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Revenue Recognition ( RELNSD_605_SD_CI_02_RR )

Revenue Recognition ( RELNSD_605_SD_CI_02_RR )

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Revenue Recognition

Use

As of SAP enhancement package 5 for SAP ERP 6.0 (SAP_APPL 605), you can control revenue recognition in your company so that you fulfill the requirements stipulated by the IFRS (International Financial Reporting Standards) and US-GAAP (US General Accepted Accounting Principles) as best as possible.

Note:
The revenue recognition functions have a large impact on how revenues are deferred and posted. To ensure that the system is stable and is configured correctly, SAP offers a free service for checking your revenue recognition settings. For more information about booking this service, see SAP Note 820417 Implementation Guide for Revenue Recognition.

Activating the Functions

You enable the new functions for revenue recognition in Customizing for Sales and Distribution in the Activate SD Functions activity.

If you activate the new functions for revenue recognition, you can flag item categories as relevant for the revenue recognition process in Customizing for Sales and Distribution as well as make other settings for revenue recognition.
The accounting documents that are created in revenue recognition can be compressed on the basis of the summarization logic in Financial Accounting. Your financial accounting manager should approve the document compression and, if necessary, your external auditor should also check it. For more information, see the documentation for the activation indicator.

Process Control

Once you have activated the new functions, you can control the revenue recognition process in more detail.

Revenue Recognition

FASB Solution

You can control specific processes for selected company codes, for example, activate the FASB solution. You use these functions to implement requirement FASB52 (Financial Accounting Standards Board Statement 52) in revenue recognition, for example:

  • You use a fixed exchange rate during the entire accrual period for the postings to the accrual accounts (balance sheet accounts).
  • Gains and losses from exchange rate fluctuation only affect the profit and loss account.

Note:
If your company has revenue recognition processes in a foreign currency, you should definitely activate this function. For more information, see SAP Note 891585 FASB52(SD) Transferring the exchange rate date to FI.

SD Document Update

The SD Document Update function determines how and when the SD documents that are relevant for revenue recognition are updated. You can choose from the following activation types:

  • Update SD documents immediately when costs arise (such as at goods issue)
  • Flag SD documents for update and update them later with transaction VF42 (Update Sales and Distribution Documents).

Billing

Costs in the Sales and Distribution application are generally mapped using the cost (condition type VPRS) and posted to the Profitability Analysis application (application component CO-PA) using the billing document.
If the condition type VPRS is flagged as accrual-relevant, there is an accrual closeout in Financial Accounting and a posting is made to a cost account.

Depending on whether or not the costs are known at the time of billing, the system determines the cost as follows:

  • If the costs are known when billing takes place, the condition type VPRS contains the correctly determined cost. The cost does not have to be updated in this case (VPRS update function).
  • If the costs are not known at the time of bililng, you must correct the cost at a later stage.
  • It might happen that not all vendor invoices are available at the time of billing, or that billing takes place before goods issue. In this case, the billing document takes the cost from the sales document or from the valuation segment in the material master record.

  • If prices are changed after billing, the goods issue posting is made with the new price. This means that the costs in the billing document do not correspond to the actual costs posted with the goods issue. If the process is accrual-relevant, incorrect costs arise in CO-PA and the relevant accrual account in Financial Accounting shows a difference.

The cost must be updated to ensure that during a current process, the approximate correct costs and at the end of a process, the correct costs are posted in Financial Accounting and distributed to the relevant billing documents. You can do this by activating the VPRS update function.

Cost Update (VPRS Update Function)

Integration

The VPRS update function is only relevant for the Billing application and is executed in the following processes:

  • Third-party business transaction with and without reference to contracts
  • Goods issue with delivery-related billing
  • Goods issue with order-related billing
  • Goods issue with contract-related billing
  • Service contract release orders with contract-related billing

Time of update

You can use additional settings to control the VPRS update function in more detail. You determine when the cost should be updated.

  • Immediate update when the billing document is created (at goods issue, for example)
  • Later update by carrying out the following activities:
  • Update Costs transaction

Call in SAP Easy Access under Logistics -> Sales and Distribution -> Billing -> Billing Document -> VF_VPRS # Update Costs
  • Background processing (job scheduling for report SDINVUPDR)

Call straight from transaction VF_VPRS # Update Costs

Note on later update

You should schedule the VPRS update function or start it manually in the following processing situations:

  • You want to update the costs or transfer prices for certain billing documents, for example, if one or more billing documents were not taken into account before the new VPRS update process was activated.
  • If you have decided that the VPRS update should not take place until later in your company, the cost is not immediately updated for a cost-relevant update.
    The system first determines the relevant billing document numbers and writes them to a worklist.
Depending on the billing process, the worklist is updated at three different stages:
  • When the incoming invoice or vendor invoice is posted

  • When the goods issue is posted

  • When a contract release order for services is posted

The billing documents are then processed later, either using the transaction or background processing in the report.
For detailed information about the selection criteria for the worklist, default data for posting the change, and about the process control, see the application documentation for transaction VF_VPRS # Update Costs.

Effects on Existing Data

Activating Revenue Recognition Functions
You could previously activate and deactivate the functions for revenue recognition using a SET/GET parameter (SAP Note 835367 Activating SD Revenue Recognition).

  • If it has already been activated using the parameter, the system automatically sets the activation indicator to active.
  • Once you have saved your settings in the Activate SD Functions activity, the system controls the activation and deactivation based exclusively on the settings in this activity. You can remove the modification described in SAP Note 835367. For more information, see the documentation for the activation indicator in the Implementation Guide.

Updating SD Documents
The following error message previously controlled the update: Message class VA, message 313. As soon as you have saved the activation using one of the two activation types, message VA 313 is no longer relevant. As of this point in time, only the selected update type determines how and when the SD documents are updated.

Effects on Data Transfer

Effects on System Administration

There is no additional authorization check in the standard system. As long as you do not create an implementation, every user who has authorization for changing Customizing settings can make settings for revenue recognition.
So that only a restricted user group can execute this activity, the BAdI for Activating Functions BADI_SD_FUNCTION_ACTIVATION runs authorization checks. That way you can prevent users from changing or adding activation information.

Effects on Customizing

You carry out the following activities in Customizing for Sales and Distribution:

  • You can activate the new functions for revenue recognition under Basic Functions -> Account Assignment/Costing -> Activate SD Functions.
  • You can flag item categories as relevant for the revenue recognition process under Sales -> Sales Documents -> Sales Document Item -> Define Item Categories.
  • You can use the Business Add-In BADI_SD_FUNCTION_ACTIVATION in the Activate SD Functions activity to implement additional authorization checks, under Basic Functions -> Business Add-Ins (BAdIs) -> Define Additional Checks for Activating SD Functions.
  • In the Control Cost Update activity, you can use the Business Add-In BADI_SD_VPRS_UPDATE to determine which document type and number range the system should use for creating new documents.

Further Information

For more information, see the documentation on the IMG activities, report SDINVUPDR, and the application documentation for transaction VF_VPRS # Update Costs.






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Length: 11712 Date: 20240523 Time: 052029     sap01-206 ( 190 ms )