| # COGS by Cost Component (tipcs3191m000) Use this session to view and maintain the detailed interim COGS of a PCS project. In other words, the interim costs of the project are specified by cost components in this session. Interim COGS and revenue for a PCS project are useful when you want to gain an insight into the interim results of a PCS project, even before any end item is shipped. After you run the Calculate Interim COGS and Revenues by Project (tipcs3290m000) session, the interim COGS and revenue of a specific PCS project can be viewed in the Interim COGS and Revenues by Project (tipcs3190m000) session. However, if for the project the Post Interim Results by Cost Component check box in the Project Details (tipcs2130m000) session is selected, you can view and maintain the COGS by cost component in the COGS by Cost Components session. To start the COGS by Cost Components session, click COGS by Cost Components on the toolbar in the Interim COGS and Revenues by Project (tipcs3190m000) details session. Related topics Overview of interim revenue recognition in Project Control (PCS) Procedure for interim revenue recognition in Project Control (PCS) Cost components in Manufacturing Estimated Costs The estimated costs for the project specified by cost component, which include: The estimated item costs (project part costs) based on the BOM, routing, and so on. If the Activity Estimation check box is selected for an activity in the Activities (tipcs4101m000) session, the estimated costs for project activities. The estimated project surcharges. If the project is a main project, the estimated costs of subprojects. The costs for orders that are related to the project, such as sales orders and service orders, are not included in the estimated costs. If the Post Interim Results by Cost Component check box in the Project Details (tipcs2130m000) session is selected, the estimated costs are specified by cost component, and can be viewed in the COGS by Cost Component (tipcs3191m000) session. If the Post Interim Results by Cost Component check box is cleared, the estimated costs are not specified by cost component, and can only be viewed in the Interim COGS and Revenues by Project (tipcs3190m000) session. Estimated Costs Variance The difference between the Estimated Costs and the Total Estimated, specified by cost component. The Estimated Costs field is calculated by LN. However, the Total Estimated Costs field can be changed by the user, for example, when you expect more or less costs than LN calculates in the Estimated Costs field. Changing the Total Estimated Costs field results in a change of the Estimated Costs Variance field. If the Estimated Costs and the Total Estimated Costs are equal, than the Estimated Costs Variance is 0 (zero). If the Post Interim Results by Cost Component check box in the Project Details (tipcs2130m000) session is selected, the estimated costs variance is specified by cost component, and can be viewed in the COGS by Cost Component (tipcs3191m000) session. If the Post Interim Results by Cost Component check box is cleared, the estimated costs variance are not specified by cost component, and can only be viewed in the Interim COGS and Revenues by Project (tipcs3190m000) session. Total Estimated The total estimated costs for the PCS project, specified by cost component. The default value of this field equals the number in the Estimated Costs field, which is calculated by LN. However, you can change the Total Estimated Costs, for example, when you expect costs that differ from the costs already recorded in LN. The difference between the Total Estimated Costs and the Estimated Costs is expressed in the Estimated Costs Variance field. If the Post Interim Results by Cost Component check box in the Project Details (tipcs2130m000) session is selected, the total estimated costs are specified by cost component, and can be viewed and maintained in the COGS by Cost Component (tipcs3191m000) session. If the Post Interim Results by Cost Component check box is cleared, the total estimated costs are not specified by cost component, and can only be viewed and maintained in the Interim COGS and Revenues by Project (tipcs3190m000) session. Actual Costs The costs of production, hours accounting, purchase, service, sales, finance, warehousing, and PCS itself that are actually booked on the PCS project, specified by cost component. You can determine actual costs on several levels: On project level: General costs, general costs via Financials (for example, travel invoices), surcharges. On customized item level: Purchase costs, inventory surcharges, production costs. On standard item level: Standard items linked to sales orders and service orders for a project. On the level of project related items: Item costs related to project. This is a separate category of costs (mainly results) which must be mapped to the PCS WIP like the costs on project level. If the Post Interim Results by Cost Component check box in the Project Details (tipcs2130m000) session is selected, the actual costs are specified by cost component, and can be viewed in the COGS by Cost Component (tipcs3191m000) session. If the Post Interim Results by Cost Component check box is cleared, the actual costs are not specified by cost component, and can only be viewed in the Interim COGS and Revenues by Project (tipcs3190m000) session. Earned LN calculates the Earned COGS by multiplying the estimated total costs at completion (the value in the Total Estimated Costs field) by the Percentage of Completion (POC). A number of POCs is displayed in this session: POC (hours based), POC (Costs), and Manual. Which POC method is used to determine the Earned COGS depends on the value of the POC Method field in the Project Details (tipcs2130m000) details session. In the end, the percentage that you type in the Confirmed field, is leading. If the Post Interim Results by Cost Component check box in the Project Details (tipcs2130m000) session is selected, the earned COGS are specified by cost component, and can be viewed in the COGS by Cost Component (tipcs3191m000) session. If the Post Interim Results by Cost Component check box is cleared, the earned COGS are not specified by cost component, and can only be viewed in the Interim COGS and Revenues by Project (tipcs3190m000) session. Actual COGS The cost of goods sold (COGS) that were already made for the project at the date and time of the interim revenue recognition, specified by cost component. The actual COGS can originate from: Sales Service Warehousing If the Post Interim Results by Cost Component check box in the Project Details (tipcs2130m000) session is selected, the actual COGS are specified by cost component, and can be viewed in the COGS by Cost Component (tipcs3191m000) session. If the Post Interim Results by Cost Component check box is cleared, the actual COGS are not specified by cost component, and can only be viewed in the Interim COGS and Revenues by Project (tipcs3190m000) session. Interim COGS The interim COGS that is or will be posted to the General Ledger module in Financials, specified by cost component. The interim COGS is calculated by running the Calculate Interim COGS and Revenues by Project (tipcs3290m000) session. The calculation is as follows:
    estimated total costs at completion = estimated cost of the projects + estimated cost variance
    earned COGS = estimated total costs at completion * percentage of completion (POC)
    interim COGS of current period = earned COGS - (already posted actual GOGS + interim COGS posted in prior period)
If necessary, the user can overrule the calculated amount by typing an amount in the Confirmed Interim COGS field. Note In case of a loss (the Expected loss check box in the Interim COGS and Revenues by Project (tipcs3190m000) details session is selected), the calculation of interim COGS is different. For more information, refer to Expected loss. If the Post Interim Results by Cost Component check box in the Project Details (tipcs2130m000) session is selected, the interim COGS are specified by cost component, and can be viewed in the COGS by Cost Component (tipcs3191m000) session. If the Post Interim Results by Cost Component check box is cleared, the interim COGS are not specified by cost component, and can only be viewed in the Interim COGS and Revenues by Project (tipcs3190m000) session. Confirmed Interim COGS The interim COGS specified by cost component, that is or will be posted to the General Ledger module in Financials. The default value of this field equals the value in the Interim COGS field but you can adjust the interim COGS in this field before you confirm it. If the Post Interim Results by Cost Component check box in the Project Details (tipcs2130m000) session is selected, the confirmed interim COGS are specified by cost component, and can be viewed and maintained in the COGS by Cost Component (tipcs3191m000) session. If the Post Interim Results by Cost Component check box is cleared, the confirmed interim COGS are not specified by cost component, and can only be viewed and maintained in the Interim COGS and Revenues by Project (tipcs3190m000) session. POC (costs based) The Percentage of Completion (POC) expresses the percentage of work on the PCS project that is completed. The POC (costs based) is based on the costs for the project. The POC is calculated by dividing the actual costs that are spent on the project until a specific date by the estimated total costs at completion. For example, the total estimated costs of the project are $1980,-. The actual costs until the moment that you want to recognize revenue are $200,-. The POC is 200/1980 = 10,1%. The setting of the POC Method field in the Project Details (tipcs2130m000) details session determines whether LN uses the POC (costs based), the POC (Hours), or the POC (Manual) to calculate the interim COGS and revenue for a specific project. In this session, the current POC is indicated by the label (Current Method). Note that LN always calculates the POC (costs based), even if the POC (costs based) is not used to calculate interim COGS and revenue. POC (hours based) The Percentage of Completion (POC) expresses the percentage of work on the PCS project that is completed. The POC (Hours) is based on the hours that are spent on the project. The POC is calculated by dividing the actual hours that spent on the project until a specific date by the estimated total hours at completion. For example, the total estimated hours of the project are 500. The actual hours until the moment that you want to recognize revenue are 100. The POC is 100/500 = 20%. The setting of the POC Method field in the Project Details (tipcs2130m000) details session determines whether LN uses the POC (costs based), the POC (Hours), or the POC (Manual) to calculate the interim COGS and revenue for a specific project. In this session, the current POC is indicated by the label (Current Method). Note that LN always calculates the POC (Hours), even if the POC (Hours) is not used to calculate interim COGS and revenue. Manual The Percentage of Completion (POC) expresses the percentage of work on the PCS project that is completed. The POC (Manual) is determined by the user who makes an estimate of the work that finished on the project. You must type the estimate in the Stage of Completion field in the Project Details (tipcs2130m000) details session for the specific project. The setting of the POC Method field in the Project Details (tipcs2130m000) details session determines whether LN uses the POC (costs based), the POC (Hours), or the POC (Manual) to calculate the interim COGS and revenue for a specific project. In this session, the current POC is indicated by the label (Current Method). Confirmed The Percentage of Completion (POC) expresses the percentage of work on the PCS project that is completed. You can type a percentage in the POC Confirmed field in the Interim COGS and Revenues by Project (tipcs3190m000) details session to overrule the POC that is used by LN to calculate interim COGS and revenue. The setting of the POC Method field in the Project Details (tipcs2130m000) details session determines whether LN uses the POC (costs based), the POC (Hours), or the POC (Manual) to calculate the interim COGS and revenue for a specific project. Project A collection of manufacturing and purchasing actions that are performed especially for a particular customer order. A project is initiated by a customer order for items having a To Order order policy. The purpose of a project is to plan and coordinate the production of these items. For a standard-to-order production, the project is only used to link the item with the customer order. Otherwise, a project can include: Customized item data (BOMs and routings) Project planning (activity planning) A budget is a special type of project. A budget is used to plan and estimate, not to carry out production. Calculation Type If you carry out revenue recognition when the status of the PCS project is Active or Finished, the calculation type of the revenue recognition is always Interim. If you close the PCS project using the Close Project (tipcs2250m000) session, the status of the last revenue recognition automatically changes from Interim to Final. In addition, the POC in the Confirmed field is automatically set to 100%. The interim COGS amount and the interim revenue amount are recalculated because of a reversal transaction that is generated to balance the account. Allowed values Calculation Type Generation date The date and time that you calculated the interim COGS and revenue. Currency currency The currrency equals the currency for the PCS project calculation, which can be viewed in the Cost Price by Project (tipcs3560m000) session. Cost Component cost component Cost Component Type Categories that are used to register the type of costs. Cost types enable you to have a more detailed view of the source of costs. Confirmed If this check box is selected, the interim COGS and revenue are confirmed. You can confirm interim COGS and revenue in two ways: Clicking (de-) Confirm in the Interim COGS and Revenues by Project (tipcs3190m000) details session. Running the Confirm and Post Interim COGS and Revenues by Project (tipcs3291m000) session while the Confirm interim COGS and Revenues check box is selected. You can cancel the confirmation by clicking (de-) Confirm again in the Interim COGS and Revenues by Project (tipcs3190m000) details session. Posted If this check box is selected, the interim COGS and revenue is posted to the General Ledger module in Financials. You can click Confirm and Post Interim COGS and Revenues by Project in the Interim COGS and Revenues by Project (tipcs3190m000) details session to start the Confirm and Post Interim COGS and Revenues by Project (tipcs3291m000) session. If you select the Post interim COGS and Revenues check box while running the session, the interim COGS and revenue is posted. |