SAP Knowledge Base Article - Public

3259282 - Revenue recognition not canceled after setting status to completed


You have set status to 'Completed' for service contract. You expect after revenue recognition run, the revenue should be cleared. However, that is not the case.




The original design is that once the service contract is released, it will trigger the event-based revenue recognition. The revenue recognition will be finalized once the service contract is technically completed.

The technically completely status is calculated automatically on the fly based on the posting status and billing status of all billing request lines. The technical complete status will only be set once the billing status is “Fully Billed”, and all the billing request lines are transferred to billing and posted.


Thus the life cycle status cannot control (to stop) the event-based revenue recognition. The reason is that we might have partially billed service contract with life cycle status is "Completed". For this case, the revenue recognition should still run to have correct report.

E.g. A service contract start with 2020.01.01 to 2021.01.01, and the billing request lines for 2020.01.01 to 2020.06.01 are all billed. Now the customer set the status to "Completed" but doesn't update the service contract end date. From the EBRR perspective, the invoiced billing request line should be recognized as revenue and also the open billing request line from 2020.07.01 to 2021.01.01 should still be recognized as receivable. The EBRR will only be cleared  when you set the service contract to completed and service contract's end date to 2020.06.01 thus all billing request lines are invoiced and posted.


To avoid the issue, you should make adjustment on the service contract end date time.

If for example, the service contract is fully canceled and the life cycle status is "Completed". However, all billing request lines are open without invoice. Then the service contract is still in consideration in EBRR with receivable considered for the service contract validity period. Because the service contract is completed from finance perspective since it still contains billing request lines which are not invoiced.

If you don't want to have this service contract be included into the EBRR anymore, then the service contract should have no more billing request line, thus we suggest you to set the service contract end date time to the same as start date time.


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