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Function documentationRevenue Recognition Processor

 

The Revenue Recognition Processor evaluates the settlement event registry and initiates the revenue and expense recognition for those delivery document items for which final settlement and billing has been performed and where all settlement events have occurred.

For partial application, revenue recognition in a contract settlement scenario is based on separate ABDs. These revenue recognition ABDs create the required reclassification postings in accounting, based on standard account determination. Separate ABDs are created per settlement group. This allows the proper support of foreign currency settlements, as each settlement group may have a different translation date (foreign exchange rate key date).

Revenue recognition ABDs for provisional settlement groups only contain items that relate to settlement units of the final settlement group that is being recognized. In this way, a provisional settlement group can trigger several revenue recognition ABDs (a partial settlement scenario). This is also applicable for split application scenarios, where there are multiple applications for a single delivery item. Each split application can be recognized independently.

Integration

You have integrated the third party trading system, if relevant. For more information, see Possible Third Party Integration

Prerequisites

All relevant event registry indicators are set and the entry has the status Ready.

Features

  • Determines readiness

    Evaluates all settlement event indicators (title transfer, governing weight, governing quality, and final price) based on configuration of these indicators.

  • Confirms proof of delivery

    Initiates the required goods movement out of SIT cockpit if material stock is in outbound SIT.

  • Recognizes revenue, primary expenses, and accrued expenses

    Determines revenue recognition for all relevant documents of the selected event registry entry and creates the corresponding ABD (Agency Billing Document) to recognize them.

  • Recognizes secondary expenses (settled and accrued)

    Determines all accrued and settled expenses relevant for the selected event registry entry and creates the corresponding VBD (Vendor Billing Document) to recognize them.

  • Updates the Quantity Type table

    Updates the quantity type table for the contract commodity item.

  • Provides a Goods Movement indicator

    Sends this indicator to the third party, if relevant, and indicates the physical receipt of goods.

An additional feature of the revenue recognition processor is to recognize revenue without reference to a contract. In such a case only a delivery document exists. Following are the features of revenue recognition without reference to contract:

  • There is no provisional settlement or billing.

  • Governing weight and governing quality are always at origin.

  • Prices are always final.

  • Quantity, quality, or pricing adjustments are handled through credit and debit memos and the related revenue is recognized immediately.

Activities

To recognize revenue, proceed as follows:

  1. On the SAP Easy Access screen, choose Start of the navigation path Agricultural Contract Management Next navigation step Contract Settlement Next navigation step Revenue Recognition Next navigation step Revenue Recognition Processor End of the navigation path.

  2. Choose Revenue Recognition Processor.

  3. Enter the required details and choose Execute (Execute).

    The revenue recognition monitor appears.

  4. Choose a document which is in Ready status.

  5. Choose the Recognize Revenue and Expenses pushbutton.

    The status of the document changes to Complete.

To update the application document, proceed as follows:

  1. Choose the completed document's Ref. Doc (Reference Document) field.

    The application document is displayed.

  2. In the Item Overview group box, choose the Items tab page.

  3. Choose the line item and then choose Toggle (Toggle).

    The Item Details group box gets updated.

  4. In the Item Details group box, choose the Status tab page.

    The Status Management group box appears. It displays the statuses and follow-on actions.

  5. Choose the Other Object (Other Object) to view the settlement status.

    The Active Statuses group box displays that revenue recognition for that document is active. This indicates that revenue has been recognized for the particular document.

The following activities take place for a revenue recognition scenario without reference to contract:

  • The delivery document notifies the Revenue Recognition Monitor to create a new registry entry.

  • On creation of a new entry, the settlement event indicators for governing weight, governing quality, and final price are set automatically.

  • There are no references to application documents or settlement documents.

  • There are no related VBDs representing secondary expenses.

  • The third party trading system is not updated.