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Former Member

Revenue Recognition concept in SAP

Hi.

I know what is revenue recognition.

My requirement is Can somebody give me some live examples of revenue recognition and places where to configure the same in SAP.

I have also collected some data from help.sap.com.

Hope some more inputs by the consultants here.

Regards

Aravind

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    author's profile photo Former Member
    Former Member
    Posted on Jun 07, 2007 at 12:07 PM

    Hi Arvind,

    I can say one live example -- Monthly journal subscription.

    Normally, we pay yearly subscription amount but the amount of revenue would be recognised monthly on delivery of journal every month.

    Regards,

    Murali

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  • author's profile photo Former Member
    Former Member
    Posted on Jun 07, 2007 at 10:38 AM

    I have worked on revenue recognition in 2 areas - Project systems (using Results analysis) and SD (for periodic billing)

    In projects, you can use results analysis to recognise revenues (or cost - depending on what kind of results analysis you want to perform). In this case, based on Percentage of completion of cost (actual cost / planned cost) the system can accrue or defer revenues.

    In SD, you have periodic billing that uses revenue recognition. For e.g. you provide an annual service to your customer, for which you bill him in advance. At this point, the accountign entry would be

    Dr. Customer $12000

    Cr. Deferred revenues (balance sheet) $12000

    The revenue recognition program (VF44) will be run monthly which will then recognise the revenue proportionately:

    Dr. Deferred reveneus (balance sheet) $1000

    Cr. Revenue (PL) $1000

    Hope this helps

    Praveen

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  • author's profile photo Former Member
    Former Member
    Posted on Jun 07, 2007 at 10:49 AM

    Hello

    I have not worked on these topics, but check these notes

    820417 - Implementation Guide for Revenue Recognition

    779365 - Best Practice document for revenue recognition

    Regards

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  • author's profile photo Former Member
    Former Member
    Posted on Jun 07, 2007 at 07:18 PM

    Thank you all for your answers. Were really helpful.

    Regards

    Aravind

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