Introduction to SAP Results Analysis

Results Analysis is functionality in SAP Controlling to valuate ongoing,

unfinished activities, such as production orders, internal orders or
projects at month-end. The underlying assumption for each of these
activities is that they will add value when they are finished – a production
order will yield a finished product, while a customer project will eventually
be billed to the customer.
To learn more about SAP results analysis and other SAP FICO topics please
visit our new SAP FICO Learning Center, please click here
Now if you look at the mere profit and loss of such an activity before the
added value has been achieved (that is, before the goods receipt has been
posted for the production order or before the customer project has been
billed), you will only see costs and therefore, a loss. If you happen to look
at month-end, it would seem that the activity has an unfavorable effect on
your company’s results.
With SAP Results Analysis, you can provide a more realistic view of your
ongoing activities by capitalizing the value added so far in the balance
sheet. Simply, you reverse the costs posted to your activities during the
month and convert them into stock. If we maintain the assumption that
the activity will lead to added value, then we can show this value in the
inventory of your balance sheet as equivalent to the costs incurred.
Results Analysis comes with a number of different methods to determine
the value of the inventory to be capitalized at month-end. The simplest of
these is the Work in Process (WIP) calculation, which is primarily used for
production orders. In this scenario, you consider the capitalized inventory
to be equal to the total cost of a production order minus any credits from
goods receipt of finished products. For a customer project, the work in
process is the difference between the total cost and the (partial) billings. In
this scenario, there are a variety of options available  to valuate the work
in process. For example, you can consider the ratio between the planned
and actual costs, compared to the planned and actual revenue for a more
realistic result. You could also ignore all billings and show all costs as work
in process until the project is finished.
An important variation of Results Analysis is the Percentage of Completion
(POC) method. This method is primarily used in large customer projects
and is used to capitalize revenue instead of costs. With the POC method,
you assume that the costs incurred to a project will eventually lead to an
amount of revenue equal to the costs, plus your planned margin. For
example, if you have realized 25% of your planned costs, you will
capitalize 25% of your planned revenue in the balance sheet and P&L.
Results Analysis provides a flexible toolset to determine a realistic picture
of your ongoing activities at month-end closing. It can be used for
production orders, internal orders, service / maintenance orders, and
projects.