Accrual Calculations Using the Target=Actual Method
Use
The target=actual method is used to calculate accrualfor activity-dependent costs. You plan the activity-dependent primary costs using an accrual cost element:
On the cost centers for which you want to calculate accrual
In the timeframes during which you want to execute accrual calculations
When calculating accruals in the actuals, the system determines the target costs of the relevant cost center based on an activity type and inserts the target values in the fields for actual values. This method is particularly useful where you can plan accrual on a period basis and where the costs are activity-dependent.
ExampleYou expect energy costs of $24,000 in period 11 on production cost center 4310, dependent on the number of production hours. A quarter of these costs, $6,000, are not activity-dependent. On cost center 4310, you plan activity-dependent accruals (cost element type 4) which the system can then distribute equally on the posting periods using standard distribution key 1. The actual activity quantity for activity type PHR (production hours) is 1200 hours, whereas the plan activity quantity was 1000 hours. This results in an operating rate of 1200 / 1000 = 120%.
The system calculates the following values for the accrual:
Cost accounting accruals total $27,600. The corresponding amount posted in Financial Accounting is $24,000. The expense in the Financial Accounting component (FI) is posted on the credit object in period 11, as are the period-based credits in the Controlling component (CO). You can transfer the difference of -$3,600 to the operating profit.
End of the example.