Accounting Standards: IFRS and US-GAAP

Objectives

After completing this lesson, you will be able to:

  • Understand how the system manages generally accepted accounting standards IFRS and US-GAAP

Event-Based Revenue Recognition and Accounting Principles

Scope items 1P0 and 33O detail how IFRS and US-GAAP respectively are handled in the system.

Event-based Revenue Recognition also supports revenue calculation and posting based on stand-alone selling prices and allows bundling in the context of IFRS 15. For more information, see SAP Note 2524569

Event-based Revenue Recognition calculates and posts real time revenue and cost adjustment for professional services for fixed price, time and material, and periodic service projects, using US GAAP Ledger functionality. Revenue recognition is either cost-based or time-based depending on the project type.

Event Based Revenue Recognition supports parallel accounting, the use of multiple ledgers to separate different valuation approaches. By this principle, you can setup different accounting principles or different revenue recognition methods in the different ledgers that will lead to different values.

Relevant EBRR configuration to determine different accounting principles is included in

Event Based Revenue Recognition Configuration

102530Maintain Settings for Event-Based Revenue Recognition
102517Derivation of Recognition Key for Projects
104054Define Replacement Rules for Recognition Keys

Configuration for financial reporting needs to be complete for the accounting standards needed. Configuration for Event Based Revenue Recognition is then referenced to these standards as well (see next lesson for details on configuration).

To fully setup different accounting principles, you may need the support of a finance consultant expert.

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