OKG3 Customizing RA Key to calculate Revenue recognition

Can someone throw light on how to configure PS RA Key to make the system calculate revenue based on POC percentage of completion. Need specifics around the valuation method and the overall scheme.
Thanks

Hi sridhar,
I am putting very short you need read lot of help for more information.
1 okg1 create new key
2 okg2 version 0 (will be there) turn extended control on and technical cost elements give a single cost element for the fields cost element category 31 RA. tick the indicator transfer to financial accounting.
3 maintain the combination Ra version and Ra key and select the 03 method cost based poc method.
4 maintain line id for costs, revenues
5 in okg5 assign all the cost elements to line id costs,
revenue elements to the line id revenues
6 in okg4 assign the cost line id to k and revenue line id to revenue category.
update the line id to cost elements
7 define the posting rules for cosr ans wipr rucr.
please include the cost element in your allocation structure or else it will throw you a error at the time of settlement.
I tried put it very simple, But it requires lot of reading the sap help to understand in detail.
Thanking you
Vengaiah Chowdary

Similar Messages

How Revenue Recognition value calculate in VF45 for an item

Hello Experts,
I want to know how system calculates Revenue Recognition for any item in VF45. I know the configuration part of Revenue Recognition but want to know the calculation part, how calculation going to find out the vale of the Revenue recognition.
Item net price is 3139255.45 and system calculate Revenue recognition for this item is 3139020.94.
I want to know how calculation going for Revenue recognition.
Can any body help me out ? any link /document related to Revenue Recognition Calculation (not configuration) please share with me.
Thanks,

Hello Prasanth,
For example :- Maintaining an annual Price ZPRC - 1200 and Billing plan is Annual
So, while recognising SAP takes 1200 / 365(Number of days) = 3.287 per day
For jan - 31 days - 31*3.287 =101.91
For feb - 28 days - 28*3.287 = 92.05
Thank you for your time.

Custom Depreciation Key

Hi gurus,
we'd like to create a custom depreciation key which calculates a fiscal depreciation following this rule:
80% of the IAS depreciation.
We tried to use the user exit EXIT_SAPLAFAR_002 without results.
Can you please provide me any suggestions about customizing settings needed and the correct user exit to be used?
Thanks to all.
Best regards.

I've found this SAP note: 1131960. It means that there are two BADIs to use: FAA_DC_CUSTOMER and FAA_EE_CUSTOMER. The user exit EXIT_SAPLAFAR_002 has been replaced by FAA_EE_CUSTOMER->SET_PERCENT_AMOUNT method as specified by SAP note. This is the start point for my custom immplementation...
Hi to all.

Pricing procedure not to bill customer but revenue recognition

I'm looking for guidance on how to setup a pricing procedure conditions. First let me explain the situation. What happens is the customer buys say 2000 software licenses on a sales order. The customer is billed and the customer account is debited and a deferred account is credited. Now the customer activates one of the licenses. The pricing from the sales order is copied to a contract. This contract has a start and end date for the license. Now that license can start to be recognized based on the period of the line item contract dates.. The issue we have is that normally for deferred revenue billing takes places. Problem is customer was already billing on the sales order. Somehow the pricing procure has to credit the deferred account that was posted on the sales order and then credit the revenue recognition account that can be used by transaction VF44.
So on the invoice associated with the sales order Invoice from sales order
Dr Customer $1000
Cr 2370 $1000
The account 2370 is the deferred account. This part is fine.
Now we activate 1 of the licenses.
So the pricing procedure has to do the following with no billing to the custo0mer account Invoice from contract
Dr 2370 $120
Cr 2371 $120
This is the problem part. crediting the deferred account 2370 and then posting into the revenue recognition account 2371
Rev Rec – VF44 for Period1
Dr 2371 $10 Cr 4340 $10 Any ideas would be appreciated

Hi
In SD billing documents customer is always debited or credited based on nature of transaction. For posting in two different G/Ls instead of customer account there is only one possible way which I know. In free goods pricing system can post debit and credit entries to different G/Ls and these G/Ls are controlled through account keys which you assign to condition types in pricing procedure.
Do you have any Idea of free goods pricing and its posting? Explore this and give it a try. I am not sure about this because I didn't test this. You can test and see if it helps.
In this for contract item category you have to use free goods pricing which you set in item category settings in VOV7.
Thank$

Revenue Recognition Functionality through Result Analysis (RA) key

Hi all,
We have a requirement for Revenue recognition, Can anyone guide me Revenue recognition functionality through Result Analysis (RA) key and functions of RA Key .
Regards,
Lal Maheswararao

Hi Makrand,
Thank you for your Valuable reply. Actually I am looking Specifically for the Revenue Recognition functionality in Cloud computing Business Scenarios. Like the income has to be recognized over the period of time on the basis of service provided. And it should calculate Percentage of completion for calculating revenues and Cost and how much profit it has to be recognised over the period.
These functions will possible through Result Analysis method. but i have very limited knowledge about RA method.
Can you please explain in general how Result analysis method will work and if possible with necessary configuration.
Regards,
Lal Maheswararao

Revenue Recognition based on User Status of assigned Sales Order line item

Dear Community members,
We have requirement to recognize / de-recognize revenue posted to WBS for calculation of RA, based on the 'User status' of the assigned Sales Order line item.
To elaborate requirement further -
1) WBS Element - XXX - 10 ( with operative indicator - Plan/Bill/Account Assign)
2) Sales Order(SO) Line Items assigned to the above WBS -
- SO No - 123 Line Item 10 - Actual Rev - $ 300 - User Status - EXE (Meaning this work is in progress , partial payment received thus actual revenue for RA at WBS is 'Zero'
- SO No - 124 Line Item 20 - Actual Rev - $ 400 - User Status - COMPL(Meaning this work is Complete , all payment received thus actual revenue for RA at WBS is $400
- SO No - 125 Line Item 10 - Actual Rev - $ 800 - User Status - EXE (Meaning this work is in progress , partial payment received thus actual revenue for RA at WBS is 'Zero'
As per WBS reports Actual Revenue posted to WBS XXX-10 is $ 1500 ( $300$400$800) , however since two SO line items ( SO 123 /line item 10 and SO 125 / line Item 10 ) are NOT having User status 'COMPLETE', the actual revenue posted by those line items $ 1100/- ($300 + 800) should not be included as Actual Revenue for RA at WBS level.
Thus Actual Revenue for RA at WBS XXX-10 should be $ 400 /- ( the revenue posted by SO 124/line item 20 which has user status as 'COMPLETE')
How do above can be achieved?? Is there any standard solution for this?? Is any SAP Note available for this (I too am looking for one but not found any ) ?? do we need any enhancement , Customer exit etc
Thanks in advance
with regards

Hi,
Thanks. You are right that the 'Completed Contract Method' would defer revenue recognition. However, the status checked would be of the RA object (WBS Element in this case, as RA key is on WBS and RA is being calculated on the WBS).
However, our requirement is to check the user status of the Sales Order Line items assigned to the WBS element and filter the revenues posted based on the active user status of individual Sales Order Line item.
Please give you inputs.
Thanks in advance
With regards

Help on Revenue Recognition

Hello Friends,
I’m hoping someone can help me in answering the following questions.
Example of a bundle solution that includes product license, education and consulting services. One parent SKU that auto-explodes into three child SKUs – product, education, consulting.
1. Booked revenue is allocated to one PL (based on parent SKU). Do we need to create a new unique PL? Can this be re-allocated to 3 PLs? How is this done?
Example of a Education blended offering which includes different delivery methods – ILT, video-ILT, eLibrary (WBT modules) and certification. One parent SKU that auto-explodes into the child SKUs. Each child SKU will trigger the appropriate behavior similar to the standalone offering. Customer will need to get a voucher for each component to redeem against.
2. Can we still track revenue for each delivery method and certification by the child SKU? If not, why not and how can this be done?
3. Will revenue recognition be handled separately for each component (child SKU) or as part of the bundle, by the parent SKU. For example, we send the customer a voucher for each component, sometime revenue can be recognized when the voucher is sent to the customer (eg. WBT can recognize revenue immediately once the voucher is sent to the customer).
4. Issues/requirements we need to be aware when setting this up?
Thanks for all the help...
Vijay

Hi
But the error is related to controlling . Just go to OKKP and check wheather you have checked in the controlling area properly or not
make the following down payment configurations
item category group - 0005
item category - TAO
for this TAO item category a billing plan 01 (milestone billing plan -01) will be assigned and its billing relevance should be I which is order related billing .
billing doc type - FAZ
cancellation billing doc type - FAS
maintain a condition type AZWR which is down payment settlement , it has requirement as 2 and calc type as 48 acct key as ERL
Now when you enter a material in line item 10 and go to item data , you can see the billing plan tab.
now go to billing plan tab and enter the start date and enter the dates on which billing has to be done and then in billing request enter 0009 which is for down payment.once u press enter automatically it all the dates get blocked and billing request by default you get as 1 , that you change it to 4 or 5 . 4 is for down payment at value basis and 5 is for down payment at percentage basis. and beside that there will be a billing type .assign billing doc type as FAZ. to all dates
check the copying requirements are there at VTFA as 20 and for item category TAO copying requirements 23 is maintained or not
now do the cycle OR - LF - FAZ (billing doc type)
Regards
Srinath

Revenue Recognition with RA on Service Contracts

We have configured SD Revenue Recognition function (ECC 5.0). We have warranty maintenance contracts running. On this basis we have the following scenario and issue.
The warranty maintenance contracts are created without a billing plan (Reqmt. type SE so that we can settle costs later). The value of which is transferred to Deferred Revenue Account and is recognised at the end of the contract period (As it bears the retention money with the customer). Until this step things are working fine. We use VF44 to recognise revenues.
However, there are costs incurred (both material & labour) in relation to such contracts. To track this, we create a Service Order s against the Service Contract for each month. Later on fulfillment, the orders are settled to the Service Contract. This is reflecting in the Service Order. But the finance team wants to recognise the revenues to the extent of costs incurred. I'm not sure how we can do this. The following is an example scenario.
Contract Value : $1000
Contract period : 1 yr (1.1.2010 to 31.12.2010)
Contract billed at the start of the year on 1.1.2010 so the amount is moved to Revenue Provision (Deferred Revenue)
At the end of the year $1000 lying in Deferred Revenue will be moved to Revenue Account through Revenue Recognition (VF44)
Now, costs incurred as follows which are booked in separate service orders against the contract and on completion, settled to the contract. There is no definite schedule for these costs.
Apr 2010 : $100
Jun 2010 : $200
Sep 2010 : $500
Now, the finance team wants to recognise revenue to this extent during the relevant periods. For eg.
Apr 2010 :
Deferred Revenue A/c $100
To Revenue A/c $100
Jun 2010 :
Deferred Revenue A/c $200
To Revenue A/c $200
Sep 2010 :
Deferred Revenue A/c $500
To Revenue A/c $500
And at the end of Dec 2010 :
Deferred Revenue A/c $200
To Revenue A/c $200
(for the remaining amount)
Can anyone guide me how this can be achieved? Can I do it by running RA on Service Contracts?
Thanks in advance.
Ravi.

One option:
This is how we do it in my company. This scenario is of committed services where biling is based on bill plan but revenue is as incurred. So you will bill 100% in advance to have a deferred position but evey month you calculate the service delivered/incurred and recognize the revenue reference to that service. You have to deliver the equivalent hours (To match the amount you want to recognize) and the VF44 based on delivery document. You might have to adjust your ETC based on the amount you want to recognize every month and the total qyantity to deliver.
In summary, basically you use following steps:
1. Sales order with delivery related item category (Assigned to service contract, in my case we use WBS).
2. VF04 for billing as per plan
3. VL01N to deliver the quantity matching the amount
4. VF44 with reference to delivery.
Item category has revenue recognition 'B'.
Hope it gives some idea.
Thanks.
Rahul

Revenue Recognition based on percentage of completion of work.

Hello Experts,
My customer has the following scenario for revenue recognition.
My customer sell services. So I create a project and attach to the sales contract which has mile stones for billing.
After completion of milestones, billing is triggered automatically. No issues on this part.
When comes to revenue recogntion, they recognise the revenue after the work completion and nothing related to billing.
They take forecasted manhours(planned hours) for the services and take the time sheet hours (actual hours) and calculate the percentage of completion. They apply the percentage in revenue and based on the percentage of completion, they do revenue recognition.
My questions..
1. Is this a standard functionality in SAP? My customer is in sap 4.7
2. If this is not a standard functionality, then how to tackle this issue. Is there any work around?
Any type of help would be grateful.
Regards
Srinivasan Desingh

Hello,
The Best Practices document alongwith the scenarios supported in standard SAP is available as an attachment in the Note 1172799.
Regards,
Raghavendra YN

Revenue Recognition Accounting in PS Results Analysis

I am trying to understand certain aspects in the accountng involved for the process of Results Anaysis. In my case, we have configured RA for revenue recognition and all is working well. We have a project that has a billing element and an account assignment element under it. Invoices go to the billing element, costs go to the aa elemet. RA key is entered on the billing element. RA calculates Revenues and COS and the billing element settles them to PA. While calculated, defered and unbilled revenue post to FI using OKG8 configuration settings. All is fine on the mechanics of this.
What I do not understand is the treatment for the actual costs. Are they supposed to be settled to PA as well? If so...then, the costs seem to double up in PA (COS from RA calculated based on the actual costs via the billing element and Actual costs themselves from from the aa element). Are the actual costs supposed to remain in the aa WBS element and not be settled? It seems unbalanced. Can anyone explain?

Hi,
Settlement process involves a sender object and a receiver object. Receiver object is the cost object on which actual cost incurred in the sender object is settled. RA is one of the receiver objects for settlement, but not the only one.
Your scenario seems to be periodic calculation of WIP (result analysis) and final settlement of production orders.
The periodic WIP (RA) postings done in FI are reversed and replaced with COGM when the production order is finally delivered. The entries in FI at this stage is based on the "Standard Price" maintained in the material master (depending on the valuation variant). Then the final settlement of production order takes place and the total actual cost is arrived at. The difference in cost between "actual cost" and standard price" is settled to RA as a separate entry.
The reversal of entries when the production is delivered (as explained above) ensures that cost is not reckoned twice.
Hope this explanation meets your requirement.
If so, you may like to close the thread. Otherwise, please revert.
Muraleedharan.R

Revenue Recognition calcolation...

I have a problem with periodic task "Revenue Recognition". When I launch the execution, for example, for the month of September, the system does not calculate the schare of accounting of revenue but it relize all amount of revenue. I want to understand why the system does not execute the right calculation.
Please can you explain me this situation?
Thanks

Hi Andrea,
I believe you are referring to accrual method "percentage of completion" calculation process
Lets take for instance Sales Order % POC calculation.
Calculated POC = ( Actual Cost / Estimated Cost ) * 100 %
For Item 123-10 , Calculated POC = ( 14277 / 8550 ) *
100 % = 166.98 %
For Item 123-20 , Calculated POC = ( 0 / 8550 ) * 100 % = 0 %
================
Also refer to
1.Revenue Recognition for Project Sales - help document
2.Revenue Recognition for Customer Contracts - help document this may help.
Thanks
Lokesh Sharma

Revenue recognition through RA

Hi CO and RA Gurus
Does any one know how to do Revenue Recognition using Result Analysis Keys.
thanks
KT

Hi,
Result Analysis:
Overview:
The objective for calculating Work in Process (WIP) is to determine the value of manufacturing activity in process at the end of a fiscal period, during a fiscal period and to properly reflect this value on the financial statements. WIP calculation is a facet of Results Analysis (RA). RA is a specialized tool within the controlling module that computes and analyzes the value of WIP. The terms WIP calculation and RA are generally interchangeable.
Results analysis is used to:
a. Calculate the inventory value of finished and unfinished products in a non-valuated project stock or non-valuated sales stock environment or
b. You are using a valuated sales order stock or valuated project stock and want to capitalize goods that have been delivered but not yet invoiced.
The difference between SAP and other systems is in the treatment of material consumption for manufacturing. Component issues to production orders, run schedules, WBSs, etc is immediately treated as an expense to the P&L statement. The issue is not treated as a reclassification from raw or semi-finished inventory to WIP inventory. SAP considers WIP to be a snapshot of values that can be computed on demand and passed to the general ledger as required to re-class the values to the balance sheet. This process demands a specific, methodical approach to be used for period-end and mid-period processing. Rules used to calculate the value of WIP and settle WIP to the G/L are defined in multiple RA tables depending upon the requirements of the company. RA is designed to support a variety of calculation techniques and there may and are alternate settings depending on the demands of the company. To support the configuration, scenarios and unit testing need to be thorough. RA needs to be configured towards the middle of the of the implementation with subsequent testing. This will allow for configuration of the data needed to support WIP and RA (chart of accounts, production orders, projects, cost centers, cost elements, etc.)
Configuration Transactions:
OKG1 u2014 Create Results Analysis Key
OKG2 u2014 Results Analysis Version
OKG9 u2014 Results Analysis Version
OKGC u2013 OKGD u2014 Valuation Methods
IMG SPRO u2014 Define Line IDs
OKGB u2014 Define Assignment Mapping by incoming charges by cost element to line IDs
OKG5 u2014 Define Assignment Mapping by incoming charges by cost element to line IDs
OKG4 u2014 Define Update
OKG6 u2014 Define Number Ranges
If your done with RA configuration and posted actual cost,plan cost and plan revenue.
you can calculate revenue recognistion using KKA2 T.code for projects.
Hope this helps you.
Thanks,
Rau

Revenue recognition report

Hi SAP gurus,
I am developing a deferred revenue report in revenue recognition. Can any one please explain the best process to capture the data from relevant tables?
Thanks,
Raj

Hi
There was 1 report required for our customer to see deffered revenues , i have given following functional requirements.
Tables and fields used in our report.
u2022     VBERVE u2013 BDJPOPER, PRCTR, GSBER, VBELN_N, WRBTR, SAKRV, WRBTR, BELNR.
u2022     VBAKu2013 KUNNR.
u2022     VBAP u2013 VBELN, MATNR, ARKTX, POSNR, PSTYV, NETPR, PS_PSP_PNR,
u2022     KNA1- Name1, ADRNR.
u2022     ADRC- COUNTRY, REGION.
u2022     BKPF u2013 AWKEY, HWAER, HWAE2, BUKRS.
u2022     LIPS - LFIMG, VBELN
Step 1:
u2022     From table VBREVE, get all sales order nos. (VBREVE- VBELN) where the subsequent document category VBREVE- VBTYP_N = u2018Ju2019.
u2022     VBERVE u2013 BDJPOPER, PRCTR, GSBER, VBELN_N, WRBTR, SAKRV, WRBTR, BELNR.
Step 2:
u2022     With VBREVE-VBELN, go to VBAP where VBREVE-VBELN = VBAP-VBELN
u2022     Get all sales order line items VBELN, MATNR, ARKTX, POSNR, PSTYV, NETPR, PS_PSP_PNR, and VBELN_N from VBAP.
     Step 3: Concatenate SAMMG & REFFLD in VBREVE and put in BKPF-AWKEY join BKPF.
     Step 4: Currency key
Document curr = bkpf-waers.
local curr = bkpf-hwaer.
group curr = bkpf-hwae2.
     Step 5: Exchange rate
lexch = bkpf-kursf. (local currency)
gexch = bkpf-kurs2. (group currency)
Amount
VBREVE-WRBTR = amount in doc currency
damount = amount in doc currency
lamount = amount in local currency
gamount = amount in group currency.
Account = g/l account.
damount = -1 * vbreve-wrbtr.
          IF lexch LT 0.
            lexch = -1 * lexch.
            lamount = damount / lexch.
          ELSEIF lexch IS INITIAL.
            lamount = damount.
          ELSE.
            lamount = damount * lexch.
          ENDIF.
          IF gexch LT 0.
            gexch = -1 * gexch.
            gamount = lamount / gexch.
          ELSEIF gexch IS INITIAL.
            gamount = lamount.
          ELSE.
            gamount = lamount * gexch.
          ENDIF.
          account = vbreve-sakrv.
Step 6: Get KUNNR from   VBAK.
Step 7: Join KNA1 and VBAK to get customer name Name1 with KUNNR.
Step 8: Join KNA1 table with ADRC to get country and region with joining column ADNR.
Step 9:   Join LIPS table with VBELN to get LFIMG for delivered Qty
I have pasted FS document prepared by me for this report, hope this helps u.

SD Revenue Recognition-SAP Audit

Hey Experts,
I understand that before we could go live with SAP SD Rev Rec functionality, post UAT, we need to present the system with complex scenarios for SAP Audit.Upon their approval only, it is suggested to move the design to production.
Could some one who have gone through such SAP Audit tell me
-->Min / Max duration for the audit
-->Share experiences like expectation from SAP, any corrections suggested post audit by SAP etc
Awaiting for earliest response
Thanks in Advance
Banu

Hello Banu,
The assessment is a free-of-charge service SAP offers to
ensure that mandantory conditions and customizing settings are met.
The prerequisites are reported in note 782758.
Initially you have to fillup the questionnaire which SAP sends.
Once the Activation key is provided, you have to do the testing of the processes in the TEST/DEV system.
Then the test cases have to be provided to SAP for assessment.
SAP then gives you the approval to use revenue recognition in your
PRODUCTIVE system after SAP has reviewed the testing data you provided
and don´t find an error.
This assessment is necessary in order to get future support by SAP
in terms of the revenue recognition functionality.
Please inform SAP at least four weeks before you go live with the
revenue recognition functionality.
Regards,
Raghavendra YN

Price Change for Revenue Recognition

Dear experts,
I am using Revenue Recognition of type B with Revenue Recognition before invoicing.
I have an issue/question about the way price changes are treated in the functionality.
The below example is used to describe the issue for your understanding:
1.Pricing master data: $100/EA
2.Price of item in sales order: $100/EA
3.Qty in sales order: 10 EA
4.Delivery & Goods issue: 10 EA
5.Revenue Recognised (VF44) for: $1000
Accounting Entry:
DR Unbilled Accounts Receivable $1000
CR Revenue $1000
6.Change in pricing master data: $120/EA
7.Partial Invoice for: 2 EA @ $120/EA
Accounting Entry:
DR Customer $240
CR Unbilled Accounts Receivable $240
8.Partial Invoice for balance qty: 8 EA @ $120/EA
Accounting Entry:
DR Customer $960
CR Unbilled Accounts Receivable $760
CR Deferred revenue $200
9.Subsequent Revenue Recognition (VF44)
Accounting Entry:
DR Deferred revenue $200
CR Revenue $200
As you can see in the example above, the amount of the price difference is not credited to sales in step 7. From what I have seen so far the additional amount due to price difference gets credited to sales only after the total invoice value for the item exceeds the revenue recognized.
Is there any option to set the system so that the price difference is taken into account for revenue recognition during each invoicing (even
when the invoicing is partial) ?
Thanks in advance for your help.

The price difference will not go to Sales in Step 7. The reason being Revenue Recognition works on the item rather than the amount. Since you have run F-44, the system finds the same in Unbilled Receivables and posts to that account.
For updating the price changes, you have to run VF46 to cancel the original RR entries. In this case, it will just clear of the RR lines if realization has not happened and post a reversal if realization has happened. This txn will also create a new RR line for VF44 which you can process.
Refer Note 820417 Implementation guide for RR. Download the attachments and look into Part2 doc page 13. This explains how to deal with price changes in sales document.
Hope this helps.
Ravi.

OKG3 Customizing RA Key to calculate Revenue recognition

Similar Messages

Maybe you are looking for