Periodic valuation of long-term orders.
Results analysis valuates the ratio between costs and a base for the order's progress towards completion, such as revenue or quantity produced.
Example:
If an order's progress is measured using the actual revenue, the cost of sales approriate for that revenue is calculated. The revenue, cost of sales, and reserves for imminent loss (if calculated) represent the profit on the order for the period, and are settled to Profitability Analysis.
The cost of sales calculated is compared with the actual costs; either work in process or reserves for unrealized costs are created for the difference. Postings are made for these values in Financial Accounting.