How To Fix FARR_RAI645 - New performance obligation &1 created for contract &2

SAP Error Message - Details

• Message type: E = Error

• Message class: FARR_RAI - Revenue Accounting Item

• Message number: 645

• Message text: New performance obligation &1 created for contract &2

Self-Explanatory Message

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Smart SAP Assistant

• What is the cause and solution for SAP error message FARR_RAI645 - New performance obligation &1 created for contract &2 ?

  The SAP error message FARR_RAI645 indicates that a new performance obligation has been created for a specific contract. This message typically arises in the context of revenue recognition and contract management, particularly when dealing with the new revenue recognition standards (like IFRS 15 or ASC 606).
  Cause:
  
  New Performance Obligation Creation: The system has identified that a new performance obligation needs to be created for the specified contract. This can happen due to changes in the contract terms, additional services or goods being added, or modifications in the existing performance obligations.
  Contract Modifications: If there are changes in the contract that affect the performance obligations, such as adding new deliverables or changing the scope of existing ones, the system will trigger this message.
  Revenue Recognition Rules: The error may also be related to how the revenue recognition rules are set up in the system, which may require the creation of new performance obligations based on the contract's current state.
  
  Solution:
  
  Review Contract Changes: Check the contract referenced in the error message to understand what changes have been made that would necessitate the creation of a new performance obligation.
  Validate Performance Obligations: Ensure that the performance obligations are correctly defined and aligned with the contract terms. You may need to adjust the existing obligations or create new ones as necessary.
  Consult Documentation: Refer to SAP documentation or your organization's guidelines on revenue recognition and performance obligations to ensure compliance with accounting standards.
  System Configuration: If the issue persists, it may be necessary to review the configuration settings in the SAP system related to revenue recognition and performance obligations. This may involve consulting with your SAP functional team or a consultant.
  Testing: After making any changes, perform testing to ensure that the new performance obligations are being created correctly and that revenue recognition is functioning as expected.
  
  Related Information:
  
  SAP Notes: Check for any relevant SAP Notes that may address this specific error message or provide guidance on handling performance obligations.
  Training and Documentation: Ensure that users involved in contract management and revenue recognition are trained on the latest processes and understand how to manage performance obligations effectively.
  Consulting SAP Support: If the issue is complex or cannot be resolved internally, consider reaching out to SAP support for assistance.
  
  By following these steps, you should be able to address the FARR_RAI645 error message and ensure that performance obligations are managed correctly within your SAP system.