How To Fix FARR_CONTRACT_MAIN275 - Cost recognition flag for performance obligation &1 must be set.

SAP Error Message - Details

• Message type: E = Error

• Message class: FARR_CONTRACT_MAIN - Revenue Accounting: Contract Management

• Message number: 275

• Message text: Cost recognition flag for performance obligation &1 must be set.

Self-Explanatory Message

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Smart SAP Assistant

• What is the cause and solution for SAP error message FARR_CONTRACT_MAIN275 - Cost recognition flag for performance obligation &1 must be set. ?

  The SAP error message FARR_CONTRACT_MAIN275 indicates that there is an issue with the cost recognition flag for a performance obligation in a contract. This error typically arises in the context of SAP's Revenue Accounting and Reporting (RAR) module, which is used for managing revenue recognition in compliance with accounting standards such as IFRS 15 and ASC 606.
  Cause:
  The error message is triggered when the system detects that the cost recognition flag for a specific performance obligation (identified by &1) is not set. This flag is essential for determining how costs associated with the performance obligation are recognized in the financial statements. If the flag is not set, the system cannot proceed with the revenue recognition process for that obligation.
  Solution:
  To resolve this error, you need to ensure that the cost recognition flag for the specified performance obligation is set correctly. Here are the steps you can take:
  
  
  Access the Contract: Go to the relevant contract in the SAP system where the performance obligation is defined.
  
  
  Check Performance Obligations: Navigate to the section where performance obligations are listed. Identify the specific performance obligation that is causing the error (indicated by &1).
  
  
  Set the Cost Recognition Flag:
  
  Edit the performance obligation details.
  Look for the field related to the cost recognition flag (it may be labeled as "Cost Recognition" or similar).
  Set the flag to the appropriate value (usually "X" for active or "1" for true).
  
  
  
  Save Changes: After setting the flag, save the changes to the contract.
  
  
  Reprocess the Revenue Recognition: Once the flag is set, attempt to reprocess the revenue recognition for the contract to see if the error is resolved.
  
  
  Related Information:
  
  Documentation: Refer to the SAP documentation for Revenue Accounting and Reporting for detailed information on performance obligations and cost recognition.
  Transaction Codes: Familiarize yourself with relevant transaction codes such as:
  
  FARR: Revenue Accounting and Reporting
  FARR_CONTRACT: To manage contracts in RAR.
  
  
  Consult SAP Notes: Check for any SAP Notes related to this error message for additional guidance or patches that may address known issues.
  User Roles: Ensure that you have the necessary permissions to edit contracts and performance obligations in the SAP system.
  
  If the issue persists after following these steps, consider reaching out to your SAP support team or consulting with an SAP expert for further assistance.