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Event-Based Revenue Recognition in S/4HANA 1610

by Ugur Hasdemir June 21, 2017 1 comment

In this blog I will explain the new Event-Based Revenue recognition functionality in S/4HANA 1610.
Type and hit enter...

The Purpose of event based revenue recognition in a nutshell:

◾ Real-Time Reporting

◾ No Reconciliation

◾ Full Transparency

With Event-Based Revenue Recognition, postings to relevant account assignment objects will lead to revenue
recognition calculations. The basis for the revenue recognition calculations are all document line items that are assigned
to the account assignment object.
technologies, U
S/4HANA and all relate
Processes that do not write a prima nota do not result in any real-time revenue recognition postings (for example,
changes of plan data do not directly result in revenue recognition postings). If necessary, period-end closing postings
(periodic revenue recognition) will correct the event-based postings.

In S/4HANA 1610 only the Sales Project with contract type Fixed Price, Time & Expense and Periodic Billing is supported
as account assignment object.

As mentioned, the basis for the revenue recognition calculations are all document line items that are assigned to the
Subscribe to
account assignment object (Project in this case). The entry of a source document (e.g. time confirmation), produces two
separate journal entries: First Name

◾ A journal entry for the initial cost or revenue posting

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◾ A journal entry for the revenue recognition posting

Last Name

Job Title

Email Address

Country of residence

Supported Revenue Recognition Proceedings 1

The below Revenue Recognition proceedings and billing types are supported in the current release:

◾ Cost/Working Hours Based (POC) – Fixed Price Billing

◾ Invoice Based (POC) – Fixed Price Billing

◾ Cost Based (T & E) – Time & Expense Billing

◾ Time Based Revenue recognition – Periodic Billing

◾ No Deferral – All Types of Billings

◾ Completed Contract – All Types of Billings Data Migration in

◾ Manual Revenue Recognition – All Types of Billings Revamped

Customizing steps for event based revenue recognition 2

In the S/4HANA 1610 system all the required customizing in Cost Object Controlling – Event Based Revenue Recognition
must be done. I won’t bother you with the customizing steps in detail but it consists of the following:

◾ Source Assignment

◾ Source Assignment and Posting Rule

◾ Result Analysis Key

◾ Document Type and Financial Statement Version

Sales Project with T&M billing and Cost Based POC Embedded Analy
(with demo video
Let’s see how Event-Based Revenue Recognition works.
3

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Event-Based Revenue Recognition in S/4HANA 1610 – S/4HANA Blog Page 3 of 7

In this example I use a sales project with T&M billing and Cost Based POC. The time confirmations are posted as expense
and realized revenues are posted based on DIP profile. Invoices are posted to P&L and reposted to deferred Revenue.

Sales price for man hours is € 100 and cost price is € 50. The process steps are as below.

The yellow outlined steps are the postings resulting from the event based revenue recognition. In addition the cost object to which the
postings belong are indicated.

S/4HANA 1709 wha

Sales Project with Periodic Service and Time Based Billing

Confirmations are posted as COS adjustments / WIP. Invoices are posted as realized revenues and reposted to deferred revenues. COGS
are calculated and posted based on DIP profile and COGS will post accrued costs. The periodic run recognizes cost and revenues time
based on the basis of the invoice schedule / billing plan.

Michał on
demo videos)

arifianty on

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Event-Based Revenue Recognition in S/4HANA 1610 – S/4HANA Blog Page 4 of 7

New App: Event Based Revenue Recognition Arnold on

The purpose of this new app is to monitor revenue recognition postings and perform manual adjustments.
Deepti on

Monika Patel on
Revamped

∠ BRF+

∠ Data Migration

∠ Embedded Analytics

∠ Fiori 2.0
The object list displays all billing elements that are relevant for the event-based revenue recognition with the value posted on the object in
separate columns for actual, accrued/deferred and recognized values.
∠ Management Accou

It is possible to select one object and drill-down to the details.

∠ Profitability Analysis

∠ S4HANA

∠ July 2018

∠ May 2018

∠ November 2017

∠ August 2017

∠ June 2017

∠ April 2017

It is possible to enter temporary manual adjustments through the app. Entered manual adjustments will be cleared again with the next ∠ March 2017

periodic revenue recognition run.

∠ February 2017

∠ January 2017

∠ December 2016

∠ BRF+

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Event-Based Revenue Recognition in S/4HANA 1610 – S/4HANA Blog Page 5 of 7

∠ Data Migration

∠ Embedded Analytics

∠ Fiori 2.0

∠ Management Accou

∠ Profitability Analysis

∠ S4HANA

Next to manual adjustments it is also possible to enter reserves. Manual Reserves will not be cleared again with the next
periodic revenue recognition run. The adjustments have to be cleared manually if needed. ANALYSIS FOR OFFICE

EMBEDDED
ANALYTICS

FIORI

MANAGEMENT ACCOUNTI

PROFITABILITY
ANALYSIS

S4HANA 1610

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UGUR
HASDEMIR

With a financial background combined with his passion for Information Technology, Uğur is a trusted advisor with
experience in ERP implementation since 2010 in the area of Financial and Management accounting. Driven by his
passion for new technologies, Uğur has focused on SAP S/4HANA since the introduction of Simple Finance in 2014.
Read More: http://s4hanablog.com/about-me/

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1 COMMENT

AR REPLY

 January 28, 2018 - 01:00

Hello Ugur ,
I need some help for Event Based Revenue Recognition . Are you able to help ?

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