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

Similar Messages

Revenue Recognition Forecast Based on Quotations

I have a requirement to create a revenue recognition forecast based on the open quotations. These quotations linked to opportunities are open for some time before being signed and provide a good basis for forecasting revenue recognition in upcoming quarters. We have many revenue recognition methods here including time based, service based, collection based, POD, and POC. I don't see much useful standard functionality in SD revenue recognition nor in results analysis for creating these forecasts from quotes.
The SD revenue schedules in tables VBREV* are not generated on quotation document lines nor on items that are not billing relevant. RA can be run in planning mode, but it is a secondary process on the saved data in CO on a cost object that must be run individually for each future period.
Not only do we need the Revrec forecast, but we want to simulate changes to our quotes and projects and immediately see the affect on Revrec. I am about to create a custom development within sales document processing to create the Revrec forecasts in a rough manner in a Z table. Before I start to code, I am curious to know if anyone else has had such requirement and has better ideas of how to accomplish this.

Hello Karl,
The Best Practices document in the Note 1172799 provides details regarding all the SAP supported processes for RR functionality.
Regards,
Raghavendra

Result Analysis , Settlement and Revenue

Dear Gurus,
I really appreciate if you can help me in resolving the below issue.
We are using results analysis and settlement processes in our project
We want to recognize the revenue before billing.
Is there any way I can post actual revene to financial accounting before doing
billing through Settlement.
I would be greatul to you guys if some one can help me at the earliest .
Thanks,
Viswas Anantharangachar

Hi,
In my understanding this is the requirement of Revenue recognition functionality implementation. This is more SD than PS function. Please use T-Code VF44 , or VF47.
Please remember that the RR functionality was not enough stable in the ver 4.7 so you must have ECC5 in place.
Enjoy SAP.
Dont forget to give points if its useful ans.
Namskar,
Ketan Dave

KJ280 Message Results Analysis KKA1

Hi All,
I am Trying to do a Results Aanalysis on one Serivce Order in KKA1 and it throws the following Error , I changed the status TECO, and changed the RA Key ,Just a try, but still gives the same Error Message, If anyone can Help me in this I really appreciate that.
Thanks,
Sandhya
Order without revenue: Only RA types F and Z permitted
Message no. KJ280
Diagnosis
The order type of the order on which you are attempting to perform results analysis does not allow revenue posting.
In the results analysis version, you specified that work in process for this order is calculated separately instead of through results analysis for the sales order item or WBS element. This means that the work in process will be calculated through the results analysis key in the order until the order has the status DLV (delivered) or TECO (technically completed). Once the order has one of these statuses, the actual costs for the order are included in results analysis for the higher-level sales order or WBS element.
Procedure
Enter a results analysis key in the order that is suitable for calculating work in process. To do this, choose a results analysis key for which a valuation method with results analysis type F (calculate work in process) or Z (cancel work in process) is defined.
If no results analysis key has been defined for WIP calculation, you must go into Customizing and change the valuation method of the results analysis key accordingly.

Hi,
Plz check u r RA version. In the version check under calculate WIP or RA for section. I think in u r version there is tick box on Internal and service orders w/o revenue. In conjunction with this check which is more appropriate between first and last option in this section.
If last option selected, it wont allow if you have any revenues on your order. Then check u r valuation method statuses and u r order status.
Regards
Sudhakar Reddy

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

Item Category--Revenue Recognition

Dear All,
system is not allowing me to assign revenue recognition field in VOV7 as it is grey field.
As well when I tried through IMG/S&D/Basic Function/Account assignement/Revenue Recognition Item Category-Change mode system is showing grey field for revenue recognition here also.
Please guide on how can I assign here.
Regards,
Sainath

Hi,
In order for this to work, the revenue recognition functionality has to be activated in the system (because of important financial implications and risks, it isn't activated by default).
You need to raise a message to SAP for this.
Please check OSS note 820417.
Best of luck,
Cosmin

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 Categary Use

Dear Gurus,
We have 7 different categories to assign to the item category for revenue recognition.
out of them I want to use option "D - used with timebased and billing related revenue recognition". so i want to know the effects
this category.
1) if I use D category can I realize revenue before the post of invoice also or I have to have post the invoice first before the VF44?
As per the description it indicates that I have to post the invoice first. But in case suppose I want to recognized revenue on the time basis only will the same category work?
2) Also I want to know as the service tax is not the part of revenue so at the time of revenue recognition in VF44 we will get the service tax amount included with net value or only net value will be realized?
Please guide me. Thanks in advance.
regards,
Sanjay

Hello Sanjay,
Use of the SAP ERP SD revenue recognition function is subject to a special release restriction see Note 820417.
Please review the Note 1172799 which has the "Best Practices guide" as an attachment, which should answer majority of your queries on Revenue Recognition.
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

What is RESULT ANALYSIS,REVENUE RECOGNITION in PS

hi gurus
can any one explains me abt revenue recoginition and result analysis in Project Systems
thx
regards
mahesh

RA cannot be done with out POC
POC is an essential requirement to calculate the accruals and deferrals
There are various RA methods which basically calculate the POC
eg
Cost based -> POC = act cost/ plan cost
Rev based -> POC = act rev/ plan rev
Statistical -> POC can be entered manaully using statistical key figures
Progress Analysis -> POC is based on value from Progress Analysis - you need to set this up if you are using Progress analysis
So basically you can do RA without Progress Analysis to calculate POC. The determination of this depends on your company's financial policies and regulatory requirements in the country you are operating

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

Change Result analysis key in WBS element

Hi Friends,
Is it possible to change result analysis key in WBS element?
Any thoughts/suggestions would be welcome.
Regards,
Soumya

Hi Soumya ,
Changing an RA Key in a WBS Element is easy and it just any normal activity which one can do. But the important thing is that you will have to look at the potential repurcussions which will arise because of changing the RA Key. As long as both the RA keys have the same valuation method and other relevant settings , changing would be OK. If the Valuation methods are different then there would be inconsistencies in Financial Accounting as the computation of revenues / cost of sales would be differing.
Excercise due caution .
Regards,
Venkat.

How to configure Reserves Settings in WIP-Result Analysis Key

Hi,
I need to Capitalize the un-realized revenues/Cost?. I came to know that it can be fixed by doing configuration in Result Analysis Key. What are the settings that i need to do in WIP configuraion (Product Costing). Kindy help me or provide me some inputs to full fill this requirement.
Thanks
Kishore

Use Tcode OKG5 - Assign the required Cost elemnets to a Line ID, under "Req To Cap" coloum.

Results analysis data is calculated through sales order

Hi All,
I m trying to calculate WIP of one process Order through KKAX. But I am getting the below error
Results analysis data is calculated through sales order 300002423 001000
Message no. KJ112
Diagnosis
The order you selected for WIP calculation or results analysis is assigned to a sales order. A results analysis key was entered for this sales order.
System Response
The system determines results analysis data for orders assigned to sales order items through the results analysis for the sales order.
Procedure
Carry out results analyis on sales order 300002423 001000.
This process Order is related to Sales Order and I have checked the Result Analysis key is attached to Sales Order.
Please help me out in this issue.
Thanks!
Regards,
Vivek

Hi,
I was getting the above error because a RA key was selected ar Sales Order, Now what I have done is I have removed the RA Key from Sales Order, there is already a RA key attached to Process Order. Now When i am calculating KKAX (WIP) I am getting below message
The order is not a WIP element
Message no. KJ148
I have done this because my client is not using KKA3(RA fro Sales Order)
Please help!!!!!!!!!
Thanks!
Regards,
Vivek Srivastava

Update Result Analysis not allow for category E(Revenue)

Hi,
While defining update for Result Analysis for Sales Order Costing - Controlling Area - RA Version - RA Key for WIP in Sales ORder - Line ID as Revenue - and category E(Revenue), put Secondary GL against Cost/Revenue in tcode OKG4, system shows message as :
Use only categories "A", "K", and "N" in WIP calculation
Message no. KQ115
Diagnosis
In the valuation method, you chose WIP calculation as the results analysis type.
Procedure
For WIP calculation, you can only update costs ( category K), settled costs (category A), and costs not to be included (category N [revenue], for example).
As a result while doing WIP on Sales order in tcode KKA3 system shows message as "No update of line IDs specified in CO area 0810 version 0 RA key 000004" in message no KJ208.
Here RA KEY 000004 is used for WIP on Sales Order. We have defined 4 line ids which are assigned with RA Key for WIP on Actual Cost against category K (Cost) for 3 line ids and 1 line is used with category A (Settled cost). Same way for RA key Sales Order I have to mention against category E (Revenue). But system does not allow me.
Best Regards,
Samat Roy

Hi Dadoni,
In OKG3 (Valuation Method) there are two different RA Keys I have maintained. RA Key 000002(WIP of Actual Cost) which is used with production order and RA Key 000004(Result Analysis for Sales Order) is maintained with Sales Order. Both the RA Keys have common status which are REL, DLV, PREL and TECO. Is it correct or wrong staus for Sales Order WIP ? Here status number area 1> PREL, 2> REL, 3> DLV and 4> TECO.
Kindly tell me for RA Key 000004(WIP on Sales Order) you have mentioned only 3 status which are REL, TECO and FNBL. Is it necessary to maintained more status for Sales order WIP. What will be its status number and inside parameter setting from RA Type to other indicator setting ?
Best Regards,
Samrat

Revenue Recognition Functionality through Result Analysis (RA) key

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