Preface

13

How This Book Is Organized

13

Acknowledgments

15

Conclusion

15

1 Introduction to Revenue Recognition

17

1.1 What Is Revenue Recognition?

18

1.2 Five-Step Model of IFRS 15

19

1.2.1 Step 1: Identify the Contract

20

1.2.2 Step 2: Identify Performance Obligations

23

1.2.3 Step 3: Determine the Transactional Price

25

1.2.4 Step 4: Allocate the Transactional Price

26

1.2.5 Step 5: Recognize Revenue

29

1.3 Industry Impact

32

1.3.1 Telecommunications

33

1.3.2 Life Sciences

39

1.3.3 Manufacturing

44

1.4 Revenue Recognition and SAP

46

1.4.1 Revenue Accounting and Reporting

47

1.4.2 Event-Based Revenue Recognition

52

1.5 Summary

52

2 Designing Your Revenue Recognition Landscape

55

2.1 The SAP Landscape and Revenue Recognition

55

2.1.1 SAP System Landscape

55

2.1.2 RAR in the SAP Landscape

58

2.2 Integration with Different SAP Components

61

2.2.1 Sales and Distribution

61

2.2.2 Customer Relationship Management

64

2.2.3 Billing

65

2.2.4 Non-SAP Systems

67

2.3 Revenue Recognition Data Model

70

2.3.1 Sender Components

72

2.3.2 Structures

74

2.3.3 Tables

84

2.3.4 Relationships

99

2.3.5 Extensions and Transports

103

2.4 Choosing Your Revenue Recognition Tool

110

2.4.1 RAR with SAP S/4HANA

111

2.4.2 RAR with SAP ERP

112

2.5 Summary

115

3 Configuring Inbound Processing (Classic and Optimized)

117

3.1 Setting Up Revenue Accounting Integration

118

3.2 Inbound Processing

122

3.2.1 RAI Classes in Classic Inbound Processing

123

3.2.2 RAI Classes in Optimized Inbound Processing

131

3.3 Extending RAI Classes

138

3.3.1 Defining Extensions

138

3.3.2 Populating Extensions

140

3.4 Summary

140

4 Revenue Accounting Items

141

4.1 Processing Revenue Accounting Items

141

4.1.1 Processing Methods

142

4.1.2 Parallel Processing Framework

153

4.1.3 Processing Order Items

155

4.1.4 Processing RAIs with a Predecessor

158

4.2 Managing Revenue Accounting Items

161

4.2.1 Changing Items

161

4.2.2 Exempting Items

163

4.3 Extending Transaction FARR_RAI_MON

166

4.4 Error Resolution While Creating Revenue Accounting Items

168

4.4.1 Proactive and Reactive Measures

168

4.4.2 Inflight Errors

170

4.4.3 Data Validation Checks

172

4.4.4 Resolving Errors without Transaction FARR_RAI_MON

175

4.5 Business Rules Framework Plus

177

4.5.1 Applications and Structures for RAR Integration

179

4.5.2 BRFplus Setup in RAR

183

4.6 Creating Custom Revenue Accounting Items

185

4.6.1 Custom RAI Structure

186

4.6.2 Custom RAI Content

187

4.6.3 Singleton Classes

200

4.6.4 Dynamic Processing Flow Controlled from Table

206

4.7 Summary

211

5 Contract Management

213

5.1 Setting Up Contract Management

213

5.1.1 Optimized versus Classic Contract Management

213

5.1.2 Accounting Principles

216

5.1.3 Presentation Methods

218

5.1.4 Calculation Methods for Local Currency

225

5.1.5 Contract Modifications

228

5.1.6 Cost Recognition

228

5.1.7 Contract Assets and Liabilities

228

5.1.8 Assign Company Codes, Number Ranges, and Contract Categories

232

5.1.9 Condition Types

234

5.1.10 Posting Periods

235

5.2 Setting Up Performance Obligations

236

5.2.1 Create Performance Obligation Types

238

5.2.2 Determine POB Types in BRFplus

242

5.3 Managing Performance Obligations and Event Types

252

5.3.1 Over Time Revenue Recognition

253

5.3.2 Point-in-Time Fulfillments

263

5.4 Modifying Contracts

277

5.4.1 Prospective or Retrospective

278

5.4.2 Contract Combination

284

5.4.3 Terminating Contracts

292

5.4.4 Contract Freeze

295

5.5 Handling Price Allocations

299

5.6 Summary

301

6 Revenue Posting and Reporting

303

6.1 Basics of Reporting and Calculations

303

6.1.1 Posting Logic

303

6.1.2 Customization for Posting of Revenue

307

6.1.3 Table FARR_D_POSTING and Revenue Categories

316

6.2 Posting with ABC

327

6.2.1 Transfer Revenue

330

6.2.2 Calculate Contract Liabilities and Contract Assets

331

6.2.3 Revenue Posting Run

334

6.3 Integrating with Profitability Analysis

338

6.4 Reporting

341

6.4.1 SAP Fiori Applications

341

6.4.2 New Styles of Reporting and CDS Views

353

6.5 Summary

363

7 Administration and Troubleshooting

365

7.1 Parallel Processing Framework and Performance Issues

366

7.1.1 What Is Parallel Processing?

366

7.1.2 Application Server Instances

368

7.1.3 Job Server Group

369

7.1.4 Custom Parallel Processing Framework

373

7.1.5 Modularization

379

7.1.6 Packaging

382

7.2 Reclassification

383

7.2.1 Creation and Structure of ZFARR_D Tables

384

7.2.2 Populating the Custom Posting Table

388

7.2.3 Extending the Standard Posting Program

390

7.3 Data Cleanup

392

7.3.1 Data Checks

393

7.3.2 Customizing

403

7.3.3 Business Add-In FARR_BADI_RAI2

405

7.3.4 Message Capturing by Simulating

406

7.4 Helpful Tips and Tricks

414

7.4.1 Navigator

414

7.4.2 Additional Information

418

7.5 Summary

423

8 Migrating to Optimized Contract Management

425

8.1 Business Case for Migration

426

8.2 Preparation Activities for Migration

427

8.2.1 Contract Management Activation

428

8.2.2 BRFplus Verification

428

8.2.3 Business Add-In Modifications

429

8.2.4 Process Changes

432

8.3 Performing the Migration

434

8.3.1 Migration Activities

434

8.3.2 Migration Errors

437

8.4 Post-Migration Cleanup

440

8.5 Summary

441

9 Event-Based Revenue Recognition

443

9.1 Solution Background

443

9.2 Sell-from-Stock Scenario

447

9.3 Sales-Oriented Scenario for Customer Projects

448

9.4 Revenue Recognition Keys

452

9.5 Summary

452