Combine Revenue Contracts
Application component: Revenue Accounting Contract Processing
App type: Transactional
Line of business: Finance
Leading industry: Cross Industry
Solution capability: Financial Accounting (S/4)|Revenue and Cost Accounting (S/4)
Description:  You can combine revenue contracts by following these steps:   Open the Fiori App Combine Revenue Contracts.   Search for your revenue contracts.   In the result list, select the two revenue contracts that you want to combine, and then select Quick Combine.   In the next popup window, specify the following information:   Target Revenue Contract that will remain   Reason Code of the contract combination   Effective Date of the contract combination     
User can use this application to combine two revenue contracts.
Key features: Determine the source contract and the target contractYou can decide which contract is the source contract and which is the target contract. The revenue contract that no longer exists after combination is the source contract. The revenue contract that remains after contract combination is the target contract.Validation of combining two revenue contractsThe system validates the information below for both revenue contracts that you want to combine.For the two revenue contracts that you will combine, they must have the same value in the following attributes:  Account Principle   Company Code   Customer   Business Partner Number   Local Currency Calculation Method   Level for Posting Liabilites and Assets to Posting Table   Transaction Currency   Receivable Adjustment Account   Type of the Financial Valuation Object  The following rules apply to both contracts:  Both the source contract and target contract were created using optimized contract management   Neither the source contract nor the target contract has Early Termination selected   Neither the source contract nor the target contract has Soft-deleted selected   The target contract will have at least one performance obligation (POB)   The effective date is no later than the current system date  Specify the reason code at contract combinationYou need to specify your reason codes for contract combination in customizing: Revenue Accounting   Revenue Accounting Contracts  Define Business Change Reason f. Manual Contract CombinationThe reason codes specified in customizing will be listed in the popup window of the contract combination.After you have defined your reason codes, you need to implement the BADI FARR_BADI_CHANGE_TYPE_DETN. This defines whether the reason code will be a retrospective change or prospective change.Price re-allocation and catchup calculation at contract combinationWhen you combine revenue contracts, the contract price of the target contract is reallocated according to the change type of the reason code.If the change type of the reason code is defined as a prospective change, then the system performs a prospective price re-allocation up to the effective date.If the change type of the reason code is defined as a retrospective change, then the system performs a retrospective price re-allocation and a catchup of recognized revenue will be calculated.For more information about price allocation, please refer to Reallocation at Contract Change with Change Type and Catch-up Calculation at Contract Change.Postings that already occurred for the source contract It is possible that before contract combination, there are already postings for the source contract. As the two revenue contracts will be combined, the postings that occurred on the source contract will be reversed using the source contract ID and then reposted using the target contract ID.The method used to reverse the source contract and repost using the target contract ID consists of the following: Granularity of the reversal and repost For revenue posting, invoice correction posting, and exchange rate difference posting, the reversal and reposting occurs on the POB level. For contract assets, contract liabilities, unbilled receivables, and deferred revenue (DR) posting:  If the Level for Posting Liabilities and Assets to Posting Table is on the contract level, then the reversal and reposting occurs on the contract level   If the Level for Posting Liabilities and Assets to Posting Table is on the POB level, then the reversal and reposting occurs on the POB level    Separation based on the reconciliation key status For postings without any open reconciliation keys after (and including) the fiscal period of the effective date, the reversal and reposting take the aggregated value and it is then posted in the fiscal period of the effective date.For postings with reconciliation keys that are not open after the fiscal period of the effective date, the reversal and reposting take the aggregated value of each period and posts them in each period separately.For postings with reconciliation keys that are still open on the source contract, the contract ID of those posting entries is directly changed to the target contract ID. Account determination For reversal and reposting of the revenue posting, invoice correction posting, and exchange difference posting, the account for the reverse posting and reposting of the entry, uses the existing account from the POB. For reversal and reposting of the contract asset, contract liability, unbilled revenue, and deferred revenue:  If the Level for Posting Liabilities and Assets to Posting Table is on the contract level:   The account for the reverse posting uses the existing account from the source contract   The account for the reposting uses the existing account from the target contract     If the Level for Posting Liabilities and Assets to Posting Table is on the POB level:   The account for the reverse posting and reposting entry, uses the existing account from the POB     
Business roles: Revenue Accountant| External Auditor
Revenue Accountant : 
Displays and edits revenue contracts relevant information, check and reconcile postings for revenue contracts. 

External Auditor : 
Reviews the accounts of organizations to ensure the accuracy and completeness of their financial records.