How To Fix FARR_CONTRACT_MAIN002 - Multiple performance obligations in contract &1 are marked as residual

SAP Error Message - Details

• Message type: E = Error

• Message class: FARR_CONTRACT_MAIN - Revenue Accounting: Contract Management

• Message number: 002

• Message text: Multiple performance obligations in contract &1 are marked as residual

Self-Explanatory Message

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Smart SAP Assistant

• What is the cause and solution for SAP error message FARR_CONTRACT_MAIN002 - Multiple performance obligations in contract &1 are marked as residual ?

  The SAP error message FARR_CONTRACT_MAIN002 indicates that there are multiple performance obligations in a contract that are marked as residual. This typically occurs in the context of revenue recognition and contract management within SAP, particularly when using the SAP Revenue Accounting and Reporting (RAR) module.
  Cause:
  
  Multiple Performance Obligations: The contract in question has more than one performance obligation, and some of them are marked as residual. This means that these obligations are not fully satisfied or recognized, leading to potential discrepancies in revenue recognition.
  Configuration Issues: There may be issues with how the performance obligations are configured in the system, such as incorrect settings or missing data.
  Data Entry Errors: Incorrect data entry during the creation or modification of the contract or performance obligations can lead to this error.
  Contract Structure: The structure of the contract may not align with the expected configuration for performance obligations, leading to conflicts in how they are recognized.
  
  Solution:
  
  Review Performance Obligations: Check the performance obligations associated with the contract. Ensure that they are correctly defined and that their statuses are appropriate.
  Adjust Residual Markings: If certain performance obligations should not be marked as residual, update their status accordingly. This may involve changing the recognition criteria or adjusting the contract terms.
  Check Configuration: Review the configuration settings in the SAP system related to revenue recognition and performance obligations. Ensure that they align with the business requirements and accounting standards.
  Data Validation: Validate the data entered for the contract and its performance obligations. Correct any discrepancies or errors found during this validation.
  Consult Documentation: Refer to SAP documentation or help resources for specific guidance on handling performance obligations and revenue recognition issues.
  Engage SAP Support: If the issue persists after reviewing and adjusting the above points, consider reaching out to SAP support for further assistance.
  
  Related Information:
  
  SAP RAR Documentation: Familiarize yourself with the SAP Revenue Accounting and Reporting documentation to understand how performance obligations are managed.
  Training and Best Practices: Consider training sessions or workshops on SAP RAR to better understand the nuances of contract management and revenue recognition.
  Community Forums: Engage with SAP community forums or user groups where similar issues may have been discussed, and solutions shared.
  
  By addressing the underlying causes and following the suggested solutions, you should be able to resolve the error message FARR_CONTRACT_MAIN002 effectively.