Sales BOM & revenue recognition & pricing with VSOE

[danny_clendinneng]

Hello all,

For rev rec experienced people only. Thank you.

The question is related to the rev rec posting value and pricing.

I am trying to implement revenue recognition with specific VSOE rules for posting values.

The amount to be posted that the client wants is a calculated value according to Fair Market Value which uses Vendor Specific Object Evidence.

The calculation works like this: total order value (like NETWR) * VSOE item value / VSOE total value for order.

The calculation gives values that represent teh fair market values for the materials sold and the revenue recognition relative to the FMV. Example Sell an equipment for 200 and a warranty for 50 total order value 250. The warranty of 50 has revenue to be recognized over the life of the warranty in equal amounts per period e.g. 5 per month for next 10 months (the warranty period).

However, the VSOE or FMV for equipment is 180 and warranty is 40.

The calculation for revenue recognition posting is 250 * 180 / 220 = 204.55 and the warranty revenue is 250 * 40 / 220 = 45.45

The 45.45 is then spread over the 10 months in equal amounts in rev.rec.

The problem:

In the pricing procedure, I can only have 1 price. e.g.PR00 and that value goes to rev.rec.

my calculation provides a different value that I need to go to rev.rec.

Here is what I have done to get the value.

PR00 - price ERL

ZDIS - discount ERS

ZHOE - VSOE values

ZVSO - Cumulated value of ZHOEs in document - calc 9xx routine using KUMU style

ZVSR - result of calculation

In all scenarios, I need to post to revenue recognition the value from ZVSR.

To complicate matters, consider a sales BOM with pricing at top level.

It is the sales BOM scenario which made this obvious that the sub-item has no price as it is included in the top level price.

But the top level item has no VSOE value.

e.g.

equipment kit PR00 250 no VSOE

part 1 VSOE + claculated rev to post

part 2 VSOE + calculated rev to post

warranty - rev.rec. over 10 months VSOE + calculated rev to post

In the above, there is no value into VF45 for the warranty as there is no price - no NETWR.

Any ideas - solutions will be most welcome.

Thank you and kind regards,

Danny C.

[Former Member · Accepted solution]

YOU MAINTAIN THE FOLLOWING SETTING.....

1) Maintain revenue recoginition and start date from IMG->S&D>BASICFUNCTIONS-->ACCOUNT ASSIGNMENT/COSTING-->REVENUE RECOGNITION.

2) In pricing procedure in accrual fied maintain account key.

3)From the above path or VKOA maintain revenue account determination for maintained condition type for "WARRANTY'.

4) maintain priodic calendar for that sales document(NOTE: RESET VALUE CALUCUCULATED ON LENGTH OF POSTING PERIOD/LEGNTH WARRANTY PERIOD * WARRANTY VALUE).

5) maintain end date in sales document for posted item.

I HOPE IT MAY WORK OUT IF NOT LET US KNOW WE WILL LOOK IT FORWARD.....

[danny_clendinneng]

Thanks for the input, it was a bit helpful in having me revisit the account keys.

I did resolve the issue myself by redoing the pricing procedure to actually take the calculated value instead of the price.

ZPR0 was set to statistical with no account keys assigned, as well as all discounts.

The calculated value condition ZVSR is used to post the revenue and the rev.rec. values to deferred accounts.

This did cause some other minor issues like forms and I think there may be a rounding issue in some cases.

I will need more testing to see if there are any other issues.

Thanks again for the reply.

Danny C.