Using time-related revenue recognition you can carry out recognition over a specific period of time.An example of this is revenu e recognition for the length of a service contract.
With time-related revenue recognition the recognition is carried out between a specific start and finish date in equal parts. The start and end dates are determined on item level in the sales document. The number of periods between these dates is determined using the financial calendar for the company code assigned to the document.
Time-related revenue recognition can be used for:
Time at which revenue recognition is carried out
You can determine whether revenue recognition for sales document items is carried out at the point of sale/contract or later when the billing document is created. Control is described in the unit Customizing ->Determining Revenue Recognition Methods
The following documents can be used as a reference for time-related revenue recognition:
Example of a time-related revenue recognition:
You agree a contract with the customer and invoice the customer for the product with the help of a periodic billing plan. The contract covers 12 periods and an amount of 12000. This means over 12 periods there is 1000 per contract period.