Status Management in sap for contracts

Hi All

Please could anyone help with a very known but yet so confusing thing in sap crm contract management.

I know most of the consultants would also want to know.

So please could any one explain this deep.

I know there is something called status while contract replication from isu to crm or vice-versa.

Like when contract is created in crm status will be A

when replicated then B.

I would be very thankful if someone would help with this.i mainly want to know basically how does it work