For a value contract with target value, revenue recognition is preferably service-related; alternatively it can be time-related. For other contracts, it is only time-related.

You define the type of revenue recognition in Customizing for Customer Relationship Management, under  Transactions Basic Settings Define Transaction Types .

Use the revenue recognition category to define how revenue is recognized over the contract duration for SAP CRM service contract items with a periodic billing plan.

You do this in Customizing for Customer Relationship Management, under  Transactions Basic Settings Define Item Categories .

For business transaction category Sales choose Customizing Item, and in field Rev. recog. (revenue recognition category), choose an appropriate value (for service-based revenue recognition or time-based revenue recognition), in tile Contract Data. Service confirmations that contain services released from service contracts are generally used for service-based revenue recognition. Alternatively, service orders that release services from service contracts can also be used. For more information about this setting, see the F1 help for this field.

If a target value exists in a service contract, the target value is used to calculate planned revenue. A condition type is required to determine the revenue account.

You determine the revenue account in Customizing for Customer Relationship Management, under  Transactions Basic Settings Define Item Categories .

For the service contract item category (standard Customizing SCN) and the business transaction category Sales, choose an appropriate condition type from the Condition Type field, using which you can determine the revenue account.

In the same step, choose a billing-relevant entry in the Bill. Relevance field.

Define the controlling type and controlling level for the CRM transaction type for the service contract.

You do this in Customizing, under  Integration with Other SAP Components Customer Relationship Management Settings for Service Processing Controlling Integration Establish Controlling Type, Controlling Level, and Controlling Scenarios .

At item level, select Single-Object Controlling so that each service contract item can be assigned to an internal order, and the results analysis amount for each item can be saved. The leading transaction type is that of the service contract.

Define Customizing for results analysis.

You do this in Customizing under  Controlling Product Cost Controlling Cost Object Controlling Product Cost by Sales Order Period-End Closing Results Analysis .

Revenue recognition for CRM service contracts copies the percentage of completion from the CRM service contract. To enable this, you must create the statistical key figure ABGMNG from key figure category totals values in SAP ERP. As a unit for the statistical key figure, you can select a percentage indicator (%), for example. This key figure in SAP ERP is updated by period from SAP CRM. The appropriate results analysis method is 05, the Quantity-Based POC Method, together with the quantity base C. This determines the percentage of completion from the values of the statistical key figure ABGMNG.

The planned revenue is transferred to allow the period split to document the changes to the planned revenue. This enables any changes to the planned revenues by period to be used for the evaluation. If you want to do this, you must do the following:

Assign the revenue cost element to a line ID that must be capitalized. Assign a results analysis cost element to the line ID and to category E (revenues). Under this, the calculation results of the results analysis are updated to the internal order, and displayed in reports.

So that the percentage of completion is only used for recognition of revenue, and the costs are not analyzed, assign the line IDs of the costs in results analysis Customizing to the update of category D (special costs).

Define the following posting rules for the settlement to FI: