How To Fix FARR_CONTR_LIFECYCLE035 - Derecognition cannot exceed recognized revenue from perf. oblig. &1.

SAP Error Message - Details

• Message type: E = Error

• Message class: FARR_CONTR_LIFECYCLE - Message from Contract Lifecyle (RAR 2.0 Object Model)

• Message number: 035

• Message text: Derecognition cannot exceed recognized revenue from perf. oblig. &1.

What causes this issue?

A contract change or fulfillment resulted in the derecognition of
revenue (e.g. goods return). The quantity to be derecognized exceeds the
quantity that is currently recognized for the performance obligation.

System Response

The system has stopped processing of the affected contract.

How to fix this error?

The system issues an error message and will not allow you to continue with this transaction until the error is resolved.

Procedure for System Administrators

Error message extract from SAP system. Copyright SAP SE.

Smart SAP Assistant

• What is the cause and solution for SAP error message FARR_CONTR_LIFECYCLE035 - Derecognition cannot exceed recognized revenue from perf. oblig. &1. ?

  The SAP error message FARR_CONTR_LIFECYCLE035 indicates that there is an issue with the derecognition of revenue in relation to the recognized revenue from a performance obligation. This error typically arises in the context of revenue recognition processes, particularly when dealing with contracts and performance obligations in SAP's Financial Accounting and Reporting (FARR) module.
  Cause:
  The error occurs when the system detects that the amount you are trying to derecognize exceeds the amount that has been recognized as revenue for a specific performance obligation. This can happen due to several reasons, including:
  
  Incorrect Data Entry: The amount entered for derecognition may be higher than the recognized revenue.
  Misconfiguration: There may be a configuration issue in the revenue recognition settings or in the contract management settings.
  Timing Issues: The timing of the derecognition and revenue recognition may not align properly, leading to discrepancies.
  Incomplete Revenue Recognition: If revenue has not been fully recognized for a performance obligation, attempting to derecognize more than what has been recognized will trigger this error.
  
  Solution:
  To resolve this error, you can take the following steps:
  
  Review the Performance Obligation: Check the performance obligation associated with the contract to ensure that the recognized revenue is accurate and complete.
  Verify Derecognition Amount: Ensure that the amount you are trying to derecognize does not exceed the recognized revenue. Adjust the derecognition amount accordingly.
  Check Configuration Settings: Review the configuration settings in the SAP system related to revenue recognition and contract management to ensure they are set up correctly.
  Consult Documentation: Refer to SAP documentation or help resources for guidance on revenue recognition and derecognition processes.
  Run Reports: Use relevant reports to analyze recognized revenue and derecognition amounts to identify discrepancies.
  Seek Support: If the issue persists, consider reaching out to your SAP support team or consulting with an SAP expert for further assistance.
  
  Related Information:
  
  SAP Notes: Check for any relevant SAP Notes that may address this specific error or provide additional guidance.
  Training and Documentation: Ensure that users involved in revenue recognition processes are adequately trained and have access to documentation on best practices.
  Audit Trail: Maintain an audit trail of changes made to contracts and performance obligations to help identify the source of discrepancies.
  
  By following these steps, you should be able to identify the root cause of the error and implement a solution to resolve it.