| # Procedure for interim revenue recognition in Project Control (PCS) This topic describes the steps to calculate interim COGS and interim revenue for a PCS project. Step 1. Project Details (tipcs2130m000) In the Project Details (tipcs2130m000) details session, you must determine in the Percentage of Completion Calculation Method field which method is used to calculate the Percentage of Completion (POC) of the PCS project. The selected POC is used to calculate the interim COGS and revenue. In the Project Control Parameters (tipcs0100m000) session, you can also select a POC method. This method is used as a default value in the project details of PCS projects that are generated from a sales order line by using the Generate (Project PCS) Structure for Sales Orders (tdsls4244m000) session. Step 2. Calculate Interim COGS and Revenues by Project (tipcs3290m000) To actually calculate interim COGS and revenues for one or more PCS projects, you must run the Calculate Interim COGS and Revenues by Project (tipcs3290m000) session. ERP Enterprise carries out the following steps: The actual costs for the PCS project are calculated until the Reference Date, but the actual cost prices are not overwritten. If the Perform estimated cost calculation check box is selected, the estimated cost price for the PCS project is calculated. The estimated cost price of the PCS project is based on the the cost prices of items linked to the project, with the project quantity taken into account, the estimated surcharges, and the estimated cost price of the activities. Estimated costs for the PCS project that were already calculated, are overwritten. If the Perform estimated cost calculation check box is cleared, the estimated project costs are not calculated but they are taken from the Cost Price by Project (tipcs3560m000) session. Actual hours are calculated. Project hours can originate from the PCS project, the PCS activities, SFC production orders, and service orders. If interim revenues and COGS for a specific project are determined for the first time, the estimated hours need to be entered manually in the Interim COGS and Revenues by Project (tipcs3190m000) session. The reason is that hours for SFC, service, and PCS cannot be estimated. Only using the estimated activity hours would be misleading. If you calculate interim COGS and revenue in subsequent periods, the number of hours is used that you entered manually the first time. The estimated and actual COGS/revenues are determined. The sum of the most recent estimated revenues for sales, service, and warehousing is calculated. Furthermore, the sum of actual revenues is determined, and the sum of actual COGS for the PCS project, and the related sales orders, service orders, and warehousing orders. The percentage of completion (POC) for the PCS project is calculated based on the method you chose in the Percentage of Completion Calculation Method field in the Project Details (tipcs2130m000) session. If you selected POC (manual) as POC method in the Project Details (tipcs2130m000) session, you can indicate in the Stage of Completion field the percentage of the work on the PCS project that is completed. The Interim and Interim are calculated. Step 3. Interim COGS and Revenues by Project (tipcs3190m000) You can view the calculated COGS and revenue in the Interim COGS and Revenues by Project (tipcs3190m000) session. Some of the calculated amounts and the POC percentage, you can adjust manually. For every PCS project one or more interim COGS/revenues can be listed. From the appropriate menu, or with the buttons, you can handle the rest of the interim COGS and revenue procedure. This described in the next steps of the procedure. Step 4. COGS by Cost Component (tipcs3191m000) If for a PCS project the Post Interim COGS and Revenues by Cost Component check box in the Project Details (tipcs2130m000) details session is selected, you can view in the COGS by Cost Component (tipcs3191m000) session how the COGS is distributed over cost components. You must start this session from the appropriate menu of the Interim COGS and Revenues by Project (tipcs3190m000) session, or by clicking Cost Components. If the interim COGS and revenue are not yet confirmed and/or posted, you can still modify the estimated costs and the confirmed interim COGS. Step 5. Confirm interim COGS and revenue After viewing and adjusting data in the Interim COGS and Revenues by Project (tipcs3190m000) session and/or the COGS by Cost Component (tipcs3191m000) session, you can confirm the data by clicking (de-) Confirm in the Interim COGS and Revenues by Project (tipcs3190m000) session. If after confirming, you still want to make changes, you can click (de-) Confirm again to deconfirm the data. To confirm interim COGS and revenue, you can also start the Confirm and Post Interim COGS and Revenues by Project (tipcs3291m000) session, select the Confirm Interim COGS and Revenues check box, and run the session. Confirm and Post Interim COGS and Revenues by Project (tipcs3291m000) Step 6. Post interim COGS and revenue After confirming, the interim COGS and revenue must be posted to the General Ledger module in Financials. In the Interim COGS and Revenues by Project (tipcs3190m000) session, start the Confirm and Post Interim COGS and Revenues by Project (tipcs3291m000) session from the appropriate menu, or click Confirm & Post. Select the Post Interim COGS and Revenues check box, and run the session. Related topics Overview of interim revenue recognition in Project Control (PCS) |