Show TOC

 Accrual Calculations Using the Plan=Actual Method

Use

The plan=actual method is used to accrue activity-independent amounts. Target costs cannot be determined because no activity-dependent costs occur. All the plan costs are used as the actual costs. As is the case with target=actual accrual calculation, you must be able to plan the costs for plan=actual accrual by period, meaning you assume a predefined amount, such as an annual insurance premium, and use this amount to plan the costs which would be incurred each month. During primary cost planning, the system spreads the total amount across the posting periods based on the distribution key you select.

Example Example

Cost center 4110 anticipates paying an insurance premium of $12,000 in period 11. You plan accrual amounts for this cost center, which the standard system distribution key 1 (equal distribution) spreads evenly across periods 1 through 12. When you calculate accrual, the system automatically enters the plan monthly value of $1,000 in the actual value fields.

End of the example.

As with the percentage method, you can specify either an internal order or a cost center as the accrual object. The system then creates period-based credit postings on this object. You can settle this object on a general ledger account, allowing you to identify any imbalances between the balances and the accruals.