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Object documentationItem Categories for License Contracts

 

The item category defines the commercial significance of a license acquisition or license sale item and influences the settlement response for license contracts.

The Intellectual Property Management business scenario makes a distinction between rights items, which are used to restrict the right to the respective Intellectual Property in terms of content, and royalties items, which are used to represent license fees. A combination of rights and royalties items is found in certain item categories.

Additionally, holdbacks can be maintained to define contractual terms which guarantee the licensee that no other sale will be made against the holdback's rights during the holdback period.

Note that to use the holdbacks feature, you must activate the business function Intellectual Property Management (CRM_IPM_1).

The Intellectual Property Management business scenario also contains the advance and minimum guarantee item categories. These are used to represent license agreements on advances and minimum guarantees in the system, against which license revenues can be recouped.

 

By selecting the item category, you define the characteristics and features of license sales items and control settlement response.

Note Note

The item categories provided by SAP for license acquisition and license sales items are configured by way of the Define Item Categories Customizing activity (from SAP Customizing for CRM, select Start of the navigation path Transactions Next navigation step Basic Settings Next navigation step Define Item Categories End of the navigation path.

Additional information on defining IPM-specific item categories is found in the business scenarios for Intellectual Property Management under SAP for Media in the SAP Solution Manager.

End of the note.

Structure

Features of IPM-Specific Item Categories

You configure IPM-specific item categories by way of the Define Item Categories Customizing activity (from SAP Customizing for CRM, select Start of the navigation path Transaction Next navigation step Basic Settings Next navigation step Define Item Categories End of the navigation path).

However you also need to configure additional settings for these categories, by way of the Define Settings for IPM Item Categories Customizing activity (from SAP Customizing for CRM, select Start of the navigation path Industry-Specific Solutions Next navigation step Media Next navigation step Intellectual Property Management Next navigation step Transactions Next navigation step Settings for IPM Transactions Next navigation step Define Settings for IPM Item Categories End of the navigation path).

Relevance to Rights

Rights-relevant items are those whose rights (from the license sale) are to be observed during the rights availability analysis.

Note Note

Rights items in license acquisition are not currently observed during the rights availability analysis.

End of the note.

Note Note

Advances, minimum guarantees and pure royalties items are not relevant here.

End of the note.

Relevance to the Difference Calculation (Confirmation)

Items that are relevant to the difference calculation are observed during the difference calculation in billing. The difference calculation is used for royalties items with variable usage-dependent license fees, which are billed periodically using billing request items (BRIs). Valuation of these items is dependent on the data that the licensee confirms. For more information about the difference calculation, see Billing Plans in Intellectual Property Management.

Relevance to Clearing

Items that are relevant to the clearing are recouped against license revenues. Examples of this are the item categories for advances and minimum guarantees.

Relevance to Price

Items that are relevant to price are those for which conditions are determined or entered manually and then evaluated.

Note Note

An item can still trigger a value flow even if it is not relevant to price: If the item is relevant to the difference calculation, a series of price-relevant BRIs have been assigned beneath it. These are evaluated sequentially during the difference calculation.

In contrast to this, the higher-level item and not the milestone BRIs is relevant during milestone billing. (Milestone BRIs only contain a share of the net value of the higher-level item, but no share of their individual conditions.)

Pure rights items are not relevant to price and do not trigger a value flow.

End of the note.

Condition Group for Price Agreements

A condition group, which contains the condition types required, is entered for item categories for which price agreements are to be entered for specific condition types in the Define Item Categories sub dialog in the following Customizing activity: Start of the navigation path Customer Relationship Management Next navigation step Transactions Next navigation step Basic Settings Next navigation step Define Item Categories End of the navigation path.

Relevance to Billing

The value flow for an item that is relevant to price is first created when it is settled (billing). Billing relevance, which is defined for each item category, controls the time of release for settlement.

  1. Fixed license fees

    Item categories for fixed license fees such as IEM1 (IPM acquisition rights and royalties item) and IVM1 (IPM sales rights and royalties item) in the SAP Customizing settings provided have the Billing After Contract Release billing relevance.

  2. Variable license fees

    Royalties items are not relevant to billing. Billing relevance is dependent on the billing request items assigned below the royalties item.

    1. License acquisition

      Billing request items in the SAP Customizing settings for variable royalties, such as IEB2 (IPM acquisition BRI difference calculation) have the Billing After Contract Release billing relevance.

    2. License sales

      Billing request items in the SAP Customizing settings for variable license revenues, such as IVB2 (IPM sales BRI with confirmation) have the Transaction-Related Following Completion billing relevance.

  3. Milestones

    Royalties items are not relevant to billing. Billing relevance is dependent on the billing request items assigned below the royalties item.

    Billing request items in the SAP Customizing settings for milestones, such as IBV1 (IPM sales milestones) have the Billing After Contract Release billing relevance and Calculation Type for Milestones milestone billing.

See also:

Event-Controlled License Settlement

Billing Plan

Various billing plans are available to you in Intellectual Property Management which define the frameworks for billing.

These include:

Note Note

For more information about the billing plan, see Billing Plans in Intellectual Property Management.

Additional information on the Customizing settings to be made is available in the SAP Solution Manager.

End of the note.

Billing request items (or distribution items), which are found in the respective billing plans (or in the revenue plan) are distinguished by the business transaction category or item category.

Billing Request Item for

Item Category

Business Transaction Category

Milestones

IEB1 (IPM acquisition milestones) or IVB1 (IPM sales milestones)

Billing request item (BUS 2000163)

BRIs with difference calculation (acquisition or confirmation (sales)

IEB2 (IPM acquisition BRI difference calculation) or IVB2 (IPM sales BRI with confirmation)

Billing request item (BUS 2000163)

Distribution

IVS1(IPM distribution item)

Revenue distribution item (BUS 2000188)

The item category of a BRI is determined from the transaction type, item category group (optional), item category usage and the item category for the higher-level item. The item category usage must have the same name as the flow category for the billing plan type, which was determined from the customer billing plan procedure (optional), transaction type and the item assigned above the BRI.

Structuring of Item Categories in License Contracts

In the back-end system, item categories in license contracts are structured as described in the table below. On the user interface, however, the distinction between main items and sub-items is not visible.

Item Level

Item Category

Main item level

  • Advances

  • Minimum guarantees

  • Rights items

  • Holdback items

  • Royalties items

    Note Note

    Royalties items can be further subdivided into royalties items with:

    • Fixed license fees

    • Variable license fees

    • Installment payments (milestones)

    End of the note.

  • Dummy items for expanding relationships

    You can maintain a dummy item with item category IED1 (IPM acquisition dummy) or IVD1 (IPM sales dummy) for the acquisition or sale of a series. Do this if you do not want to maintain rights and royalties agreements for the series, but do want to expand the individual season and episodes and record the corresponding rights and royalties items at this level.

Sub-item level

  • Advances

  • Minimum guarantees

  • Rights items

  • Holdback items

  • Royalties items

    The following items only appear as sub-items for royalties items:

  • Distribution items (for calculating outgoing royalties, revenue recognition for license sales, SAP CO objects)

  • Billing request items (for periodic settlement of variable royalties and installment payments)

  • Final invoice items: These include final invoice items in the SAP Customizing settings provided IEA2 (IPM acquisition final invoice guaranteed advance), IEA4 (IPM acquisition final invoice repayable advance), IVA2 (IPM sales final invoice guaranteed advance) and IVA4 (IPM sales final invoice repayable advance).

If royalties are not to be maintained at a more detailed level than the rights, rights and royalties items can be combined in an item.