SAP Knowledge Base Article - Public

3081920 - Revenue Recognition Run Posts Negative Revenue After POC Change

Symptom

  • You execute a revenue recognition run for sales order item XYZ-XX of project ABC (XYZ-XX represents the sales order item ID, ABC represents the project ID). 
  • The sales order item is assigned to a POC based accrual method, for example 108-Recognize using Cost-to-Cost Project POC. 
  • In the run's application log you notice a negative Current Recognized Revenue Amount. 

Environment

SAP Business ByDesign

Reproducing the Issue

  1. In the Cost and Revenue work center go to the Revenue Recognition view.
  2. Find run XXX and open the Log Result.
  3. Navigate to the Processed Successfully tab.
  4. Choose the Advanced Information tab and select POC-Based.
  5. Find the entries for sales order items XYZ-XX.
  6. In the Current Recognized Revenue Amount a negative value appears. 

Cause

The Percentage of Completion (POC) has been reduced for the sales order item since the last update run.

When using POC based accrual methods then the due revenue is realized according to the calculated/manually maintained POC. The POC is calculated with the formula Actual Cost ÷ Planned Cost.

Example:

For Sales Order item XYZ-XX a Net Value (planned revenue) of 1000,00 LC (Local Currency) is calculated.

In a previous run a POC of 40% is to be used. Accordingly, 40% of the item's planned revenue are realized, 400,00 LC.

Later, the POC got reduced, either

  • manually or
  • by reducing the actual costs, for example due to expense reversals or manual journal entry adjustments
  • by increasing the planned cost (for accrual method 108 this means, further planned work or expenses, or materials were added to the project)

Now the POC of the sales order item is 30%.

The next revenue recognition run checks all previously posted values.

As the POC is now 30% only 30% of the sales order item's net value are due to be realized.

The run therefore reduces the revenue by 100,00 LC which appears as a negative figure,  -100,00 LC,  in the Current Recognized Revenue amount column.

Resolution

To analyze why the revenue recognition run calculates a negative amount in the Current Recognized Revenue amount column

1. Check the Revenue recognition history report:

  1. In the Sales Documents Items view find Sales Order item XYZ-XX.
  2. Press Revenue Recognition and choose Revenue Recognition History. 
  3. In the report check, the Total Earned Revenue amount of the update run executed before the run that recognized the negative revenue amount. 
  4. Take note of the run's ID. 

2. Check the last Update run: 

  1. In the Revenue Recognition view, find the run which you just noted down.
  2. Open the Application log and navigate to the Processed Successfully tab.
  3. Choose the Advanced Information tab and select POC-Based.
  4. Check the POC used and compare this with the POC used of the current run. 
  5. You'll notice that the POC previously used is higher than the POC used in your current run. 

3. Find out why the POC has been reduced:

3.a. POC data of the sales order item:

  1. In the Sales Document Items view find Sales Order item XYZ-XX.
  2. Press Edit Manual Revenue Recognition Data and choose Percentage of Completion. 
  3. Compare the Last POC used value and the Calculated value: The calculated value could be lower than the last POC. Or a manual, lower POC is maintained. 

3.b. Change log of the Sales Order item:

  1. In the Sales Document Items view find Sales Order item XYZ-XX.
  2. In the Administrative Data tab press on the View Changes link.
  3. Check if there has been any manual change of the POC since the last update run. 

3.c. Check if there are any reductions of the Actual Costs:

  1. In the Sales Document Items view find Sales Order item XYZ-XX.
  2. Press Reports and choose Sales Document - Line Items for Project. 
  3. Check if there have been any expense reversals or manual journal entry postings that reduced the actual cost of the project since the last update run. 

Should you still not be sure why the POC used by the current run is lower than the POC used by the last update run contact support.

Keywords

negative current recognized revenue, POC, 108, 102 , KBA , SRD-FIN-COR , Cost & Revenue , Problem

Product

SAP Business ByDesign 2105