How To Fix FARR_CONTRACT_MAIN816 - Non-distinct perf. ob. &1 should be 'Not Unit Distinct'

SAP Error Message - Details

• Message type: E = Error

• Message class: FARR_CONTRACT_MAIN - Revenue Accounting: Contract Management

• Message number: 816

• Message text: Non-distinct perf. ob. &1 should be 'Not Unit Distinct'

Self-Explanatory Message

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Smart SAP Assistant

• What is the cause and solution for SAP error message FARR_CONTRACT_MAIN816 - Non-distinct perf. ob. &1 should be 'Not Unit Distinct' ?

  The SAP error message FARR_CONTRACT_MAIN816 indicates that there is an issue with the performance obligation (PO) in a contract that is not distinct. Specifically, the message states that the performance obligation identified by the placeholder &1 should be marked as "Not Unit Distinct." This typically arises in the context of revenue recognition and contract management, particularly when dealing with performance obligations in accordance with accounting standards like IFRS 15 or ASC 606.
  Cause:
  
  
  Non-Distinct Performance Obligation: The error occurs when the system identifies a performance obligation that is not distinct, meaning it cannot be separately identified from other obligations in the contract. This could be due to the nature of the goods or services being provided, where they are interrelated or dependent on each other.
  
  
  Configuration Issues: There may be configuration settings in the SAP system that do not align with the requirements for defining performance obligations.
  
  
  Data Entry Errors: Incorrect data entry during the creation or modification of contracts or performance obligations can lead to this error.
  
  
  Solution:
  
  
  Review Performance Obligations: Check the performance obligation identified in the error message. Ensure that it is correctly defined and that it meets the criteria for being distinct. If it is not distinct, it should be grouped with other obligations.
  
  
  Adjust Contract Settings: If the performance obligation is indeed not distinct, you may need to adjust the contract settings to reflect this. This could involve changing the classification of the performance obligation or modifying the contract terms.
  
  
  Consult Documentation: Refer to SAP documentation or guidelines related to revenue recognition and performance obligations to ensure compliance with accounting standards.
  
  
  Configuration Review: If the issue persists, review the configuration settings in the SAP system related to contract management and performance obligations. Ensure that they are set up correctly according to your organization's accounting policies.
  
  
  Seek Support: If you are unable to resolve the issue, consider reaching out to your SAP support team or consulting with an SAP expert who specializes in contract management and revenue recognition.
  
  
  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 contract management are trained on the proper handling of performance obligations and the criteria for distinctiveness.
  Accounting Standards: Familiarize yourself with the relevant accounting standards (IFRS 15, ASC 606) that govern the recognition of revenue and performance obligations.
  
  By following these steps, you should be able to identify the root cause of the error and implement the necessary changes to resolve it.