The quantity-based method can be used for sales orders.

With quantity-based results analysis, you can calculate the costs affecting net income on the basis of the invoiced quantity.

The invoiced quantity can be the standard for the percentage of completion (POC) of the order if:

• The quantity to be invoiced is known

• Complex payment conditions in the Sales and Distribution component result in revenue not being received in a linear manner

• The revenue cannot be planned by period

You have planned costs and quantities.

POC = Q(a) / Q(p)

C(PA) = POC * C(p) = Q(a) / Q(p) * C(p)

R(PA) = R(a)

The revenue affecting net income equals the actual revenue. The costs affecting net income are equal to the planned costs multiplied by the invoiced quantities divided by the planned quantity. The costs affecting net income can be passed to CO-PA together with the revenue affecting net income.

If the actual costs are greater than the costs affecting net income, the system creates capitalized costs.

If the actual costs are less than the costs affecting net income, the system creates reserves for unrealized costs.

Inventory values and reserves for unrealized costs can be transferred to FI and EC-PCA when you settle.

The planned values determine how the cost of sales is calculated:

• For a profit order (order for which the planned revenue is greater than the planned costs), the cost of sales is equal to the calculated costs.

• For a deficit order (order for which the planned revenue is less than the planned costs), the cost of sales is equal to the actual revenue plus the realized loss.

This method differs from the revenue-based method (method 01) in that the quantity specified in the invoice is used as a basis for valuation, rather than the revenue calculated by means of pricing.

In the standard system, the planned quantity equals the quantity in the sales order item.

The quantity-based method can also be applied to other objects if you make the appropriate setting in the Expert Mode of the valuation method in the Quantity base field.

You have planned revenues of USD 200,000 and costs of USD 120,000 for your sales order. The order quantity is 100 units.

In period 01 you have actual costs of USD 20,000. You have not billed the customer. In results analysis, the system calculates the following data:

• No costs affecting net income
• No revenue affecting net income
• Capitalized costs of USD 20,000 using the formula Capitalized costs = Actual costs less costs affecting net income

You then settle the capitalized costs to FI and EC-PCA.

The following values are reported in CO-PA:

The income statement shows the following values:

In period 02 the actual costs increase to USD 80,000. You deliver to your customer and send him a milestone invoice for USD 100,000. The invoiced quantity is 40 units. The order is partially delivered and partially billed. In results analysis, the system calculates the following data:

• Revenue affecting net income of USD 100,000
• Costs affecting net income using the formula Costs affecting net income = Planned costs x Confirmed quantity / Planned quantity in the amount of the actual costs of USD 48,000
• Capitalized costs of USD 32,000

You then settle the following:

• The revenue affecting net income to CO-PA
• The calculated costs to CO-PA
• The capitalized costs to FI and EC-PCA

The following values are reported in CO-PA:

The income statement shows the following values:

In period 03 the actual costs increase to USD 90,000. You deliver a second amount to your customer and send him a second milestone billing for USD 90,000. The total revenue is USD 190,000. The invoiced quantity is 40 units. The order is partially delivered and partially billed. In results analysis, the system calculates the following data:

• Costs affecting net income in the amount of the actual costs of USD 96,000
• Revenue affecting net income of USD 190,000
• Reserves for unrealized costs of USD 6,000

You then settle the following:

• The revenue affecting net income and the calculated costs to CO-PA
• The reserves for unrealized costs to FI and EC-PCA

The following values are reported in CO-PA:

The income statement shows the following values:

In period 04 the actual costs increase to USD 130,000. You deliver the remaining goods and send the customer the final invoice for USD 10,000. The invoiced quantity is 20 units. The total revenue is USD 200,000. The order is now fully delivered and fully invoiced.

In results analysis, the system calculates the following data:

• Calculated costs in the amount of the actual costs of USD 130,000
• Revenue affecting net income: USD 200,000 The revenue affecting net income is set equal to the actual revenue.

You then settle the following:

• The revenue affecting net income to CO-PA together with the calculated costs
• The cancellation of the reserves to FI and EC-PCA

The following values are reported in CO-PA:

The income statement shows the following values:

The order has a total profit of USD 70,000.