 Implementing Revenue Recognition Knowledge Document 3 Implementing Revenue Recognition 3. additional notes from note 813850 Supported processes in revenue recognition Before starting with the implementation of revenue recognition functionality. the very first step to do is. which processes are supported by SAP-functionality.doc Page: 10 Of: 91 . look at your system-status! © SAP AG 07/2005. All rights reserved. This document contains detailed information about: ¾ Necessary Customizing settings ¾ Supported processes and scenarios ¾ Limitations and restrictions placed on the solutions offered ¾ Recommendations for monitoring the revenue recognition process ¾ A guide for implementation You will find a link to the latest version of this document in SAP-note 779365. at a minimum. but also a FI task ¾ Revenue Recognition needs to be implemented by SAP-certified SD-and FI consultants. 'International Accounting Standards' (IAS) / 'Financial Reporting Standards' (FRS). SAP AG File: RR_Best_Practice_Knowledge_Document_V1. © SAP AG 07/2005.Best Practice 3 Implementing Revenue Recognition Knowledge Document In order to comply with the latest accounting principles and current financial regulations. All rights reserved. like 'Generally Accepted Accounting Principles' (US-GAAP).doc Page: 11 Of: 91 . SAP provides some general recommendations for customers using Revenue Recognition in the Sales and Distribution component (SD). the results by using the transactions VF47 which provides a more technical view as VF45 which delivers a transaction view of SD and FI.Revenue Recognition . Some information from this note: ¾ the setup of the function is not only an SD task. as well as the 'SarbanesOxley Act'. ¾ It is necessary to monitor the Revenue Recognition function monthly. ¾ Program modifications in a revenue recognition relevant process are discouraged because they may have unexpected effects and may result in an incorrect data stream for FI. The account of the revenues to be deferred (in the following called D/R account) and the account of the unbilled receivables (in the following called U/R account) have to be created as new accounts. All rights reserved.1 Global informations When you try to start customizing revenue recognition.2 Presteps For the setup of revenue recognition processes you have to customize 1) FI accounts and their settings 2) SD item-categories and their settings 3) revenue recognition type on item category level 4) account determination The following accounts are needed for the representation of the revenue re-cognition process: ¾ Revenue account (recognized revenues) ¾ Receivables account (customer account) ¾ Revenues to be deferred (deferred revenue account or D/R account) ¾ Unbilled receivables (unbilled receivables account or U/R account) For the revenue account and receivables account you can use the accounts that you used before in the other standard processes.doc Page: 12 Of: 91 . © SAP AG 07/2005. we want to ensure that customers who intend to use this function are aware of and agree to the necessary determining factors and prerequisites.1. SAP AG File: RR_Best_Practice_Knowledge_Document_V1.1. you will find.Revenue Recognition . Only this way the posting process of the revenue recognition can be monitored. According to SAP-note 820417 the path on IMG Sales and Distribution -> Basic Functions -> Account Assignment/Costing -> Revenue Recognition -> Set Revenue Recognition For Item Categories is not open for any entering or changing of customizing data. i. different account numbers must be used. 3. ¾ The U/R account must be different from the D/R account. Despite this special release process.1. By releasing the SD Revenue Recognition function separately. that customizing item for revenue recognition cannot be entered or changed.Best Practice 3 Implementing Revenue Recognition Knowledge Document Starting with customizing 3. customers are still responsible for setting up.e.1. using and operating the R/3 SD Revenue Recognition function. Usage of R/3 SD Revenue Recognition functionality is under a special activation by SAP (see also SAP-notes 779366 and 605665). Best Practice 3 Implementing Revenue Recognition Knowledge Document © SAP AG 07/2005. SAP AG File: RR_Best_Practice_Knowledge_Document_V1. All rights reserved.doc Page: 13 Of: 91 . ¾ An account number is never a revenue account that is used for the accruals accounts (U/R and D/R account).Revenue Recognition . doc Page: 14 Of: 91 .1. All rights reserved. This indicates that the G/L account is managed as a balance sheet account.Revenue Recognition . SAP AG File: RR_Best_Practice_Knowledge_Document_V1. because only these accounts and their balances are carried forward at fiscal year-end. Transaction : On Tab “Type/Description” field “Balance sheet account” (SKA1-XBILK) must be set to YES.3 Unbilled receivable account and deferred revenue account For the unbilled receivable account and for the deferred revenue account the following settings in FI must be maintained: FS00 Path: Financial Accounting -> General Ledger Accounting -> G/L Accounts -> Master Records -> G/L Account Creation and Processing -> Edit G/L Account (Individual Processing) -> Edit G/L Account Centrally © SAP AG 07/2005. Unbilled receivable and deferred revenue account have to be balance sheet accounts.1.Best Practice 3 Implementing Revenue Recognition Knowledge Document Customizing FI accounts and their settings 3. Revenue Recognition .doc Page: 15 Of: 91 . On Tab “Control data” the following fields have to be fill out: Field “Only balances in local currency” (SKB1-XSALH) to no *1) Field “Tax category” (SKB1-MWSKZ) with + (Only output tax allowed) or * (All tax types allowed) *2) Field “Posting without tax allowed” (SKB1-XMVNO) to yes Field “Open item management” (SKB1-XOPVM) to yes Field “Line item display” (SKB1-XKRES) to yes SAP AG *3) *4) *5) File: RR_Best_Practice_Knowledge_Document_V1.Best Practice 3 Implementing Revenue Recognition Knowledge Document © SAP AG 07/2005. All rights reserved. Revenue Recognition .doc Page: 16 Of: 91 . Postings to these accounts represent incomplete processes or process-steps. So the revenue recognition processes are able to post in different currencies. Set up accounts with open item management if offsetting entries are to be assigned to the postings made to these accounts. In this case. The balance of these accounts is always equal to the balance of the open items. When taxes are entered using jurisdiction codes. *3) With “yes” it indicates that the account can still be posted. All rights reserved. For example. you allow users to post items without tax codes in the corresponding expense and revenue accounts. For line item display. because in this case you cannot use document summarization! Userexit xxxxxxxxx must be used to set the assignment in the SD invoices. Here just “+” or “*” are used. In revenue recognition it should be possible to post both. you would usually set up a separate tax code for the non-taxable transactions. the system stores an entry per line item in an index table which contains the link between line item and account. to an account. Be careful when using open item management. even if a tax code has not been entered.Best Practice 3 Implementing Revenue Recognition Knowledge Document *1) With “no” it Indicates that balances are updated not only in local currency when users post items to this account. *5) With “yes” here it indicates that line item display is possible in this account. *4) With “yes” it determines that open items are managed for this account. SAP AG File: RR_Best_Practice_Knowledge_Document_V1. Items posted to accounts managed on an open item basis are marked as open or cleared. *2) Possible entries: © SAP AG 07/2005. taxable and non-taxable items. however. this separate tax code cannot be used since jurisdiction codes cannot be specified for foreign customers. SAP AG File: RR_Best_Practice_Knowledge_Document_V1.Best Practice 3 Implementing Revenue Recognition Knowledge Document © SAP AG 07/2005.Revenue Recognition . On Tab “Create/bank/interest” there is one entry necessary: Field “Post automatically” (SKB1-INTB) with yes This mark indicates that this account can only be posted to by the system using account determination tables. because manual posting will never change the revenue recognition tables. No manual posting is allowed. All rights reserved.doc Page: 17 Of: 91 . SAP AG File: RR_Best_Practice_Knowledge_Document_V1.Best Practice 3 Implementing Revenue Recognition Knowledge Document 3. For revenue accounts you need accounts with type P&L. On Tab “Type/description” Set field “P&L statement acct” (SKA1-XPLACCT) to yes. All rights reserved.1.Revenue Recognition .4 Revenue account For the revenue account the following settings must be maintained: © SAP AG 07/2005.doc Page: 18 Of: 91 .1. On Tab “Control data” maintain the following fields: Field “Posting without tax allowed” (SKB1-XMVNO) to yes Do not select field “Only balances in local crcy” (SKB1-XSALH).Best Practice 3 Implementing Revenue Recognition Knowledge Document © SAP AG 07/2005. All rights reserved. Always NO SAP AG File: RR_Best_Practice_Knowledge_Document_V1.doc Page: 19 Of: 91 .Revenue Recognition . © SAP AG 07/2005. No additional customizing is necessary for revenue recognition. you have to customize this in your item categories. When you want to use a billing plan. On sales item level.1.Best Practice 3 Implementing Revenue Recognition Knowledge Document SD-Customizing 3. deliveries and invoices. On sales document header level you have to do just the normal customizing for the sales document types.Revenue Recognition . So you have to customize these documents. you are working with SD contracts or customer orders. Path: Sales and Distribution -> Sales -> Sales Documents -> Sales Document Item -> Define Item Categories SAP AG File: RR_Best_Practice_Knowledge_Document_V1.1. when using revenue recognition.doc Page: 20 Of: 91 .5 SD item-categories and their settings Normally when you are working with revenue recognition. you have to do some customizing. All rights reserved. doc Page: 21 Of: 91 . Field “billing plan type”: For a billing plan type. for billing”: Use “I” for the document item category you want to use with a billing plan. You can create your own billing plan type in customizing via path Sales and Distribution -> Billing -> Billing Plan -> Define SAP AG File: RR_Best_Practice_Knowledge_Document_V1. Field “relev. choose one of the above types or create your own billing plan type and the use this one for the item categories.Revenue Recognition .Best Practice 3 Implementing Revenue Recognition Knowledge Document © SAP AG 07/2005. All rights reserved. 6 Customizing revenue recognition type on item category level You will find this part of customizing via the following path: Sales and Distribution -> Basic Functions -> Account assignment / Costing -> Revenue Recognition Or via transaction: OVEP.Best Practice 3 Implementing Revenue Recognition Knowledge Document Billing Plan Types or transaction OVBI for periodic billing or transaction OVBO for milestone billing.1. 3. recognition” are: How to use this revenue recognition category? Referring to chapter 3 in this document. SAP AG File: RR_Best_Practice_Knowledge_Document_V1. All rights reserved.Revenue Recognition . where the processes are described. © SAP AG 07/2005. Set Revenue Recognition For Item Categories Possible entries for the field “Rev.doc Page: 22 Of: 91 .1. the usage of this category is explained. 3 recognition used with servicebased revenue see chapter 4.10 used with servicebased revenue recognition in return process with reference to a contract and calloff-order Category ‘D’: see chapter 4.1 at time of billing used with standard revenue recognition Category ‘A’: see chapter 4.Best Practice 3 Implementing Revenue Recognition Knowledge Document Here a short summary: Category blank ‘ ‘: see chapter 4.4 used with servicebased recognition in contracts with calloffs revenue see chapter 4. Details are described in the ‘Best Practice IS-M’ Category ‘F’: see chapter 4.Revenue Recognition .6 used with credit/debit memo timebased revenue recognition with memo request see chapter 4. Category ‘B’: see chapter 4.doc Page: 23 Of: 91 . All rights reserved.9 used with servicebased revenue recognition in return process with reference to an order see chapter 4.7 used with credit/debit memo revenue recognition with reference to a preceding document SAP AG File: RR_Best_Practice_Knowledge_Document_V1.5 used with timebased and billing related revenue recognition Category ‘E’: is relevant for customers who use the ‘Industry Solution Media’.2 recognition used with timebased revenue see chapter 4.8 used with credit/debit memo timebased revenue recognition without memo request see chapter 4.8 used with credit/debit memo timebased revenue recognition without memo request © SAP AG 07/2005. The accrual start date determines the start of the period in which revenues should be recognized. the earlier of the following dates: Billing plan start date Start date of first settlement period File: RR_Best_Practice_Knowledge_Document_V1. the billing date of the first milestone • In a periodic billing plan. All rights reserved. You have the following options: ¾ Proposal based on contract start date Revenue recognition proposes the start date of the sales contract for the item as the accrual start date.1. ¾ Proposal based on billing plan start date Revenue recognition proposes one of the following dates as the accrual start date: SAP AG • In a milestone billing plan.doc Page: 24 Of: 91 .1.7 Customizing revenue recognition accrual start date Selects the start date for the accrual period and is relevant for the revenue recognition type A. © SAP AG 07/2005.Revenue Recognition .Best Practice 3 Implementing Revenue Recognition Knowledge Document 3. 1.8 Account determination Next customizing step is the account determination. You will find this item via path Sales and Distribution -> Basic Functions -> Account Assignment/Costing -> Revenue Recognition -> Maintain Account Determination or transaction VKOA.doc Page: 25 Of: 91 . (SAKN2) D/R account SAP AG File: RR_Best_Practice_Knowledge_Document_V1.Best Practice 3 Implementing Revenue Recognition Knowledge Document 3. customizing transaction according the following example: Assign G/L accounts for revenues and deferred revenues: ¾ G/L account no. In the SD module. All rights reserved.1. This occurs in © SAP AG 07/2005. (SAKN1) revenue account ¾ Provision acc. both the revenue account and the account for deferred revenue amounts must be maintained in the revenue account determination.Revenue Recognition . the system performs a reconciliation account determination within the revenue recognition and uses the so determined reconciliation © SAP AG 07/2005.Best Practice 3 Implementing Revenue Recognition Knowledge Document Assign account for unbilled receivables: In customizing transaction OVUR. account. the system checks whether the reconciliation account determination is active. There are two possibilities for the determination of the reconciliation account: 1) The reconciliation account is taken from the customer master record of the payer. If this is the case. SAP AG U/R account File: RR_Best_Practice_Knowledge_Document_V1. the account for unbilled receivables (U/R account) is maintained depending on the reconciliation account and the associated chart of accounts.Revenue Recognition . All rights reserved.doc Page: 26 Of: 91 . (note : 644296) ¾ Maintain NonBldRec. 2) For the billing type assigned to the sales document. ¾ No special revenue recognition functionality is used.1 Standard Revenue Recognition at time of billing General Information ¾ Process 1 is the R/3 standard method for revenue recognition consisting of revenue recognition at the time of billing. The illustration of typical core business processes show an overview of the suggestive process flow based on the selected revenue recognition method. if they want to post revenues in Financial Accounting. Within the process flow the separate steps can be done in reverse order. Revenue recognition method = ‘ ‘ (blank). especially the chronological order of the creation/releasing of the invoice and the posting of the revenues is variable. For each core business processes using a chosen revenue recognition method two processes are described to display the different account postings depending on the sequence.Best Practice 4 Description of Core Business Processes Knowledge Document 4 Description of Core Business Processes © SAP AG 07/2005.doc Page: 27 Of: 91 . ¾ Companies use standard revenue recognition. All rights reserved. The description is simplified and the process flow productive landscapes are much more complex.Revenue Recognition . as soon as an invoice is released to accounting. SAP AG File: RR_Best_Practice_Knowledge_Document_V1. partial invoicing of partial revenue recognition included. 4. There is no relation to values done and there is no partial delivery. Additional important information Nothing. SAP AG File: RR_Best_Practice_Knowledge_Document_V1. All rights reserved. Variations of the process Nothing. Business steps overview and process description Will not be discussed further as this process is the standard billing process with the standard revenue recognition at the time of billing. Critical functions Nothing.Revenue Recognition .Best Practice 4 Description of Core Business Processes Knowledge Document © SAP AG 07/2005.doc Page: 28 Of: 91 . All rights reserved. ¾ Time-related revenue recognition can be used for single billing document items without billing plan functionality. This sales document contains the line items. ¾ Revenue recognition method = ‘A’. which can contain a billing plan.1 Process 2 – time based with VF44 as first As a first step in the process the sales contract is created. with periodic billing plans and with milestone billing plans.2.2 Time based revenue recognition (‘A’) General Information ¾ Using time-related revenue recognition.Best Practice 4 Description of Core Business Processes Knowledge Document 4. © SAP AG 07/2005. The proportions for the periods are equal. which have to be billed as well as SAP AG File: RR_Best_Practice_Knowledge_Document_V1. ¾ Process 2 characterizes that transaction VF44 is used before invoice.Revenue Recognition .1. Business steps overview and process description 4.doc Page: 29 Of: 91 . An example of this is revenue recognition for the length of a service or rental contract. it is possible to carry out recognition over a specific period of time. Process 3 demonstrates the process when the invoice is posted before transaction VF44. All rights reserved. If only a partial billing took place or was realized.doc Page: 30 Of: 91 . © SAP AG 07/2005. the revenue lines are calculated. In such cases another revenue account (deferred account) can be posted. the steps following the order creation may be repeated for further periods until the sales document is completed. The saving of this document triggers the creation of control lines (VBREVK) and the revenue lines (VBREVE) for each period.2 SAP AG Process 3 – time based with invoice as first File: RR_Best_Practice_Knowledge_Document_V1. When the invoice is created and released for accounting. According to the number of periods and the amount to be billed. Since the revenue recognition is now initialized. The number of periods between these dates is determined using the financial calendar for the company code assigned to the document. which posts on the reconciliation account ‘unbilled revenues’ and on the revenue account. This triggers the update of the control lines with the realized value and the new balance and the update of the revenue lines. 4.Revenue Recognition . The start and end dates are determined on item level in the sales document. With time-related revenue recognition the recognition is carried out between a specific start and end date in equal parts. it is possible to realize the revenue using transaction VF44. containing information of the invoice. and the control lines are updated as well. In FI an accounting document is automatically created. The revenue recognition tables are also updated by this step.2. which balances (or reduces) the reconciliation account and posts on the receivables account. A new reference line is created. another accounting document is created. Here the billing plan dates or the contract data dates will be used.1.Best Practice 4 Description of Core Business Processes Knowledge Document the relevant conditions. When the invoice is first created and released to accounting. This sales document contains the line items. In such cases another revenue account (unbilled receivable account) can be posted. According to the number of periods and the amount to be billed. Note 496721 explain the solution: the added condition has to be classified in a way that it is not relevant for revenue recognition. a sales order can be used as sales document in this process. The invoice cannot be released to accounting. Critical functions ¾ A contract will be used without contract data and without billing plan. The start and end dates are determined on item level in the sales document. This triggers the update of the control lines and the update of the revenue lines. which then replaces the contract. an accounting document is created.Revenue Recognition . the error message F5 702 would appear. © SAP AG 07/2005. This triggers the same follow on steps. As a consequence the posted values from VF44 would differ from the values posted by the billing document. The saving of this document triggers the creation of control lines (VBREVK) and the revenue lines (VBREVE) for each period.Best Practice 4 Description of Core Business Processes Knowledge Document As a first step in the process the sales contract is created. SAP AG File: RR_Best_Practice_Knowledge_Document_V1. Additional important information Nothing. With time-related revenue recognition the recognition is carried out between a specific start and end date in equal parts. In this case a billing plan has to be used. If only a partial billing took place or was realized. As a consequence no VBREVE can be created. an accounting document is automatically created. ¾ Instead of a contract. and the new condition is using separate accounts. the revenue lines are calculated. the steps following the order creation may be repeated for further periods until the sales document is completed. All rights reserved. if the sales order contains no contract data. as there is no start and no end date. This event also triggers the update of the control lines with the realized value and the new balance and creates the reference lines. ¾ Additional steps of the process can include the delivery of items and posting goods issue which do not affect the revenue recognition process. Here the billing plan dates or the contract data dates will be used. ¾ A condition is added manually in the invoice. which can contain a billing plan.doc Page: 31 Of: 91 . Also in FI. The number of periods between these dates is determined using the financial calendar for the company code assigned to the document. It posts to a different reconciliation account called ‘deferred revenues’ and to the receivables account. which have to be billed as well as the relevant conditions. Now transaction VF44 runs. which posts on the reconciliation account ‘deferred revenues’ and on the revenue account. Variations of the process Nothing. not in the contract/order. doc Page: 32 Of: 91 . All rights reserved. Knowledge Document SAP AG File: RR_Best_Practice_Knowledge_Document_V1.Revenue Recognition .Best Practice 4 Description of Core Business Processes © SAP AG 07/2005. where services are included. ¾ Process 4 demonstrates the process.1 SAP AG Process 4 – service based with VF44 as first File: RR_Best_Practice_Knowledge_Document_V1.3 Service based revenue recognition (‘B’) General Information ¾ Using service-related revenue recognition. © SAP AG 07/2005. Business steps overview and process description 4. when the invoice is posted before transaction VF44. ¾ Revenue recognition method = ‘B’.1. Process 5 demonstrates the process.doc Page: 33 Of: 91 . you can carry out recognition on the basis of a specific event. when transaction VF44 is run before invoicing. An example of this is revenue recognition for a service contract.Best Practice 4 Description of Core Business Processes Knowledge Document 4.Revenue Recognition .3. All rights reserved. The saving of this document triggers the creation of the control lines (VBREVK) only. This triggers the creation of the revenue lines (VBREVE) in service based revenue recognition according to the document data. another accounting document is created which balances (or reduces) the reconciliation account and posts to the receivables account. It is now possible to realize the revenue using transaction VF44. the control lines will also be updated. the line items are copied into this document. When the goods have left the company stock. 4. which have to be billed. This sales document contains the line items. This sales document contains the line items. No revenue lines are created at this stage. goods issue is posted. as well as the relevant SAP AG File: RR_Best_Practice_Knowledge_Document_V1.Revenue Recognition . All rights reserved. The next process step consists of the creation of the delivery with reference to the order/contract. and the update of the revenue lines. This triggers the update of the control lines with the realized value.1. The goods are picked either with lean warehouse management or with full warehouse management including transfer orders. A new reference line is created containing information from the invoice. In FI an accounting document is automatically created which posts to the reconciliation account ‘unbilled receivables’ and to the revenue account.doc Page: 34 Of: 91 .2 Process 5 – service based with invoice as first As a first step in the process the sales order or sales contract is created. which have to be billed as well as the relevant conditions.3. a new balance. When the invoice is created and released to accounting. The revenue recognition tables are also updated by this step. © SAP AG 07/2005.Best Practice 4 Description of Core Business Processes Knowledge Document As a first step in the process the sales order or sales contract is created. goods issue is posted. which posts to the reconciliation account ‘deferred revenue’ and to the receivables account. © SAP AG 07/2005. The revenue recognition tables are updated by this step. It is necessary to adjust the revenues and to complete the order process. No revenue lines are created at this stage. All rights reserved. The revenue lines have to be updated. ¾ If the order item is relevant for ‘order-related-invoicing’ (FKREL = B or I) and there is a under/over delivery (there is more invoiced than delivered/ there is more delivered than invoiced) the value. This triggers the creation of the revenue lines (VBREVE) in service based revenue recognition according to the document data. The saving of this document triggers the creation of the control lines (VBREVK) only. ¾ If there are changes of condition values or time data in the sales order. Critical functions ¾ If the order item is relevant for ‘delivery-related-invoicing’ (FKREL = A) and there is a under/over delivery (there is more ordered than delivered/ there is more delivered than ordered) the value. The adjustment process for contracts is not supported for < 46C HP 48 and 470 < HP 22) ¾ Variations of the process Nothing. The goods are picked either with lean warehouse management or with full warehouse management including transfer orders. which posts to the reconciliation account ‘deferred revenue’ and to the revenue account. which is ordered and invoiced. Now the invoice is created and released to accounting. The adjustment is only done. the control lines will also be updated. has to be considered as revenues.Revenue Recognition . The adjustments in case of under/over delivery. are not possible for contracts using performance based revenue recognition. the line items are copied into this document. price or time changes as described in order processing. The next process step consists of the creation of the delivery with reference to the order/contract.Best Practice 4 Description of Core Business Processes Knowledge Document conditions. This is done by the system as soon as a reason for rejection is set.doc Page: 35 Of: 91 . which is delivered and invoiced. an adjustment is necessary for the revenues. In FI an accounting document is automatically created. It is necessary to adjust the quantity of the order according to the delivery quantity. has to be considered as revenues. SAP AG File: RR_Best_Practice_Knowledge_Document_V1. This triggers the update of the control lines and the update of the revenue lines. When the goods have left the company stock. A new reference line is created containing information from the invoice. An accounting document is created. if there wasn’t an invoice created and if there was a complete delivery (vbup-lfsta = C). After this step transaction VF44 is used. All rights reserved. SAP AG File: RR_Best_Practice_Knowledge_Document_V1. Nothing.doc Page: 36 Of: 91 .Best Practice 4 Description of Core Business Processes Knowledge Document Additional important information © SAP AG 07/2005.Revenue Recognition . ¾ Revenue recognition method = ‘B’ for the contract and call off order. All rights reserved.1. when transaction VF44 is run before invoicing. This contract creation generates control lines in table VBREVK.Revenue Recognition .doc Page: 37 Of: 91 .4 Service based revenue recognition (‘B’) contract with call off General Information ¾ Using service-related revenue recognition you can carry out recognition on the basis of a specific event. ¾ Process 6 demonstrates the process. when the invoice is posted before transaction VF44. which may contain a billing plan. Business steps overview and process description 4. An example of this is revenue recognition for a contract with a call off order while the contract item is invoiced and the linked call off order item is delivered. Process 7 demonstrates the process. In the SAP AG File: RR_Best_Practice_Knowledge_Document_V1.1 Process 6 – service based with VF44 as first The first step in this process is the creation of the sales contract.4.Best Practice 4 Description of Core Business Processes Knowledge Document 4. © SAP AG 07/2005. 4. The next process step is that the goods are picked either with lean warehouse management or with full warehouse management including transfer orders. an update of the control and revenue lines is generated. which posts to the unbilled account. All rights reserved. when transaction VF44 is run.1. which may contain a billing plan. When the goods have left the company stock. In a second step a call off order is generated with reference to the contract and a delivery may have been created with reference to the call off order. The created FI document posts to the unbilled account. the reference lines will be created and the control lines will be updated. This triggers the creation of the revenue lines (VBREVE). This contract creation generates control lines in table VBREVK. The next process step is that the goods are picked either with lean warehouse management or with full warehouse management including transfer orders. After the invoice is created with reference to the contract and released to accounting.Best Practice 4 Description of Core Business Processes Knowledge Document second step a call off order is generated with reference to the contract and a delivery may have been created with reference to the call off order. When the SAP AG File: RR_Best_Practice_Knowledge_Document_V1.doc Page: 38 Of: 91 . In the subsequent step.2 The first step in this process is the creation of the sales contract.4. Process 7 – service based with invoice as first © SAP AG 07/2005. goods issue will be posted.Revenue Recognition . Additionally an accounting document is automatically created in FI. Additionally an accounting document is automatically created in FI. ¾ Changes of the revenue recognition accounts (D/R account / U/R account) are not supported. where the invoice is related to the contract and the call off order is to be delivered. SAP AG File: RR_Best_Practice_Knowledge_Document_V1. there must be a link to a contract item otherwise the call-off order items are handled separately. reference lines (VBREVR) will be created and control lines (VBREVK) will be updated. if there is no invoice created. Before an invoice is created. which posts to the deferred account. an update of the control and revenue lines is generated. The creation of a credit memo in reference to a credit memo request doesn’t lead to the clearing of the balance and therefore the credit memo must be created in reference to the billing document. Additionally an accounting document is automatically created in FI. goods issue is posted. which posts to the deferred account. ¾ In case of changes of condition values or time data in the contract / call-off order an adjustment for the revenue is only possible. control lines are created in table VBREVK and during saving of the call off order revenue lines are generated in table VBREVE. The difference between billed and recognized value has to be posted by a credit memo. After the related delivery has posted the goods issue. two other scenarios exist: ¾ The call off order will be invoiced and delivered: When the call off order is created with reference to the contract. All rights reserved. Important remark: The invoice has to be created in reference to the call off order (order-related invoicing) and NOT in reference to the delivery (delivery-related invoicing). While transaction VF44 runs in the next step. In the subsequent step an invoice is created and released to accounting.Revenue Recognition . ¾ If there is an over/under delivery of the call-off order items. ¾ The contract will be invoiced and the call off order will not be delivered: While the contract is created. revenue lines (VBREVE) are created.Best Practice 4 Description of Core Business Processes Knowledge Document goods have left the company stock. Critical functions © SAP AG 07/2005. Variations of the process In accordance with the above described process. the process should be completed. the price and time changes have to be done correspondingly in the contract item and the related call-off order item.doc Page: 39 Of: 91 . ¾ If terms are added manually in the call-off order. There is no clearing of the balance on the clearing account. This triggers the creation of the revenue lines (VBREVE). the saving of the call off order creates control lines (VBREVK). © SAP AG 07/2005. All rights reserved. SAP AG File: RR_Best_Practice_Knowledge_Document_V1. The revenue recognition relevance of the contract and the call off order item categories should be set to ‘B’. while the billing relevance of the call off order item category should be ‘ ‘. ¾ The call of order will be invoiced and delivered: The item category of the contract should be customized with revenue recognition relevance ‘ ‘.doc Page: 40 Of: 91 . the item category of the call off order with ‘B’. while the billing relevance of the call off order item category should be ‘ ‘. The revenue recognition relevance of the contract and the call off order item categories should be set to ‘B’.Best Practice 4 Description of Core Business Processes Knowledge Document Additional important information In order to implement the three scenarios. the following customizing settings must be configured in the sales document types: ¾ The contract will be invoiced and the call off order will be delivered: The billing relevance of the contract item category should be ‘B’ or ‘I’. The billing relevance of the contract item category should be ‘ ‘. ¾ The contract will be invoiced and the call off order will not be delivered: The billing relevance of the contract item category should be ‘B’ or ‘I’.Revenue Recognition . while the billing relevance of the call off order item category should be ‘B’. doc Page: 41 Of: 91 . Then the invoice will be created. you can carry out recognition on the basis of an invoice over a specific period of time. Business steps overview and process description The contract or the sales order will be created. ¾ Process 8 will be initialized at the point in time when the billing document is released to accounting.5 Time based and billing related revenue recognition (‘D’) General Information ¾ Using time based and billing related revenue recognition. An example of this is revenue recognition for the length of a service or rental contract after the invoice is created and released. © SAP AG 07/2005. Afterwards transaction VF44 is run. After the invoice was released to accounting all the Revenue Recognition tables are SAP AG File: RR_Best_Practice_Knowledge_Document_V1. All rights reserved. The proportions for the periods are equal. ¾ Revenue recognition method = ‘D’.Revenue Recognition .Best Practice 4 Description of Core Business Processes Knowledge Document 4. Revenue Recognition . The revenue recognition cancellation process has no reference to the original revenue recognition process. Variations of the process Additional steps of the process can include the delivery of items and post goods issue. SAP AG File: RR_Best_Practice_Knowledge_Document_V1. The reference lines. In FI. the control lines and the revenue lines are now available for the Revenue Recognition Process. which do not affect the revenue recognition process. an accounting document is automatically created which posts to the reconciliation account ‘deferred revenues’ and on the revenue account. the new balance and the update of the revenue lines. This triggers the update of the control lines with the realized value. It is now possible to realize the revenue using transaction VF44. All rights reserved. Nothing.doc Page: 42 Of: 91 .Best Practice 4 Description of Core Business Processes Knowledge Document filled. Critical functions © SAP AG 07/2005. revenue and reference lines. Additional important information The cancellation of the invoice using transaction VF11 is starting its own revenue recognition process. The invoice posts to the deferred account and to the receivable account. The releasing of the invoice cancellation document triggers the creation of separate control. Best Practice 4 Description of Core Business Processes Knowledge Document 4. © SAP AG 07/2005. ¾ Revenue recognition method = ‘A’. order or invoice.doc Page: 43 Of: 91 . the system checks. it is possible to carry out recognition over a specific period of time. otherwise the posting is made to the unbilled receivables (U/R) account. ¾ When creating and transferring a credit memo to accounting. ¾ Process 9 demonstrates the credit memo processing. ¾ The credit/debit memo process with a credit/debit memo request sets up its own revenue recognition tables. The credit/debit memo request is created in reference to a contract. when transaction VF44 is ran before creation of the credit memo.Revenue Recognition . All rights reserved. when posting to the reconciliation accounts. An example of this is revenue recognition for the length of a credit/debit memo request. Business steps overview and process description SAP AG File: RR_Best_Practice_Knowledge_Document_V1. Process 10 demonstrates the credit memo processing. The proportions for the periods are equal. whether a balance exists on the deferred revenue (D/R) account. ¾ The credit memo process has the opposite posting logic to the billing.6 Time based revenue recognition in credit/debit processing with a credit/debit memo request (‘A’) memo General Information ¾ Using time-related revenue recognition in a credit/debit memo processing. when the credit memo is posted before transaction VF44 is ran. The debit memo process has the same posting logic to the billing. All rights reserved. When the invoice is created and released to accounting. This sales document contains the line items. The start and end dates are determined on item level in the sales document. A SAP AG File: RR_Best_Practice_Knowledge_Document_V1. With time-related revenue recognition the recognition is carried out between a specific start and end date in equal parts. The saving of this document triggers the creation of control lines (VBREVK) and the revenue lines (VBREVE) for each period. The revenue lines are calculated based on the number of periods and the amount to be billed.1.Revenue Recognition . which have to be billed as well as the relevant conditions. it is possible to realize the revenue using transaction VF44. an accounting document is automatically created. This triggers the update of the control lines with the realized value. Since the revenue recognition is now initialized. the new balance and the update of the revenue lines. Here the billing plan dates or the contract data dates will be used. which balances (or reduces) the accruals account and posts to the receivables account. which posts to the accruals account ‘unbilled receivables’ and to the revenue account. 4. The revenue recognition tables are also updated by this step.1 Process 9 – time based with VF44 as first As a first step in the process the credit/debit memo request is created. which posts to the accruals account ‘deferred revenues’ and to the revenue account.doc Page: 44 Of: 91 .6. which may contain a billing plan. another accounting document is created. In case of the credit memo process. an accounting document is automatically created. The number of periods between these dates is determined using the financial calendar for the company code assigned to the document.Best Practice 4 Description of Core Business Processes Knowledge Document © SAP AG 07/2005. In case of the debit memo process. Best Practice 4 Description of Core Business Processes Knowledge Document new reference line is created.1.6. which can contain a billing plan. This sales document contains the line items. In case of the credit memo process the accruals account is called ‘unbilled receivables’ account.doc Page: 45 Of: 91 . the opposite accruals accounts will be used for the credit memo process than are used for the debit memo process (invoices and debit memos have the same posting logic in accounting). As a result. SAP AG File: RR_Best_Practice_Knowledge_Document_V1. the revenue lines are calculated. which have to be billed as well as the relevant conditions. The number of periods between these dates is determined using the financial calendar for the company code assigned to the document.2 As a first step in the process the credit/debit memo request is created. Here the billing plan dates or the contract data dates will be used. All rights reserved. containing information from the invoice and the control lines are also updated. Process 10 – time based with invoice as first © SAP AG 07/2005. 4. The start and end dates are determined on item level in the sales document.Revenue Recognition . The saving of this document triggers the creation of control lines (VBREVK) and the revenue lines (VBREVE) for each period. When the invoice is created and released to accounting a different accruals account is posted together with the receivables account in the accounting documents. According to the number of periods and the amount to be billed. With time-related revenue recognition the recognition is carried out between a specific start and end date in equal parts. Variations of the process The credit/debit memo processing with a credit/debit memo request can also be used as standalone process.doc Page: 46 Of: 91 .Revenue Recognition . Additional important information Nothing. As a result the opposite accruals accounts will be used for the credit memo process than for the debit memo process (invoices and debit memos have the same posting logic in accounting). SAP AG File: RR_Best_Practice_Knowledge_Document_V1. Critical functions © SAP AG 07/2005. Then transaction VF44 runs. Nothing. All rights reserved. This triggers the update of the control lines with the realized value and the new balance and updates the revenue lines as well. It triggers the same steps as described previously.Best Practice 4 Description of Core Business Processes Knowledge Document In case of the debit memo process the accruals account is called ‘deferred revenues’ account. An example of this is revenue recognition for the length of a credit/debit memo request.doc Page: 47 Of: 91 . SAPKH46C28). Afterwards transaction VF44 is ran.Revenue Recognition . it is possible to carry out revenue recognition over a specific period of time equal to the original process. SAP AG File: RR_Best_Practice_Knowledge_Document_V1. ¾ No new revenue recognition tables will be created. The credit/debit memo process updates the revenue recognition tables of the preceding sales process. It is implemented with note 447513 (SAPKH45B50.Best Practice 4 Description of Core Business Processes Knowledge Document 4. © SAP AG 07/2005. when the credit memo is released to accounting. The proportions for the periods are equal. order or invoice. The credit/debit memo request is created request in reference to a contract.based revenue recognition type ‘A’ For preceding sales documents with type ‘B’ the note 839596 is relevant ¾ Process 11 consider only type ‘A’ and will be initialized at the point in time.7 Credit/debit memo revenue recognition with reference to preceding document (‘F’) General Information ¾ Using credit/debit memo revenue recognition with reference to a preceding document. All rights reserved. ¾ The revenue recognition method = ‘F’. SAPKH46B38. In this case the subsequent credit/debit memo generates reference lines (VBREVR) corresponding to the reference document. The posting to the accounts depends on whether there is a balance on the D/R or the U/R account (revenue recognition run is done and/or invoice is released to accounting in the original process). SAP AG File: RR_Best_Practice_Knowledge_Document_V1.Revenue Recognition . Business steps overview and process description The credit/debit memo process will be created with reference to a preceding sales document. the system checks whether the reference document is relevant for 'time-related revenue recognition' (method 'A'). In FI an accounting document is automatically created which posts to the accruals account of either the D/R or U/R and to the revenue account.Best Practice 4 Description of Core Business Processes Knowledge Document © SAP AG 07/2005. and with revenue recognition type ‘F’ it updates the revenue recognition tables of the preceding sales process. When this type is set for the credit/debit memo request. All rights reserved.doc Page: 48 Of: 91 . It is now possible to realize the corrected revenue using transaction VF44. This triggers the update of the control lines and the update of the revenue lines. If revenues have already been posted.Best Practice 4 Description of Core Business Processes Knowledge Document Critical functions ¾ Variations of the process Nothing. the system must enable a correction posting (adjustment line).doc Page: 49 Of: 91 . Valid for 46C > SP 49 and 470 > SP22: For the update you can use the VF42 and report SDRRAV54 (description see note 780993) SAP AG File: RR_Best_Practice_Knowledge_Document_V1. Additional important information © SAP AG 07/2005. it is necessary to do a manual update using VA02/VA42 or to run report ZZ_SALES_DOC_CHANGE from note 385149.Revenue Recognition . Valid for 46C < SP49 and 470 < SP22: For updating the revenue recognition tables (VBREVK and VBREVE) of the preceding sales process (after the credit/debit memo was created). This update will not be executed automatically. All rights reserved. In detail: In the VBREVK the field ACC_VALUE and in VBREVE the field WRBTR have to be updated. Revenue Recognition - Best Practice 4 Description of Core Business Processes Knowledge Document 4.8 Time based or service based revenue recognition recognition in credit/debit memo processing without a credit/debit memo request (‘A’ or ‘B’) General Information ¾ Using time-related revenue recognition in a credit/debit memo processing, it is possible to carry out recognition over a specific period of time equal to the original process. Using service-related revenue recognition in a credit/debit memo processing, it is possible to carry out recognition on the basis of a specific event equal to the original process. The credit/debit memo is created in reference to an invoice and there is no credit/debit memo request. © SAP AG 07/2005. All rights reserved. ¾ No new revenue recognition tables will be created. The credit/debit memo process updates the revenue recognition tables of the preceding sales process. ¾ The revenue recognition relevance is transferred from the previous document. Revenue recognition method = ‘A’ or ’B’. ¾ Process 12 will be initialized at the point in time when the credit memo is released to accounting. Afterwards transaction VF44 is ran. SAP AG File: RR_Best_Practice_Knowledge_Document_V1.doc Page: 50 Of: 91 Revenue Recognition - Best Practice 4 Description of Core Business Processes Knowledge Document © SAP AG 07/2005. All rights reserved. Business steps overview and process description If a credit memo/debit memo is created and the reference document is the billing document, the credit memo/debit memo updates the revenue recognition tables of the preceding sales process. Therefore the posting to the accounts depends on whether there is a balance on the D/R or the U/R account (revenue recognition run is run and/or invoice is released to accounting). Critical functions ¾ Using revenue recognition method ‘B’ in a credit/debit memo created with reference to the preceding invoice in a contract process is not supported. This does not apply to order processes. Variations of the process SAP AG File: RR_Best_Practice_Knowledge_Document_V1.doc Page: 51 Of: 91 Revenue Recognition - Best Practice 4 Description of Core Business Processes Knowledge Document When using Revenue recognition method = ‘D’, the credit memo/debit memo doesn’t update the existing revenue recognition tables of the preceding sales process. The credit memo/debit memo is starting its own revenue recognition process. The release of the credit memo/debit memo document triggers the creation of separate control, revenue and reference lines. Additional important information © SAP AG 07/2005. All rights reserved. For updating the revenue recognition tables (VBREVK and VBREVE) of the preceding order process (after the credit/debit memo was created) it is necessary to do a manual update using va02/va42 OR to run report ZZ_SALES_DOC_CHANGE from note 385149. This update will not be executed automatically. In detail: In the VBREVK the field ACC_VALUE and in the VBREVE the field WRBTR have to be updated. If revenues have already been posted, the system must enable a correction posting (adjustment line). SAP AG File: RR_Best_Practice_Knowledge_Document_V1.doc Page: 52 Of: 91 doc Page: 53 Of: 91 . ¾ No new revenue recognition tables will be created.Revenue Recognition . All rights reserved. ¾ Revenue recognition method = ‘B’. © SAP AG 07/2005.9 Service based revenue recognition in return processing with reference to an order (‘B’) General Information ¾ Using service-related revenue recognition in a return processing can carry out recognition on the basis of a specific event equal to the original process. The return order is created in reference to an order after the order was delivered. ¾ Process 13 demonstrates the process when transaction VF44 is ran before creation of the credit memo.Best Practice 4 Description of Core Business Processes Knowledge Document 4. The return order is invoiced with a credit memo. Business steps overview and process description SAP AG File: RR_Best_Practice_Knowledge_Document_V1. The return process updates the revenue recognition tables of the preceding sales process. Process 14 demonstrates the process when the credit memo is posted before transaction VF44 is run. Revenue Recognition - Best Practice 4 Description of Core Business Processes Knowledge Document © SAP AG 07/2005. All rights reserved. 4.9.1.1 Process 13 – service based return processing with reference to an order with VF44 as first The return process will be created with reference to a preceding sales document and with revenue recognition type ‘B’. It updates the revenue recognition tables of the preceding sales process. As a first step the return sales order is created with reference to the sales order. This sales document contains the line items, which have to be credit as well as the relevant conditions. The saving of this document triggers not the update of the control lines (VBREVK). No revenue lines are created at this stage. The next process step consists of the creation of the delivery with reference to the return order; the line items are copied into this document. The goods receipt is posted. This triggers the creation of the revenue lines (VBREVE) in service based revenue recognition according to the document data. It is now possible to realize the revenue using transaction VF44. This triggers the update of the control lines with the realized value, a new balance, and the update of the revenue lines. In FI an accounting document is automatically created, which posts to the reconciliation account D/R or U/R and to the revenue account. The posting to the accounts depends on whether there is a balance on the D/R or the U/R account (revenue recognition run is done and/or invoice is released to accounting in the original process). SAP AG File: RR_Best_Practice_Knowledge_Document_V1.doc Page: 54 Of: 91 Revenue Recognition - Best Practice 4 Description of Core Business Processes Knowledge Document When credit memo is created and released to accounting, another accounting document is created, which balances (or reduces) the reconciliation account and posts to the receivables account. The revenue recognition tables are also updated by this step. A new reference line is created containing information from the credit memo, the control lines will also be updated. Process 14 – service based return processing with reference to an order with invoice as first © SAP AG 07/2005. All rights reserved. 4.9.1.2 The return process will be created with reference to a preceding sales document and with revenue recognition type ‘B’. It updates the revenue recognition tables of the preceding sales process. As a first step the return sales order is created with reference to the sales order. This sales document contains the line items, which have to be credit as well as the relevant conditions. The saving of this document triggers not the update of the control lines (VBREVK). No revenue lines are created at this stage The next process step consists of the creation of the delivery with reference to the return order; the line items are copied into this document. The goods receipt is posted. This triggers the creation of the revenue lines (VBREVE) in service based revenue recognition according to the document data. SAP AG File: RR_Best_Practice_Knowledge_Document_V1.doc Page: 55 Of: 91 Revenue Recognition - Best Practice 4 Description of Core Business Processes Knowledge Document In the subsequent step a credit memo is created with reference to the return sales order and released to accounting, reference lines (VBREVR) will be created and control lines (VBREVK) will be updated. Additionally, an accounting document is automatically created in FI, which posts to the D/R or U/R account Therefore the posting to the accounts depends on whether there is a balance on the D/R or the U/R account (revenue recognition is run and/or invoice is released to accounting). While transaction VF44 runs in the next step, an update of the control and revenue lines is generated. Additionally an accounting document is automatically created in FI. Critical functions Variations of the process © SAP AG 07/2005. All rights reserved. Additional important information SAP AG File: RR_Best_Practice_Knowledge_Document_V1.doc Page: 56 Of: 91 The return order is created in reference to the call off order after the call off order was delivered. The return process updates the revenue recognition tables of the preceding sales process. Business steps overview and process description SAP AG File: RR_Best_Practice_Knowledge_Document_V1. ¾ No new revenue recognition tables will be created. © SAP AG 07/2005. In the original process the contract item is invoiced and the linked call off order item is delivered.doc Page: 57 Of: 91 .10 Service based revenue recognition in return processing with reference to a contract and call off order (‘B’) General Information ¾ Using service-related revenue recognition in a return processing with reference to a contract / call off order can carry out recognition on the basis of a specific event equal to the original process. Afterwards transaction VF44 is run. All rights reserved.Best Practice 4 Description of Core Business Processes Knowledge Document 4. ¾ Process 15 will be initialized at the point in time when the goods issue posting is done for the return order. ¾ Revenue recognition method = ‘B’.Revenue Recognition . There won’t be a credit memo for the return process due to the call off order isn’t billing relevant. where the invoice is related to the contract and the call off order is to be delivered. SAP AG File: RR_Best_Practice_Knowledge_Document_V1. revenue lines (VBREVE) are created. This triggers the creation of the revenue lines (VBREVE) in service based revenue recognition according to the document data.Revenue Recognition . There is NO link between the call of order and the return process. After the related delivery has posted the goods issue. All rights reserved. No revenue lines are created at this stage. The saving of this document triggers not the update of the control lines (VBREVK).doc Page: 58 Of: 91 . Critical functions Nothing Variations of the process In accordance with the above process. which have not to be credit. As a first step the return sales order is created with reference to the call off order. In this process the sales contract is relevant for billing. Also the return delivery and the return credit memo create their entries with the number of the return order. The goods receipt is posted. an update of the control and revenue lines from the contract is generated.Best Practice 4 Description of Core Business Processes Knowledge Document The return process will be created with reference to a preceding sales document and with revenue recognition type ‘B’. The next process step consists of the creation of the delivery with reference to the return order. This sales document contains the line items. the line items are copied into this document. © SAP AG 07/2005. Additionally an accounting document is automatically created in FI. In the following return order processing the return order will be create with reference to the call off order. another scenario exists: ¾ The call off order will be invoiced and delivered: When the call off order is created with reference to the contract. Afterwards it is possible to run transaction VF44. the saving of the call off order creates control lines (VBREVK). which posts to the D/R or U/R account Therefore the posting to the accounts depends on whether there is a balance on the D/R or the U/R account (revenue recognition is run and/or invoice is released to accounting). Important remark: The invoice has to be created in reference to the call off order (order-related invoicing) and NOT in reference to the delivery (deliveryrelated invoicing). It updates the revenue recognition tables of the preceding sales process. The saving of the return order creates control lines (VBREVK) with the document number of the return order. the following customizing settings must be configured in the sales document types: ¾ The contract will be invoiced and the call off order will be delivered: The billing relevance of the contract item category should be ‘B’ or ‘I’. The billing relevance of the contract item category should be ‘ ‘.doc Page: 59 Of: 91 .Best Practice 4 Description of Core Business Processes Knowledge Document Additional important information In order to implement the two scenarios. The revenue recognition relevance of the contract / call off order / return order item categories should be set to ‘B’. All rights reserved. while the billing relevance of the call off order and return order item category should be ‘ ‘. SAP AG File: RR_Best_Practice_Knowledge_Document_V1.Revenue Recognition . while the billing relevance of the call off order and the return order item category should be ‘B’. the item category of the call off order and the return order with ‘B’. ¾ The call of order will be invoiced and delivered: The item category of the contract should be customized with revenue recognition relevance ‘ ‘. © SAP AG 07/2005. Revenue Recognition .doc Page: 60 Of: 91 . ¾ Standard process for migration of revenue recognition data from a former system to SAP R/3. © SAP AG 07/2005. ¾ IS-OIL processes with revenue recognition. SAP AG File: RR_Best_Practice_Knowledge_Document_V1. ¾ Changing of document currency in the order/contract after invoicing/revenue recognition. ¾ Revenue recognition for Taxes. ¾ Revenue recognition in Down Payments. All rights reserved.Best Practice 5 Processes currently not supported Knowledge Document 5 Processes currently not supported ¾ Revenue recognition for the internal billing in case of Cross Company processing. ¾ Revenue recognition in Scheduling Agreements. ¾ Revenue recognition for Third Party Processing. ¾ Changing of revenue recognition accounts before note 568227 was implemented (important: restrictions in note 568227 have to be considered). Every migration is individual for every customer. ¾ Revenue recognition in proof of delivery (POD) process. ¾ CRM with revenue recognition. ¾ Revenue recognition in combination with treasury hedging functionality. That means. why is an accurate monitoring that important? It‘s the first time that SAP provides a functionality.doc Page: 61 Of: 91 .Best Practice 6 Monitoring of the revenue recognition data Knowledge Document 6 Monitoring of the revenue recognition data 6. the time dimension as well as possible split of the revenue amounts.1 Monitoring aspects © SAP AG 07/2005. but distributes the realisation of revenues over a certain range of periods. there is a decoupling of billing document and revenues posting in FI concerning both. SAP AG File: RR_Best_Practice_Knowledge_Document_V1. that despite the mentioned decoupling finally those revenues are realised. which are billed to the customer. When monitoring the revenue recognition data.Revenue Recognition . which doesn‘t post the revenues directly with the billing document. there are two parts of technically monitor this data and documents: • FI-monitoring • SD-monitoring The next question is. An accurate monitoring ensures. All rights reserved. In order to monitor the revenue recognition process.doc Page: 62 Of: 91 .Best Practice 6 Monitoring of the revenue recognition data Knowledge Document 6. SAP AG File: RR_Best_Practice_Knowledge_Document_V1. To display balances on accounts use transaction FS10N.Revenue Recognition . All rights reserved. the first step is to check whether there are balances on the accrual accounts or not.2 FI-Monitoring Check Account Balances © SAP AG 07/2005. All rights reserved.Revenue Recognition . a drill-down to line item display is possible.doc Page: 63 Of: 91 . SAP AG File: RR_Best_Practice_Knowledge_Document_V1.Best Practice 6 Monitoring of the revenue recognition data Knowledge Document © SAP AG 07/2005. If detailed information is required. the document flow can be used first.doc Page: 64 Of: 91 .Revenue Recognition . The reconciliation can be done for a certain range of periods.Best Practice 6 Monitoring of the revenue recognition data Knowledge Document Alternatively transaction FBL3N can be used in order to show the line items of an accrual account directly © SAP AG 07/2005. A more value-oriented view is provided by the transaction VF45 from the sales perspective and FBL3N from the FI perspective. SAP AG File: RR_Best_Practice_Knowledge_Document_V1. You can use transaction VF48 to compare the FI and SD values created by the billing process as well as by the revenue recognition run. they can be reconciled with the revenue recognition data in SD on an aggregated level. In order to get an overview what happened in total with a sales document. If open item management is used only the line items respectively the sales documents can be displayed which cause the balance on the account Reconcile FI and SD Values If balances are determined on the accrual accounts. VF45 displays the deferred revenues. All rights reserved. Use to VA02/VA42 or VA03/VA43 to view the documentflow. (2) As a basis for the automatic clearing of the open items the field ‚Assignment‘ has to be maintained in the customizing transaction ‚Prepare Automatic Clearing‘. SAP AG File: RR_Best_Practice_Knowledge_Document_V1. All rights reserved. create new accounts and do not change the open item management flag for an existing.Revenue Recognition .Best Practice 6 Monitoring of the revenue recognition data Knowledge Document the unbilled receivables.13. Automatic Clearing of Accrual Accounts In order to monitor the accrual accounts effectively. © SAP AG 07/2005. Please note: If you haven‘t yet activated open item management.doc Page: 65 Of: 91 . FBL3N can be used to show the relevant FI postings related to a revenue recognition sales document using the assignment field as a selection parameter. Prerequisites are: (1) Activate open item management in the master data of the accrual accounts (see customizing in chapter 9). already in use account. the billed and the realized amounts on the level of a sales document item. The results of both views should fit together. it is recommended to use the automatic clearing process in FI with transaction F. To enable an automatic clearing.Revenue Recognition . All rights reserved.Best Practice 6 Monitoring of the revenue recognition data Knowledge Document (3) The standard revenue recognition fills the assignment field in the FI document in dependence from the revenue recognition type : revenue recognition type ‘A’: BSEG-ZUONR sales number and item number revenue recognition type ‘B’: BSEG-ZUONR sales number and item number revenue recognition type ‘D' BSEG-ZUONR invoice number and item number © SAP AG 07/2005. Therefore an SD user exit has to be implemented (SAP enhancement SDVFX004) SAP AG File: RR_Best_Practice_Knowledge_Document_V1.doc Page: 66 Of: 91 . the billing run has to fill this field in the same matter. The transaction displays the deferred revenues. a balance on the account for not invoiced receivables and also on the account for deferred revenue amounts. the billed and the realized amounts on the level of a sales document item. filter. The report created by this transaction contains detailed information at SD document item level: • posted revenues • invoiced values • balances on unbilled/deferred accounts • Status of the process • All related follow-on documents There are some restrictions when using transaction VF45. both. the unbilled receivables.doc Page: 67 Of: 91 . because the older versions o do not display the costs (VPRS) o have no direct link to the SD and FI documents involved o don’t have sort. See note 777118 for explanation File: RR_Best_Practice_Knowledge_Document_V1. This display is incorrect. display or hide additional fields • SAP AG transaction VF45 shows for SD documents. All rights reserved.Best Practice 6 Monitoring of the revenue recognition data Knowledge Document 6. for which a revenue cancellation was posted via VF46. © SAP AG 07/2005.3 SD-Monitoring with VF45 VF45 Overview The transaction VF45 is a more value-oriented view from the sales perspective. • always use the revised version of VF45 as distributed in note 787174. the posting are correct. subtotal.Revenue Recognition . • Company code • Sales document type • Sales document item • Sold-to party SAP AG File: RR_Best_Practice_Knowledge_Document_V1. Selection criterias of VF45 There is just one mandatory field in VF45.Best Practice 6 Monitoring of the revenue recognition data Knowledge Document © SAP AG 07/2005. the field “sales document”. All rights reserved. The other fields can be used to increase the number of document to be analysed.doc Page: 68 Of: 91 .Revenue Recognition . doc Page: 69 Of: 91 . SAP AG File: RR_Best_Practice_Knowledge_Document_V1.Best Practice 6 Monitoring of the revenue recognition data Knowledge Document © SAP AG 07/2005. All rights reserved.Revenue Recognition . As a result you will get the following report: From this report you can reach the follow-on document by double-click. 4 SD-Monitoring with VF47 VF47 Overview The transaction VF47 is a central point in the early stage of analysis the Revenue Recognition on a customer’s system. Nethertheless VF47 is a rather technical view on the revenue recognition tables. For an analysis this report should not run in update mode (check box „Test Run Without Update“ has to be on) VF47 selection criteria When starting VF47. Sales-. VBREVE and VBREVR and the appropriate sales documents. you have to fill out a full screen of selection criteria. various errors may occur during the processing of items. item number item numbers of the sales document SAP AG File: RR_Best_Practice_Knowledge_Document_V1.doc Page: 70 Of: 91 . The report of VF47 shows inconsistencies between the revenue recognition tables VBREVK. In the following text the fields will be described.Best Practice 6 Monitoring of the revenue recognition data Knowledge Document 6. at least once in a month to be sure that there are no problems or errors in your revenue recognition data. Enter the sales documents. If a sales document contains items relevant for revenue recognition. company code sales document type sales document number mandatory entry. VF47 should be scheduled as a frequent batch process. Run VF47 every week. All rights reserved.and FI-documents can be taken into account to search for inconsistencies beyond the revenue tables. you want to analyse.Revenue Recognition . billing. © SAP AG 07/2005. When you enter a date here.doc Page: 71 Of: 91 . Technically. the system checks whether all items relevant for revenue recognition from the relevant billing documents have an entry in the reference table (VBREVR). Incl. For example. the system reconciles the document flow with the reference table Docs From: ¾ It is possible that not all billing documents may be used for a check after a migration. FI: ¾ If this flag is set. Packaging Number of lines within a package accessing database on package level max. SAP AG File: RR_Best_Practice_Knowledge_Document_V1. All rights reserved. the system ignores all billing documents that were created before this time. Thus this analysis program can determine control lines from the detail lines even if reference lines are missing and then compare them with the control lines of the database.Revenue Recognition . This means that only those control lines are checked that do not have status ‘C’ (VBREVKRRSTA) Check Reference Lines: ¾ If this flag is set. this can occur if current contracts were copied from a preceding system. Check types: Only check current Documents: ¾ The systems only checks lines that have not been completed yet. the system attempts in addition to read the FI documents of the billing documents in order to simulate non-existing reference lines (VBREVR) and to include them in the calculation of the control lines. number of control lines © SAP AG 07/2005.Best Practice 6 Monitoring of the revenue recognition data Knowledge Document General Data. However. the system is forced to always use the revenues from the FI documents when determining the simulated control lines. the system is forced to always use the revenue lines from the revenue table (VBREVE) when determining the simulated control lines. balances and posted revenues of the 'new' control lines are based on the data updated in SD. Read Revenue Lines SD: ¾ If you set this flag. Thus. This flag is not set by default. you can carry out the revenue recognition (VF44) on collective processing level as File: RR_Best_Practice_Knowledge_Document_V1. The system therefore attempts to link the billing document with the generated FI document. : ¾ If also the FI documents for the billing documents are read. the reference lines cannot be simulated.Revenue Recognition . Read Revenue Lines FI: ¾ If you set this flag. the system determines the status on the basis of the detail lines and then compares it with the status of the respective control lines. However. this flag must be set. The system assumes that the billing items have generated posting items in chronological order. This is because the individual posting items can be summarized (compressed) in financial accounting. balances and posted revenues of the 'new' control lines are based on the data updated in FI. the system also reads the sales document types (if it has not done so yet) in order to compare the net item value (VBAP-NETWR) with the total accrued value of the control lines (VBREVK-ACC_VALUE). the FI documents are generated on sales document level (BKPF-AWKEY) during the revenue recognition (VF44). All rights reserved. © SAP AG 07/2005. Thus. Check Control Line Status: ¾ This flag is set by default. If this is not the case. The data required for simulating the missing reference lines is copied from the billing document.doc Page: 72 Of: 91 . this only occurs if the billing document was posted to 'deferred revenues' or' non-billed receivables' only. Collective Run No:’ o SAP AG Generally. the reference lines cannot be simulated here either. With this information. For this case. The relevant FI documents are identified via the assignment number ‘Incl. If both accounts are involved. remember that the billing document and the FI document do not have to match completely. This is necessary because both the reason for rejection on item level and the billing block on header and item level affect the control line status.Best Practice 6 Monitoring of the revenue recognition data Knowledge Document Compr. Check Total Amount : ¾ If you set this flag. It ensures that the system also reads the sales document data in order to check whether the status of the control lines is correct. you must set this flag in order to find these FI documents. you must select at least one of these selection options. Also for Currency change SD/FI: SAP AG File: RR_Best_Practice_Knowledge_Document_V1. if you want to carry out a correction. level: ¾ If you set this flag.doc Page: 73 Of: 91 . Message at doc. the system does execute all checks selected. That is. If you set this flag. That is. but the collective number. In addition. The scope of these corrections is defined by the following selection options. but the log is output on the basis of the sales document level. This means that the control lines (VBREVK) were redetermined via the revenue lines (VBREVE) and the reference lines (VBREVR). In this case. The report is able to make changes on the database.Revenue Recognition . © SAP AG 07/2005. Only docs with error messages: ¾ Sales documents that do not have any errors are indicated with a green checkmark in the log.Best Practice 6 Monitoring of the revenue recognition data Knowledge Document well. the system overwrites the control lines that can be corrected. The system issues error messages only once per document although the errors may occur more often. All rights reserved. you must deselect the 'Test Run without Update' flag Change control lines: ¾ If you set this flag. the FI document does not get the sales document number as a reference number. This may cause a slight performance loss. the system no longer displays these correct sales document numbers in the log. but only the incorrect ones with their corresponding error messages. if the FI documents are generated on collective processing level. Delete control lines: ¾ If you set this flag. the report attempts to regenerate missing reference lines (VBREVR). All rights reserved. if you want to create revenue lines for a certain posting period. In this case. ‘Posting period:’ ¾ Generally. all revenue lines of this sales document that concern the determined posting period have status 'C' (VBREVE-RRSTA ='C'). The first line gets status (VBREVE-RRSTA) 'A' (to be recognized). Create reference lines: © SAP AG 07/2005. that is. However. the report always generates two revenue lines. ¾ If you set this flag. Both lines have the same revenue value (VBREVEWRBTR) with one value being positive and the other one being negative. the report generates revenue lines (VBREVE) if it detects balances on both clearing accounts (E16). SAP AG File: RR_Best_Practice_Knowledge_Document_V1. Create revenue lines: ¾ If you set this flag.Revenue Recognition . the system deletes those control lines from the database that have neither revenue lines nor reference lines. you can specify a period here. The basis for this is either the respective billing document or the FI document generated from the billing document.Best Practice 6 Monitoring of the revenue recognition data Knowledge Document o If you set this flag. This posting period is always the first posting period (descending sort order) of a sales document that no longer contains revenues to be recognized.doc Page: 74 Of: 91 . the system overwrites the control lines although there are different currencies in the control lines and existing revenue documents. the second gets status 'C' (recognized). the system determines a posting period for the new revenue lines to be created. This must be done in the 'YYYYPPP' format where 'Y' represents the year and 'P' the period. E05 Missing Revenue Account in Revenue Lines: SAKRV E06 Missing Account for 'Restricted Revenues' in Revenue Lines: SAKDR E07 Missing Account for 'Non-Billed Requests' in Revenue Lines: SAKUR © SAP AG 07/2005.doc Page: 75 Of: 91 . E16 Detail Lines have Determined Balance for 'Restricted Revenues' and for 'Non-billed Requests'.3 Incorrect values / balances E10 Differences in Total Accrual/Deferral Amount: E11 Differences in Balance: WRBTR. E02 Missing Account for 'Non-Billed Requests' in Control Lines: SAKRRK E03 No Accounts Available in Control Lines.1 Account determination errors: E01 Missing Account for 'Restricted Revenues' in Control Lines: SAKRR. E08 Missing Account for 'Restricted Revenues' in Reference Lines: SAKRR.4. 6. 6. SAP AG File: RR_Best_Practice_Knowledge_Document_V1. E12 Differences in Recognised Revenues: RVAMT.Best Practice 6 Monitoring of the revenue recognition data Knowledge Document VF47 Error categories 6.2 Inconsistencies between VBREVK / VBREVE/ VBREVR E04 No Control Lines Found.Revenue Recognition . although Time-Related Revenue Recognition E17 No Reference Lines Available for Billing Document in Table VBREVR.1. E09 Missing Account for 'Non-Billed Requests' in Reference Lines: SAKRRK.4 status problem E13 Different Status found: RRSTA.1.1. All rights reserved. E14 No Detail Lines Available. E15 Control Lines with Balance for 'Restricted Revenues' and for 'Non-Billed Requests'.4.4. E18 Total Amount Difference for Control Lines and Sales Document Item: E24 Total amount difference for control lines and billing item: 6.1.4. E20 Currency Differs in Control Lines and Reference Lines.1.doc Page: 76 Of: 91 .4. E22 Currency Differs in Accounting Document and Control Lines.1.5 Currency problem E19 Currency Differs in Control Lines and Revenue Lines. 6. Important precondition for running VF47 is the implementation of all notes for the VF47.7 Assignment problem © SAP AG 07/2005. see below. All rights reserved.Best Practice 6 Monitoring of the revenue recognition data Knowledge Document 6. 6. E25 Error during determination of posted values on account: Revenues not posted! E26 'No FI documents found.4. If errors occurs please contact SAP support. Revenues not posted!' The complete explanations find in the note 399777 and 542161.1. E23 System Error: Document Could Not Be Blocked.Revenue Recognition . SAP AG File: RR_Best_Practice_Knowledge_Document_V1.6 Lock problem E21 Document in Processing.4. Schedule VF47 on a weekly basis and review errors. 706955 (optional) VF47: Package processing via control lines 660742 Incorrect error message E25 in VF47 656013 (optional) Authorization check of update function VF47 600334 Incorrect status determination (header) in VF47 590143 Minor subsequent corrections from Note 542161 (VF47) 578840 Activation: reference procedure VBRR in VF47 542161 Error corrections in transaction VF47 536984 Extension of syntax warnings in VF47 527301 (rrrel=D) Incorrect messages with category "D" in VF47 769103 (rrrel= D) VF47: Error E17 in case of several documents 399777 SAP AG Report: consistency check of revenue tables (VF47) File: RR_Best_Practice_Knowledge_Document_V1. All rights reserved.Revenue Recognition .Best Practice 6 Monitoring of the revenue recognition data Knowledge Document 385149 Report for saving sales documents without changes 739495 VF47: Incorrect listing of E17 errors 717473 VF47: No error code flag with mixed types © SAP AG 07/2005.doc Page: 77 Of: 91 . only actions with incomplete revenue recognitions (revenue postings and billing document postings) are taken into account.5 SD Monitoring with VF48 VF48 Overview This compare report serves to explain the balance of an accruals account used in the Revenue Recognition. to trace the balance.Best Practice 6 Monitoring of the revenue recognition data Knowledge Document 6. 3.doc Page: 78 Of: 91 . Transaction VF47 (Inconsistency Check in Revenue Tables) is available for this purpose. Company code (required entry field) Enter the company code of the accruals account to be checked. VF48 selection parameter You must/can start the selection with the following selection parameters : 1. the indicator must not be set. 4. G/L account ( required entry field) Enter the accruals account to be checked. All rights reserved.Revenue Recognition . However. © SAP AG 07/2005. In this case. 2. Its primary aim is to trace balances and not to trace possible inconsistencies between SD and FI. Results of VF48 SAP AG File: RR_Best_Practice_Knowledge_Document_V1. Posting period from/ to (required entry field) Enter the period to be checked in posting periods. because only these postings are necessary for an explanation of the balance. it may be necessary for the system to also display completed (cleared) revenue recognition processes. Indicator: Only Not Cleared Documents (optional entry field) If you set this indicator. or to check whether this balance corresponds to the SD data (VBREVx tables). doc Page: 79 Of: 91 . a split screen appears. If the necessary selection parameters were set and the report is started.Best Practice 6 Monitoring of the revenue recognition data Knowledge Document © SAP AG 07/2005.Revenue Recognition . SAP AG File: RR_Best_Practice_Knowledge_Document_V1. All rights reserved. doc Page: 80 Of: 91 . If this is not the case. These are the revenue amounts that were recognized in the selected period according to SD.Best Practice 6 Monitoring of the revenue recognition data Knowledge Document © SAP AG 07/2005. SAP AG File: RR_Best_Practice_Knowledge_Document_V1.Revenue Recognition . These are the revenue amounts that were deferred in the selected period according to SD.Balances Here per currency different balances are displayed. This appears to result in an inconsistency between SD and FI.5. since there is an inconsistency between FI and SD. but there really is no inconsistency at all.1. then these values are not known in SD (VBREVx tables). All rights reserved. billing items in the VBREVR table that are relevant for revenue recognition. If you now take the balance of revenue recognitions. this result must be analyzed further.1 Upper part of the screen . d) Total balance This is the balance of the accruals account for the selected period that was determined in FI. minus the balance of billing documents and minus the balance of other postings. 6. Transactions VF47 and VF45 (among others) are available for further analysis. b) Balance from billing documents This balance is determined from the posted. then the result should reflect the total balance in FI. The calculation consists of the following: a) Balance from revenue recognitions This balance is determined from the posted revenue lines in the VBREVE table. c) Balance from other postings If not only the revenue recognition process (VF44/VF46/VF01/VF02/VFX3) but also other FI transactions such as FB01 posted to the selected accruals account. For each currency in the form of a calculation. based on the VBREVE table (this is the revenue that was posted to the selected accruals account).Revenue Recognition . based on the billing items relevant for revenue recognition (this is the revenue that was posted to the selected accruals account). c) Accrued total value This is the revenue amount of the document item to be recognized at accruals account level.1. the revenue recognized in the selected period is displayed.2 Lower part of the screen . All rights reserved. b) Recognized revenues For the relevant document item. the revenue billed in the selected period is displayed. Data is retrieved using the reference line table (VBREVR). SAP AG File: RR_Best_Practice_Knowledge_Document_V1. Data is retrieved using the control row table (VBREVK) in which the relevant accrued total value is updated. If the totals are different. (The total in the 'Balance' column must equal the total balance in FI). Data is retrieved using the revenue line table (VBREVE). This is where SD detail data (VBREVx tables) concerning the selection at sales and distribution document item level is listed.5.VBREVx rows (SD tables) © SAP AG 07/2005. there are inconsistencies between FI and SD The following values are displayed for the items: a) Billed revenues For the relevant document item.doc Page: 81 Of: 91 .Best Practice 6 Monitoring of the revenue recognition data Knowledge Document 6. 6.5. billing document is also possible. All rights reserved. see Note 787174. you can also receive more detailed information a) Billing documents (F5) This is where the billing items that are relevant for the selected document item are displayed.Revenue Recognition . the accounting documents which resulted in these balances are displayed here. b) Other FI documents (F6) If balances exist from other postings. A jump to the respective © SAP AG 07/2005. This is done in Transaction VF45 . A jump to the respective accounting document is also possible.'Revenue Recognition: Overview.' For more information.3 Additional function In addition to the screen described above.1. SAP AG File: RR_Best_Practice_Knowledge_Document_V1.Best Practice 6 Monitoring of the revenue recognition data Knowledge Document d) Balance This balance at document item level is calculated by subtracting the recognized revenues from the billed revenues. c) Overview (F7) This is where the revenue recognition data that is relevant for the selected document item is listed.doc Page: 82 Of: 91 . additional notes from note 813850 © SAP AG 07/2005. (Manually) completing contracts / correction rows for contracts For contracts. these modifications cannot be performed manually or by using the SAP Note Assistant. additional notes from note 813850 470 SP23. Users receive detailed information about which revenues are to be posted. After they are posted. Previously. The user interface has also been improved. Updating revenue recognition data on sales document In some cases. The functions of each extension are described in detail in the composite SAP Note 800983. 2. All rights reserved. there was no definition in the system to state. There are now two available options: Immediate update of sales documents. To deal with this. revenue recognition data has to be redetermined.Best Practice 7 Functional enhancements Knowledge Document 7 Functional enhancements Following is an overview of the technical extensions and new additions contained in the special Support Package . the up-to-date values are displayed on screen. when a process was finished. that are to be updated and updating them at a later time by calling transaction VF42.Revenue Recognition . a new DDIC field was set up in tables VBUP/VBUK (MANEK = manual end of contract).doc Page: 83 Of: 91 . A revenue recognition correction row for contracts can still be created with it. report ZZ_SALES_DOC_CHANGE has been replaced by transaction VF42 and report SDRRAV54. contracts can be closed or completed. when invoices are created and the issue of goods is posted. Flagging documents. This means. Because of their size and complexity. that the sales document also must be changed to reflect the new data. Using this field. the data had to be updated using report ZZ_SALES_DOC_CHANGE (manually or as a job). 46C SP49. 3. when goods are issued or invoices are created. SAP AG File: RR_Best_Practice_Knowledge_Document_V1. Now. 1. Modification of locking logic in VF44/VF46 The processing logic in transactions VF44 and VF46 has been changed to enable running VF44/VF46 in parallel with invoicing. Status determination VF44 sets the status in VBUP.Best Practice 7 Functional enhancements Knowledge Document 4. transaction VF48 will not work with the documents. is entered. but for which no accruals account was specified in customizing. Error handling in account determination Account determination is not interrupted. Extension of transaction VF45 The report was set to ALV GRID. It does not take place until the source objects have been archived. 9. They create the necessary data model. Archiving is now independent from the order or invoicing. If you do not use these notes. 7. You must use notes 798033 and 780126 to be able to run this report. 8. Archiving for the revenue recognition tables A new archive object (SD_VBREV) is available. 5.doc Page: 84 Of: 91 . that is relevant to revenue recognition. VF44 also writes an entry in table VBREVC. The control rows are displayed and VBREVE can be displayed. the balance of an accruals account can be analyzed across periods.Revenue Recognition . source and cancellation lines can be updated separately. if a condition. 6. Report for reconciliation/reproduce-ability of accruals accounts With a new report (transaction VF48). the system returns the incomplete notification. All rights reserved. This is necessary to display cancellation rows in the process and data control functions more clearly. © SAP AG 07/2005. Changing the cancellation update VF46 The field REVFIX was added to table VBREVE. and links to the associated SD and fixed documents are possible. The overall status is then set by program SDRRAV54 (see point 1). VPRS is still incorporated into the display. SAP AG File: RR_Best_Practice_Knowledge_Document_V1. Only when all conditions have been processed. With this field. Sp 49 or Rel 470 Sp 23) 8. ¾ When using report ZZVF44HN (VF44 in the background) and an error occurs during the posting of FI documents.1 General restrictions ¾ The order/contract has to include a billing plan or at least contract data. 8.doc Page: 85 Of: 91 . ¾ Note 568227 has to be implemented. transaction OVUR (see note 777996).Revenue Recognition . This assignment is hard coded and an internal number range is mandatory. Otherwise no ‘real’ revenue recognition can take place. the system triggers command ROLLBACK WORK and thus the creation of the accounting documents is prevented for the entire packet and an error log is written. ¾ Third account for the unbilled receivables must be maintained in customizing. File: RR_Best_Practice_Knowledge_Document_V1. there must be different accounts for each condition. PS_PST_PNR. ¾ With the revenue recognition functionality costs will be passed to CO-PA during the revenue recognition run. All rights reserved. if you are using time related revenue recognition (A or D). Relevant account assignment objects are: AUFNR.2 Account restrictions ¾ Separate accounts for G/L account and deferred revenue account have to be maintained in customizing. if the following preconditions are met: SAP AG o VPRS condition has to be statistical and KNTYP has to be ‘G’ o The item must not have an account assignment object associated with it. ¾ There must be no change of the revenue recognition accounts in case of contracts with call-off orders using revenue recognition relevance ‘B’. A current processing packet consists of a maximum of 999 control lines.3 Cost restrictions ¾ In the customizing of CO-PA the costing based profitability analysis has to be active (see transaction KE4I). (valid only for systems before Rel 46C. ¾ The G/L account must be different from the deferred revenue account and from the unbilled receivables account. VBELV / POSNV. ¾ The document type for the revenue recognition document is 'RV'. © SAP AG 07/2005. transaction VKOA (see note 777996).Best Practice 8 Restrictions from SD side Knowledge Document 8 Restrictions from SD side 8. ¾ If in the CO document the value of each condition has to be listed. Best Practice 8 Restrictions from SD side Knowledge Document This means that posting of VPRS condition for items relevant for revenue recognition depend on the non-existence of an account assignment object.4 Adjustment restrictions ¾ There are different changes possible. which will affect revenue recognition data: o time adjustments o price adjustments Time adjustments can be: o changes of the contract data o changes of the billing plan data: end date (FPLA-ENDAT) dates from (FPLA-LODAT). ¾ When using performance based revenue recognition the total cost amount for the event is posted in the period the event occurs.Revenue Recognition . the system requires a relevant pricing condition. ¾ When using time based revenue recognition the cost amount per period is calculated from the total cost amount in the same way. © SAP AG 07/2005. VPRS will be ignored during the revenue recognition run and the costs are posted with releasing of the invoice. dates to (FPLA-TNDAT). ¾ A single statistical VPRS condition without a revenue condition cannot be processed. neither during the billing nor during the actual revenue recognition the cost is considered. An accrual of the costs in the revenue recognition does not occur. o When using partial billing plan the value of the VPRS condition is split. . To post a VPRS condition by the revenue recognition and not by billing. ¾ If the VPRS condition is set as accrual-relevant cost condition (XKOMV-KRUEK = ‘X’). Exceptions: . 8. o add settlement periods manually o delete settlement periods manually Price adjustments can be: SAP AG o change of a condition value in the sales document o change of a condition value in the billing document o add a condition in the sales document File: RR_Best_Practice_Knowledge_Document_V1. All rights reserved. the cost (VPRS) is posted directly as an accrual in the financial accounting. the revenue per period is calculated: o When using a periodic billing plan the value of the VPRS condition is considered in each period.If the goods issue posting is non-valuated the costs are determined from the sales order item. If the item has an account assignment object. that is.If the valuation is done at item level in a batch material the costs are determined from the sales order item. In this case revenues and costs are posted at different times.doc Page: 86 Of: 91 . which has to be recognized according to the new net value. The total difference is added to the value of the first open period (where VBREVE-RRSTA = 'A'). No check is done to see.doc Page: 87 Of: 91 . ¾ If the net value to be recognized in the item relevant for revenue recognition will be changed and if revenues have already been posted.Revenue Recognition . separate revenue lines are created. o In the customizing of the used data category. SAP AG File: RR_Best_Practice_Knowledge_Document_V1.Best Practice 8 Restrictions from SD side Knowledge Document o add a condition in the billing document ¾ If a billing plan is used. in case of already recognized revenues. the billing plan data has to be updated after the changes. e. that pricing occurs at item level and not at the level of the settlement periods. that the system considers the new situation in whole and checks. the system must enable a correction posting for the difference amount. This issue applies when using revenue recognition method ‘A’ or ‘B’. Then the billing value will be redetermined and the VBREV* tables are updated (except for the settlement periods that are invoiced). All rights reserved. which correction is necessary by comparing the old and the new amount for each period. Please have look to note 496721. Preconditions: o The Corr field (FPLA-AUTKORR) has to be set. For the new periods the amount. the pricing type must not be set to ‘B’. o If the new condition has its own G/L account. If the order item is relevant for ‘delivery-related-invoicing’ (FKREL = A). a new settlement period is added. ¾ If a sales order is relevant for performance based revenue recognition and adjustments are necessary in case of under/over the value. so that a correction settlement period is created within the billing plan and then the VBREV* tables are updated according to the change. will be set. ¾ If a condition is added manually in the sales document and also a time adjustment is done.g. which is assigned to the billing plan type. o If for the new condition the same G/L account is determined as for the other conditions. the existing revenue lines are updated and. if the condition is only valid for one settlement period. ¾ If a condition is added manually in the invoice. © SAP AG 07/2005. This is standard functionality due to the fact. the related conditions have to be classified in a way that they are no longer relevant for revenue recognition. This means. it is necessary to adjust the quantity of the order according the delivery quantity. not in the contract/order. and the new condition is using separate accounts. The value of those conditions will be posted directly to a revenue account and not to a clearing account. otherwise there is no VBREV* update. the value of the new condition is populated in revenue lines for the entire validity period and not only for the new settlement period. which will be invoiced has to be considered as revenue and posted to the G/L account. adjustment lines are created. ¾ Contracts with call-off orders using revenue recognition relevance ‘B’: SAP AG o The call-off order items have to be linked to a contract item (e. which are not done in the corresponding contract items. it is necessary to adjust the revenues and to complete the order process. Manually added items in call-off orders without link to a contract item are handled separately. the adjustment is only done. This is done by the system as soon as a reason for rejection is set. o Before invoicing. o After invoicing.g. if there was no invoice created and if the delivery was completed. File: RR_Best_Practice_Knowledge_Document_V1. there must be no changes to the condition values and/or time adjustments in the call-off order items. ¾ If a sales order is relevant for performance based revenue recognition and adjustments are necessary in case of a pricing change in the sales order.Best Practice 8 Restrictions from SD side Knowledge Document If the order item is relevant for ‘order-related-invoicing’ (FKREL = B or I). 8. there must be no changing of condition values and/or time adjustments in contract and/or call-off-order. All rights reserved. o There must be no over/under delivery of the call-off order items. o There must be no changes of the revenue recognition accounts (D/R account / U/R account). assortment functionality).Revenue Recognition . it has to be posted by a credit memo.doc Page: 88 Of: 91 . The creation of a credit memo with reference to a credit memo request doesn’t lead to the clearing of the balance and therefore a credit memo has to be created with reference to the billing document. If there is a difference between billed and recognized value.5 Restrictions for specific processes © SAP AG 07/2005. Because this is maybe impractical. balance sheet accounts are generally translated using the current closing exchange rate. SAP AG File: RR_Best_Practice_Knowledge_Document_V1. the account has to be set as ‘open item management’ otherwise the balances can only be updated in foreign currency. Non-monetary items should be reported using the historical exchange rate (the exchange rate at the date the transaction was recognized). reconciliation becomes difficult or impossible. but never to the revenues account. 9.e. ¾ To distinguish revenue recognition postings from other postings without revenue recognition-relevance on the revenues account the revenue recognition-values can be determined via header field BKPF-AWTYP (VBRR or former VBAK). but never to the D/R or the U/R account. © SAP AG 07/2005. ¾ Non-revenue recognition relevant invoice positions in the same invoice always post to the revenues account. that revenue recognition relevant invoice positions always post either to the D/R or the U/R account.Revenue Recognition . ¾ According to IAS. separate accounts shall be used. These rules apply in case the local currency is the functional currency of the respective subsidiary (which is usually the case). All rights reserved. Otherwise. ¾ For D/R and U/R accounts only revenue recognition relevant postings are allowed. all invoices are created and all revenues are recognized).Best Practice 9 Other restrictions Knowledge Document 9 Other restrictions 9. currency differences should be posted to a currency differences account (P&L account) affecting net income. To translate on a line item level.2 Translation of foreign currencies ¾ The translation of foreign currencies cannot be accomplished in logistics. ¾ The P&L accounts are to be translated using the rates at the dates the transactions were recognized. ¾ When the open items on the D/R or the U/R account are cleared at the end of the process (i. This means that only postings from invoices (with revenue recognitionrelevance) and postings from revenue recognition (VF44 / VF46) are allowed. According to this unbilled. appropriately weighted average exchange rates can be used.doc Page: 89 Of: 91 . For manually posted accruals or other adjustments. ¾ These rules for translation of foreign currency statements are similar to USGAAP rules.and deferred-accounts are not revaluated. ¾ The translation of foreign currencies is possible on line item or on balances.1 REVREC and NON-REVREC Postings ¾ Please keep in mind. Important precondition for running report ZZ_SALES_DOC_CHANGE is the implementation of note 568227. if necessary. ¾ As transfer of old data into the revenue recognition processes is required.doc Page: 90 Of: 91 . ¾ Monitor continuously the results of the revenue recognition processes .Schedule report ZZ_SALES_DOC_CHANGE / SDRRAV54. ¾ Important remarks to consider in the job planning: . ¾ Consider the latest version of the SAP R/3 Revenue Recognition Best Practices Guide. before 46C HP 49 or 470 HP 23 . consider SAPs consulting offering. ¾ Do not run VF44 and VF01 in parallel.see chapter 5. © SAP AG 07/2005. ¾ Avoid program modifications.Best Practice 10 Important to do´s Knowledge Document 10 Important to do´s ¾ Use go-live assessment offering in the implementation phase.Revenue Recognition .see chapter 7 and 11. review it by the external auditor of the company . on a regular basis to update the revenue recognition data in case of adjustments.see chapter 6. especially the latest notes on revenue recognition. ¾ Set up revenue recognition functionality by SAP certified SD and FI consultants and approve it by the responsible Head of Accounting and. The link can be found in note 779365. SAP AG File: RR_Best_Practice_Knowledge_Document_V1. All rights reserved. ¾ Implement the latest support package. when your system is not on the latest support package for your release.Never run invoicing in parallel mode with the VF44 of the revenue recognition process. Make sure that the functional enhancements are implemented . ¾ Don’t deactivate revenue recognition in the productive system landscape. Revenue Recognition . All rights reserved.doc Page: 91 Of: 91 . VA42. 11 Important notes 412660 Incorrect status in VBREVK after VA02.Best Practice 11 Important notes Knowledge Document © SAP AG 07/2005. VF44 508305 List of the FI/CO documents contains too many 521671 No currency translation for billing documents 568227 Account changes causes data inconsistencies 598997 Incorrect correction lines for condition change 618110 Incorrect balance in VBREVK for billing item value 628020 Incorrect correction items with category B 681790 Incorrect FI documents for accrual periods with 696466 Incorrect adjustment line for type 'B' with call-off 731869 No cumulation in billing documents with posting 734577 No writing of control lines without detail lines SAP AG File: RR_Best_Practice_Knowledge_Document_V1.
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