revenue recognition with partial credits

[Former Member]

Hello,

We have an issue regarding recognising revenue on contracts where a partial credit has been raised.

Example:

Assume a 2 year contract, £2,400 (£1,200 year 1, £1,200 year 2)

The first year is billed and paid in full and then in the second year a credit is issued for £1,200

When the credit happens revenue makes a correction based on the contract value including the credit. In the first year we recognise £100 per month. At the end of year 1 we have recognised £1,200.

However when the credit is issued SAP makes a correction and it now takes £1,200 as being the contract value and splits this over 24 months. It removes anything we have previously recognised and now recognises £50 a month. As the first year was billed and paid this revenue should not be corrected regardless of what happens in year two.

Also when the correction happens, instead of placing the unrecognised revenue in the deferred account it place's this in the unbilled revenue.

Would this problem be resolved if we used revenue distribution type 'c' which distributes revenue based on the individual billing plan years.

And,

Why does the unrecognised revenue go into the unbilled account ?

Any thoughts or advice would be very useful.

Many Thanks,

Matt

[Former Member]

Please check the amount and the start of accrual period and end of accrual period. It should be for one year and not two if you want to apply 1200 over one year. If the accrual period is two years then obviously the accrued amount is going to be 50. Conversely if the accrued period is two years then the amount should be 2400 and not 1200.

regds

Jude