on 11-24-2008 5:00 AM
Dear Expert,
What is this INTEREST CALCULATION.
Can any one explain with simple example .
Regards
Chandra
Hi,
The interest component calculates the interest on actual values in projects on a daily basis.
System draws up balances based on costs, revenues, and/or incoming/outgoing payments.
The interest is calculated using interest rates for the balances. The interest calculated in this way is totaled over the interest calculation period and updated in the project as costs (interest loss) or revenues (interest profit).
Characteristics of the interest calculation function:
1.The interest calculation is based on the payment data (such as down payments) and actual costs (example: internal activities) or actual revenues.
2.The interest is calculated on a daily basis. Daily balances are drawn up in order to calculate the interest.
3. In the case of planned interest calculation, the interest on payment data is also calculated on a daily basis, whereas with planned costs and revenues it is calculated on the basis of periods.
4.Documents are written for the interest postings.
5.Interest postings can be cancelled.
6.One can also calculate compound interest.
7.User exits are available for making our own adjustments.
For customer projects (projects with one billing element), interest relevant data is aggregated in billing elements; the interest is calculated there.
In addition, WBS elements in customer projects can have an interest profile with the indicator "Calculate interest separately" or "No interest calculation". Separate interest calculation takes place for all the WBS elements subordinate to this one.
In the case of cost projects, target interest is determined in the account assignment elements - meaning that it is not aggregated upwards. Cost projects are projects without billing elements.
In the case of investment projects (projects with an investment profile), interest is calculated on each account assignment element.
Regards
Tushar
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Interest calculation is used to determine more precisely the costs incurred in a project. Normally interest calculation is used for Long term projects which may run into several years.
During cost planning, if interest is considered for the total costs, this gives more accurate project costs.
In a similar way this can be used for Revenue planning to give better estimates/ results.
You may refer the following link for better understanding:
[http://help.sap.com/saphelp_47x200/helpdata/en/86/98853478616434e10000009b38f83b/frameset.htm]
Venu
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