Processing Period-End Closing Activities

Objective

After completing this lesson, you will be able to Process period-end closing activities.

Period-End Closing Activities

You can use the maintenance order to plan and execute maintenance work. This means that the order initially bears all the costs that result from the planning and consumption of resources.

The costs generated by consuming the resources required appear on the debit side of the order as actual costs.

You should answer the following questions to ensure that cost allocation and tracking adhere to the allocation-by-cause principle:

  • Is the order really the originator of the costs?

  • What is the role of the maintenance object or maintenance requester?

This is the basis of order settlement.

Depending on the type of task, the order is settled to its actual originator and credited with the costs of resources consumed. Order costs are borne by another receiver, which is also a cost accounting object. This can, for example, be the cost center of the maintenance object, or the organizational unit that requested this work to be executed.

Therefore, the order is merely a collector of all costs incurred during the planning and execution phases with the purpose of tracking them from a cost-related perspective.

The routine maintenance tasks that arise through the technical administration of a specific maintenance object are generally settled to the cost center of this object.

To perform technical administration of the maintenance object, the corresponding cost center must be specified as the receiver in the settlement rule for the order. The actual costs for the order are passed on to the cost center, which is debited. At the same time, these costs are credited to the order. The balance of actual costs for the order after complete settlement equals zero while the actual cost on the cost center is greater than zero.

Perform Period-End Closing Activities

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