Entering content frameFunction documentation (11) Inventory Determination, Without Planned Costs, With Milestone Billing Locate the document in its SAP Library structure

Use

You can use the method Inventory Determination, Without Planned Costs, With Milestone Billing for:

You can use the method Inventory Determination, Without Planned Costs, With Milestone Billing to:

The inventory is canceled as soon as actual revenues are received. If actual costs are incurred in a subsequent period but no actual revenues are received, the system again creates inventory in the amount of the actual costs of the period.

Note the following:

As soon as revenue is received, the actual costs are considered cost of sales in full. In other words, the cost of sales is not proportional to actual revenues as with the revenue-based method, nor is it proportional to the quantity sold as with the quantity-based method.

Prerequisites

Choose a results analysis method in simplified Customizing for Product Cost by Sales Order under Period-End Closing ® Results Analysis ® Valuation Method.

Features

R(PA) = R(a)

C(PA) = 0 if R(a) per = 0

If R(a) per <> 0 then C(PA) cum = C(a) cum

If R(a) per = 0 then C(z) = C(a) cum

Cum = cumulative values since the last actual revenue

Per = results analysis period

Example

Period 01

In period 01 you have actual costs of USD 20,000 but no revenues. In results analysis, the system calculates the following data:

You then settle the following:

The following values are reported in CO-PA:

Profitability Analysis

Actual revenues

0

Calculated cost of sales

0

Profit

0

The income statement shows the following values:

Income Statement

Expense

Revenue

Actual costs 20,000

Inventory increase
Capitalized costs 20,000

20,000

20,000

Period 02

In period 02 actual costs increase to USD 80,000. You deliver to your customer and send an invoice for USD 100,000. The order is partially delivered and partially billed. In results analysis, the system calculates the following data:

You then settle the following:

The following values are reported in CO-PA:

Profitability Analysis

Revenues (actual revenues)

100,000

Cost of sales (actual costs)

80,000

Profit

20,000

The income statement shows the following values:

Income Statement

Expense

Revenue

Actual costs 80,000

Actual revenues 100,000

Profit 20,000

 

100,000

100,000

Period 03

In period 03 actual costs increase to USD 90,000. No billing takes place. In results analysis, the system calculates the following data:

You then settle the following:

The following values are reported in CO-PA:

Profitability Analysis

Revenues (actual revenues)

100,000

Cost of sales (actual costs)

80,000

Profit

20,000

Caution

This results analysis data was already settled to CO-PA in period 02.

The income statement shows the following values:

Income Statement

Expense

Revenue

Actual costs 90,000

Actual revenues 100,000

Profit 20,000

Capitalized costs 10,000

110,000

110,000

Period 04

In period 04 actual costs increase to USD 130,000. You deliver to your customer and send an invoice for USD 100,000. Total revenue is USD 200,000. The order is now fully delivered and fully invoiced. In results analysis, the system calculates the following data:

You then settle the following:

The following values are reported in CO-PA:

Profitability Analysis

Revenues (actual revenues)

200,000

Cost of sales (actual costs)

130,000

Profit

70,000

The income statement shows the following values:

Income Statement

Expense

Revenue

Actual costs 130,000

Actual revenues 200,000

Profit 70,000

 

200,000

200,000

The profit on your sales order is USD 70,000.

 

 

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