How to realize the combination of contracts for revenue recognition

[tmsuzuki]

Dear,

SAP recognizes the registered order as a contract for revenue recognition,

but where do you decide to combine multiple purchase orders from customers into one contract?

Using SAP? or other system?

A customer uses an offline check sheet to determine contract merging, and then registers the result as an order.

If you have any example, I would be happy if you could share it.

Best regards,

Tomoyuki

[JulianoRomanato]

Hello tmsuzuki.

How are you? I have excluded the Tag "SAP S/4HANA Cloud" and included the Tag "SAP S/4HANA Cloud for Sales" for this question, as Sales Contracts are related to Sales Line of Business.

Regards.

Juliano Romanato.

[GeovanaLettnin]

Dear tmsuzuki,

We helped you to accept the answer, since there were no further updates under the topic.

You can unaccept it anytime if the answer provided was not helpful enough and you have further questions.

Best regards,

Geovana

[OwenLiu · Accepted solution]

Hi Tomoyuki,

Thanks for your reply.

From our understanding, the requirement is to combine sales orders, since purchase order is the main costs.

If so, suggest you to check the solution for CBRR:

Contract-Based Revenue Recognition | SAP Help Portal

Best Regards,
Owen

[tmsuzuki]

Dear　Owen,

Thank you for your support!

I will check the solution for CBRR.

Best regards,

Tomoyuki Suzuki

[tmsuzuki]

Dear Owen,

Thank you for your comment.

My customer asked about how to realize steps 1 and 2 of 5 steps of revenue recognition in S4HC or the other way(other system or manual)

As for the identification part of the judgment in step 1,

For example, if the same customer receives two purchase orders at the same time,

I think it should be considered the same contract.

I would like to confirm the operation part in that case.

In S4HC, 5 steps of revenue recognition,

-Step 1: Identification of the contract
-Step 2: Identify performance obligations
→Register the results as a sales order(Contract) and sales order item(performance obligations) in S4HC after step 1 and 2.

-Step 3: Calculate the transaction price

-Step 4: Allocate the transaction price to the transaction obligation
-Step 5: Recognition of revenue from satisfaction of performance obligations
→ Steps 3, 4 and 5 are supported by S4HC functions.

If you have any information about case studies of IFRS15, especially step 1 and 2, please let me know.

For example, Company A uses another system, Company B uses manual operation and Company C uses another SAP solution etc
I would be really happy if there is any information not limited to EPPM.

Thank you for your cooperation.

Best regards,

Tomoyuki

[OwenLiu]

Still not clear about the scenario..

"registered order as a contract", do you mean service contract?

Could you please describe the scenario more clearly?

[tmsuzuki]

Dear Owen,

Thank you for your comment.

The scope item is "4I9".,"BD9","J11".

Best regards,

Tomoyuki

[OwenLiu]

Hi Tomoyuki,

Which scenario are you talking about?

Do you have specific scope item?

Best Regards,
Owen