
Contract-Based Revenue Recognition - IFRS (3KK)
The scope item enables you to manage revenue recognition according to IFRS 15 following the five-step model.
Revenue contracts are created automatically for the corresponding provider contracts created in Contract Accounting and Invoicing.
You can identify the performance obligations included in each revenue contract based on the items in the provider contract.
You can determine the total price and then allocating the total price among the performance obligations based on the standalone selling price.
The revenue for performance obligations is recognized as they are fulfilled over time.
You calculate contract liability and contract asset values and make postings to the general ledger to reflect revenue-related recognition transactions.
Key Process Steps Covered
- Manage revenue contracts
- Process revenue contracts
- Perform periodic activities including transfer revenue, calculate contract liabilities and contract assets, and post revenue to general ledger
- Shift revenue contracts to next period
Benefits
- Eliminate the need for manual processes through process automation and integration
- Support compliance to revenue accounting standard IFRS 15
- Provide reconcilable contract management for revenue recognition
Additional Information
- This scope item is excluded from the default activation
This scope item supports revenue recognition according to IFRS 15 for contract accounting and invoicing. To use this scope item, you must have a license for the contract accounting and invoicing solution, which is separately priced.
Where is Contract-Based Revenue Recognition - IFRS(3KK) being used?
This Scope item is used in the following way:
- As a support function of Accounting and Financial Close within Finance Scope Item Group