In the interest calculation, the system processes the hierarchy top-down. The interest profile controls how balances are formed and how interest is posted. The following settings are possible:

• Derive automatically

• Capital investment projects
• Customer projects
• Overhead cost projects

• Calculate interest separately

• Do not calculate interest

For CO internal orders, interest is calculated (or not calculated) on a balancing object basis.

The interest calculation only takes account of cost, revenues, and payments already capitalized in an asset under construction. Interest processing is per WBS element. The values from orders, network, and activities assigned to the WBS element are not included. If you want to include the values from orders for the project, you must first settle the orders to the WBS element.

In hierarchy processing, the system treats WBS elements with capital-investment profiles as if you had selected a separate interest calculation for them.

This means that the interest calculation ignores capital investment projects.

Prerequisite Applying to Capital Investment Projects:
You must have maintained a capital-investment profile for the WBS element.

Balances are formed on billing elements for the subhierarchies below them. The system updates the interest in the billing element.

Prerequisite Applying to Customer Projects
The project hierarchy must include at least one WBS element flagged as a billing element.

Balances are formed and figures updated per account assignment object. Account assignment objects are:

• WBS element

• Internal order

• Plant maintenance order

• Service order

• Network

• Network activity

Prerequisites Applying to Cost Projects
The WBS element is not below a billing element in the project hierarchy. No capital-investment profile has been maintained.

The manual settings you enter override the interest calculation logic derived automatically. The following alternatives exist:

• Calculate interest separately

• Do not calculate interest

The interest profile is passed on to lower-level objects which do not have their own interest profiles within a hierarachy at the time of the interest run. Interest profile inheritance ends with manually controlled objects or WBS elements with interest profiles. The interest profile is not inherited by the subtrees below these WBS elements.