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Introduction
SAP Real Estate Management module, is a part of the comprehensive SAP ERP suite, stands out as a powerful tool designed to address the complex needs of real estate professionals. This module integrates seamlessly with other SAP functionalities, providing a robust platform for managing property portfolios, lease agreements, and facility operations. However, one critical limitation that users must be aware of, is its incompatibility with the Accrual Engine Legacy Migration for Real Estate contracts.
This article delves into the implications of this limitation, providing insights into how organizations can overcome the challenges associated with migrating real estate contracts within SAP.
Real Estate Accrual Engine Legacy Migration Limitation
Leasing Contracts that have more than one month rental period, Paid or collected in advance , shall have Rent amortization entries, these entries help in the systematic allocation of rent expenses over the lease term, ensuring that the financial statements accurately reflect the true financial position and performance of the organization by spreading the cost/revenue of a lease over the rental period.
Kindly check the below business example, explaining the issue using SAP terminology
Fiscal year Start = 01.07
Cutoff Date= 31.03.2024
Contract start date=01.02.2020
Condition Start Date (Current Rental Period)= 01.02.2024
Condition Amount =9000
Frequency = 3 Months- In advance
Deferral Balance =6000
Deferral Remaining amount = 3000
According to SAP, Accrual Engine Legacy data transfer for the above business example is not supported by RE-FX and the Legacy Data Transfer Customizing view V_TACEDS_LEGACYM can not be maintained in the RE environment and that handling of legacy accrual/deferral data is only supported by RE-FX when migrating from RE Classic.
Also one of SAP recommendation is to ensure that the opening balance for respective accrual/deferral accounts is zero at the point when starting with the RE-FX accrual/deferral, which practically will not be applicable to have accrual/deferral accounts zero for all leasing contracts
Accrual Engine Legacy Migration Technique
Based on the above limitation, we used a workaround technique, to be able to migrate Accrual Deferral amounts in Real Estate Module
Rental period within one Fiscal year - 2024
Fiscal year Start = 01.07
Cutoff Date= 31.03.2024
Contract start date=01.02.2020
Condition Start Date (Current Rental Period)= 01.02.2024
Condition Amount =9000
Frequency = 3 Months- In advance
Deferral Balance =6000
Deferral Remaining amount = 3000
- Accrual / Deferral Date:
“Cash Flow” Date should be = 01.02.2024 – “Start of the Rental Period”
Then we need to execute “Accrual / Deferral” run – T-Code: RERAALCN and Key date should be the same as the cutoff date : 31.03.2023
Cash Flow Rule (Rental period across One Fiscal year) : Date should be the start of rental period
- The below accounting entries will be generated for the Accrual / Deferral run in 31.03.2024
1 | Dr 1* Prepaid Rent 9000 Cr 3* Rent Expense 9000 | Inception Entry - I |
2 | Dr 3* Rent Expense 6000 Cr 1* Prepaid Rent 6000 | Periodic Recognition Entry- P |
- Based on the above Accrual / Deferral Run entries , Prepaid rent GL account will have correct balance , but regarding Rent Expense / or Revenue accounts we will still have delta amounts for the pervious rental periods in the current fiscal year, which should be uploaded using LTMC or whatever uploading tool.
Now let’s see the above example applied on SAP Flexible Real estate Module
Create Lease In Real Estate Contract
Fiori App | Manage Contract |
Menu Path | SAP Menu è Accounting è Flexible Real Estate Management è Contract è Process Contract |
T-Code | RECN |
Rent Frequency = 3 Months
Rent Condition Amount = 9000
Current Rental Period From 01.02.2024 to 30.04.2024
Cash Flow From= 01.02.2024 (Start of the Rental Period – Condition Valid From Date)
As part of the Real Estate Migration Steps , execute the Accrual / Deferral run on the Cut Off Date, 31.03.2024
Fiori App | Accrual/Deferral: Contracts |
Menu Path | SAP Menu è Accounting è Flexible Real Estate Management è Accounting è Accrual/Deferral è Accrual/Deferral: Contracts |
T-Code | RERAALCN |
Accrual / Deferral Run Accounting entries
Deferral Balance , and Deferral remaining Balance
Fiori App | Display Accrual Objects |
Menu Path | SAP Menu è Accounting è Flexible Real Estate Management è Accounting è Accrual/Deferral è Display Accrual Objects |
T-Code | REEXACRSHOW |
Now let’s see more complex example when Rental period is across two years and we need to post to the Prepaid GL account (Balance Sheet GL) , the amount related to current Fiscal Year only.
Rental period across Two Fiscal years 2023 / 2024
Fiscal year Start = 01.07
Cutoff Date= 31.03.2024
Contract start date=01.05.2020
Condition Start Date (Current Rental Period)= 01.05.2023
Condition Amount =12000
Frequency = 12 Months- In advance
Balance =11000
Remaining amount = 1000
- Accrual / Deferral Date:
“Cash Flow” Date should be = 01.07.2023
Then we need to execute “Accrual / Deferral” with the cut off date : 28.02.2024
Cash Flow Rule (Rental period across Two Fiscal years) : Date should be the start of fiscal year (01.07)
- The below accounting entries will be generated for the Accrual / Deferral run in 31.03.2024
1 | Dr 1* Prepaid Rent 10000 Cr 3* Rent Expense 10000 | Inception Entry - I |
2 | Dr 3* Rent Expense 9000 Cr 1* Prepaid Rent 9000 | Periodic Recognition Entry- P |
Now let’s see the above example applied on SAP Flexible Real estate Module
Create Lease In Real Estate Contract
Fiori App | Manage Contract |
Menu Path | SAP Menu è Accounting è Flexible Real Estate Management è Contract è Process Contract |
T-Code | RECN |
Cash Flow From= 01.07.2023 (Start of Fiscal Year Date)
Rent Frequency = 12 Months
Rent Condition Amount = 12000
Current Rental Period From 01.07.2023 (Cash Flow From Date) to 30.04.2024
As part of the Real Estate Migration Steps , execute the Accrual / Deferral run on the Cut Off Date, 31.03.2024
Fiori App | Accrual/Deferral: Contracts |
Menu Path | SAP Menu è Accounting è Flexible Real Estate Management è Accounting è Accrual/Deferral è Accrual/Deferral: Contracts |
T-Code | RERAALCN |
Accrual / Deferral Run Accounting entries
Deferral Balance , and Deferral remaining Balance
Fiori App | Display Accrual Objects |
Menu Path | SAP Menu è Accounting è Flexible Real Estate Management è Accounting è Accrual/Deferral è Display Accrual Objects |
T-Code | REEXACRSHOW |
Disclaimer and Liability Notice
This article may discuss sample coding or other information that does not include SAP official interfaces and therefore is not supported by SAP. Changes made based on this information are not supported and can be overwritten during an upgrade.
SAP will not be held liable for any damages caused by using or misusing the information, code or methods suggested in this document, and anyone using these methods does so at his/her own risk.
SAP offers no guarantees and assumes no responsibility or liability of any type with respect to the content of this technical article or code sample, including any liability resulting from incompatibility between the content within this document and the materials and services offered by SAP. You agree that you will not hold, or seek to hold, SAP responsible or liable with respect to the content of this document.
SAP Real Estate Management FIN Real Estate
