Accounting

u Plan transfers Cost-accounting depreciations and interest from Asset Accounting are transferred to the plan. The same applies to the wages and salaries from Human Resources (HR), as in the Personnel Cost Planning scenario. u Planned accrual calculation Workers compensation contributions are used to show how accrual is calculated using the cost element percentage method. u Planned cost splitting Using a splitting structure, the activity-independent costs are distributed to their activity types based on the key figures that were planned and posted to activity types. Cost elements that are not defined in the splitting structure are split to the appropriate activity types using the equivalence numbers of these activity types. u Planned price calculation The transfer prices of the activity types are calculated on the basis of the planned activity. These prices are always calculated iteratively. Cost centers 4275 and 4276 have the capacity to determine transfer prices. The transfer prices on cost centers 4275 and 4277 are different every month. u Actual data In addition to the actual costs transferred from Asset Accounting and Human Resources, further primary costs, results analyses, various types of secondary costs, and statistical key figures have also been entered. u Cost accrual Actual accrued costs are determined by the system and posted. Costing sheet ID-EU1 is used for the percentage method. The target/actual method is also available. u Indirect activity allocation You can use indirect activity allocation to create secondary relationships regarding planned and actual activity allocation. This is mainly used to replace the assessment thus enabling you to include assessment costs in the transfer prices of the activity types. An additional advantage of this is that, unlike in the assessment, you can assign costs to specific activity types, but at the same time these assignments are activity type independent. u Activity allocation of target/actual costs This type of allocation is used for cost center 1230 Energy, activity type 1232 Energy consumption in kWh (target/actual). The receiving cost center obtains an actual activity that has been derived from planning. This planned value is, however, changed on the basis of the operating rate of the receiver.

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Accounting

u Actual cost splitting Actual costs are split in the same way as planned costs. Splitting structures 11 and 12 are used for this. u Actual price determination Actual prices have been determined for all cost centers, but are not used for allocation. Instead, they are used for the purposes of analysis. u Variance calculation Variance calculation is used to identify the variances for cost centers, production orders, and cost object hierarchies in the course of period-end closing. Variance has been calculated for all the cost centers in the IDES system. Cost centers 4276 and 4278 have been set up so that you can look at the calculation results. Unlike cost center 4278, cost center 4276 has a transfer price variance this is because the activity type prices were determined using the capacity, and not using the planned activity.

Cost Center Accounting in Company Code 2000

u Planning data Planning data up until the year 2000 has been entered in version 000 for the cost centers assigned to company code 2000. This planning data has been kept simple because the transfer prices used for activity allocation are always entered manually. No costs have been planned for cost center 2-1230 (Energy) so that the activity allocation functions for actual costs can be demonstrated. u Actual data The GBP object currency is used as well as the DEM controlling area currency. This allows you to report in both currencies. u Cost accrual The system has determined and posted planned and actual accrued costs. Costing sheet ID-EU2 was used for this. u Cost distribution Cost center 2-1210 has distributed the planned and actual cost of telephone units using the statistical key figure Telephone units. This statistical key figure is planned on the receiving cost centers, and posted as an actual value. It represents the number of telephone units used by each cost center. Distribution cycle I-DP-2 was used for planning, and distribution cycle I-DA-2 for the actual values. u Cost assessment All activity type prices are entered manually so that costs can be assessed. This applies, for example, to the costs of the Cafeteria staff and personnel cost centers, and to the costs of the Telephone cost center that were not allocated during distribution. The assessment cycle for planned costs is I-AP-2, and I-AA-2 for actual costs.

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Accounting

u Determining actual prices Actual activity prices have been determined for all cost centers. These actual prices are, however, not used for allocation, but for the purposes of analysis. Cost center 2-1230 (Energy) is an exception to this rule this cost center allocates actual prices. u Valuating actual prices Only activity types have been planned for cost center 2-1230 (Energy). However, a planned price has not been set for this activity type. No plans have been made to have the activity accepted by receiving cost centers, either. First, only the actual quantity is allocated to the receiving cost centers. These quantity flows are valuated at the end of the period when the actual price is valuated. The actual costs of this cost center are divided by the actual activity, and then the quantity flows are valuated again using this price. The reconciliation ledger is used to reconcile with Financial Accounting any value flows within cost accounting that affect a companys balance sheet, and profit and loss statement. The company codes of account assignments from an external to an internal accounting system are checked to make sure that they are correct. Postings from FI can only be made to CO objects in the same company code. Cross-company code allocations are made in CO. The cost center DP Germany provides DP services for the DP cost centers in Great Britain. These services (activities) are settled between the two cost centers using internal activity allocation. The expenses in Financial Accounting are rectified for the cost centers using the reconciliation ledger. Data from this ledger is used to generate adjustment postings in Financial Accounting. Since business area balance sheets are created, the cost centers and orders have to be assigned to business areas. This means that when account assignments pass from the external to the internal accounting system, the business areas are automatically derived from the CO target account assignments. There are a large number of cross-business area allocations in Overhead Cost Controlling. These cross-business area allocations are mainly the result of internal activity allocations for cost centers that are active company-wide (Cafeteria, Human resources, Telephone, for example). The reconciliation ledger is used to generate reconciliation postings in Financial Accounting so that cross-business area allocations can be taken into account there. u Order types In the IDES system, order types have been created on the basis of functions. u Manual collective processing Manual collective processing is a simple way of maintaining order master data using lists. The orders of order type 0450 can be used to demonstrate this. u Automatic collective processing In this type of collective processing, the system maintains order master data automatically. Status changes for a substitution can be demonstrated in the IDES system using orders of order type 0450.

Cross-Company Code Allocations

Cross-Business Area Allocations

Internal Orders in Company Code 1000

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Accounting

u Planning data Planning data has been entered in version 000 for the year 2000. The main purpose of this data is to show how planning is integrated for orders relating to cost centers. To show this, integration has been activated in the order type and in version maintenance. This means, that if a cost centers activity is consumed, this activity is saved as a scheduled activity on the cost center. During planned order settlement, the receiving cost center is debited correspondingly. These quantity flows are valuated when the activity prices are calculated. This means that the activity flow from the sending cost center to the receiving cost center (via the order) is fully integrated in activity price calculation. u Budgets Some orders have been assigned budgets to demonstrate the budget functions and the active availability check. Order type 0100 is used to show budget management functions (budget allocation, supplements and returns). u Active availability control In the IDES system, the budgeted orders of order type 0100 (order 100002 in particular) are used to demonstrate the active availability control. If an FI posting is made and this posting causes the budget to be exceeded, the budget manager specified in Customizing is informed by e-mail. u Commitment functions The term commitment refers to a contractual or scheduled commitment which is not yet reflected in Financial Accounting, but which will lead to actual costs in the future. In the IDES system, order 100002 of order type 0100 is used to demonstrate commitment functions. It displays a purchase requisition commitment and a manual funds reservation. u Actual costs Primary costs and activity inputs from cost centers have been posted in the actual costs. u Overhead rates In an overhead calculation, you calculate overhead as a percentage value or as a quantity. This can prove useful if it is the number of pieces of a material (and not the value of the material) that affects overhead costs. In the IDES system, order 100005 of order type 0100 is used to demonstrate quantity-based overhead calculation. u Order settlement (using percentage values or fixed amounts) Orders are often distributed to several receivers when they are settled, and each receiver is assigned a specific percentage value. When you edit the settlement rule during a settlement by amount, you can specify a fixed amount for the order rule. This amount is settled once, or periodically, for the receivers specified. Order 100001 of order type 0150 has been set up in the IDES system to demonstrate settlement by amount. This order settles a predefined amount for cost center 3110.

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Accounting

u Settlement with source assignment This enables you to settle the costs incurred in the sender order for different receivers, on the basis of the cost element and cost element group. This means that, on the basis of the source cost element of the order debit, costs which can be capitalized are settled to the fixed asset, and costs which cannot be capitalized are settled to the cost center. In the IDES system, order 100000 of order type 0150 and source structure U1 is used to demonstrate this function. u Hierarchical order settlement It is possible that the settlement receiver of an order is another order. An order settlement hierarchy should be used here to ensure that all orders are credited correctly. In the IDES system, the orders of order type 0800 are used to demonstrate how the sequence in which the orders are processed is determined. u Direct activity allocation from cost centers to processes The method for direct activity allocation from cost centers to processes is the same as allocation between cost centers. This is illustrated in the example process, 300000 Painting. It receives activity type 1421 (labor hours) in the planning data for the R&D cost center 4500. u Indirect activity allocation from cost centers to processes This also uses the same method as the cost centers. A cycle segment method is used to credit sender cost centers and to debit processes. This is illustrated in process 300200 Pallet transport, which is debited (for example, in the planning data) using activity type 2423 from cost center 4130 with the machine hours of the forklift. u Activity allocation from cost centers to processes using structured processes The structured processes are a retrograde method for resource input. However, this is significantly more flexible than indirect activity allocation and enables you to differentiate between variable and fixed transferred quantities. This is where calculation formulas are defined, which can access other data structures in the environment for business processes. These include fields of material masters, bills of material, or routings for production orders or sales orders. As an example of this method, process 300100 (Drying painted PC casings automatically) and process template T-DRY are described. This requires a different number of paint layers depending on the color. This means that different work times are used from cost center / activity type 4500 / 1421of the model builder who places the parts in the drying device. u Manual process quantities and price planning The quantities of the defined cost driver are portrayed as process quantities. The process costs divided by the process quantity equal the price with which the process costs can be further allocated. If the data is not complete, you can also enter process quantities and / or prices manually as an aid. This is shown in the example for process 300200, number of pallet movements.

Activity-Based Costing

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Accounting

u Process quantity planning using scheduled activities from PP To aid process quantity planning, you can also access data from PP. IDES contains an example which uses sales and operations planning (SOP) figures for colored products and a process template to calculate the number of painting and drying activities expected. u Price calculation This shows how to calculate prices automatically using plan costs and plan quantities for processes. u Process templates in Product Cost Planning The PCs R-4000 costing is used to show how the process costs are clarified as overhead costs in the standard cost estimate for products. The T-Prod process template is used. u Process templates in production orders In the same way as Product Cost Planning that does not refer to orders, a detailed example shows how process costs are portrayed in a production order. u Transferring process costs to profitability analysis during direct sales When stock products are sold, the products can be classified in detail in Product Costing, using their cost component. In the IDES example, the process costs were channeled into their own cost element, and are thus visible in Profitability Analysis. u Sales-order-related production with updates of cost drivers in the Logistics Information System (LIS) One main advantage of Activity-Based Costing being integrated with the remaining SAP environment is that all conceivable basis figures from other applications are available. In the IDES example, the following key figures from LIS are used for allocating process costs: Sales order items, purchase orders, goods receipts, customer-related: Credit limit excesses. u Transfer of LIS key figures to statistical key figures for the processes These LIS key figures are portrayed in the IDES example as statistical key figures on the processes. u Process activity input controlled by statistical key figures The statistical key figures in the processes are then used as keys for indirect activity allocation from cost centers to processes. u Transfer of the LIS key figures to Profitability Analysis At the end of the value chain, the same LIS key figures are transferred to the market segment in Profitability Analysis.

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Accounting

u Process assessments to Profitability Analysis Assessment is used to allocate the process costs to Profitability Analysis, based on the transferred LIS key figures. You can then make a detailed analysis of the costs there. u Sales planning and Plan process allocation to market segments using a template You can transfer the process cost planning to Profitability Analysis online. This is done for process 400910 in the example. u Planning the resource input to the process The resource input for process 400910 and the reconciliation are displayed in the planning data. u Process allocation to Profitability Analysis using a template This is where allocations are made to Profitability Analysis using the template method. The process quantities are allocated online to the corresponding market segment. The sales planning and plan process allocation are allocated using a template, as this is a useful method. This is done in the same order as the assignment of processes to CO-PA value fields, planning scenario for the process and actual process allocation to market segments using a template. This creates one unit.

Settings and Special Features in CO-PC

Product Cost Planning is used to plan the costs of a product before an order to commence manufacturing is placed. If a quantity structure from the R/3 Logistics components exists, the cost estimate is carried out in the form of a product costing. If there is no quantity structure, you can use unit costing to enter the costing items manually or with batch processing. Cost Object Controlling comprises preliminary costing (these are the planned costs of the cost object), simultaneous costing (i.e. the valuation of all actual quantity flows), and final costing (this is usually performed as a period-end closing).

Characteristics and Value Fields

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Accounting

Depending on the production type involved, you can compare the planned, target and actual costs of the products with each other, and perform variance calculations.

Fig. 2-4: Tasks Involved in Product Cost Controlling

The following manufacturing processes can be shown using the IDES corporate group: u Order-related production u Repetitive manufacturing u Process manufacturing u Make-to-order production u Engineer-to-order production (pumps, automobiles) (PCs, lamps) (paints, solvents, tablets) (motorcycles, PCs) (elevators)

Information System

The Information System for Product Cost Controlling allows you to organize clearly the information gained from product costing and from the various applications of Cost Object Controlling. The IDES system provides you with a range of flexible options for selecting and analyzing production orders and costing data.

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Accounting

Settings and Special Features in CO-PA

By defining the characteristics for Profitability Analysis, you can obtain a detailed profitability report and can plan sales and results in detail. The characteristics are used to create the profitability segments. The value fields contain the transaction data from Profitability Analysis (cost accounting method). A value field is mainly a summarization of cost elements or revenue elements (for example, cost of sales or goods manufactured). By linking the value fields, you create key figures that you can use in reporting, for example, for contribution margins. In IDES, the value fields are set out so that you can make highly detailed analyses. IDES thus contains contribution margin schemes that enter all value flows from the other components in the R/3 System, and enable variance analyses (such as, production variances).

Characteristics and Value Fields

Fig. 2-5: Reporting in Profitability Analysis

The IDES system contains a clearly laid out planning procedure for certain product lines. This procedure includes Sales and Operations Planning, Overhead Cost Controlling, Product Cost Controlling, and Profitability Analysis. Contribution margins are analyzed during planning to estimate what the various sales volumes will be.

Planning

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Accounting

Reporting

You can use corresponding characteristics and value fields to create your own reports. Reporting is an extremely flexible, interactive process. IDES contains a range of reports that each fulfill a specific business task. Reporting options include the comparison of planned and actual data, a contribution margin analysis extending from the sales organization level, through the customer level right down to the product level, or an analysis of estimated sales. To meet the special reporting requirements of some industries, user-defined operating concerns were created that take specific characteristics and value fields into account. This enables corresponding analysis and planning for the bank, retail and service provider industries.

Industry Solutions

Investment Management (IM)

Overview
Generally speaking, extensive, company-wide planning and budgeting procedures are followed before capital investments are made. From a Controlling point of view, there are three main issues that have to be addressed: u Preinvestment analysis Check to see if the investments that are planned will actually benefit the company u Cost planning Determine the overall investment costs for a given period u Budgeting Allocate the funds available for investments to areas of responsibility company-wide The Investment Management component of the R/3 IDES system can be used to demonstrate many aspects of the management of capital investments. The entire investment process is covered from the planning phase right through to settlement.

Settings and Special Features

Investment program
Investment programs can be used to manage budgets encompassing a large number of individual measures (orders or projects). An investment program comprises individual positions that are linked in a hierarchical structure. This hierarchical structure can be identical to the groups organizational structure or defined according to any criteria you wish.

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Accounting

You will create an investment program in the IDES system. The investment program is made up of the program definition, the investment program positions, and the hierarchical structure. In addition to the overall values for the plan and budget, which represent the approved side of the investment program, you can also manage annual values . For carrying out your investment measures (building a new administrative building, for example, or procuring and installing new hardware), you use orders and projects in the IDES system. The main differences between orders and projects are: u In projects, the objects that bear costs can be structured hierarchically. u Orders, on the other hand, are always one-dimensional. In other words, it is not possible to organize budgets or to distribute budget values hierarchically within several orders . u Only projects are integrated with networks and Logistics functions. This means that it is not possible to work through capacity and resource planning scenarios with orders. In the IDES system, Investment Management has a cross-company code investment program with a total of 65 positions. The hierarchy of investment program 30000 (IDES investments 1997) corresponds to the organizational structures in IDES. The top position of this investment program is called 1 Europe and represents controlling area 1000. Positions 10 Germany (company code 1000) and 20 Great Britain (company code 2000) are directly below this top position. The level below this represents selected profit centers, and the last hierarchy level contains cost centers that are assigned to these profit centers. The following diagram illustrates the entire hierarchy of the investment program as it appears in IDES. The investment program is planned bottom-up. After this, top-down budgeting is performed (see Appendix B). Investment measures are projects or internal orders that are used for handling fixed asset expenditures that are not directly capitalized due to their size and the large proportion of internal activity involved. These system objects, also referred to as investment orders or investment projects, are used to collect primary and secondary costs, calculate overhead and interest, manage down payments and purchase order commitments, and for a range of other functions.

Investment project

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Accounting

Statistical orders

You can handle each order in cost accounting as a statistical order. Costs are not affected by a statistical order, nor can a statistical order be settled. In Investment Management, statistical orders can be used to manage budgets for fixed assets that are not assets under construction and can therefore be posted directly. You can link a statistical order to one or more fixed assets. When acquisitions are posted to the asset, the amount appears under the original cost element not only on the cost center (thus affecting costs), but also on the order (statistically). However, the system checks the order budget first (active availability control). This means that statistical orders can be used to manage a budget for one or more assets. A statistical order is needed because it is not possible to assign a budget directly to fixed assets. You can also use a statistical WBS element instead of a statistical order.

Investment measures

In 1997, a total of 39 investment measures were created for program position 10 Germany. These investment measures can be broken down as follows: u Projects Ten projects have been created: r Project 1-4200/P: Investments for cost center (CC) 4200 (Investments in production) r Project 1-4210/P: Investments for CC 4210 (reorganization of assembly) r Project 1-4270/P: Investments for CC 4270 (installation of conveyor belts) r Project 1-4220/P: Investments for CC 4220 (introduction of software) r Project 1-4130/P: Investments for CC 4130 (construction of warehouse) r Project 1-4400/P: Investments for CC 4400 (test laboratory) r Project 1-1200/P: Investments for CC 1200 (renovation of restaurant) r Project 1-2100/P: Investments for CC 2100 (introduction of software) r Project 1-2200/P: Investments for CC 2200 (introduction of software) r Project 1-4275/P: Investments for CC 4275 (product line laptops) Actual values and commitments are posted for the investment projects using the Materials Management component. Internal activity allocations are also made, as well as postings in Financial Accounting. Completed project phases are settled to assets. Projects 1-4200/P and 1-4275/P are particularly extensive. However, since certain project steps come later, some WBS elements do not have any values in 1997.

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Accounting

u Orders A total of 29 orders were created using internal number assignment: r Five orders with line item settlement (order type IM01): These orders are assigned to program positions 1-4205, 1-1000, 1-1230, 14277 and 1-4278. The actual values are posted using the Financial Accounting component. Internal activity allocation is also performed. The line items are settled using assets. r 24 statistical orders for assets (budget orders, order type IM09): These orders are, for example, assigned to program items 1-3100, 1-3200 and 1-4120. Assets are created in various asset classes for these orders. The actual values are posted using the Financial Accounting component. In order to obtain an integrated report for the FI-AA and PM components, pieces of equipment have been created for the assets linked to the orders of program positions 1-3140, 1-3200, 1-4100 and 1-4280. These pieces of equipment are all assigned to asset class 3200 (personal computers), and have been assigned maintenance costs using the Plant Maintenance component. Pieces of equipment (equipment numbers P-1000-N001 through P-1000-N009) for eight existing assets (asset numbers 2108 through 2116) of asset class 2100 (Machines, straight-line) have also been assigned maintenance costs. These pieces of equipment stem from the Plant Maintenance Clarification Plant example. The line items on an investment measure are usually settled at regular intervals. Settlement is either individual (line item settlement), or collective (summary settlement). These two methods of settlement differ from each other in the demands placed on system resources, and in the detail of the proof of origin of asset charges. Both these methods of settlement are possible in the IDES system. In line item settlement, each item is handled individually. This means that a very high degree of detail is possible in the proof of origin. The runtime for line item settlement is higher than the runtime for summary settlement, where the items are settled collectively on the basis of cost elements. The proof of origin for a summary settlement is broken down by cost element. In the IDES system, you perform a summary settlement for a WBS element by entering the settlement rule for each cost element group (source assignment), and a line item settlement for an order.

Settlement and closing for investment measures

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Accounting

Enterprise Controlling (EC)

Overview
Enterprise Controlling is subdivided into four areas: u Executive Information System (EIS) u Business Planning (BP) u Consolidation (CS) u Profit Center Accounting (PCA)4

Executive Information System (EIS)

The Executive Information System provides information on all of the factors that influence an organizations business activities. The Executive Information System gathers relevant data from internal and external sources, and provides users with important, up-to-date information that is easy to analyze. EC-EIS collects and evaluates information from a range of areas within and outside of an organization. You can set up an SAP EIS data pool to suit an organizations individual needs. You can then supply this data pool with data from the other information systems (Financial Information System, Human Resource Information System, Logistics Information System, Cost Accounting, and so on), or with data from outside the organization. Since this data is structured consistently, you can subdivide the EIS data pool into self-contained data areas. In the system, these data areas are referred to as EIS aspects. You can define aspects to meet your organizations individual requirements aspects containing information on the financial status, logistics, human resources, or on current market factors and stock prices. For each of these aspects you can create reports which will evaluate this data. The analysis tools available in EC-EIS include: u Report portfolio u Drilldown report u Data mining Report portfolios contain information for specific persons, and present this information graphically. Particular emphasis is placed on presenting this information as simply and clearly as possible. Reports enable you to look at info aspects from a number of perspectives, and provide drill-down, drill-up, drill-through, and traffic light functionality. Data mining enables you to search through large amounts of data and complex data structures to see if there are any unexpected relationships or irregularities. You can then use the information obtained to set up hypotheses so that you can make well-informed decisions.

As of Release 4.0, also EC-CS (Consolidation).

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Accounting

The table below gives an overview of the various aspects that have been set up in the IDES system: Aspect
500 700

Name
IDES Investment IDES View Forecast

Function
IM Reporting View of several aspects

Version
2 1/2

Dates
1995-2000 01-08/96 01-05/96 01/97 10/90-10/96 01-12/95 01-12/96 01-08/96 01-05/96 01/97 10/90-10/96 09-11/96 01-12/96 01/95-12/96

701 703

IDES Marketing IDES Profitability

Includes external data Profitability Analysis

1 1/2

704 705 706 720

IDES Sales Info Sys. IDES Personnel Info IDES Legal Cons. IDES Cross Reporting

LIS reporting HR reporting LI-LC/CS reporting Links several aspects

1 41 14 1

The increasingly dynamic business environment, and tougher competition for customers and capital has resulted in tendencies such as globalization, decentralization and information networking. These tendencies are presenting more new challenges for enterprise. In this scenario efficient enterprise planning plays a critical role in the management process. Because of the increasingly complex structures of groups and enterprises, appropriate planning tools are required to enable goal-directed and foresighted action. As well as comprehensive functions for configuring the complete enterprise planning model with its multidimensional views and key figure systems, EC-BP offers a range of facilities to improve the efficiency of the planning process. From Release 4.5, the data structures on which EC-BP is based are integrated with those of EC-EIS Executive Information System. Therefore you can use all the reporting functions available in EC-EIS, for example, navigation and exception reporting, on the EC-BP data basis. As a result of the high level of integration between EC-EIS and EC-BP, and their identical look and feel, the introduction of both components in the total EC-Enterprise Controlling context is eased significantly. Aspect 880 has been created for Business Planning in IDES. This aspect contains a large number of planning layouts, planning profiles, variants and so on, which can be used for planning activities such as copy functions, revaluation factors (such as plant 1999 = actual 1998 + 10 %), seasonal distributions, automatic planning runs, complex forecasting methods and Excel planning. EC-BP also contains Scenario Planning, which can be used to carry out various business scenarios and what-if analyses for the purposes of evaluating future decisions.

Business Planning (BP)

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Accounting

Consolidation (CS)

The component Consolidation (CS) encompasses general consolidation functions for external and internal reporting purposes. CS consolidates hierarchies of organizational units of transaction-based SAP accounting applications. Due to the high degree of integration of CS with these systems, in addition to statutory consolidated statements at the company level, the customer is also able to perform business area consolidation, profit center consolidation, as well as consolidation based on the data of corporate-wide profitability analysis of products. In addition to use in central SAP systems, the Consolidation component can be employed in heterogeneous scenarios for example with different financial transaction applications or on different hardware platforms. CS can be flexibly customized to meet the individual requirements of an enterprise. For this purpose SAP delivers comprehensive orgware in the form of predefined table settings for reflecting typical accounting methods. In particular, the orgware includes country and industry-specific charts of accounts, standard report programs and methods of foreign currency translation, interunit elimination and the consolidation of investments. As of Release 4.0 of R/3, the new component EC-CS features both statutory consolidation as well as management consolidation, hence complimenting the existing consolidation component FI-LC in Financials, which is mainly geared towards statutory consolidation. The IDES system reflects a company consolidation with a chart of accounts according to US GAAP. Data for each company has been imported from Excel worksheets using the flexible upload function. The additional financial data for consolidation of investments was entered manually. Currency translation uses the modified current exchange rate method. Interunit elimination comprises the elimination of IU receivables/payables, revenue/expense, sales/cost of sales, investment income and dividends payable. Consolidation of investments uses the purchase method for all companies, for which the first consolidation has been carried out. The information system contains numerous drilldown reports for the balance sheet, income statement, prior year comparisons, and so forth. This is a stand-alone example, which focuses on the IDES structures but is not imported with data. A consolidation example that demonstrates the integration of CS to FI, EC-PCA and EC-EIS will be created in a separate client. This model will also be delivered as soon as the documentation is complete.

Profit Center Accounting (PCA)

Profit Center Accounting sets out to create an enterprise structure on the basis of earnings. The enterprise structure can be organized on the basis of a range of factors (product, location, or function, for example). All transactions that affect sales and costs, or stock changes regarding products and assets created in-house, and work in process are stored in PCA. This means that you can draw up an operating profit for a profit center. Both the cost-of-sales approach and the period accounting approach can be used. Profit centers are not part of the real value flow they are calculated parallel to this value flow, but are merely statistical values. The profit center account assignment is derived from other account assignment objects (cost centers, orders, or projects, for example): users do not need to enter any further data.

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Accounting

By assigning individual balance sheet items, you can extend a profit center so that it becomes an investment center (i.e. besides the transactions affecting earnings, stock is also included). This extends the profit centers area of responsibility, and enables you to obtain additional key figures such as the return on investment, cash flow, and profit-sales ratios. To do this, you flag the profit centers so that balance sheet items can be assigned to them. The period accounting approach is used in the IDES system. At the cost element and revenue element level, the costs of the period are compared with the sales per period and profit center. As the P&L account can also be displayed using the cost of sales accounting approach in Financial Accounting in IDES, there is also a scenario for the cost of sales accounting approach in Profit Center Accounting. The American and European controlling areas each have their own (practically identical) profit center hierarchy. The individual profit centers are product-based (with the exception of Administration and Services). IDES contains the following processes: u Maintenance and assignment of master data and master data hierarchies u Planning processes in Profit Center Accounting u Transaction-based and periodic transfer of balance sheet items to Profit Center Accounting u Manual corrections in Profit Center Accounting u Use of average balance values in Profit Center Accounting u Analyses in Profit Center Accounting according to the period accounting approach and the cost of sales accounting approach.

Fig. 2-6: Profit Center Hierarchy Germany

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Accounting

Fig. 2-7: Company Hierarchy

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Accounting

Real Estate Management

Overview
The Real Estate Management component maps all the activities involved in managing your real estate portfolio using fully integrated processes. The key functions provide administrative and business support for all rental processes. Rental accounting, controlling and logistics functions are fully integrated with Real Estate Management.

Organizational Structure and Master Data

Company codes used in Real Estate Management Comp. code Name
1000 3000 IDES AG IDES US INC

Head office
Frankfurt New York

Country
Germany United States

Currency
DEM US

Language
G US

Fig.: 2-8: Master Data in Real Estate Management

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Accounting

Fig.; 2-9: Real Estate Profit Center Hierarchy in Controlling Areas 1000 and 2000

Business Partners
A list of tenants that have already been created in IDES is included in the appendix.

Processes
Most of the processes consist of display and create sections. For a quick look at a process or part of a process, the Display section is sufficient. For a deeper understanding of a certain process, we recommend using the Create section. The following processes are documented for Real Estate Management in company code 1000 and 3000: u Master Data in Real Estate Management In this section you create (or display) a business entity, property, land register, building and rental units. You need this master data for the subsequent rental processes. u Rental: Management of Interested Parties and Lease Out In this section you create (or display) a rental request and an applicant. You conduct a search for matching rental units, choose one of the rental units you created in the section on Master Data, and create an offer. The applicant accepts the offer and you proceed to create and activate a lease-out.

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u Rental: Tenant Changeover Here you create a renewal for a limited lease-out, assign periods of notice information, create and activate a notice, and finally create a rental inspection of the rental unit. u Rental Accounting: Debit Position for a Lease-Out and a Vacant Rental Unit You conduct a debit position for your lease-out and display your tenants open items. You then repeat this procedure for a vacant rental unit. The vacancy debit position run creates imputed costs for vacant rental units. If a cost center for vacancies has been defined in the rental unit, the costs are assigned to this cost center. Otherwise they are assigned to the rental unit. u Rental Accounting: Incoming Payments (Manual or Automatic, Electronic Account Statement) You carry out a number of different types of manual incoming payments. You also conduct an automatic incoming payment using an electronic account statement (in company code 1000 only). u Rent Adjustment You execute a number of different rent adjustments (an adjustment based on an index, a graduated rent adjustment, a freely definable adjustment defined by an amount or percentage, and finally an adjustment based on the sales revenues of the tenant). u Service Charge Settlement You define participating rental units, display a settlement variant, define a settlement unit, release cost collectors, execute the debit position, enter an invoice, simulate and execute the operating costs settlement, and calculate and adjust advance payments based on the settlement results. u External Service Charge Settlement You carry out a settlement for your real estate portfolio using sample A-tape and D-tape files that you would normally receive from the settlement company (company code 1000 only). u Rental: Lease-In You create a lease-in contract, a partner with a vendor account, set up the resubmission and the cost and revenue distribution functionality, and then run resubmission and renewal reports. u Integration with Asset Accounting This example demonstrates the integration between Real Estate Management and Asset Accounting. First you display the master data in the Asset Accounting component. Then you view the asset values in the asset accounts. Finally, you display the depreciation order attached to this asset.

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u Integration with Controlling You run various controlling reports on Real Estate objects. u Integration with Plant Maintenance This example describes how to rectify a malfunction in an elevator as quickly as possible. You have to create the elevator as a functional location. Then you create a malfunction report and use this to generate a maintenance order. You then assign an existing maintenance task list to this order. You process this order, and finally enter a confirmation when processing has been completed. You also learn what needs to be set up in Customizing so that the system can automatically create functional locations for Real Estate objects. u Document Management You display a document attached to a Real Estate object. u Information Systems You run a Real Estate report on vacancy and conduct a rental unit to lease-out analysis.

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