How To Fix AO298 - Internal rate of return cannot be calculated due to the order of data

SAP Error Message - Details

• Message type: E = Error

• Message class: AO - Appropriation requests - Master data / Customizing

• Message number: 298

• Message text: Internal rate of return cannot be calculated due to the order of data

What causes this issue?

The system could not calculate an internal rate of return, because the
data for the cash flow does not allow the calculation. This situation
could arise, for example, if all cash flows are positive (meaning that
more revenue than costs are planned in each year).

System Response

The internal rate of return is not calculated.

How to fix this error?

Check the consistency of your plan data.

Error message extract from SAP system. Copyright SAP SE.

Smart SAP Assistant

• What is the cause and solution for SAP error message AO298 - Internal rate of return cannot be calculated due to the order of data ?

  The SAP error message AO298, which states "Internal rate of return cannot be calculated due to the order of data," typically occurs in the context of financial calculations, particularly when dealing with investment appraisals or cash flow analysis in SAP's Asset Accounting or Investment Management modules. This error indicates that the system is unable to compute the internal rate of return (IRR) due to the sequence or arrangement of cash flows.
  Causes:
  
  Incorrect Cash Flow Order: The cash flows may not be entered in the correct chronological order. For IRR calculations, cash inflows and outflows must be sequenced properly over time.
  Inconsistent Cash Flows: If there are multiple cash flows with inconsistent signs (e.g., alternating between positive and negative values), it can lead to difficulties in calculating IRR.
  Insufficient Data: There may not be enough cash flow data points to perform the calculation.
  Negative Cash Flows: If the cash flow series has more than one change in sign (e.g., from negative to positive and back to negative), it can lead to multiple IRR solutions or no solution at all.
  
  Solutions:
  
  Check Cash Flow Order: Review the cash flow entries to ensure they are in the correct chronological order. Adjust the sequence if necessary.
  Review Cash Flow Values: Ensure that the cash flows are consistent and logical. If there are multiple sign changes, consider revising the cash flow structure.
  Add Missing Data: If there are missing cash flows, add the necessary entries to provide a complete picture of the investment or project.
  Use Alternative Methods: If IRR cannot be calculated due to the nature of the cash flows, consider using other financial metrics such as Net Present Value (NPV) or Modified Internal Rate of Return (MIRR) that may provide a more stable solution.
  Consult Documentation: Refer to SAP documentation or help resources for specific guidelines on cash flow entries and IRR calculations.
  
  Related Information:
  
  IRR Calculation: The internal rate of return is a financial metric used to evaluate the profitability of an investment. It is the discount rate that makes the net present value (NPV) of all cash flows from the investment equal to zero.
  SAP Modules: This error is commonly encountered in SAP modules related to Asset Accounting (FI-AA) and Investment Management (IM).
  SAP Notes: Check for any relevant SAP Notes or updates that may address this specific error or provide additional guidance on cash flow management.
  
  If the issue persists after following these steps, it may be beneficial to consult with an SAP expert or your organization's SAP support team for further assistance.