Hierarchy
EA-FIN (Software Component) EA-FIN⤷
CA-JVA (Application Component) Joint Venture und Production Sharing Accounting⤷
GJV2 (Package) Joint Venture Development
IMG Activity
| ID | SIMG_PRO_0018 | Stepped Rate Rules |
| Transaction Code | S_KK4_66000004 | IMG activity: SIMG_PRO_0018 |
| Created on | 19990917 | |
| Customizing Attributes | SIMG_PRO_0018 | Stepped Rate Rules |
| Customizing Activity | SIMG_PRO_0018 | Stepped Rate Rules |
Document
| Document Class | SIMG | Hypertext: Object Class - Class to which a document belongs. |
| Document Name | SIMG_PRO_0018 |
Companies in different regions use stepped rate rules to calculate costs for several different types of overhead.
International region companies use stepped rate rules to apply parent company overhead costs.
Canadian region companies define stepped rate rules for the following types of overhead costs:
- Exploration
- Construction
- Drilling
US region companies define stepped rate rules for the following types of overhead costs:
- Major construction overhead (MCO)
- Catastrophe overhead
These stepped rate rules for various types of overheads are applied to expenses booked to WBS elements. The type of overhead rule that applies to expenses booked to a WBS is determined by the JV overhead type assigned to the JVA cost object type that is in turn assigned to the WBS.
The specific rule for a particular overhead type is assigned on the JOA. The rule will be applied to expenses booked to WBS's with an appropriate JVA cost object/overhead type designation that belong to JV's in the JOA.
The stepped rate rules for the JVA company are defined on the JV Stepped Rate Rules screen. These rules can then be assigned for a particular overhead type on JOA's in the company.
Example
Requirements
Before defining the stepped rate cost calculation rules for the JVA company, you should define the cost object types (project/WBS elements, cost centers, and internal orders) for the company. If the JV overhead type assigned to the cost object type indicates a type of overhead to which stepped rate rules are applied, expenses booked to WBS elements to which the cost object type is assigned will be subjected to the stepped rate rule designated on the JOA.
Before processing cost calculations, you must define the G/L accounts for the following automatic posting processes that govern cost calculation processing for stepped rate overheads.
For international region companies these processes consist of:
Process Description
JIE International Overhead Expense Account
JIO International Overhead Offset Account
For US region companies these processes consist of:
Process Description
J6E Construction Overhead (MCO) Expense Account
J6O Construction Overhead (MCO) Offset Account
J9E Catastrophe Overhead Expense Account
J9O Catastrophe Overhead Offset Account
For Canadian region companies, these processes consist of:
Process Description
J7E Exploration Overhead Expense Account
J7O Exploration Overhead Offset Account
J6E Construction Overhead (MCO) Expense Account
J6O Construction Overhead (MCO) Offset Account
J8E Capital Drilling Overhead Expense - Canada
J8O Capital Drilling Overhead Offset -Canada
Standard settings
For stepped rate rules, the initial threshold functions differently from subsequent thresholds. When actual expenses exceed the first threshold set for a rule, the rate set for that threshold is applied to the entire amount of the actual expenses. An example follows:
Objective: Apply 10% overhead to entire amount when expenses
exceed $25,000
No Threshold Rate
1 25000 10
Actual Expenses: $26,000
Cost Calculation Overhead: 10% of $26,000 or $2600
For subsequent thresholds, the rate defined for each threshold applies to the amount that exceeds the current threshold but falls short of the next threshold, if there is one.
If you wish to apply a single threshold with a stepped rate rule and want the rate to apply only to the expense amount that exceeds the threshold, you must set two thresholds. The first threshold should be set just short of the threshold that should trigger the rate and itself have a rate of 0. The second threshold should be set at the amount that should trigger the rate. An example follows:
Objective: Apply 10% overhead only to the amount that exceeds
$25,000
No Threshold Rate
1 24999 0
2 25000 10
Actual Expenses: $26,000
Cost Calculation Overhead: 10% of ($26,000-$25000)= $100
Recommendation
Activities
Defining stepped rate cost calculation rules for the JVA company is a two-step process:
- Assign a name, time frame, and description to the new rule
- Define a series of thresholds and rates that are triggered by them
Setting up Stepped Rate Rules
You can perform the first task involved in defining stepped rate cost calculation rules by selecting New entries and then entering the following information on the JV Stepped Rate Rules screen:
In the StpRl field, enter the name of the new rule.
In the TFrame field, enter the time frame (current period, year to date, inception to date) for selecting expense data to which the new rule will be applied.
In the Description field, enter a description of the new rule.
Assigning Thresholds and Rates
To assign a series of thresholds and the rates to be triggered by those thresholds for the new rule, select the new rule on the JV Stepped Rate Rules screen and then select Stepped rate thresholds.
On the JV Stepped Rate Thresholds screen, select New entries and enter the following information:
In the No field, enter a number that represents the place in the series of thresholds in which the threshold will be applied.
In the Threshold Amount field, enter the amount of the threshold. The rate defined for the threshold will be applied to all amounts that exceed the threshold and fall short of the next threshold.
In the Rate field, enter the percentage rate to be applied to the total expenses that meet the selection criteria for the rule and threshold.
Further notes
Business Attributes
| ASAP Roadmap ID | 105 | Define functions and processes |
| Mandatory / Optional | 2 | Optional activity |
| Critical / Non-Critical | 2 | Non-critical |
| Country-Dependency | A | Valid for all countries |
Assigned Application Components
| Documentation Object Class | Documentation Object Name | Current line number | Application Component | Application Component Name |
|---|---|---|---|---|
| SIMG | SIMG_PRO_0018 | 0 | ALR0002181 | Joint Venture und Production Sharing Accounting |
Maintenance Objects
| Maintenance object type | C | Customizing Object |
| Assigned objects | ||||||
|---|---|---|---|---|---|---|
| Customizing Object | Object Type | Transaction Code | Sub-object | Do not Summarize | Skip Subset Dialog Box | Description for multiple selections |
| VC_T8J8B | C - View cluster | GJ74 | PRO_0018 | Stepped rate rules |
History
| Last changed by/on | SAP | 20030410 |
| SAP Release Created in |
