| # Interim COGS and Revenues by Project (tipcs3190m000) Use this session to view and adjust interim cost of goods sold (COGS) and revenues for a PCS project. With interim COGS and revenue you can gain an insight in the results of a PCS project, before any end item is shipped. The data that you can view in this session is the result of running the Calculate Interim COGS and Revenues by Project (tipcs3290m000) session. You cannot specify data in this session, but you are allowed to adjust the values in the following fields: Total Estimated Costs Total Estimated Revenue Total Estimated Hours Confirmed Interim COGS Confirmed Interim Revenue Confirmed POC The overview session can list several interim COGS and revenues for a specific project. If you double click an interim COGS and revenue, all details can be viewed. Related topics Overview of interim revenue recognition in Project Control (PCS) Procedure for interim revenue recognition in Project Control (PCS) 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 A generally accepted medium of exchange (such as: coins, treasury notes, and banknotes). ERP LN distinguishes two currency types: Home currency, used internally by companies for example, to calculate costs, to record budgets, and to register tax amounts Transaction currency, used in transactions with business partners, such as orders and invoices The currency equals the currency for the PCS project calculation, which can be viewed in the Cost Price by Project (tipcs3560m000) session. End Date The date until which the actual costs are taken into account for revenue recognition. The date is determined in the Calculate Interim COGS and Revenues by Project (tipcs3290m000) session when calculating the revenue recognition. Expected loss If this check box is selected, the total estimated costs exceed the total estimated revenue. An expected loss (the Expected loss check box is selected) affects the calculation of the interim COGS. According to the General Accepted Accounting Principles (GAAP), a loss must be recognized as soon as it is noticed. Consequently, the calculation of interim COGS in case of an expected loss differs from the calculation of interim COGS in case of a profit. Example Total estimated costs = 1980 Total estimated revenue = 1500 Percentage of Completion (POC) = 10% If the Expected loss check box is selected, the calculation of the amount in the Interim field is as follows: The total estimated result at completion is 1500 - 1980 = -480. The earned revenue is 10% of 1500 = 150. The interim revenue in this case is also 150. The interim COGS is 150 - (- 480) = 630. In case of a profit ( the Expected loss check box is cleared), the interim COGS is calculated as described in the Interim field. Note Profit or loss makes no difference for calculating interim revenue. Reason of change You can type additional information to indicate why you did revenue recognition, or why you manually changed the calculation for revenue recognition. For example, you can indicate that you raised the amount in the Total Estimated Revenue field because you received an additional sales order but the order is not yet incorporated in the ERP LN software. Estimated Hours The estimated hours for the PCS project. Initially, this field is 0 (zero) because the estimated hours are not calculated by ERP LN. If you run the Calculate Interim COGS and Revenues by Project (tipcs3290m000) session for the first time to get interim COGS and interim revenues, you must type the number of estimated hours yourself in the Total Estimated Hours field. After that, this number of hours is also displayed in the Estimated Hours field. Total Estimated Hours The total number of estimated hours for the PCS project. This number is not calculated by ERP LN but you must type the number when you determine interim revenue and COGS for the first time by running the Calculate Interim COGS and Revenues by Project (tipcs3290m000) session. Actual Hours The number of hours that is actually spent on the PCS project. Spent hours are, for example, man hours and machine hours that are booked on production orders related to the PCS project. Estimated Costs The estimated costs for the project, 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 COGS and Revenues by Cost Component check box in the Project Details (tipcs2130m000) session is selected, the costs are specified by cost component, which can be viewed in the COGS by Cost Component (tipcs3191m000) session. Variance The difference between the Estimated Costs and the Total Estimated Costs. The Estimated Costs field is calculated by ERP LN. However, the Total Estimated Costs field can be changed by the user, for example, when you expect more or less costs than ERP LN calculates in the Estimated Costs field. Changing the Total Estimated Costs field results in a change of the Variance field. If the Estimated Costs and the Total Estimated Costs are equal, than the Variance is 0 (zero). If the Post Interim COGS and Revenues by Cost Component check box in the Project Details (tipcs2130m000) session is selected, the estimated costs variance is specified by cost component, which can be viewed in the COGS by Cost Component (tipcs3191m000) session. Total Estimated Costs The total estimated costs for the PCS project. The default value of this field equals the number in the Estimated Costs field, which is calculated by ERP LN. However, you can change the Total Estimated Costs, for example, when you expect costs that differ from the costs already recorded in ERP LN. The difference between the Total Estimated Costs and the Estimated Costs is expressed in the Variance field. Note You cannot maintain this field if the Post Interim COGS and Revenues by Cost Component check box in the Project Details (tipcs2130m000) session is selected. In that case, the costs are posted by cost component. Click on the toolbar to start the COGS by Cost Component (tipcs3191m000) session. In this session, you can maintain the costs by cost component. Actual Costs The costs of production, hours accounting, purchase, service, sales, finance, warehousing, and PCS itself that are actually booked on the PCS project. 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 COGS and Revenues by Cost Component check box in the Project Details (tipcs2130m000) session is selected, the actual costs are specified by cost component, which can be viewed in the COGS by Cost Component (tipcs3191m000) 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 Percentage of Completion Calculation Method field in the Project Details (tipcs2130m000) details session determines whether ERP LN uses the POC (costs based), the POC (hours based), or the POC (manual) to calculate the interim COGS and revenue for a specific project. Note that ERP LN always calculates the POC (costs based), even if the POC (costs based) is not used to calculate interim COGS and revenue. In this session, the current POC is indicated by the label (Current Method). You can always overrule the POC by typing a percentage in the POC Confirmed field. POC (hours based) The Percentage of Completion (POC) expresses the percentage of work on the PCS project that is completed. The POC (hours based) 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 Percentage of Completion Calculation Method field in the Project Details (tipcs2130m000) details session determines whether ERP LN uses the POC (costs based), the POC (hours based), or the POC (manual) to calculate the interim COGS and revenue for a specific project. Note that ERP LN always calculates the POC (hours based), even if the POC (hours based) is not used to calculate interim COGS and revenue. You can always overrule the POC by typing a percentage in the POC Confirmed field. POC (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 Percentage of Completion Calculation Method field in the Project Details (tipcs2130m000) details session determines whether ERP LN uses the POC (costs based), the POC (hours based), or the POC (manual) to calculate the interim COGS and revenue for a specific project. You can always overrule the POC by typing a percentage in the POC Confirmed field. POC Confirmed The Percentage of Completion (POC) expresses the percentage of work on the PCS project that is completed. You can type a percentage in this field to overrule the POC that is used by ERP LN to calculate interim COGS and revenue. The setting of the Percentage of Completion Calculation Method field in the Project Details (tipcs2130m000) details session determines whether ERP LN uses the POC (costs based), the POC (hours based), or the POC (manual) to calculate the interim COGS and revenue for a specific project. Estimated The estimated expected revenues (including the revenues that are already realized) for all sales orders, service orders, and warehousing orders related to the project. Variance The difference between the Estimated (which is calculated by ERP LN) and the Total Estimated Revenue. You can change the amount in the Total Estimated Revenue field, for example, because you expect a sales order, but the order is not yet recorded in ERP LN. Changing the Total Estimated Revenue field results in a change of the Variance field. If the Estimated and the Total Estimated Revenue are equal, than the Variance is 0 (zero). Total Estimated Revenue The total estimated revenue for the PCS project. The default value of this field equals the number in the Estimated field, which is calculated by ERP LN. However, you can change the Total Estimated Revenue, for example, when you expect a sales order, but the order is not yet recorded in ERP LN. The difference between the Total Estimated Revenue and the Estimated is expressed in the Variance field. Earned Revenue ERP LN calculates the Earned Revenue by multiplying the estimated total revenue at completion (the value in the Total Estimated Revenue field) by the Percentage of Completion (POC). A number of POCs is displayed in this session: POC (hours based), POC (costs based), and POC (manual). Which POC method is used to determine the Earned Revenue depends on the value of the Percentage of Completion Calculation Method field in the Project Details (tipcs2130m000) details session. In the end, the percentage that you type in the POC Confirmed field, is leading. Actual Revenue The revenue that is already posted for a PCS project by the Sales Invoicing module in Central Invoicing at the date of the interim revenue recognition. The actual revenue can originate from: Sales Service Warehousing. Only transfers that are crossing project boundaries are applicable. Posted Interim Revenue The interim revenue that is already posted to the General Ledger during previous interim revenue recognition. Interim The interim revenue that is or will be posted to the General Ledger module in Financials. The interim revenue is calculated by running the Calculate Interim COGS and Revenues by Project (tipcs3290m000) session. The calculation is as follows: If necessary, the user can overrule the calculated amount by typing an amount in the Confirmed Interim Revenue field. The interim revenue must be confirmed by clicking (de-) Confirm in this session, or by running the Confirm and Post Interim COGS and Revenues by Project (tipcs3291m000) session while the Confirm Interim COGS and Revenues check box is selected. If you click Confirm and Post Interim COGS and Revenues by Project, the Confirm and Post Interim COGS and Revenues by Project (tipcs3291m000) session is started, and you can confirm and post the interim revenue to the General Ledger module in Financials. Confirmed Interim Revenue The interim revenue 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 Revenue field but you can adjust the interim revenue in this field before you confirm it. 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. The actual COGS can originate from: Sales Service Warehousing If the Post Interim COGS and Revenues by Cost Component check box in the Project Details (tipcs2130m000) session is selected, the actual COGS are specified by cost component, which can be viewed in the COGS by Cost Component (tipcs3191m000) session. Earned COGS ERP 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 based), and POC (manual). Which POC method is used to determine the Earned COGS depends on the value of the Percentage of Completion Calculation Method field in the Project Details (tipcs2130m000) details session. In the end, the percentage that you type in the POC Confirmed field, is leading. If the Post Interim COGS and Revenues by Cost Component check box in the Project Control Parameters (tipcs0100m000) session is selected, the earned COGS are specified by cost component, which can be viewed in the COGS by Cost Component (tipcs3191m000) session. Posted Interim COGS The interim COGS that is already posted to the General Ledger during previous interim revenue recognition. Interim The interim COGS that is or will be posted to the General Ledger module in Financials. The interim COGS is calculated by running the Calculate Interim COGS and Revenues by Project (tipcs3290m000) session. The calculation is as follows: 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 is selected), the calculation of interim COGS is different. For more information, refer to Expected loss. The interim COGS must be confirmed by clicking (de-) Confirm in this session, or by running the Confirm and Post Interim COGS and Revenues by Project (tipcs3291m000) session while the Confirm Interim COGS and Revenues check box is selected. If you click Confirm and Post Interim COGS and Revenues by Project, the Confirm and Post Interim COGS and Revenues by Project (tipcs3291m000) session is started, and you can confirm and post the interim COGS to the General Ledger module in Financials. If the Post Interim COGS and Revenues by Cost Component check box in the Project Details (tipcs2130m000) session is selected, the interim COGS are specified by cost component, which can be viewed in the COGS by Cost Component (tipcs3191m000) session. Confirmed Interim COGS The interim COGS 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 field but you can adjust the interim COGS in this field before you confirm it. If the Post Interim COGS and Revenues by Cost Component check box in the Project Details (tipcs2130m000) session is selected, the confirmed interim COGS are specified by cost component, which can be viewed in the COGS by Cost Component (tipcs3191m000) session. Total Estimated Result The Total Estimated Revenue minus Total Estimated. Earned Result The Earned Revenue minus Earned COGS. Actual Result The Actual Revenue minus Actual COGS. Posted Interim Result The Posted Interim Revenue minus Posted Interim COGS. Interim Result The Interim minus Interim. Confirmed Interim Result The Confirmed Interim Revenue minus Confirmed Interim COGS. 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. Confirmation date The date that the interim COGS and revenue are confirmed. User confirmed The user that confirmed the interim COGS and revenue. 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 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. Posting date The date that the interim COGS and revenue are posted to the General Ledger module in Financials. User posted The user that posted the interim COGS and revenue. Calculate Interim COGS and Revenues by Project Click to start the Calculate Interim COGS and Revenues by Project (tipcs3290m000) session. (de-) Confirm Click to confirm an interim COGS and revenue. If the interim COGS and revenue are already confirmed, you can click to deconfirm them. Note that before confirming, you can adjust the POC in the POC Confirmed field, and/or the COGS or revenue in respectively the Interim COGS field and the Interim revenue field. To confirm interim COGS and revenue, you can also run the Confirm and Post Interim COGS and Revenues by Project (tipcs3291m000) session while the Confirm Interim COGS and Revenues check box is selected. Cost Components Click to start the COGS by Cost Component (tipcs3191m000) session. Print Project Costs and Revenues Click to start the Print Project Costs and Revenues (tipcs3490m000) session. Confirm and Post Interim COGS and Revenues by Project Click to start the Confirm and Post Interim COGS and Revenues by Project (tipcs3291m000) session. |