Revenue recognition

[Former Member]

Hi!

I'm checking if SAP revenue recognition can be used in my project.

I'd like to know what SAP does in this situation:

- I create a sales order (no delivery is expected).

- VF44: i realize revenue for 10.000 euro

- I create invoice and release it for accounting for 15.000 euro.

So the revenue recognition is for 10.000 euro but the value of my bill is 15.000 euro. What does the system do with the 5.000 euro difference?

My client actualy takes that difference as a down payment, so what would happend in the next revenue recognition?

Regards!

Eduardo

[Former Member · Accepted solution]

Hi,

Firstly, i would like to know, how rev. recog. happened w/o Delivery as Rev. recog. done with ref. to del. Doc.

Now coming to ur query:

You recognized Rev. for 10.000 Euro and invoiced value is 15.000 Euro.

so, the difference ammt. 5.000 euro will be reflect in debtor's A/c. as 10.000 Euro of invoice value will be credited to Income Corporate.

Best Regards,

Amit

[Former Member · Accepted solution]

Hi Amit, thanks for your reply!

In SAP RR best practice it says that revenue recognition can be done for a service material, which is not delivery relevant.

Would you mind to explain the procces in more detail?

- When i create the revenue in VF44 an accounting document is created like: DR unbilled / CR revenue

- At the time of billing: DR: receivable / CR unbilled

This is the normal procces, but how would it in the situation I desribed before?

Thanks!!

[Former Member · Accepted solution]

Hi,

I try to explain:

1. When Invoice Created (15.000 euros)

Debetor's A/c - 15 euro (Dr - debited)

To Deffered A/c - 15 euro (Cr - Credited)

2. On Rev. recog. - VF44

Deffered A/c - 10 euro (Dr - debited)

To Income A/c - 10 euro (Cr - Credited)

3. Now, in next Rev. recog. (for remaining 5 euros)

Deffered A/c - 5euro (Dr - debited)

To Income A/c - 5 euro (Cr - Credited)

4. On Down Payment (5 euros)

Bank A/c - 5 euro (Dr - debited)

To Debtor's A/c - 5 euro (Cr - Credited)

5. On final Collection

Bank A/c - 10 euro (Dr - debited)

To Debtor's A/c - 10 euro (Cr - Credited)

******************

Initally your debtor was debited with 15 Euros (point 1), which is getting knock-off in Points 4 (5 euros) and point 5 (10 euros).

Also, Deffered rev. a/c was getting credited with 15 euros (point 1), which is getting knock-off against point 2 (10 euros) and point 3 (5 euros).

Finally, your Bank A/c is debited with 15.000 Euros and Debtor is credited with 15.000 euros.

Best Regards,

Amit