<?xml version="1.0" encoding="utf-8"?>
<ManualTopic ID="/baanerp/tp/onlinemanual/000345" xml:lang="en">
	<Header>
		<Title xmlns:ssa="http://www.ssaglobal.com" xmlns:HTML="http://www.w3.org/TR/REC-html40">Profit Percentage method</Title>
		<Keyword><Level1>Profit Percentage</Level1>
		</Keyword>
	</Header>
	<AimSection><Paragraph>Select this method to calculate the COGS on the basis of recognized revenue and a profit percentage.</Paragraph>
	</AimSection>
	<GeneralSection><Paragraph><GUIRef href="" role="manual">When to use this method</GUIRef>
		</Paragraph>
		<Paragraph>This method is often used for projects that do not have hardware deliverables. Example: Engineering and development projects.</Paragraph>
		<Paragraph><GUIRef href="" role="manual">Calculation of COGS</GUIRef>
		</Paragraph>
		<Paragraph><Emphasis>COGS = Total Revenue Recognized till that date x (1- Profit Percentage)</Emphasis>
		</Paragraph>
		<Paragraph>You can manually enter the percentage or click <GUIRef href="" role="manual">Profit Percentage</GUIRef> to get the calculated value. SSA ERP calculates the percentage using the following formula:</Paragraph>
		<Paragraph><Emphasis>Profit percentage = Budget/Contract amount</Emphasis>
		</Paragraph>
		<Paragraph><Emphasis>or</Emphasis>
		</Paragraph>
		<Paragraph><Emphasis>EAC (Estimate at Completion)/ Contract amount.</Emphasis>
		</Paragraph>
		<Note><SectionTitle>Note</SectionTitle>
			<Paragraph>When the COGS is determined at Project level, ERP allows you to select the base to calculate the Profit Percentage. You can either select Budget or select Estimate at Completion as the base to calculate the profit percentage. For extensions, EAC is not applicable. Hence, SSA ERP calculates the percentage using the following formula:</Paragraph>
			<Paragraph><Emphasis>Profit percentage = Budget/Contract amount</Emphasis>
			</Paragraph>
			<Paragraph>For projects with <GUIRef href="" role="manual">Unit Rate</GUIRef> invoicing method, the ceiling amount is considered as the contract amount.</Paragraph>
		</Note>
		<Paragraph><GUIRef href="" role="manual">Levels at which it can be recognized</GUIRef>:</Paragraph>
		<List><ListItem>Project</ListItem>
			<ListItem>Extension</ListItem>
			<ListItem>Element</ListItem>
			<ListItem>Activity</ListItem>
		</List>
	</GeneralSection>
	<RelatedTopics><SectionTitle>Related topics</SectionTitle>
		<RelTopic><Link href="/baanerp/tp/onlinemanual/000337" role="manual">Revenue Recognition (RR) and Cost of Goods Sold (COGS)</Link>
		</RelTopic>
	</RelatedTopics>
</ManualTopic>
