ONE Service and Impact on SAP’s Financial Reporting (Web Message)

March 9, 2015 by SAP News 0

Now updated with Full Income Statements from Prior Year Periods

Web Message

ONE Service
In its services business, SAP has started to radically simplify the way it engages with customers and delivers services to its customers: Under the new ONE Service approach, rather than offering different services separately with a mix of local and global delivery, SAP provides services in one service portfolio, out of one global organization and under one contract. This combination of services will be reflected in SAP’s financial reporting by combining the respective revenue in one revenue line item of the income statement. Therefore, SAP will amend the structure of its Income Statement, starting with the first quarter of 2015. This Income Statement modification does neither change total revenue nor the reported cloud subscriptions and support revenue and software revenue. The business outlook which the Company published on January 20th is based on this modified Income Statement format.

Income Statements from Prior Year Periods
As outlined above, SAP is implementing the ONE Service approach to provide holistic service offerings to its customers. This combination of services will be reflected in SAP’s financial reporting by combining the respective revenue in one revenue line item of the income statement. Therefore, SAP will amend the structure of its income statement, starting with the first quarter of 2015 by presenting one revenue line item called ‘Services’ which includes premium support services, professional services and other services. Revenue from Enterprise Support and other standardized support offerings will continue to be reported in the ‘Software support’ line. The formerly presented subtotal ‘Software and software-related services’ (SSRS) revenue which still included premium support revenue is replaced by the subtotal ‘Cloud & software’ revenue which excludes premium support services. Accordingly, the corresponding expenses related to premium support are now included in the Services line item and excluded from the Cloud & software line item. For this reason we have provided the updated Income Statements for the prior year periods and quarters for the years 2013 and 2014 as well as revenue by region for Software & Cloud.

View the supplementary financial information for the income statement amendment › (PDF)

For more information refer to the Company’s webinar.

View the related presentation › (PDF)

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