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Former Member

2 GL accounts in vkoa (rev account determination) why?

hi ,

why are there 2 GL accounts in VKOA when we do account determination from sd point of view?

i thought , when we maintain conditions here with teh combination of certain fields like application/char of acc/sord/acct assignement grpcust/acct assignement grp material/acct key/gl account/gl account

why are there 2 gl accounts???

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3 Answers

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    Former Member
    Aug 21, 2007 at 01:23 AM

    The second G/L account is the deffered revenue account.

    Suppose you have a product called support and you charge $1200/- annualy for the support. You bill the customer upfront & the customer pays $1200/-. But, you have to give the service to the customer for 12 months , hence the revenue will be recognised over a period of 12 months. So in this case the entire $1200 goes to the deffered account and every month you recognise the $100/-. i.e. the revenue from deffered account is transferred to normal revenue account.

    Thanks

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    Former Member
    Aug 21, 2007 at 01:41 AM

    what kind of account do you mean by deffered account . and please can you give some more reasons or examples for why do we use two gl accounts in account determination?

    reddy

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    • Former Member

      Deffered account is also a GL account. See, if the customer makes the payment, this money needs to be put somewhere. If we put in a normal G/L account, then it gets recognised and will be shown in your financials.

      But, if it goes to deffered account(something like Work in progress account), that means you have received the money but you do not want to send it to your normal account. This happens mostly in case of periodic billing/milestome billings. In these scenarios, the money will be recognised only for that particular period for which the service was rendered and balance money will lie in deffered account. Then at the month end/whenever you want to recognise revenue, you run VF44 transaction. This will transfer the revenue from deffered to normal revenue acount.

      Hope this clarifies

      Thanks

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    Former Member
    Aug 21, 2007 at 04:51 AM

    Hi,

    The First GL Account column is to enter the GL Accounts to which Revenue is posted. The Second GL Account field is normally kept blank. But if you have a business process wherein on billing, you want the revenue to be posted to an Accrual Account, then you maintain the Balance sheet Accrual Account in the Second GL Account column. This would generally be used for Business processes where revenue is recognized not based on billing but is recognised separately

    For example in media industry (Newspaper Subscription). In subscription, you collect the money from the customers in advance for the subscription period but delivery of the newspaper happens on a daily basis.

    Therefore, in a such a scenario, you do not recognise the Revenue when the money is collected but the revenue is recognised after the newspaper is delivered to the customer. In such a case, when billing is done upfront, the total amount received is considered as a Accrued Revenue and Posted to the GL Account entered in the Second Column,

    Then there is a separate process like revenue recognition by which the revenue is transferred from the Accreud Revenue Account to the Revenue Account (First column)

    Thanks

    sadhu kishore

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