- You create a fix price contract item XYZ-XX in a foreign currency (XYZ-XX represents the contract item ID).
- You assign a straight-line accrual method.
- You check the Calculated Revenue per period in the foreign transaction currency and the Realised Revenue amounts in local company currency:
- For each period of the contract item's life span the same Calculated Revenue appears.
- But the Realised Revenue amounts in company currency are different in each period.
SAP Business ByDesign
Reproducing the Issue
Go to the Cost and Revenue work center.
- Go to the Sales Document Items view.
- In the Accounting Data tab check the Revenues per Period table.
- In the Calculated Revenue column the same amount appears for each period of the contract item's life span.
- But in the Realised Revenue column the amounts appear very different in each period.
- You try to translate the Calculated Revenue amounts into the Realised Revenue amounts, applying the respective valid exchange rate but the amounts are different.
- When a contract item is maintained with a list price in a foreign currency then each revenue recognition run revalues the revenue to be realised based on the total contract item net value in company currency, valid on the posting date of the run.
- The realised revenue is calculated as a delta of the net value to be realised in the period and the previously realised revenue.
- So, comparing the calculated and realised revenue per period will not translate into transaction currency amount per period x Exchange Rate = Realised Revenue/ Company currency amount.
- Company Currency: USD
- Contract item XYZ-XX
- Transaction Currency: EUR
- Net Value: 12.000,00 EUR
- This revenue is to be realised evenly across 12 periods: Calculated Revenue per period: 1.000,00 EUR
- Exchange Rate EUR-USD: 1,194
- Contract Iem Net value in company currency: 14.328,00 USD (12.000,00 EUR x 1,194)
- Revenue to be realised per period: 1.194,00 USD (14.328,00 USD / 12)
- Realised Revenue in period 1: 1.194,00 USD [(14.328,00 USD / 12) x1]
- Exchange Rate EUR-USD: 1,218
- Contract item net value in company currency: 14.616,00 EUR (12.000,00 EUR x 1,218)
- Revenue to be realised per period: 1.218,00 SUD (14.616,00 /12)
- Revenue to be realised in period 2: 2.436,00 USD [(14.616,00 /12) x 2
- Previously realised revenue (in period 1): 1.194,00 USD
- Delta/Realised Revenue in period 2: 1.242,00 USD (2.436,00 USD - 1.194,00 USD)
- Exchange Rate EUR-USD: 1,23
- Contract item net value in company currency: 14.760,00 USD (12.000,00 EUR x 1,23)
- Revenue to be realised per period: 1.230,00 (14.760,00 USD / 12)
- Revenue to be realised in period 3: 3.690,00 USD [(14.760,00 USD / 12) x3]
- Previously realised revenue: 2.436,00 USD
- Delta/Realised Revenue in period 3: 1.254,00 USD
This is the designed system behavior.
Once the contract item is completed (end date reached, invoicing status finished, fulfilment status finished) all deferrals or accruals posted due to exchange rate differences will be cleared with the following revenue recognition run.
Help Document: Revenue Recognition for Customer Contracts
KBA: 2609018 - How Exchange Rate is Derived for Different User's Time Zone
3095841 - IFRS 15 - Completed Customer Contract Item Still Considered For Revenue Recognition
Revenue Recognition. Realised Revenue. Calculated Revenue. Contracts. Current Earned Revenues Amount. Total Revenue. Exchange Rate. Currency , KBA , SRD-FIN-COR , Cost & Revenue , How To