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deferred revenue from sales

Former Member
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hi

i have the following scenario.please help in finding a solution

1. a service contract is created and billed to the customer at the beginning of the contract start

2. the invoice value is not posted to sales revenue account but to a deferred revenue account

3.every month a part (one twelveth) of the invoice value is transferred from deferred sales revenue account to revenue account

can we implement the whole procedure through pricing procedure. if so how........if not what is the solution

thanks in advance

koustav

Accepted Solutions (1)

Accepted Solutions (1)

Former Member
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Hi Koustav,

Yes this can be done through revenue recognition in which you can realize the part of revenues from deferred to revenue accounts.

Perform the following settings:

1) Set revenue recognition for item categories.This can be done by following the path sprosdbasic func-account assn/costing-revenue recognition.

2) Once the first step is done you need to set account assignment for this.Following path wud be useful sprosdbasic func-account assn/costing-revenue recognition---maintain account determination.

3) Here you need to assign revenue and deferred accounts.There wud be 2 columns .In first column put your revenue account and in second column put your deferred account.Your defferd acc should be a balanced shhet account and your revenue account should be a P&L acc.These settings can be done by FI consultant in t-code FS00.

4) Create your service contract and then invoice and when your accounting document wud be generated,these will be passed to your deffered account.

5) In order to pass them to revenue acc goto t-code VF44 and here you can select you invoice for which you want to pass the figures to revenue accounts.

This whole scenario wud solve your problem.

Reward points if it helps.

Regards

Karan

Answers (4)

Answers (4)

sapfab1
Explorer
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Hello Experts,

Can anyone help me with the work around for Revenue Recognition.

Can Revenue recognition can be handled in some other way. Please reply.

Thanks.

Former Member
0 Kudos

Edited by: Koustav Biswas (SDN ID) on Feb 8, 2008 10:34 AM

Former Member
0 Kudos

Hi Koustav,

Did you figure out the solution for this, can you post it

Thanks

Former Member
0 Kudos

What about the associated costs?

Former Member
0 Kudos

Did you got an answer for handling cost? We have same scenario implementing RR, but for some materials it is negative price (cost, not revenue). Question is how to handle this in RR? Total subscription contract value will always be positive (revenue), but some materials used in contract infact have negative prices.........

Anyone?

Former Member
0 Kudos

hi karan

i am stuck up.........i don't know why but the <b>Rev. recognition</b> and <b>acc period start</b> fields ar in display mode. i tried to change the setting from item category configuration, but its greyed out there also.

could you please help me sort that out

thanks in advance

koustav

Former Member
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Hi Koustav,

I forgot to mention but this will be greyed out by default so you need to get authorization from Basis people.

Regards

Karan

Former Member
0 Kudos

Hello Koustav,

Did u implement Revenue recognition functionality for the service contracts.I am also implementing RR for the service contracts with monthly,quarterly,semi annualy and annually periodic billing.

Can you pl.let me know as to how exactly you implement the same

Thanks,

Former Member
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hi

we implemented deferred revenue functionality, not by activating revenue recognition funtionality, but by using condition types and account keys.

regards

koustav

Former Member
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Hello Koustav,

I will appreciate if you can give me your email ID so that i can ask you the question regarding the revenue recogntion.

Actually at my client's site, we are planning to activate the RR functionality at item category level . Then do you think it will be necessary to make any changes to account keys and condition types?

pl.advise

Thanks

Former Member
0 Kudos

Hi,

I would be most grateful if you could help me with a similar situation that I'm facing in my project. I want to be able to implement revenue recognition without going through the process of enabling it for item categories through an SAP release.

I understand that you have figured out a way to implement the same by just playing around with the conditions and account keys in your pricing procedure. I would be most grateful if you would share the same with me.

It goes without saying that any feasible solution would be rewarded promptly.

my email id is srimuruganv@gmail.com

Former Member
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Hi Karan

I am asked to implement Revenue Recognition at my client place.

As i am very much new this Revenue Recognition Process , i have explored all the sources.

SAP best practice document and many SAP notes (820417,779366,605665,769080 and so on)

But did not end up with desired result , fortunately i saw your posts on Revenue Recognition.

Can you help me, how to activate Revenue Recognition for item category level in SD as it is greyed out at the moment.

With best regards

Nallamothu.

Former Member
0 Kudos

hi karan

thansk a ton for your immediate reply. i had looked at teh setting but couldn't make much meaning earlier. i will try out in system and get back to your for any further clarification

regards

koustav