SAP Knowledge Base Article - Public

2940572 - Revenue Recognition Run Generates Redundant Debit and Credit Posting Lines for Deferred Revenue / Cost of Goods sold

Symptom

  • You execute the Revenue Recognition Run.
  • You notice that the run has debited and credited the same amounts with all the exact same accounting details on the Deferred Revenue Account or the Deferred Cost of Goods Sold Account for no apparent reason.
  • Or you might notice that fully completed sales order items are still considered by the revenue recognition run. The Revenue fully recognized indicator is not set for these items.

Environment

SAP Business ByDesign

Reproducing the Issue

  1. In the Cost and Revenue work center go to the Revenue Recognition view.
  2. Open the run in question. 
  3. Navigate to the Postings tab and here to the Journal Entries sub-tab. 
  4. You notice two posting lines, one debit, one credit with exactly the same amount. 
  5. Click the Journal Entry ID to open the Posting.
  6. You verify that both posting lines, on the Deferred Cost of Goods sold or the Deferred Revenue account (depending on what is to be recognized by the run) contain exactly the same information (no change of Project Task, Sales Document Item, Business partner, profit center).
  7. Go to the Processed successfully tab of the run. In the POC based or Time and Material Based sub-tab you find sales order items that completed and should no longer be processed by the run. Take note of their IDs, for example XYZ-XX (XYZ-XX represents the ID of a completed sales order item). 

Revenue Fully Recognized Indicator not set:

  1. Take note of their IDs and navigate to the Sales Document Items view in the Cost and Revenue work center.
  2. Find item XYZ-XX and go to the Dates tab. 
  3. Verify that a date is maintained in the Final Delivery or Invoice Date field. 
  4. Navigate to the Accounting Data tab. 
  5. Here, the Revenue Fully Recognized indicator is not set. 
  • You wonder why these seemingly unnecessary postings have been made. 
  • You wonder why completed sales order items do not get finished for revenue recognition. 

Cause

In your Solution Profile, Profit Center Accounting is activated:

  1. In your project scope go to step 4- Questions.
  2. Under Financial and Management Accounting select General Ledger and choose General Ledger again. 
  3. In the questions tab, the question under Profit Center and Segment Accounting is selected. 

But the set of books, selected for the Revenue Recognition Run, uses the Function of Expense reporting principle:

  1. In the General Ledger go to the Sets of Books and Assigned Companies view. 
  2. Find the respective company and set of books combination and select it. 
  3. In the Details section, under Set of Books Information check the Reporting Principle. Here, Function of Expense is selected.

With the Function of Expense reporting principle in place it is not intended to derive Profit Center and Segments in the relevant Journal Entries.

But, as Profit Center Accounting is active, all Sales Document items do get automatically assigned to a profit center. For the connected Customer Invoices as well as Cost of Goods sold entries, however, the Profit Center cannot be derived (due to the Set of Books Reporting Principle).

Therefore, the Revenue Recognition run triggers a 'Profit Center reposting' and creates these two redundant posting lines and cannot finish sales document items for revenue recognition so that they keep getting processed.

Resolution

We are working on improving the Revenue Recognition posting logic when Profit Center Accounting is active in the Solution Profile but a Set of Books uses the Function of Expense reporting principle.

For now it is recommended to use a reporting principle which includes profit center accounting, such as 'Function of Expense, Profit Center/ Segment', if working with Profit Centers and Segments is an option for your Company.

Another option would be to deactivate profit center accounting in the solution profile.

Keywords

debit and credit postings, Revenue recognition run postings, Deferred Revenue, Deferred Cost of Goods sold, revenue fully recognized , KBA , revenue recognition zero posting , debit credit zero posting , SRD-FIN-COR , Cost & Revenue , Problem

Product

SAP Business ByDesign all versions