2896346 - IFRS15 - Completed Sales Order Item Still Considered for Revenue Recognition in IFRS Set of Books

• You create a project-based, fix-price sales order item. 
• You assign an accrual method to the item. The item is connected to a Performance Obligation (POB) of a Revenue Accounting Contract (RAC). 
• All incurred costs and invoiced revenues have been realized accord to the accrual method conditions.
• You close the assigned project task to complete the item's delivery status as well as finish its Invoicing status.
• As a result, you expect the revenue recognition run to no longer process this sales order item but rather set the Revenue fully Recognized indicator. 
• Instead, the revenue recognition run keeps amounts deferred or accrued for the item.

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To check the sales order item status:

1. In the Cost and Revenue work center go to the Sales Document Items view.
2. Find sales order item ABC-XX (ABC-XX represents the sales order item ID). 
3. In the Accounting Data tab you notice that the Revenue Fully Recognized indicator is not set. 
4. In the Dates sub-tab you verify that a Final Delivery and Invoice Date appears, indicating that the item is completed for Delivery as well as Invoicing. 
5. In the Associated Objects tab, find the project task ID assigned to sales order item ABC-XX. 
6. Click on the ID to verify that the project task is closed. 

You expect the revenue recognition run to clear all deferrals, accruals, contract assets and liabilities for the item and to only realize the actual invoiced revenue and incurred cost amount.

However, you notice that the revenue recognition run keeps cost or revenue values deferred/accrued or calculates contract asset/liability values for the item:

1. In the Cost and Revenue work center go to the Revenue Recognition view.
2. Find the respective revenue recognition run and select the IFRS set of book's application log.
3. Navigate to the Processed Successfully tab and choose the Advanced Information tab.
4. Select POC Based and filter for sales order item ABC-XX.
5. You notice amounts remain deferred or accrued or are calculated as contract assets/liabilities.

• The IFRS15 functionality is active: With the IFRS15 functionality, revenue recognition is based on the Revenue Accounting Contract (RAC) and its Performance Obligations(POB) where every sales document item  must be assigned to a POB item.
• Sales order item ABC-XX is still being considered for revenue recognition as further, not completed sales document items are assigned to its RAC.

• Only when a RAC is completed, meaning, when all items are fulfilled and invoiced, the sales order items associated with the RAC will be finished for Revenue Recognition.
• As long as there are further, not completed sales document items assigned to the RAC of Sales Order Item ABC-XX, this item will not be completed for Revenue Recognition but considered until all items are completed.

First check if there are further sales document items associated with the RAC of sales order item ABC-XX:

1. In the Sales Document Items view of the Cost and Revenue work center find sales order item ABC-XX.
2. In the Revenue Accounting Contract column you see the RAC ID XYZ (XYZ represents the RAC ID which Sales Order Items ABC-XX is associated with). 
3. Click this ID to open the RAC. 
4. In the Contract Changes tab, under Sales Document Involved press Expand All.
5. You can now see all POBs of this RAC with the respective sales order or even customer contract item assigned to them. You see POB XYZ-YY, which is associated with sales order Item ABC-XX. You might see further POBs, for example XYZ-ZZ associated with another sales order item or customer contract item, say, DEF-XX (DEF-XX represents the ID of a different sales document item). Or you might see further sales order items associated with the same POB, XYZ-YY, which sales order item ABC-XX is associated with as well. 

To check the Status of the other sales document item(s):

1. Go back to the Sales Document Items view.
2. Find Sales Order or customer contract Item DEF-XX.
3. Check the Dates tab. If there is no Final Delivery and Invoicing Date maintained, the sales document item is not completed. Hence, all items associated with RAC XYZ will be considered by the Revenue Recognition run.

Completed Sales Order item, IFRS15, Contract Liability, Recognize Based on Manual Amounts, Revenue fully Recognized, IFRS , KBA , SRD-FIN-COR , Cost & Revenue , Problem