Symptom
- Due to floating exchange rates the revenue recognition run posts an accrual or a deferral revenue amount for an invoiced sales order item maintained in foreign currency.
- For the sales order item accrual method 1-Recognize at point of invoice is assigned
- As the sales order item is fully invoiced you do not expect the revenue recognition to consider any exchange rate differences for customer invoices posted in previous periods.
Environment
SAP Business Bydesign
Reproducing the Issue
- Go to the Cost and Revenue work center.
- Go to Revenue Recognition view.
- Find and open Revenue Recognition Run ABC (ABC represents the ID of the run).
- Navigate to the Processed Successfully tab and select Advanced Information. Then choose the Event Based sub-tab.
- You notice an accrued revenue (if the current total earned revenue value is higher than in previous periods) or a deferred revenue (of the current total earned revenue value is higher than realized before).
Cause
The sales order item is not completed for revenue recognition:
- Go to the Sales Document Items view of the Cost and Revenues work center.
- Find the sales order item in question.
- Go to the Accounting Data tab.
- You notice the Revenue fully recognized indicator is not set.
As long as this indicator is not set, any exchange rate fluctuations will update the realised revenue of the sales order item.
There can be different reasons, why the Revenue fully recognized indicator not set:
- The sales order item is not yet completed: The Final Delivery or Invoice Date not set: In the Sales Document Items view check the Final Delivery and Invoice Date.
- The Final Delivery or Invoice date is after the posting date of the revenue recognition run. In that case any exchange rate fluctuations are considered until the final delivery and invoice date is on or before the revenue recognition run's posting date.
Resolution
- If only the invoiced value on the posting date of the customer invoice is to be considered, assign accrual method (5- Recog at point of invoice (invoiced rev)). This accrual method only considers the exact revenue at point of invoice and does not consider any exchange rate differences, even if the sales order item not yet completed.
- If you are dealing with Fixed Price items, the option above is not available, and the solution is to manually complete the Sales Order Item in the Customer Invoicing work center. Then, once completed, all accruals will be cleared with the next run.
Keywords
revenue recognition run; deferred revenue; accrued revenue, exchange rate differences, recognize at point of invoice, fixed price, project based , KBA , SRD-FIN-COR , Cost & Revenue , How To
Product
SAP Business ByDesign all versions