SAP Revenue Accounting and Reporting (RAR) - Introduction

SAP Revenue accounting and reporting, RAR in short is an SAP delivered software designed specifically to help businesses comply with new statutory IFRS revenue standard (ASC 606) for revenue recognition and also has the flexibility to support existing requirements. 

Revenue Accounting can be installed on SAP ERP 6.0 Enhancement Package 5 or higher. If your Financials system is below that system level, you must first upgrade the system to at least SAP ERP 6.0 Enhancement Package 5 and install integration on top of your ECC system.

Revenue Accounting Integration and Revenue Accounting communicate by using RFC function calls. If these two instances are installed in different systems, you need to define an RFC destination with connection type 3 (Connection to ABAP System) in the system where Rev. Accounting Integration is installed, pointing to the system where Revenue Accounting is installed.

The new SAP RAR has been decoupled from the SAP SD  environment and the revenue account process runs in silos with some integration configuration within SD area and involves five basic steps.

1. Identifying the contract

2. identifying the performance obligation

3. Allocation of Transaction Price

4. Fulfillment of performance obligations

5. Revenue Postings

Note: Source from SAP Help