Show TOC
Legal valuation
principles in results analysis (North America)
In addition to the standard functions of
analysis, you can also carry out results analysis according to the POC method
(percentage of completion). This method functions according to the legal
valuation principles in North America.
The calculated
revenue is the ratio of the costs to the planned costs (the percentage of
completion) multiplied by the planned revenue. It is realized in every
period.
- If the actual revenue is less than the
calculated revenue, inventory is created from which revenue can be generated.
The calculated revenue is settled to Financial Accounting as an assets
item.
- If the actual revenue is greater than the
calculated revenue, then a revenue surplus is created. The revenue surplus is
settled to Financial Accounting as a liability item, and the calculated
revenue as an asset item.
- Profit realization with the POC
method
Profit is calculated
from the ratio of actual costs to planned costs (the percentage of
completion), multiplied by the planned profit. This profit is realized in the
period in which it occurred.
This profit is
canceled if:
- The actual costs for a period are greater than
the calculated revenue for this period
- The planned costs change in such a way that an
overall loss is expected
- Loss realization with the POC
method
Loss is calculated
from the difference between the planned costs and the planned
revenue.
The planned loss is
realized as soon as it is recognized.
Part of this loss is
canceled if:
- The planned costs change in such a way that
the planned loss is reduced
- The planned costs change in such a way that an
overall profit is expected
The following
results analysis data is calculated according to the POC method:
- Revenue in excess of billings