Revenue recognition

[former_member184555]

Hello Gurus,

Can you throw some light on Revenue recognition. Please any material related to this topic to my mail ID ravisankar05@gmail.com

Will be rewarded for the contribution.

thanks

[Former Member]

Hi Holly

Can u also send me a copy to chandu710@gmail.com. Really interested to know much about it.

Thanking you

chan

[Former Member]

Hi Chan,

Will do, look for it in a few minutes.

Regards,

Holly

[Former Member]

Hi Holly,

Can you please forward the notes related to Revenue Recognition to my email ID too :

My email ID : loveknight100@yahoo.com

Regards

Rajesh

[Former Member]

Hi,

SAP has created an excellent document (SAP R/3 SD Revenue Recognition Best Practice - Version 1.4) with information on the SAP revenue recognition functionality. The document provides detailed information on the functionality with screen shots and flow charts explaining each of the revenue recognition methods and when they should be used. It's offered free of charge by SAP and can be downloaded from OSS Note 779365. I'll send a copy to your e-mail address.

Hollis Lane

Eastman Kodak Co.

hollis.lane@kodak.com

[Former Member]

Hi Holly,

Please send me the doc.of Revenue Recognition.

My email id is : tom_francis149@yahoo.com

[Former Member]

Hi Ravi Sankar,

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.

REVENUE RECOGNITION :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.

Reward points pls

Regards,

Govind.

[Former Member]

Hi Govind,

where/how do you configure this revenue recognition as Time-based or performance based?

Thanks.

Achilles

[Former Member]

Hi,

I suggest downloading the SAP R/3 SD Revenue Recognition Best Practice Guide mentioned in my previous reply to this thread. It's very helpful and explains the revenue recognition functionality in detail. If you don't have OSS note access I can send the document if you supply your e-mail address.

The revenue recognition method is assigned to the item category in the SD configuration. For time based revenue recognition the method is A. In the IMG the menu path is: Sales and Distribution/Basic Functions/Account Assignment-Costing/Revenue Recognition/Set Revenue Recognition for Item Categories

There's also additional configuration in FI. The Revenue Recognition Best Practice Guide explains what is necessary in FI.

The configuration is not open for update until you get SAP approval to activate revenue recognition, refer to note 820417 (Implementation Guide for Revenue Recognition). OSS Note 835367 has to be applied to open the revenue recognition method for update. Until the OSS note is applied the fields will not be available for input.

Regards,

Holly Lane

Eastman Kodak Co.

[Former Member]

Hi

Could you please send those OSS779365 Documents on revenue Recognition to the following ID.

rssch@yahoo.com

Advance thanks

Savya

[Former Member]

Hi Holly,

Really valuable notes.

Message was edited by:

M Jamil

[Former Member]

Hi Sankar,

This forum is to share knowledge, hence I am giving below the definition for Revenue recognition and steps to take to define the same in the system.

The R/3 standard method for revenue recognition consists of revenue recognition at the time of billing.

Companies use standard revenue recognition, if they want to post revenues in Financial Accounting, as soon as an invoice is created.

It is determined differently for different Item categories

the necessary settings are determined in CO-PA based on requirement

In revenue recon. 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 see your sales doc’s no. in VF44, then your revenue recognition is successful. Press on collective processing inside VF44 for posting the revenues from differed 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 reconciliation account in your customer master as well.

It may happen that in revenue recog item categories fields may grayed out but you have to get authorization for your id from a basis guy.

Hope the above would be useful to you.

regards,

CRK

[former_member184555]

Please send any material on this topic to my mail ID ravisankar05@gmail.com

Will be rewarded for the contribution.

Thanks