How To Fix FARR_CONTRACT_UI227 - Only BOM-structured performance obligations can switch composition types

SAP Error Message - Details

• Message type: E = Error

• Message class: FARR_CONTRACT_UI - Revenue Accounting - Contract UI

• Message number: 227

• Message text: Only BOM-structured performance obligations can switch composition types

Self-Explanatory Message

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• What is the cause and solution for SAP error message FARR_CONTRACT_UI227 - Only BOM-structured performance obligations can switch composition types ?

  The SAP error message FARR_CONTRACT_UI227 indicates that there is an issue related to the composition types of performance obligations in a contract, specifically when dealing with Bill of Materials (BOM) structured performance obligations. 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.
  Cause:
  The error occurs when you attempt to switch the composition type of a performance obligation that is not structured as a BOM. In SAP, performance obligations can be structured in different ways, and only those that are specifically defined as BOM-structured can have their composition types changed. If you try to change the composition type of a performance obligation that does not meet this criterion, the system will throw this error.
  Solution:
  To resolve this error, you can take the following steps:
  
  
  Check Performance Obligation Structure: Verify if the performance obligation you are trying to modify is indeed structured as a BOM. You can do this by reviewing the details of the performance obligation in the SAP system.
  
  
  Change Composition Type: If the performance obligation is not BOM-structured, you will need to either:
  
  Change the structure of the performance obligation to a BOM-structured type if that aligns with your business requirements.
  Avoid attempting to switch the composition type for non-BOM structured performance obligations.
  
  
  
  Consult Documentation: Review the SAP documentation related to performance obligations and BOM structures to ensure you understand the requirements and limitations.
  
  
  Seek Help from SAP Support: If you are unsure about how to proceed or if the issue persists, consider reaching out to SAP support or your internal SAP team for further assistance.
  
  
  Related Information:
  
  BOM (Bill of Materials): A BOM is a comprehensive list of materials, components, and assemblies required to manufacture a product. In the context of performance obligations, it defines how the components are structured and recognized for revenue purposes.
  Performance Obligations: These are promises in a contract to transfer a good or service to a customer. They are critical for revenue recognition under accounting standards such as IFRS 15 and ASC 606.
  SAP RAR (Revenue Accounting and Reporting): This module helps organizations comply with revenue recognition standards and manage their revenue processes effectively.
  
  By following these steps and understanding the context of the error, you should be able to address the issue effectively.