Revenue Accounting Contract
A revenue accounting contract is the object in SAP Revenue Accounting and Reporting (RAR) that represents a contract with a customer for accounting purposes. It groups the performance obligations whose transaction price is allocated together.
SAP
Explanation
Revenue accounting contracts are created and updated when revenue accounting items are processed. They contain:
• the performance obligations derived from source items, plus any additional obligations such as service-type warranties or material rights,
• the transaction price and its allocation based on standalone selling prices,
• revenue schedules and fulfillment status,
• contract asset and contract liability balances.
A revenue accounting contract does not have to match a single sales order. Items from several orders, systems, or documents can be combined – for example, by quote, master agreement, or customer project – according to the company's contract combination rules.
Why It Matters
How items are combined into contracts determines which items share an allocation and therefore directly affects revenue timing and contract balances. Contract combination is one of the most important design decisions in an SAP RAR implementation.
Related Terms
SAP RAR · Revenue Accounting Item · Performance Obligation · Allocation · Contract Modification · Contract Combination
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