Entering content frameFunction documentation Calculating Profits Using the Cost-of-Sales Approach Locate the document in its SAP Library structure

Use

The Financial Accounting application in the R/3 System lets you represent profits according to the period accounting approach as well as the cost-of-sales approach. Both of these approaches are supported in Profit Center Accounting as well in order to ensure that all the data can be reconciled between the components (see also Methods of Calculating Profits in EC-PCA).

The standard profitability reports in Profit Center Accounting are based on the period accounting approach, whereby the system breaks down the operating results by revenue and cost element.

To calculate profits according to the cost-of-sales approach, you need to access the characteristic functional area, which is derived in FI or CO. Since you can define your own functional areas as well as the methods for determining them (substitution), you need to use your own reports to display results using the cost-of-sales approach.

Integration

It is possible to derive the functional area from the information already available in the document using substitution. You can also the relevant master data in addition to the information found in the document. For example, the functional area Administration can be found using the cost center itself as well as the cost center type assigned to the cost center. Alternatively, you can enter the functional area manually.

For more information, see the R/3 Library for FI Special Ledger, under Structure link  HYPERLINK "/SAPIrExtHelp/IWB_EXTHLP.asp?_LOIO=2706E23954D9035DE10000000A114084" .

Prerequisites

You can only use the cost-of-sales approach in Profit Center Accounting if it is also active in Financial Accounting.

The required activities are described in the Implementation Guide (IMG) for Financial Accounting, under Activate Substitution .

Features

The functional area can be derived automatically for all costs posted in FI and CO based on the existing posting assignments. It is then stored in the posted documents. It is passed on to Profit Center Accounting for both plan and actual data.

Activities

The graphic below shows how a report is built in the cost-of-sales approach.

This graphic is explained in the accompanying text

 

  1. The revenues and the costs of sales are listed in the report rows by account.
  2. Variances in production orders are assigned via the accounts to which the data was posted. You can assign all debits and credits to the production cost centers using a separate function area, for example Production, for the variances in the production cost centers. The difference which arises gives you the desired variances.
  3. The rest of the overhead for the period is entered in the corresponding report rows by function area.
  4. The report rows for data from non-operating results are found using the corresponding accounts.

 

 

 

 

 

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