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SAP has introduced enhancements to SAP Business ByDesign to allow customers to comply with accounting standard IFRS 15/ASC 606 revenue recognitions requirements.  The series of case documents introduces the key requirements of IFRS 15 /ASC 606 along with steps to be taken by the client to implement the new functionality.

This special topic document focuses on:

  • How to apply late changes to the RAC and POB assignment after release of sales documents

  • the implications of applying a late change

Business Scenario

The customer should have established controls to ensure an IFRS15/ASC606 compliant sales processes, ranging from sales order creation to revenue recognition in accounting. A special focus should be put on the correct RAC and POB assignment.
By default, the SAP Business ByDesign system treats every new sales order or new customer contract as new revenue accounting contract (RAC); every sales document item is treated as new performance obligation (POB). Based on the commercial agreements the sales agent can overwrite this default to represent the correct structuring of the contract and POBs in the sense of IFRS15/ASC606. This should usually happen BEFORE the release of the order.

In case of exceptional instances, despite of controls (e.g. 4-eyes principle) or due to the lack of it there is a need to change the RAC and POB assignment AFTER the release of a sales document, SAP Business ByDesign allows to do so. But, this comes with one restriction: this is only possible before final fulfillment. Thereafter these changes or not possible any more.


A change to an existing RAC and POB structure always leads to a change of the given allocation base. The changes are applied in a retrospective manner (in the terms of IFRS15/ASC606). This means, it is treated as if the new adjusted RAC and POB structure were in place at contract inception.


Late changes must be activated in scoping:

  • For sales orders: “Do you want to allow late changes to quantity, price and ship-to for services?”

  • For customer contracts: “Do you want to allow late changes to price in customer contracts?”

Implications of late changes

All changes lead to:

  • An adoption of the allocation base of the new RAC structure

  • The next revenue recognition run will do cumulative adoption postings only taking the current valid RAC / POB assignments into account

  • Changes are treated as a retrospective change according to IFRS15 / ASC606

Following change scenarios have been enabled:

  • RAC changes to a released sales document:

    • Assign to an existing RAC

    • Assign to a new RAC

  • In both cases above all sales doc items will be defaulted as new POBs.

  • Performance obligations changes within a RAC:

    • Capability to create new performance obligation to assign existing sales document items to

    • Compound multiple sales document items into a single POB

The next illustrations show the impact of such a change:

Scenario 1: Compounding 2 RACs into a single RAC

Scenario 2: De-composing one compounded RAC into 2 single RACs

Scenario 3: Compounding POBs

Scenario 3: De-Compounding POBs

Next Revenue Recognition Run

If in a prior fiscal period a revenue recognition run has been executed, it will assure a cumulative correction/adoption posting so that the new allocation base is considered with the next revenue recognition run.

But please be aware: in case you repeat a run for a prior period after such a late change, repeat the runs for all following periods as well. It is up to the accountant to decide how to handle these cases: either repeat all former periods affected by the change or execute the run for the current closing period only to get the changes applied.