Pls check the WIP configuration settings are placed properly: 1. OKG1 - whether RA key created or not 2. OKG9 - Result analysis version: both Acutal result analysis/WIP calculation and Transfer to financial accounting are ticked properly. Also, maintain Technical RA cost element and make sure tick mark for Assignment RA key and Update RA key. 3. OKGC - Valuation methods for WIP: Here, you can find four columns updated as REL, DEL, PDEL and TECO. Based on these statuses only system can calculate WIP. 4. Define Line IDs: based on your requirement, line IDs are created or not pls check 5. OKGB - Assignment of cost elements for WIP and RA: Here, pls ensure Controlling Area, XXXX RA version - 0 Masked cost elements: If it is 43 category, maintain it as 943+++++++, based on cost element requirement arrange it Origin - ++++ Masked cost center - use can make it as ++++++++++ in case of activity and OH releated costs Masked Activity: ++++++, i.e. in case activity related costs Vbl/Fixed: + Accounting Indicator: ++ Valid From: 001:2010 (depends) Required Cap: Give the created line IDs based on primary, secondary and OH related in each line. 6. OKGA - Define Update: Here, maintain: Controlling Aare: Version: 0 RAKey: XXXX Line ID: XX, besides box maintain K (WIP) and maintain Line ID related 31 category cost element for to be updated. Also, maintain all the line IDs cost elements in the same way. For Settlement purpose select line ID 999 and select A in the box instead of K.
7. OKG8 - Posting rules for WIP and RA key: Here, maintain Contraolling Area: XXXX Company code: XXXX RA version - 0 RA category: WIPR Record - 0 R&L account: GL account where WIP will be posted to FI P&L account B/S account: give GL account for balance sheet account 8. OKG6 - Maintain number range for WIP documents
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Results Analysis (RA) by Shaun Snapp on January 6, 2008 Overview: The objective for calculating Work in Process (WIP) is to determine the value of manufacturing activity in process at the end of a fiscal period, during a fiscal period and to properly reflect this value on the financial statements. WIP calculation is a facet of Results Analysis (RA). RA is a specialized tool within the controlling module that computes and analyzes the value of WIP. The terms WIP calculation and RA are generally interchangeable. Results analysis is used to: a. Calculate the inventory value of finished and unfinished products in a non-valuated project stock or non-valuated sales stock environment or b. You are using a valuated sales order stock or valuated project stock and want to capitalize goods that have been delivered but not yet invoiced. The difference between SAP and other systems is in the treatment of material consumption for manufacturing. Component issues to production orders, run schedules, WBSs, etc is immediately treated as an expense to the P&L statement. The issue is not treated as a reclassification from raw or semi-finished inventory to WIP inventory. SAP considers WIP to be a snapshot of values that can be computed on demand and passed to the general ledger as required to re-class the values to the balance sheet. This process demands a specific, methodical approach to be used for period-end and mid-period processing. Rules used to calculate the value of WIP and settle WIP to the G/L are defined in multiple RA tables depending upon the requirements of the company. RA is designed to support a variety of calculation techniques and there may and are alternate settings depending on the demands of the company. To support the configuration, scenarios and unit testing need to be thorough. RA needs to be configured towards the middle of the of the implementation with subsequent testing. This will allow for configuration of the data needed to support WIP and RA (chart of accounts, production orders, projects, cost centers, cost elements, etc.) Configuration Transactions: OKG1 — Create Results Analysis Key OKG2 — Results Analysis Version OKG9 — Results Analysis Version OKGC – OKGD — Valuation Methods IMG SPRO — Define Line IDs OKGB — Define Assignment Mapping by incoming charges by cost element to line IDs OKG5 — Define Assignment Mapping by incoming charges by cost element to line IDs OKG4 — Define Update OKG6 — Define Number Ranges
Understanding Results Analysis for WIP Skip to end of metadata
Added by Sridhar Vasudevan, last edited by Brendan O'Brien on Apr 21, 2010 (view change) show comment
Go to start of metadata Understanding Results Analysis Key for Calculating WIP
Introduction and Configuration Guide Work in process (WIP) inventory forms a part of the working capital or current assets of a firm appearing in their balance sheet. Work in process or progress are partially completed goods, parts, or subassemblies that are no longer part of the raw materials inventory and not yet part of the finished products inventory. Fundamental Principle of International Accounting Standard 2 states that Inventories are required to be stated at the lower of cost and net realisable value (NRV). The guidance on measurement of cost of inventories is that, cost should include all: a) costs of purchase (including taxes, transport, and handling) net of trade discounts received b) costs of conversion (including fixed and variable manufacturing overheads) and c) other costs incurred in bringing the inventories to their present location and condition With SAP, the raw materials gets transferred to finished goods via production orders or process order. In this process, typically, the production order is created to which raw materials are issued, all activities performed in the process are charged along with any overheads that is apporopriate the production order. Production is ongoing, and it is quite natural that at month end, we end up with some open production orders. SAP in its product costing functionality, provides the feature to calculate the value of WIP. This will be derived based on the careful definition of Line IDs in line with the cost components. The WIP shall be the total debits cost in the order as reduced by the credits for goods receipt.
Key elements of WIP Results Analysis Configuration.
Step 1
Define Results Analysis Key OKG1.
Here you just give a name, four letter key with its description. Step 2
Create cost elements of type 31 the following minimum
1. 1. 1. 1. 2. 3. 4. 5.
Valuated Actual cost, say for eg. 990001. Calculated Costs, say 990002. WIP account 990003 WIP Reserve 990004 WIP Reserve 990005
Step 3
Define RA version, OKG9, Enable Transfer to Financial Accounting (checkbox)
Under extended control, you may enable checkboxes relating to
Generate line items Assignment/RAkey Update / RAkeyEnter the cutoff period for actual RA/WIP, the effective date before which any WIP data if existed, will not be altered. Step 4
In OKGC, define the valuation method for WIP.
Here, you specify that WIP calculation mode is one when the order has the staus REL. The calculated WIP shall be cancelled when the order status changes to DLV or TECO. You maintain this data for CO area, RA version and RA key combination. Step 5 SPRO>Controlling>Product Cost Controlling>Cost Object Controlling>Product cost by order>Period End Closing>Work in process>Define Line IDs.
The line IDs are similar to cost component, that you create during cost estimates like a) 010 for Material b) 020 for Labor and c) 030 for Overhead to say the least. Besides these, create one more line ID say 999 for the Settled Cost, which appear as credit when you make a goods receipt. Create additional WIP type 31 cost elements and their corresponding Reserve account for the above#### WIP Material 990006 1. 1. 1. 1. 2. 3. 4. 5.
WIP Material Reserve 990007 WIP Labor 990008 WIP Labor Reserve 990009 WIP Overhead 990010 WIP Overhead Reserve 990011 Step 6 Now you assign the source cost elements OKGB, that are expected in the production order to various line ID as created above.
You maintain this data for CO area, RA version and RA key combination. You use masking when you mention which cost element to be assigned to various IDs. You can also direct various cost element, if it comes with a combination of particular cost center and activity type to a particular Line ID. If you need to keep it simple, just enter +++++++ for cost centers, activity types and Business processes. Cost elements can be masked as follows; for
eg. All cost primray cost elements for materials, if they start from 210001 to 219999, the you can mask them like 00021+++++. Give the line ID in the column Required to Capitailze. Step 7 Define the update. OKGA You maintain this data for CO area, RA version and RA key combination.
Here you specify which line IDs are to be grouped under which cost elements and their reserve account. You connect the cost elements created in step 5 to the line IDs. The category for the line IDs for material, labor and overhead shall be K, that stand for cost. The line ID 999 settled cost shall be maintained as category A, (settled cost). When you assign A, you won't have to maintain any cost elements for WIP and reserve creation. Step 8
Define posting rules for WIP calculation OKG8
You do this for Controlling area, company code, RA version. Maintain this for RA category WIPR (WIP cost, Required to be capitalized) and RUCR (Reserve for unrealized cost). You maintain the P& L account (changes to stock) and the balance sheet (WIP)account.These G/L accounts are posted in Financial Accounting.
Step 9 Ensure number range assignment for the WIP transactions under appropriate head OKG6:
KABG Automat. WIP/results analysis KABM Manual WIP/results analysis KSWP Prim. Target Cost Calc. (WIP) KSWS Sec. Target Cost Calc. (WIP)
Period end WIP calculation Process The process of running WIP is the t-code KKAX for individual order processing and KKAO for collective order processing. The system debits the WIP account and credits Inventory Change account. This entire WIP is reversed and a new entry is passed the following month. When the order is fully delivered no additional WIP entries are passed. Note: The RA Key shall be entered in the production order, under the control tab. This can be defaulted through order type.
