Configuring Results Analysis

The image displays various settings related to valuation methods in an enterprise software system. It shows options for revenue-based and cost-based valuation methods, status controls for results analysis, profit basis calculations, and levels for valuation. Key terms like Realized, Finally Billed, and Technically Completed are highlighted, emphasizing the status dependency of valuations.

The results analysis method that you choose depends on your business requirements. A company handles different types of processing, and therefore uses different methods of results analysis. The results analysis method contains the rule for calculating results analysis data. You can determine how accurately the system generates accrual values in Customizing. Choose one of the 17 predefined methods in the non-expert mode. Further options are available in the expert mode.

In make-to-order (MTO) production, the sales order item passes through several stages that are represented by different statuses, and lead to different results in results analysis.

The standard system has the following relevant system statuses:

REL (released)
FNBL (final billing)
TECO (technically completed)

In Customizing for Sales Order Controlling under Period-End Closing in results analysis, enter the following:

The status at which results analysis can be performed
The status at which the work in process (WIP) is canceled (optional)
The status at which the WIP and reserves are canceled (optional)

WIP and Provisions – Allocation to Cost Elements

The image displays a user interface screen for configuring valuation methods in a software system. It shows options for revenue-based, cost-based, and profit-based valuation methods, along with settings for status control, profit basis, and valuation level. The layout provides input fields and radio buttons to select the desired configuration.

Results analysis saves the results analysis data for the sales order item under secondary cost elements, which you assign in Customizing. To be able to pass the WIP and reserves onto FI, you define posting rules in Customizing so that general ledger (G/L) accounts can be assigned to these secondary cost elements.

Customizing – Assignment Table

The image shows a table titled Assignment of Cost Elements for WIP Calculation with columns for COAR, RA ver, RA Key, Cost El., Origin, Cost Ctr., Req, Opt, Can't, %Op, and %Ca. The table contains numerical values and codes across multiple rows.

You can assign the following cost elements to line IDs:

All cost elements with which an order is debited and credited
All cost elements in costing that are used for calculating the target cost, with WIP at target cost

Note

The valuation of WIP includes all cost elements listed in the preliminary cost estimate for the product cost collector.

The relevance of categories when creating line IDs is described in the following:

Create line IDs of category K (costs) for valuation-relevant costs (such as direct material costs).
Assign line IDs to category N (not included) if you do not want any WIP to be created for entire line IDs (for example, the costs are accrued).

The line IDs break down the costs incurred for the order into direct materials costs, direct production costs, material overhead, and so on. For example, these groups can be based on the structure of the cost of goods manufactured in the cost component structure (cost component split). You can specify a percentage that cannot be capitalized separately for each line ID.

Customizing – Update Table

The image shows a system interface titled Update of WIP Calculation with columns displaying data related to cost object areas, value streams, rate keys, account types, creation and usage periods, and cost/revenue information. It is a tool for managing and updating work-in-progress calculations within an enterprise resource planning or accounting system.

For results analysis, you can use the cost elements of type 31.

The relevance of categories when creating line IDs is described in the following:

Create line IDs of category K (costs) for valuation-relevant costs (such as direct material costs).
Assign line IDs to category N (not included) if you do not want any WIP to be created for entire line IDs (for example, the costs are accrued).

Customizing – Posting Rules Table

The image shows a table and explanatory text illustrating posting rules in work-in-progress (WIP) calculation and results analysis. It outlines how different accrual cost elements like WIP material, labor, and overhead map to different profit and loss (P+L) and general ledger (G/L) accounts, and how results analysis versions can use different accounting principles like revenue-based or cost-based methods.

You specify the G/L account in FI to which WIP is settled.

The assignment is performed in the following ways:

By results analysis category:
In many cases, it is sufficient to generate a posting rule for the WIP with a requirement to capitalize (category WIPR).
By results analysis cost element:
You assign a balance sheet account and an income statement account to each results analysis category, such as each results analysis cost element. You cannot create cost elements in Controlling for the G/L accounts that you specify in the posting rules.

When the WIP is settled, the system generates a posting document in FI.

Unfinished goods inventory (WIP) is a balance sheet account and changes in unfinished goods inventory (WIP) is an income statement account.

If you have specified a profit center in the cost object, data is also transferred to Profit Center.

Results Analysis at Line ID Level

The image shows a breakdown of order items categorized into material, internal activity, and overhead costs. It illustrates how actual costs are compared to planned costs, and provides formulas for calculating the cost of sales for each category based on the planned costs and production output completion (POC). The results analysis section visualizes the material costs divided into work-in-progress (WIP) and reserves.

Results analysis calculates separate values for each line ID when you select the line identification level. Under certain conditions, this method can result in one line ID displaying WIP, while another line ID displays reserves.

Results Analysis at Totals Level

The image depicts a process flowchart for results analysis and cost apportionment in a manufacturing or production setting. It shows order items with planned and actual amounts for material, internal activities, and overhead costs. The results analysis section calculates costs based on the planned costs total, including costs of sales, work in process, and reserves.

If you select valuation at the totals level, the system calculates WIP, reserves for unrealized costs, reserves for complaints and commissions, and reserves for imminent loss for each order. These values are then distributed to line IDs according to a method of apportionment specified in the valuation method.

The standard settings for apportionment are as follows:

Capitalized costs or WIP:
Cumulative actual costs.
Reserves for unrealized costs:
Difference between planned costs and cumulative actual costs.
Reserves for costs of complaints and commissions:
Difference between planned costs and cumulative actual costs.
Provisions for imminent loss:
Display of credit for inventory that cannot be capitalized and inventory with the option to capitalize.

If you cannot use the method of apportionment, the system looks for an alternative method.

Apportionment of WIP Based on Actual Costs

The image contains four tables displaying cost analysis data. The first table shows the planned and actual revenue, material costs, internal activity costs, overhead, and total costs for an order item. The second table presents the results analysis with revenue, cost of sales, and work-in-progress (WIP) figures. The third table apportions the WIP across material, internal activity, and overhead costs. The fourth table calculates the actual material, internal activity, and overhead costs based on the WIP group and actual total figures.

The figure shows how WIP of 200 is apportioned to material (120), internal activity (40), and overhead (40) based on the actual cost in the ratio of 600:200:200 (material cost: int. act. cost: overhead cost).