SAP Knowledge Base Article - Public

2939117 - Revenue Recognition run Considers Current Exchange Rate for Revenue Postings of Previous Accounting Periods

Symptom

You notice an accrual or deferral posting for a customer invoice that has been fully realized in a previous accounting period for a sales order item, maintained with a transaction currency different to the company currency. After analyzing the revenue recognition application log you realize that the difference appears due to exchange rate differences.

You expect the revenue recognition run not to consider any exchange rate differences for customer invoices posted in previous periods.

Environment

SAP Business Bydesign

Reproducing the Issue

  1. Go to Cost and Revenue.
  2. Go to Revenue Recognition.
  3. Find and open Revenue Recognition Run ABC (ABC represents the ID of the run).
  4. Navigate to the Processed Successfully tab and select Advanced Information. Then choose the Event Based sub tab. 
  5. 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 only partially delivered and invoiced (of the ordered amount a part has been delivered and invoiced). The sales order item is not yet completed (Final Delivery or Invoice Date not set in Cost and Revenue).
  • Exchange rate differences are considered as long as the Sales Order Item is not fully completed (when the Final Delivery or Invoice Date is set).
  • All revenue accruals or deferrals will be fully cleared again once the Sales Order Item is completed. 

Resolution

If you are using Accrual Method 1-Recognize at point of invoice, and do not want to wait until the sales order item is completed to clear all revenue accruals or deferrals, resulting from exchange rate differences you can assign accrual method 5 - Recog at point of invoice (invoiced rev) to the sales order item:

  1. In the Cost and Revenue work center go to the Sales Document Items tab. 
  2. Find the sales document item in question and press Reassign. 
  3. Select accrual method 5 - Recog at point of invoice (invoiced rev). 

This Accrual Method (5- Recog at point of invoice (invoiced rev)) 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