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Results Analysis: Principle: By: TED Delpriore
Results Analysis: Principle: By: TED Delpriore
R(p) x C(a) / C(p)). The corresponding stock and reserves are created:
if the actual revenue is greater than the profit-relevant revenue, the system creates revenue in excess of billings,
if the actual revenue is less than the profit-relevant revenue, the system creates revenue surplus.
Example:
You have planned revenue of 3,000 and costs of 2,000 for your sales order.
You have actual costs of 1,000 but no revenue. During Results Analysis, the system calculates the following data:
Costs affecting net income of the sale (cost of sale): 1.000
Revenue affecting net income: 1.500
Revenue in excess of billings: 1.500
Settlement settles revenue and cost of sales to CO-PA, which consequently generates a profit of 500. You then settle the capitalized costs to FI and EC-PCA. On the basis of posting rules (which must be maintained in Customizing),
settlement generates the following posting: Inventory account against inventory change account 1,500. As the inventory change account is settled to the profit and loss account, actual amounts of 1,500 in profit and 1,000 in losses are
generated on the profit and loss account. As in CO-PA, FI and PCA generate a profit of 500.
Although no revenues have been received, profit has already been capitalized.
You have actual costs of 1,000 and actual revenue of 1,500. During Results Analysis, the system calculates the following data:
Costs affecting net income of the sale (cost of sale): 1.000
Revenue affecting net income: 1.500
Revenue in excess of billings: 300
Settlement settles revenue and cost of sales to CO-PA, which consequently generates a profit of 500. You then settle the capitalized costs to FI and EC-PCA. On the basis of posting rules (which must be maintained in Customizing),
settlement generates the following posting: inventory account against inventory change account 300. As the inventory change account is settled to the profit and loss account, actual revenue of 1,200 plus 300 inventory change in profit,
and actual costs of 1,000 in losses are indicated on the profit and loss account. As in CO-PA, FI and PCA generate a profit of 500.
You have actual costs of 1,800 and actual revenue of 3,000. During Results Analysis, the system calculates the following data:
Costs affecting net income of the sale (cost of sale): 1.800
Revenue affecting net income: 2.700
Revenue surplus: 300
Settlement settles revenue and cost of sales to CO-PA, which consequently generates a profit of 900. You then settle the capitalized costs to FI and EC-PCA. On the basis of posting rules (which must be maintained in Customizing),
settlement generates the following posting: inventory change account against inventory account 300. As the inventory change account is settled to the profit and loss account, actual revenue of 3,000 in profit, and actual costs of 1,800
plus 300 inventory change in losses are generated on the profit and loss account. As in CO-PA, FI and PCA generate a profit of 900.
Method without Planned Costs and Partial Billing
"Inventory determination without planned costs and partial billing" provides a further example. If you use this method, the calculated cost of sales is zero as long as your actual revenue is zero. The work in process is equal to the actual
costs during this time.
If the actual revenue is not zero, the calculated cost of sales is equal to the actual costs. The work in process is canceled as soon as actual revenues are received. When you bill, it is no longer possible to activate work in process.
The cost portion in stock is canceled when it achieves status TECO.
Customizing for Results Analysis
Which Results Analysis method you choose depends on your business requirements. A company will normally run different types of processing - and therefore use different methods of Results Analysis - simultaneously. The Results
Analysis method contains the rule for calculating Results Analysis data. You can determine how accurately the system generates accrual values in Customizing. Simply choose one of the 17 pre-defined methods in "Non-expert mode".
Further options are available in expert mode.
In make-to-order production, the sales order item goes through several stages, which are represented by different statuses and lead to different results in Results Analysis. In the standard system there are three relevant system
statuses:
REL (released)
FNBL (final billing)
TECO (technically completed)
In Customizing for Sales Order Controlling under Period-End Closing Results Analysis state:
At which status Results Analysis can be performed
At which status the work in process is canceled (optional)
At which status the work in process and reserves are canceled (optional)
Results Analysis saves the Results Analysis data for the sales order item under secondary cost elements, which you assign in Customizing. To be able to pass theWIP and reserves to Financial Accounting, you must define posting rules
in Customizing so that G/L accounts can be assigned to these secondary cost elements.
When you select the line identification level, Results Analysis calculates separate values for each line ID. Under certain conditions, this method can result in one line ID showing work in process while another line ID shows reserves.
If you select valuation at the totals level, the system calculates work in process, reserves for unrealized costs, reserves for complaints and commissions, and reserves for imminent loss for each order. These values are then distributed to
line IDs according to a method of apportionment specified in the valuation method.
The standard setting for apportionment is:
Capitalized costs/work in process: cumulative actual costs
Reserves for unrealized costs: difference between planned costs and cumulative actual costs
Reserves for costs of complaints and commissions: difference between planned costs and cumulative actual costs
Reserves for imminent loss: display of credit for stock which cannot be capitalized and stock with the option to capitalize.
If a method of apportionment cannot be used, the system looks for an alternative method of apportionment. The system searches in the following order:
Apportionment numbers (according to the number defined under "Update for Results Analysis")
Cumulative actual costs
Planned costs
Apportionment numbers with apportionment numbers per line ID = 1
Settlement
The results of Results Analysis are then settled to FI, CO-PA and PCA. You can settle the following to Financial Accounting (FI) and Profit Center Accounting (CO-PCA):
Stock values
Reserves for unrealized costs
Reserves for imminent loss
Reserves for complaints and commissions
The cost of sale if you are using an unvaluated sales order stock and using the cost-of-sales accounting method in Financial Accounting.
You can settle the following to Profitability Analysis (CO-PA):
Cost of sales or calculated revenue
Reserves for imminent loss and complaints
During settlement to Profitability Analysis, the generated line item of the CO-PA can be valuated with the cost component split of the sales order cost estimate or with the cost component split of a standard cost estimate.
If CO-PA is active, the settlement rule is automatically generated for the profitability segment when the sales order item is generated.
If CO-PA is inactive, you can specify in the settlement profile that the sales order must not be settled. If you do settle, a posting to FI in accordance with the posting rules will be made.
To use the settlement structure, you must first create cost element groups that aggregate the primary and secondary cost elements used for debit postings to your orders. In Customizing, you link the cost element group to the settlement
structure with a settlement assignment. For each settlement assignment, you stipulate by receiver type whether the settlement will use the original posted cost elements or a designated settlement cost element.
You might use settlement cost elements:
To identify costs allocated from orders to receiver and to describe their purpose, such as repairs or maintenance
To reduce data volume by consolidating several debit cost elements under one settlement cost element
If you want to settle costs and revenue of a sales order item to a profitability segment, you must define a PA transfer structure, which assigns costs and revenue to the value fields in Profitability Analysis. The PA transfer structure
consists of one or more items called PA settlement assignments. When defining the PA transfer structure, ensure that every debit cost element is represented in the settlement structure and can only be assigned to one settlement cost
element.
If you do not carry out Results Analysis, the posted actual costs and actual revenue of the sales order item will be settled to the profitability segment. The PA transfer structure must contain all cost elements under which costs and