Revenue recognition for customer contracts

[horst_lambauer3]

Dear experts,

I currently have the requirement from our customer to accrue revenue as well as costs for fixed price customer contracts.
Meaning our customer is selling services on fixed price bases over customer contracts but is on the other side purchasing
the sold services as well.

Therefore the revenue as well as costs (booked on the contract positions via supplier invoices) should be accrued.

I've already tested the accrual method "Straight line - even periods" which works perfectly fine and as requested from our

customer for the revenue. But it seems that the costs do not get accrued.

Is there a way to accure and recognize the costs booked to the contract position in the same way as the accrual method
"Straight line -even periods" does it for the revenue?

Many thanks in advance

Cheers Horst Lambauer

[lokesh2]

Hi Horst,

In the supplier invoicing try selecting the account assignment to customer contract but i just noticed that it does not show cost as deferred but accrued upon posting when the associated contract accrual method is 'straight line-even periods'

And yes, when posting customer invoice i see the deferred revenue.

First of all, could you tell me that is it ok to select supplier invoice with account assignment to customer contract. Kindly check it once at your side.

Thanks

Lokesh Sharma

[horst_lambauer3]

Hi Lokesh,

yes I can confirm, that my idea was to assign the supplier invoice positions to the customer contract. So the account assignment to customer contract is the Approach that I chose as well.

But I would have expected that costs as well as revenue gets deferred.

Cheers Horst

[lokesh2]

Hi Horst,

In the customer invoice, you can see the deferral revenue

In Supplier Invoice:

In my testing, altough the assignment is done to same project, it doesnt show deferral.

Thanks

Lokesh Sharma

[lokesh2]

Hi Horst,

We have further tested and confirmed about the behavior of the postings.

This is the intended design of accrual methods for customer contract of type fixed price.

The costs are recognized in the period in which they are incurred and the revenues are deferred.

The run only handles the revenues which would be recognized.

Thanks

Lokesh Sharma

[horst_lambauer3]

Hi Lokesh,

many thanks for your information. Meanwhile I've tried different accrual methods for customer contracts but it seems that none of them defer costs. Do you know any workaround or accrual method, that costs get defered when booked on customer contracts via supplier invoices?

many thanks

[former_member1066299]

Hi Horst. Were you able to find an automated method for deferring contract costs? BR -Hristo