Results Analysis Key

Key that defines the valuation of the order during period-end closing.

Use

How the results analysis key is used depends on the nature of the order.

For orders with revenue ( internal orders, sales orders, and projects), the results analysis key determines how results analysis is carried out.

Results analysis is recommended in the following situations:

o When you are using a nonvaluated sales order stock or nonvaluated project stock and you want to valuate the inventories at the end of the period

o When you are using a valuated sales order stock or valuated project stock and want to valuate goods that have been delivered but not yet invoiced, or when you want to create reserves automatically

For orders without reference to a sales order item or WBS element, the results analysis key determines how the work in process is calculated.

The production type can be make-to-stock or mass production on the basis of sales orders. The work in process is calculated at the level of the production order, process order, or product cost collector.

For capital investment measures, the results analysis key determines how the system calculates the values to be capitalized.

Examples

For orders with revenue, costs may be incurred before any revenue is received. If you are using a nonvaluated sales order stock, results analysis enables you to report the costs as work in process. After the first revenue has been posted, you can calculate the cost of sales. If the calculated cost of sales is greater than the actual costs incurred to date, the system creates reserves for unrealized costs in the amount of the difference.

No revenue is posted in CO for orders without reference to a sales order item. Each goods receipt for these orders is valuated. The work in process for these orders can be calculated with two different methods:

Work in process at actual costs

The actual costs for production orders and process orders for which no delivery has taken place are reported as work in process. After a partial delivery, the difference between the debit of the order with actual costs and the credit of the order from goods receipts is reported as work in process. When the order is complete, this work in process is canceled. The difference between the debit and credit of the order is then interpreted by the system as a variance.In Product Cost by Order, the work in process is usually valuated at actual costs.A requirement for the valuation of work in process at actual costs is that the default rule PP1 (full settlement) must be specified in the order.

Work in process at target costs

A confirmation is made for each operation or at certain reporting points. The system uses the confirmations to determine the quantity of work in process. This quantity is valuated using the strategy sequence specified in the valuation variant for work in process and scrap.In Product Cost by Period, the work in process is always valuated at target costs.A requirement for the valuation of work in process at target costs is that the default rule PP2 (periodic settlement) must be specified in the order.See also: Check default values for order types

Dependencies

The control parameters for results analysis, for the calculation of work in process, and for the calculation of the values to be capitalized are selected through the results analysis key in the order and a results analysis version. If you have not specified a results analysis key in the order, the order will not be included in the calculation of work in process during period-end closing.

The control parameters for the valuation of work in process in Product Cost by Period are defined in Customizing for Product Cost by Period.

See also: Define valuation variant for WIP and scrap (target costs)

Definition: results analysis key

Product Cost Controlling (CO-PC)

A key specifying that the object is to be selected during results analysis or when work in process is calculated.

A number of valuation control parameters are linked to this key.

whether results analysis is revenue-based, quantity-based or manual

on which basis (planned or actual data) results analysis is carried out

how profits are realized

whether the inventory, reserves and cost of sales are to be split

Return ->Definition: results_analysis_key

Definition: internal order

Controlling (CO)

An instrument used to monitor costs and, in some instances, the revenues of an organization.

Internal orders can be used for the following purposes:

Monitoring the costs of short-term jobs

Monitoring the costs and revenues of a specific service

Ongoing cost control

Internal orders are divided into the following categories:

Overhead orders - For short-term monitoring of the indirect costs arising from jobs. They can also be used for continuous monitoring of subareas of indirect costs. Overhead orders can collect plan and actual costs independently of organizational cost center structures and business processes, enabling continous cost control in the enterprise.

Investment orders - Monitor investment costs that can be capitalized and settled to fixed assets.

Accrual orders - Monitor period-based accrual between expenses posted in Financial Accounting and accrual costs in Controlling.

Orders with revenues - Monitor the costs and revenues arising from activities for partners outside the organization, or from activities not belonging to the core business of the organization.

Return ->Definition: internal_order

Definition: results analysis

Product Cost Controlling (CO-PC)

A periodic valuation of long-term orders and projects.

Results analysis valuates the relationship between the costs and a measure of the order's progress toward completion, such as the revenue or the quantity produced.

Example:

If the measure of an order's progress is the actual revenue, the cost of sales appropriate for that revenue is calculated. The revenue, cost of sales, and reserves for imminent loss (if calculated) represent the profit on the order for the period, and are settled to Profitability Analysis.

The calculated cost of sales is compared to the actual costs, and either work in process or reserves for unrealized costs are created for the difference. Postings are made for these values in Financial Accounting.

Definition: nonvaluated sales order stock

Product Cost Controlling (CO-PC)

An inventory for processing a sales order.

The value of this inventory is determined by results analysis at the end of the period.

Return ->Definition: nonvaluated_sales_order_stock

Definition: cost of sales

Controlling (CO)

The cost of goods manufactured for the products sold.

The cost of goods sold can be compared against the sales revenues.

The cost of goods sold does not contain costs for finished or semifinished products still in the inventory.

Typically, the cost of goods sold is calculated at the point of goods issue. In contrast to the period accounting method, the posting is made to an account "Cost of goods sold" and not to "Change in stock." This can be defined in Customizing for goods issues.

Return ->Definition: cost_of_sales

Definition: reserves for unrealized costs

Product Cost Controlling (CO-PC)

The reserves for unrealized costs can be created in Cost Object Controlling at the following times:

In results analysis -

Reserves for unrealized costs are defined as the difference between the cost of sales and the actual cost if the cost of sales is greater.

When work in process is calculated at actual costs -

Reserves for unrealized costs are defined as the difference between actual cost and the credits from goods receipts if the credits from goods receipts are greater than the actual cost.

Definition: Product Cost by Period

Product Cost Controlling (CO-PC)

A component that determines the cost of products by period.

The cost object can be the following:

Production cost collector

Cost object hierarchy and its cost object nodes, to which materials, run schedule headers, production orders, and process orders can be assigned

Definition: Product Cost by Order

Product Cost Controlling (CO-PC)

A component that costs products by order.

The cost object can be a production order or a process order.

Typically, the costs of production orders are analyzed by period.

Return ->Definition: Product_Cost_by_Order

Definition: results analysis version

Product Cost Controlling (CO-PC)

A version that enables multiple valuations of the same object (such as a sales order item) in results analysis and in the calculation of work in process.

Example

For balance sheet purposes, the object is valuated using a method that determines the value of the unfinished products on the basis of the actual cost incurred to date.

For internal analysis purposes, the value of the unfinished products is determined using a method that includes unrealized profits.

Return ->Definition: results_analysis_version