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SAP Revenue Accounting and ReportingSAP Revenue Accounting and Reporting, integration with
sales and distribution ifrsifrs15pete grahamrevenue accountingrevenue accounting and
reportingrevenue recognitions/4hana
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SAP Revenue Accounting and Reporting (RAR) was built from the ground up to help customers in their
efforts to handle the new revenue recognition regulations announced May 28, 2014 (IFRS 15 & ASC 606) to
be effective January 1, 2018 in countries adhering to US GAAP or IFRS. The solution automates many of the
revenue recognition and accounting processes and can simplify the tasks of revenue accountants in following
these new accounting guidelines. SAP Revenue Accounting and Reporting (RAR) (latest version 1.3) can
also assist customers in their efforts to be compliant with current accounting standards like ASC 605 or IAS
18. SAP RAR is complementary to SAP Finance solutions and is compatible with SAP ERP Financials and
SAP S/4HANA Finance.
Future and existing SAP RAR customers are constantly asking me to describe the functionality within SAP
RAR. So, to help answer these questions, a summary of the features and functionality available in SAP RAR
up through version 1.3 is listed below. The SAP RAR summary description is split into four categories: 1)
Revenue Accounting and Reporting (RAR) core features, 2) contract modification, 3) connection to
operational systems, and 4) migration of revenue documents to SAP Revenue Accounting and Reporting
(RAR) including transition. In addition, we have added sections on the roadmap, recently introduced Quality
Assurance capabilities (including in-flight and post-flight diagnostics), and recommendations on OSS note
application.
SAP Revenue Accounting and Reporting (RAR) Version 1.3 was “Released to Customer” (RTC) in December
2016 and is still part of the Early Adopter Care program; Release Notes
Revenue Accounting and Reporting (RAR) Core Features
Support for the 5-step process through business rules and event driven model (Multiple element arrangements
supported)
Contracts can be combined manually or automatically via rules if contracts have open items (contract-by-
contract processing assumed)
Recognition of revenue via events (time based, event based or percentage of completion)
Changes to fulfillment type prior to fulfillment
Revenue presentation according to IFRS 15: Contract liability / asset calculated at contract level.
Additional flexibility of contract selection for posting, simulation and error handling
Faster period close – integrated in SAP financial closing cockpit, ability to shift erroneous contracts to the next
period for catch up posting
Distribution of contract liability and asset drill down to performance obligations with customer specific logic
Estimated quantities for consumption based revenue recognition with final true up (no interim true-up)
Cost recognition
Capitalized cost of contract acquisition
Explanation for recognized revenue with associated change history to easily analyze and verify the revenue per
period
Selection of different levels of aggregation of revenue postings, parallel postings and additional and
customized checks
Foreign Currency Handling According to IAS 21/ASC 830
Contract Modification
Retrospective change, modification triggers re-allocation and cumulative catch up
Prospective change, allocation of the remaining revenue to the remaining performance obligations
Enhanced Capabilities / Flexibility for Contract Combinations
CO/PA integration
Account Determination can be derived from any attribute in order item RAIs’ with the Business Rules
Framework (BRF+)
Predecessor Documents – an order item can contain a reference to a predecessor document, i.e. return
Reconciliation of operational applications and revenue accounting
BAdi implementation of generic reconciliation framework with non-SAP operational sender systems
Simplified processing of periodic billing plans
ERP SAP hybris billing, invoicing component (formerly SAP Billing Revenue Innovation Management
(BRIM)) sends the required revenue accounting data for order items, fulfillments and invoices
Reconciliation of revenue accounting items with contracts at bill of material Item level
Integration with CRM Service Contract (including Package Quotation, service contracts, service order and
service confirmation) as stand alone or in combination with ERP SD Billing
Integration with cost object controlling – transfer for percentage of completion from results analysis to revenue
accounting, revenue accounting transfers revenue allocation to results analysis.
Enhanced CO account assignments – additional CO account assignments possible in revenue accounting and
through to reporting
Performance obligation creation direct from billing items
Simplified Invoice Handling (e.g. for flat rate Telco contracts)
Migration support – transfer all data per company code, existing sales order documents (excluding orders with
SAP SD revenue recognition)
Define transfer date and status per migration package and company code
Package with latest transfer date can still be in status migration while older packages are already
productive
Operational items have to be assigned distinctly to a package
Transfer of data from SAP Sales and Distribution (SD) revenue recognition functionality
Operational load from SAP Sales and Distribution order items transfers recognized revenue
from SAP SD revenue recognition
Transition Support
General support for full retrospective and modified retrospective transition to ASC 606/IFRS 15
Create new accounting principle as copy of existing principle or new load of data
Comments on the Roadmap of SAP Revenue Accounting and Reporting (RAR) beyond v1.3
SAP RAR is a flexible rule based and event based system that can be extended through project work or
customizations to cover additional requirements beyond its core capabilities. For each new SAP RAR release,
we consider many improvements to expand its core capabilities. For more information on the roadmap for SAP
RAR, please click here.
SAP customers wanting to provide feedback on any of these topics can contact their SAP sales representative
about joining the SAP Customer Engagement Initiative (CEI) for SAP RAR.