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SAP Inside Track

2º
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Lecture:

1º
Revenue Accounting and Reporting (RAR)
in SAP S/4HANA 2020

Daniel Mateo
SAP S/4HANA Project Manager

www.linkedin.com/in/dmateop
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Revenue Accounting and Reporting (RAR) #SitFOR

AGENDA

1 Self introduction 4 Main Customizing

Steps

2 What is SAP RAR 5 Process flow within

SAP S/4HANA 2020

3 Main Features and

Processes
6 Q&A

Fortaleza #SitFOR
Internal
Revenue Accounting and Reporting (RAR) #SitFOR

AGENDA

1 Self introduction 4 Main Customizing

Steps

2 What is SAP RAR 5 Process flow within

SAP S/4HANA 2020

3 Main Features and

Processes
6 Q&A

Fortaleza #SitFOR
Internal
Revenue Accounting and Reporting (RAR) #SitFOR

Daniel Mateo - SAP S/4HANA Project Manager

14 years experience in SAP financial accounting and
controlling modules (FICO).

Professional certifications: SAP Activate Project Manager, SAP

S/4HANA Financial Accounting, Project Manager Professional
(PMP), ITIL…

7 SAP Rollouts in America, 9 in Europe, 2 SAP S/4HANA

Greenfield implementation and 1 Global Upgrade.

Fortaleza #SitFOR
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Revenue Accounting and Reporting (RAR) #SitFOR

AGENDA

1 Self introduction 4 Main Customizing

Steps

2 What is SAP RAR 5 Process flow within

SAP S/4HANA 2020

3 Main Features and

Processes
6 Q&A

Fortaleza #SitFOR
Internal
Revenue Accounting and Reporting (RAR) #SitFOR

WHAT IS SAP RAR?

SAP Add-on designed to help companies comply with IFRS 15
REVENUE ACCOUNTING for revenue recognition processes
AND REPORTING

Five Step Model for IFRS 15 Considerations related to SAP RAR in S/4HANA:
1. Identify the contract
• SD-based revenue recognition is not longer
2. Identify the Performance available in SAP S/4HANA
Obligations (POB)
• For brownfield and greenfield implementations,
3. Determine Transaction Price
must migrate all SD Revenue Recognition relevant
4. Allocate Revenue sales orders and contracts to SAP RAR prior to the
5. Recognize Revenue S/4HANA conversion/implementation.
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Revenue Accounting and Reporting (RAR) #SitFOR

AGENDA

1 Self introduction 4 Main Customizing

Steps

2 What is SAP RAR 5 Process flow within

SAP S/4HANA 2020

3 Main Features and

Processes
6 Q&A

Fortaleza #SitFOR
Internal
Revenue Accounting and Reporting (RAR) #SitFOR

MAIN FEATURES
Multiple Element
Integration Arrangements Parallel Accounting

• SAP S/4HANA Sales and • Allocate transaction price to • Manage all data and
Distribution (SD) distinct items of a contract. valuations separately for
• Combine items from parallel accounting
• SAP S/4HANA for Customer principles.
Management (CRM) different operational
contracts into one contract. • Parallel accounting
• SAP Billing and Revenue principles can post to
Innovation Management • Combine items from
different operational different ledgers or
(BRIM) – Hybris Billing accounts.
applications.
• External Systems

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Revenue Accounting and Reporting (RAR) #SitFOR

ENHANCEMENTS IN SAP S/4HANA 2020

Create or change
Performance Obligations
(POBs) using Manage
Revenue Contracts App
Display all documents
Check and resolve contracts
relevant for a performance
with conflicts in Conflicted
obligation​ using the
Revenue Contracts Worklist
Document Flow –
App.
Performance Obligations App

View the change history for Integrated with costing-based

Cover compound groups and
revenue contracts using the profitability analysis (CO-PA)
Bill of Materials (BOMs)
Display Change History App

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Revenue Accounting and Reporting (RAR) #SitFOR

FIVE STEP FLOW

IDENTIFY IDENTIFY DETERMINE ALLOCATE RECOGNIZE
CONTRACT POB TRANS PRICE REV REV

Promise to transfer The amount that the Allocate transaction

goods or services to a seller expects to be price to the distinct Recognize Revenue
Contract(s) with a paid in exchange for POBs.
customer. when a POB is
customer: transferring the Based on the relative satisfied: service
Agreement between If those goods or goods or services. standalone selling rendered or goods
two or more parties services are distinct, Allocable transaction prices of each issued.
that has enforceable the promises are price is the net price distinct good or Can be calculated on
rights and performance minus any discounts service agreed in time basis or based
obligations. obligations and are given to the contract. on percentage of
accounted for customer in the completion.
separately. contract initiation.
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Revenue Accounting and Reporting (RAR) #SitFOR

IMPORTANT CONCEPTS

CONTRACT ASSET CONTRACT LIABILITY

Difference between revenue recognized Difference between invoiced amount and

and invoiced amount, when the invoiced revenue recognized, when the invoiced
amount is lower than the revenue amount is greater than the revenue
recognized. recognized.

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Revenue Accounting and Reporting (RAR) #SitFOR

EXAMPLE 1
Step 1 Contract with a mobile provider
• Cellphone sold under contract at 300EUR with 3 months data suscription.
• Full amount settled when the contract starts
• Cellphone delivered inmediately and service provided for the 3 months period

Step 2 Step 3 Step 4 Step 5

POB Material Description Contract SSP Allocated Fulfilment Recog. Rev. Recog. Rev. Recog. Rev.
Price amount type Month 1 Month 2 Month 3
POB1 Cellphone 300 € 250 € 220,58 € Event based 220,58 €

POB2 Mobile subscription 90 € 79,42 € Time based 26,47 € 26,47 € 26,48 €

Total 300 € 340 € 300 € 247,05 € 273,52 € 300 €

Contract Liability Month 1: 300 € – 247,05 € = 52,95 € Contract Liability Month 2: 300 € – 273,52 € = 26,48€
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Revenue Accounting and Reporting (RAR) #SitFOR

EXAMPLE 2
Step 1 Contract with a mobile provider
• Cellphone sold with 3 months data suscription under contract of 100EUR per month.
• Cellphone delivered inmediately and service provided for the 3 months period

Step 2 Step 3 Step 4 Step 5

POB Material Description Contract SSP Allocated Fulfilment Recog. Rev. Recog. Rev. Recog. Rev.
Price amount type Month 1 Month 2 Month 3
POB1 Cellphone 300 € 250 € 220,58 € Event based 220,58 €

POB2 Mobile subscription 90 € 79,42 € Time based 26,47 € 26,47 € 26,48 €

Total 300 € 340 € 300 € 247,05 € 273,52 € 300 €

Contract Asset Month 1: 247,05 € - 100 € = 147,05 € Contract Asset Month 2: 273,52 € - 200 € = 73,52€
Fortaleza #SitFOR
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Revenue Accounting and Reporting (RAR) #SitFOR

AGENDA

1 Self introduction 4 Main Customizing

Steps

2 What is SAP RAR 5 Process flow within

SAP S/4HANA 2020

3 Main Features and

Processes
6 Q&A

Fortaleza #SitFOR
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Revenue Accounting and Reporting (RAR) #SitFOR

INTRODUCTION TO CUSTOMIZING
• Since it is a product with a few implementations, without any action, the error message
FARR_FOUNDATION 300 is displayed while assigning accounting principle within Revenue
Accounting Customizing.

• It is required to open an incident on component FI-RA-CP in the SAP Support Portal following
SAP Note 2656669 - Activation of Revenue Accounting for SAP S/4HANA 1809 and later

• For detailed information about prerequisites and configuration, refer SAP Note 2915107 -
Revenue Accounting and Reporting with SAP S/4HANA 2020: Release Information Note

• Customizing Menu is available in T.Code FARR_IMG

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Revenue Accounting and Reporting (RAR) #SitFOR

MAIN CUSTOMIZING Sender Components

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MAIN CUSTOMIZING Condition Types

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MAIN CUSTOMIZING BRF+

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MAIN CUSTOMIZING BRF+

Following BRF+ application templates are delivered by SAP by default:

• FARR_ACC_DETERMINE_TEMPLATE: Template for Account Determination.

• FARR_POB_STATUS_TEMPLATE: Template to determine the status for Performance of Obligations.
• FARR_AP_SD_PROCESS_TEMPLATE: Template for revenue accounting item classes used for the
integration with Sales and Distribution (SD).
• FARR_AP_CA_PROCESS_TEMPLATE: Template for revenue accounting item classes used for the
integration of SAP BRIM – Hybris Billing (sender component CA).
• FARR_AP_CRM_PROCESS_TEMPLATE: Template for revenue accounting item classes used for the
integration of SAP Customer Relationship Management (CRM).
• FARR_AP_PROCESS_TEMPLATE: Template for revenue accounting item classes used for the integration
of any other sender component.
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Revenue Accounting and Reporting (RAR) #SitFOR

MAIN CUSTOMIZING BRF+

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Revenue Accounting and Reporting (RAR) #SitFOR

MAIN CUSTOMIZING BRF+

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Revenue Accounting and Reporting (RAR) #SitFOR

MAIN CUSTOMIZING Assignment BRF+

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Revenue Accounting and Reporting (RAR) #SitFOR

MAIN CUSTOMIZING Assignment BRF+

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Revenue Accounting and Reporting (RAR) #SitFOR

MAIN CUSTOMIZING Contract Categories

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Revenue Accounting and Reporting (RAR) #SitFOR

MAIN CUSTOMIZING Contract Categories

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Revenue Accounting and Reporting (RAR) #SitFOR

MAIN CUSTOMIZING Accounting principles

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Revenue Accounting and Reporting (RAR) #SitFOR

MAIN CUSTOMIZING Accounting principles

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Revenue Accounting and Reporting (RAR) #SitFOR

MAIN CUSTOMIZING POB types

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Revenue Accounting and Reporting (RAR) #SitFOR

MAIN CUSTOMIZING Generate Interfaces

T. Code FARR_RAI_GEN

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Revenue Accounting and Reporting (RAR) #SitFOR

MAIN CUSTOMIZING Maintain periods

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Revenue Accounting and Reporting (RAR) #SitFOR

AGENDA

1 Self introduction 4 Main Customizing

Steps

2 What is SAP RAR 5 Process flow within

SAP S/4HANA 2020

3 Main Features and

Processes
6 Q&A

Fortaleza #SitFOR
Internal
Revenue Accounting and Reporting (RAR) #SitFOR

MAIN PROCESSES
IDENTIFY IDENTIFY DETERMINE ALLOCATE RECOGNIZE
CONTRACT POB TRANS PRICE REV REV

T. Code FARR_RAI_MON T. Code FARR_REV_TRANSFER

T. Code FARR_LIABILITY_CALC

T. Code FARR_REV_POST

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MAIN PROCESSES FARR_RAI_MON

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MAIN PROCESSES FARR_RAI_MON

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Revenue Accounting and Reporting (RAR) #SitFOR

MAIN PROCESSES FARR_RAI_MON

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Revenue Accounting and Reporting (RAR) #SitFOR

MAIN PROCESSES

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Revenue Accounting and Reporting (RAR) #SitFOR

MAIN PROCESSES FARR_REV_TRANSFER

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Revenue Accounting and Reporting (RAR) #SitFOR

MAIN PROCESSES FARR_LIABILITY_CALC

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Revenue Accounting and Reporting (RAR) #SitFOR

MAIN PROCESSES FARR_REV_POST

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MAIN PROCESSES FARR_REV_POST

POB Material Description Contract SSP Allocated Allocation Fulfilment type Recog. Rev. Recog. Rev. Recog. Rev.
Price amount Effect Month 1 Month 2 Month 3
POB1 Cellphone 300 € 250 € 220,58 € -79,42 € Event based 220,58 €
POB2 Mobile subscription 90 € 79,42 € 79,42 € Time based 26,47 € 26,47 € 26,48 €
Total 300 € 340 € 300 € 247,05 € 273,52 € 300 €
Contract Liability Month 1: 300 € – 247,05 € = 52,95 € Contract Liability Month 2: 300 € – 273,52 € = 26,48€

GL Account D/C Amount GL Account D/C Amount

Revenue Adjustment Account (Invoice Correction) D 300 € Recognized Rev. Account (Trans. Price – Contract) C -300 €
Receivable Adjustment Account C -300 € Receivable Adjustment Account D 300 €

Rev. Allocation Account (Allocation Effect – Cellphone) D 79,42 €

GL Account D/C Amount
Receivable Adjustment Account D 52,95 €
Contract Liabilities Account C -52,95 €
Contract Asset Account D 0€
Receivable Adjustment Account C -79,42 €
Rev. Allocation Account (Allocation Effect – Subscript.) C -26,47€
Receivable Adjustment Account D 26,47€

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Revenue Accounting and Reporting (RAR) #SitFOR

MAIN PROCESSES

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Revenue Accounting and Reporting (RAR) #SitFOR

REPORTING

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Revenue Accounting and Reporting (RAR) #SitFOR

REPORTING

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Revenue Accounting and Reporting (RAR) #SitFOR

REPORTING

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Revenue Accounting and Reporting (RAR) #SitFOR

REPORTING

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Revenue Accounting and Reporting (RAR) #SitFOR

REPORTING

Fortaleza #SitFOR
Internal
Revenue Accounting and Reporting (RAR) #SitFOR

AGENDA

1 Self introduction 4 Main Customizing

Steps

2 What is SAP RAR 5 Process flow within

SAP S/4HANA 2020

3 Main Features and

Processes
6 Q&A

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