Revenue recognition for Fixed price project

Dear Friends,
We are facing an issue with revenue recognition. This is with regard to fixed price project(Item catagory: FPR) wherein process follows with Sales order-->Delivery-->PGI--->Revenue recognition(VF44). Revenue recognition is carried out with reference to the delivery document.
After completing revenue recognition w.r.t the delivery document, still document is appearing in VF44 for revenue recognition. My understanding is it is not supposed to be appeared in VF44. One more thing is in VF44 "Follow On" document is appearing as Sales order number.
please suggest how to fix this issue.
with regards,
S Dayananda Murthy

Dear Dayananda
I think if you see Document number in VF44 It means That document is successfully Posted

Similar Messages

Multiple Revenue Recognition Methods on a Project(Task Level)

We have projects where certain portion of revenue is recognized based on events(ex: equipment shipment) and certain portion is recognized as cost is incurred(Percentage of Completion).
In Oracle Projects we can have only one Distribution rule for Revenue per project and doesn't allow to have different Revenue distribution rule at the task level.
Business case: Project is for Equipment and Additional Service is purchased, separate tasks are created for Equipment(Task#10) and Service(Task#20).
Billing is based on Events.
Equipment(task#10) revenue is recognized based on order line shipment(event created),
revenue for Service(task#20) is recognized as Cost is incurred to perform the Service, based on POC calculation.
Following is what we tried as Proof Of Concept:
Funding is at Task Level (set at Project Type), Baseline Funding without Budget is enabled(i.e Revenue budgets are created when funding is baselined)
Billing extension Cost-to-Cost Revenue is assigned on project type, Forecast Cost Budget is used in calculations
Set the distribution rule on project to COST/EVENT
On tasks for Equipment(Task 10), we entered $0 Forecast cost budget
On tasks for Service(Task 20) we entered a $$ Amount(non zero) for Forecast Cost budgets.
Task 10( Equipment - Event based revenue), $0 Cost budget
Create Costs on task 10, Distribute, Account, run the processes to generate revenue
Create a manual revenue event for equipment shipment
Revenue events from Billing extension are not generated, since there is no cost budget, Revenue is generated only for the manual event we created - This works as expected.
Task 20(Service - POC based revenue), Cost budget is $10000 (for ex:)
Create Costs on task 20, Distribute, Account, run the processes to generate revenue
Automatic Revenue events from Billing extension(Cost-to-Cost Revenue) are generated, since there is cost budget, Revenue is generated based on POC calculation.
Questions:
With the assumption that we will not maintain forecast cost budgets for equipment tasks and use the standard Cost-to-Cost Revenue extension.
We would like to know what is the impact of the above solution option on standard Project Billing functionality and any others.
Any other workarounds to achieve what we are looking for(i.e multiple revenue recognition methods on a project)
How others achieved similar business requirement with Oracle Projects(At present we are creating a 2nd project for Service component) and it has it's cons(consolidated billing etc, since we will be funding 2 projects)
Harish

Dear Harish,
I am not sure i have a perfect solution but you can try this.
Set Billing extension to Cost/Event (Percent complete revenue) this will be used for all the scenarios where revenue should be recognised by the system like Ex: Task20
Use Pre-Approved batches for rest of transactions where the cost directly effects the Project.
Regards
Shaan

Revenue Recognition Process in Oracle Projects

I am new to Oracle Projects and needs to understand the Revenue Recognition process.
User has created one Contract under which he has Intercompany Billing, Costing and Elimination Projects. He booked the cost under the Costing project and then ran a custom elimination program to eliminate the intercompany cost. Now he is going to the billing project and running the 'Generate Draft Revenue' program however nothing is getting generated. He wants to know why revenue is not getting recoginised.
Is it the correct way of recognizing the revenue. The Distribution rule being used is Event/Event however no event has got created in the billing project to recognize the revenue.
Please suggest.

Hi ,
The subcontracting process can be exceuted in the following way..
The modules involved will be PA, PO, AP..
This can be handle with the P2P cycle..
Raise a servie PO with the project information in the PO distributions for the service that needs to be subcotracted..
specify the matchig option in the PO Shipments
Enter a receipt (Optional)
Enter a AP invoice and match it with PO or receipt as per the requirement and then run PRC: Interface supplier costs..
this will post the expenditure in the Projects.
In addition to the above i fu have complex PO (with helding some portion of the order amount as retention, advace payment to be provded)
this can be handled through creating the PO through selfsevice PO which accomodates this functionality.l
Thanks
Vijay.

Revenue Recognition for existing orders

Hi friends,
I have a requiremnt to Migrate the old and valid contracts which has not been activated Revenue recognition has to be activated with revenue rcognition.The total number of contracts/orders would be 5 lakh recordes.For the same orders part of the billing plans are billed.
Hence forth which all are going to be billed should pick the revenue recognition.
The above changes should be updated in Production environment
Can any body suggest the process to update the existing documents.
Thanks in Advance
Narendra
Message was edited by:
narendrababu dabbara

Dear Dayananda
I think if you see Document number in VF44 It means That document is successfully Posted

Revenue recognition for sub-item

I have a product called Term license, when i enter this line item in sales order, automatically i should get a sub-item warranty under it (which is only for internal purposes).
And suppose the price of the product is $1000/-, 10% of the cost of this product (i.e. $100/-)will be considered as the cost for warranty for 12 months.(The warranty is not billed separately to customer, but internally the 10% of the cost is considered as cost towards providing warranty support.)
The customer gets billed only for Term Licence and the warranty piece does not show up in the invoice. The revenue for licence part gets recognized based on the milestones completions 10/70/20%. So $900 is recognized for the term licence.
Then warranty period starts once the milestone of 70% is confirmed. And from that time the revenue $100 is split for 12 months and then this revenue is recognized monthly based on billing.
Can anyone guide me how we can set up this configuration.
Regards,
Ajay

Hi Ajay,
As far as I understood that you want to realise the warranty amount of 100$ from the customer once your 70% milestone is completed.
I think you can start realising this amount along with the license cost with each milestone.But keep your money in the deffered account.Once your 70% milestone is reached then you can start running the transaction VF44 one by one for each line item.
In this case your revenue account will only get hit once the 70% milestone is reached.
Reward points if it helps.
Regards
Karan

Revenue recognition for a customer

Hi
If a customer is located in India and company i.e company code is also in India .However if customer also wants the goods to be deilvered in singapore and if company has branch in singapore too,please let me know as per accounting rules where should the company be recognising the revenue in singapore or India.
Regards

It depends on whether the Singapore is a separate company code or not. In most cases, any overseas branch will be created as a separate company code to fulfill the local reporting needs. Therefore it becomes a separate legal entity.
If you are selling the goods from India company directly to the customer without involving the Singapore company, then the revenue will be recognised in India company only. Singapore will have no part to play in that.
However, if you are transferring the goods to Singapore branch and that in turn makes an invoice for the Customer, then Singapore will recognise the sale (revenue) from the Customer and India company will recognise the sale (revenue) from the Singapore company (Here Inter-company sale-purchase transaction will happen, Singapore will recognise the purchase from India company because both are two independant legal entities).
Ravi.

Revenue Recognition (AR Closed for future month in error)

Need help with revenue recognition. In the month of June in AR July was opened in error, so it was put in to close pending. Since July was closed the last 3 days worth of June invoices did not have any revenue recognition for July. Instead July's revenue was posted in to August since August was showing as a future period, and July was closed. Is there any fix to change the revenue recognition without doing a credit and rebill of 3 days worth of invoicing? If we reopen June, and run revenue recognition again, will that help? Thanks in advance for any help.

Well there are a few ways you can go ahead and fix this, but it depends on lot of factors.
Lets say you have 1 invoice for which the revenue has been recognized in August and not July, now you can query up that invoice in the transaction's workbench and incomplete it. After incompleting all the revenue recognized distributions would be deleted(applicable 11.5.10 onwards) and when you complete the invoice again & run the RR program the revenue would be recognized in July(provided it's in an open status). Please note though that you can incomplete a transaction only if it doesn't have any activity against it!
Now coming to the real world it's possible that the number of transaction's you have could be quite large and doing this manually through the screen might not be feasible. So you could possibly write a small pl/sql script to loop through those invoice's and incomplete them by calling the complete/incomplete group transaction's api. And then again complete them and re-run RR program to complete the fix.
Please note though that you can incomplete a transaction only if it doesn't have any activity against it!
With posted transaction's or transaction's having other activity, it's possible to fix them too but that would be taking things too far and Oracle Support/Development would be best equipped to provide you the fix in that scenario.
HTH,
Jasmeet.

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.

SD Revenue Recognition-Account settings for deferring COGS

Hi Experts
In the current process, COGS, cost of goods sold is getting posted into the COGS G/L account, while creation of billing document.
In VF44 transaction, we find option for VPRS cost being captured against every line item & are available for posting along with revenue line.
In that case, if we have to defer the COGS while creating the billing document & would recogonize it while running VF44 alone with the revenue lines, could you suggest me the account setting to be done for the same?
Anticipating earliest responses
Thanks
Banu

hi
820417 - Implementation Guide for Revenue Recognition
779365 - Best Practice document for revenue recognition
REVENUE RECOGNITION
In revenue recog. you can create your billing documents and they will be passed to accountings.But in this case your customer account would be debited and deferred accounts would be credited.
The purpose of revenue recognition is that you can post all the revenues from a deferred account to sales revenue account for a particular period together for all the docs. through transaction VF44.
if you can se your sales docs no. in VF44,then your revenue recognition is successful.Press on collective processing inside VF44 for posting the revenues from deffered acc to sales revenue account.
Configuration part includes the setting of revenue recog. in item category by following the path sd-basic functionsaccount assnmnt/costingrevenue recog.
Then you have to assign G/L accounts.In the first column of assigning g/l accounts ,enter your sales revenue account and in the second column enter deferred revenue accounts.Deferred revenue account is a spcl g/l account.
Don't forget to enter reconcilliation account in your customer master as well.
It may happen that in revenue recog item categories fields may greyed out but you have to get authorization for your id from a basis guy.
:The point at which revenue (income) is credited to a revenue account in General Ledger. There are three possible types
Time-based : Revenue is recognized in equal proportions between specific start and end dates based on the number of posting periods defined at the company level. Revenue recognition for time-based documents can occur before, during, or after the invoice process.
Performance-based : Revenue is recognized based on the occurrence of certain events such as goods issue or the performance of a service. Revenue recognition for performance-based documents can occur before, during, or after the invoice process.
Standard : Revenue is recognized at time of invoice:
The specified item was not found.
Re: Revenue Recognition
CONTRACTS
Lets take standard CQ contract type:
First maintain customer - material info record in VD51 T-code
Secondly maintain pricing for customer / material or only material combination in VK31 / VK11 T-code
Then use VA41 T-code to create a contract
VA42 to change contract
VA43 to display / view contract
In VA41, enter the document type CQ, followed by the sales area details,
Enter Sold to party.
Enter PO number
Enter PO Date
Enter Validitiy from Date
Enter Validity to Date
Enter Material
Enter Quantity say 999,999,999 or any other higher quantity as it is referred again and agaain
Hit Enter.
Save.
regards
balajia

Customization for revenue recognition

Can anyone advise why the customization setting for revenue recognition is greyed out? This is related to the setting against the item category.
Path : SD => Basic Functions => Acct Assignment/Costing => Revenue Recognition => Set revenue recognition for item categories.
Is there some other settings need to be done first or is this customization accessed from other path?
Thanks
Peter

Hi Peter,
It's the correct path you are accessing! No prior settings required.
It's working fine for me peter.
Try once again.Ensure that you are in change mode.
Regards,
Raghav
Edited by: Raghav on Jul 8, 2008 12:55 PM

Error "Enter section code" while doing revenue recog for Korea company code

Hi
While doing revenue recognition for a sales document using VF44 for Korea company code , i got an error to "enter sectio code".
There is no WHT for the customer, only VAT is entered in the sales price.
How to resolve this issue, Please help.
Thanks,
Vaishnavi

Resolved.

Revenue recognition job hangs and needs reboot of servers

We are on SAP BPC v7.0 SP6.1, using Microsoft Office 2007 and Internet Explorer 7. We have two environments - Production and QA. Production so far is running fine; QA is on a smaller environment.
I am an application user and load final production files into QA each month. For the past two months when trying to run the revenue recognition job for April 2010 and again for May 2010, the job just hangs where it would normally take about two minutes to complete. Both times it was the only job running at the time, as no one was using the QA environment. I had to terminate the job (which might leave the job running in the background) and have our Server team reboot our two servers (Application and SQL Server Analysis Services). Then the revenue recognition job completes.
Depending if I terminate and resubmit the revenue recognition job, I might get the following detail log message:
Execute formulasError
Failed to commit transaction
1 errors writing data
Send through SendGovenor failed
Last week, our DBA set the QA databases to Simple instead of Full recovery and shrank the transaction log files. I ran a test revenue recognition for July 2010 and the DBA tried to monitor the environment, but he could not see any job committing or any activity on the database. I ended up rebooting our servers to complete the test.
Has anyone experience similar problems and was able to resolve it. Any ideas would be appreciated. Thanks.
Bucky

Hi Sorin Radulescu,
I load the initial billing file using the Import logic script and select the data file and transformation file. I click on the Merge data values option; click No to run default logic; and click No, do not check work status settings. Once the import completes, I run the revenue recognition logic for the accounts and periods I am working with.
I compared our Production transformation file, default logic script (which I am not running), and revenue recognition logic script to QA and they both match. My problem is when I run the exact same revenue recognition job in QA, the job just sits in running status but should finish in a couple of minutes. I would let it run for a couple of hours in QA, then terminate the job and have our two servers rebooted, then the same revenue recognition job runs to completion within a couple of minutes.
I am just wondering if there could be some other setting that does not let the job submission kick off the actual update to the database. To make sure the database was not hosed from the terminated revenue recognition job, I ran a different but smaller job and it completed. Then I would ask for the reboot and resubmit the revenue recognition job and it completes.
I will let our DBA know about monitoring the dllhost.exe for amount of memory used. But the last time he tried to check for any activity on the database he could not see anything, but I do not know if he was checking dllhost.exe or some other files.
Thanks for your response and suggestions. Since this is our QA environment (which I try to keep current with Production), I am trying to see if I can identify the cause and fix it, in case it carryover to our Production environment.
Regards,
Bucky

Revenue recognition - deferred revenue

Hi Experts,
We want to recognize some of our revenues other than the billing date.
Some of our sales are by sea and using CIF incoterms, so if the goods was sent during the last days of the accounting period, we can not recognize it in the FI reports till the goods arrived it's destination.
So I want to do the PGI and the billing today and credit the deferred revenue account instead of the revenue account.
I saw the SPRO regards it.
1. What are the specific setting I have to use in "spro, sales and distribution, basic function, account assignment/costing, revenue recognition, set revenue recognition for item category" for this case? (time related/service related/billing related...etc)
2. Can I use regular sales order, delivery, PGI, billing document or do I have to use contract or something else?
3. Can the trigger be the incoterms/destination country instead of the item category?
Thanks
Ifer

Symptom
After you implement Note 1239165, the source code prerequisites for connecting the accruals account determination to the incompletion log in the standard system are met. This note describes the Customizing settings that you have to make to use the functions described in Note 1239165.
Other terms
Standard revenue realization, Customizing, incompletion, KONV, SAKN1, SAKN2, ZZ_RR_TVUVF, RV_INVOICE_ACCOUNT_DETERM, RR_ACCOUNT_MISS_DEF, RR_ACCOUNT_MISS_UNB, TVUVF, SAKUR, TVRRUR
Reason and Prerequisites
The Customizing settings are required to use an error group in revenue realization to specify the incompletion and to prevent the system creating subsequent documents.
Solution
Make the following settings:
1. Create the following procedures in Customizing:
Sales and Distribution -> Basic Functions -> Log of Incomplete Items -> Define Incompleteness Procedures -> Incompletion Group B (Sales - Item) -> Procedures ->
-> RR (text RevRec item). Save your entry.
2. For the accruals account, create the following status group:
Sales and Distribution -> Basic Functions -> Log of Incomplete Items -> Define Status Groups
-> Status grp General Delivery Billing doc. Price Goods movement
   RR        X        X         X             X
Additional information: The revenue accounts are assigned to the status group 00 through the error group "MP". This status group permits subsequent documents to be created.
3. It is not necessary to assign the incompletion procedure RR to the item category that is relevant for revenue recognition. In the case of item categories that are relevant for account determination, by default, the system uses the error group "MP" for the revenue accounts and the error group "RR" for the accruals accounts.
4. Create the report ZZ_RR_TVUVF to execute the entries required to check the fields and to assign the status groups. The report enters the required entries in the tables and in TVUVF. If these already exist, the system issues an error message.
The following check fields and status groups are entered:
Table     Field name Description   Screen Status Warning Rank
KONV SAKN2    accruals account          PKON RR
TVRRUR SAKUR    unbilled receivable account       RR
Attributes
Title: Insert/delete RR incompletion settings in TVUV and TVUVF
Type: 1 (Executable program)
Status: T (Test program)
Application: V (Sales and Distribution)
Package: (Customer-specific package)
Selection texts
P_DELKZ Delete revenue recognition records
P_INSKZ Create revenue recognition records
The source code is provided in the attached correction instructions.
Insert Block
*& Report ZZ_RR_TVUVF                                                 *
report zz_rr_tvuvf.
Tables *
tables: tvuvf.
Work areas *
data: begin of gvt_tvuvf occurs 0.
        include structure tvuvf.
data: end of gvt_tvuvf.
data: lvf_subrc1 like sy-subrc,
      lvf_subrc2 like sy-subrc.
data: gvs_tvuvf like tvuvf.
======================================================================
Definition of the selection screen                                   *
======================================================================
parameters p_inskz radiobutton group act.
parameters p_delkz radiobutton group act.
======================================================================
Initialization                                                       *
======================================================================
initialization.
clear   gvt_tvuvf.
refresh gvt_tvuvf.
======================================================================
Selection of data                                                    *
======================================================================
start-of-selection.
select single * from tvuvf into gvs_tvuvf
                            where fehgr = 'RR'.
                            and tbnam = 'KONV'
                            and fdnam = 'SAKN2'
                            and statg = 'RR'
                            and fcode = 'PKON'.
lvf_subrc1 = sy-subrc.
select single * from tvuvf into gvs_tvuvf
                            where fehgr = 'RR'.
                            and tbnam = 'TVRRUR'
                            and fdnam = 'SAKUR'
                            and statg = 'RR'
                            and fcode = '    '.
lvf_subrc2 = sy-subrc.
Populate fields
gvt_tvuvf-mandt = sy-mandt.
gvt_tvuvf-fehgr = 'RR'.
gvt_tvuvf-tbnam = 'KONV'.
gvt_tvuvf-fdnam = 'SAKN2'.
gvt_tvuvf-statg = 'RR'.
gvt_tvuvf-fcode = 'PKON'.
append gvt_tvuvf.
clear gvt_tvuvf.
gvt_tvuvf-mandt = sy-mandt.
gvt_tvuvf-fehgr = 'RR'.
gvt_tvuvf-tbnam = 'TVRRUR'.
gvt_tvuvf-fdnam = 'SAKUR'.
gvt_tvuvf-statg = 'RR'.
gvt_tvuvf-fcode = '    '.
append gvt_tvuvf.
clear gvt_tvuvf.
insert case
if not p_inskz is initial.
    if not lvf_subrc1 is initial and
       not lvf_subrc2 is initial.
    insert line
      insert tvuvf from table gvt_tvuvf.
      if sy-subrc is initial.
      line already there
        write: 'Line in table TVUVF inserted'.
      else.
      Error when insert
        write: 'Insert not possible'.
      endif.
    else.
    line already there
      write: 'At least one entry already in the table TVUVF'.
    endif.
else.
delete case
    if not p_delkz is initial.
      if lvf_subrc1 is initial
      and lvf_subrc2 is initial.
      delete line
        delete tvuvf from table gvt_tvuvf.
        if sy-subrc is initial.
        line already there
          write: 'Lines in table TVUVF deleted'.
        else.
        error when insert
          write: 'Delete not possible'.
        endif.
      else.
      line not there
        write: 'At least one entry not in the table TVUVF'.
      endif.
    endif.
endif.
See you Monday

Remaining Revenue Recognition

Hi all,
I am trying to figure out what is Remaining Revenue Recognition for the past few days , but cudnt get it ...can anyone explain me the process of Remaining revenue Recognition...
In SAP PS we have developed a Customised report which has a column "Remainig Revenue Recognition", One of the users would like to know from where the amount XXXX is getting fetched in the customised report for remaining revenue recognition.

Hi,
As Gokul mentioned you need to find out what Revenue Recognition stands as per your business process. But to give an idea based one of the instance that i came across; if the projects are undergoing RA, then system posts Calculated Revenue at the end of each run based on the PoC of the project. This was considered as "Revenue Recognition" for that period. So in RPSCO if we look at the calculated revenue for this project's life cycle it gives us the total revenu recognition till date. So the difference of this amount and the planned revenue gives the remaing revenue that needs to be recognised. Hope this helps.
Regards
Sreekanth

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 for Fixed price project

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