SAP Knowledge Base Article - Public

2608974 - Realized Revenue amount per Period Unexpected for Fix-Price Contract Item

Symptom

  • You create a fix price contract item XYZ-XX in a foreign currency (XYZ-XX represents the contract item ID). 
  • You assign a straight-line accrual method.
  • You check the Calculated Revenue per period in the foreign transaction currency and the Realised Revenue amounts in  local company currency:
  • For each period of the contract item's life span the same Calculated Revenue appears.
  • But the Realised Revenue amounts in company currency are different in each period.

Environment

SAP Business ByDesign

Reproducing the Issue

  1. Go to the Cost and Revenue work center.
  2. Go to the Sales Document Items view. 
  3. In the Accounting Data tab check the Revenues per Period table. 
  4. In the Calculated Revenue column the same amount appears for each period of the contract item's life span. 
  5. But in the Realised Revenue column the amounts appear very different in each period.
  6. You try to translate the Calculated Revenue amounts into the Realised Revenue amounts, applying the respective valid exchange rate but the amounts are different. 

Cause

  • When a contract item is maintained with a list price in a foreign currency then each revenue recognition run revalues the revenue to be realised based on the total contract item net value in company currency, valid on the posting date of the run.
  • The realised revenue is calculated as a delta of the net value to be realised in the period and the revenue that has been realised so far, with previous revenue recognition runs. 
  • So, comparing the calculated and realised revenue per period will not translate into transaction currency amount per period x Exchange Rate = Realised Revenue/ Company currency amount.

Example:

  • Company Currency: USD
  • Contract item XYZ-XX 
  • Transaction Currency: EUR
  • Net Value: 12.000,00 EUR
  • This revenue is to be realised evenly across 12 periods: Calculated Revenue per period: 1.000,00 EUR 

Period 1: 

  • Exchange Rate EUR-USD: 1,194
  • Contract Iem Net value in company currency: 14.328,00 USD (12.000,00 EUR x  1,194) 
  • Revenue to be realised per period: 1.194,00 USD (14.328,00 USD / 12)
  • Realised Revenue in period 1: 1.194,00 USD  [(14.328,00 USD / 12) x1]

Period 2: 

  • Exchange Rate EUR-USD: 1,218
  • Contract item net value in company currency: 14.616,00 EUR (12.000,00 EUR x 1,218) 
  • Revenue to be realised per period: 1.218,00 SUD (14.616,00 /12)
  • Revenue to be realised in period 2: 2.436,00 USD [(14.616,00 /12) x 2
  • Previously realised revenue (in period 1): 1.194,00 USD
  • Delta/Realised Revenue in period 2: 1.242,00 USD (2.436,00 USD - 1.194,00 USD)

Period 3: 

  • Exchange Rate EUR-USD: 1,23
  • Contract item net value in company currency: 14.760,00 USD (12.000,00 EUR x 1,23)
  • Revenue to be realised per period: 1.230,00 (14.760,00 USD / 12)
  • Revenue to be realised in period 3: 3.690,00 USD [(14.760,00 USD / 12) x3]
  • Previously realised revenue: 2.436,00 USD
  • Delta/Realised Revenue in period 3: 1.254,00 USD

etc.

Resolution

This is the designed system behavior.

See Also

Help Document: Revenue Recognition for Customer Contracts

KBA: 2609018 - How Exchange Rate is Derived for Different User's Time Zone

Keywords

Revenue Recognition. Realised Revenue. Calculated Revenue. Contracts. Current Earned Revenues Amount. Total Revenue. Exchange Rate. Currency , KBA , SRD-FIN-COR , Cost & Revenue , How To

Product

SAP Business ByDesign all versions