SD Revenue Recognition-Account settings for deferring COGS

Question

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

Answer 1

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