Serial
No. Content Point
1 What is SAP RAR?
Considerations related to
2
SAP RAR in S/4HANA:
3 Five Step Model for IFRS 15:
4 Main Features of SAP RAR:
Enhancements in SAP
5 relevant for a performance obligation using the Document Flow – Performance
S/4HANA 2020:
Five-Step Flow for Contracts
6
with a Customer:
7 Important Concepts in RAR:
8 Introduction to Customizing:
9 Main Customizing Steps:
Summary
SAP RAR (Revenue Accounting and Reporting) is an SAP Add-on designed to assist
companies in complying with IFRS 15 for revenue recognition processes. It ensures
accurate revenue recognition and reporting.
- SD-based revenue recognition is no longer available in SAP S/4HANA. - For
brownfield and greenfield implementations, it is necessary to migrate all SD Revenue
Recognition relevant sales orders and contracts to SAP RAR before S/4HANA
conversion/implementation.
1. Identify the contract
2. Identify the Performance Obligations (POB)
3. Determine Transaction Price
4. Allocate Revenue
5. Recognize Revenue
- Integration with SAP S/4HANA Sales and Distribution (SD) - SAP S/4HANA for
Customer Management (CRM) - SAP Billing and Revenue Innovation Management
(BRIM) – Hybris Billing - External Systems - Allocate transaction price to distinct items
of a contract. - Combine items from different operational contracts into one contract. -
Combine items from different operational applications. - Manage all data and
valuations separately for parallel accounting principles. - Parallel accounting principles
can post to different ledgers or accounts.
- Ability to create or change Performance Obligations (POBs) using the Manage
Revenue Contracts App. - Capability to check and resolve contracts with conflicts
through the Conflicted Revenue Contracts Worklist App. - Display of all documents
Obligations App. - View change history for revenue contracts using the Display Change
History App. - Enhanced support for compound groups and Bill of Materials (BOMs). -
Integration with costing-based profitability analysis (CO-PA).
- Identify the contract, which is an agreement with enforceable rights and
obligations between parties.
- Identify Performance Obligations (POB) within the contract, especially if they
are distinct and can be accounted for separately.
- Determine the transaction price, representing the amount the seller expects to
be paid for transferring goods or services.
- Allocate the transaction price to distinct POBs based on their relative
standalone selling prices. –
 Recognize revenue when a POB is satisfied, which could be based on time or
percentage of completion.
- Contract Asset: Represents the difference between revenue recognized and invoiced
amount when the invoiced amount is lower than the revenue recognized. - Contract
Liability: Represents the difference between invoiced amount and revenue recognized
when the invoiced amount is greater than the revenue recognized.
- Customizing is required for SAP RAR, and it involves opening an incident to activate
Revenue Accounting for SAP S/4HANA 1809 and later versions. - Prerequisites and
detailed configuration information can be found in SAP Notes. - Customizing Menu is
available in T.Code FARR_IMG.
- Configuration of Sender Components - Configuration of Condition Types -
Configuration of BRF+ (Business Rules Framework plus) - Assignment of BRF+
Templates - Assignment of Contract Categories - Configuration of Accounting
Principles - Configuration of POB Types - Generation of Interfaces - Maintenance of
Periods
 - Using T.Code FARR_RAI_MON for contract identification, POB identification,
determining transaction price, allocating revenue, and recognizing revenue. - Utilizing
10 Main Processes in SAP RAR: T.Code FARR_REV_TRANSFER for revenue transfers. - Utilizing T.Code
FARR_LIABILITY_CALC for liability calculations. - Using T.Code FARR_REV_POST for
revenue posting.

- Reporting capabilities within SAP RAR for tracking and analyzing revenue-related
11 Reporting in SAP RAR:
data.