Settlement - AUC or Cost Center

[Former Member]

Hi Experts,

We have a New product development project. Our client develops a Prototype for his customer. Am using four 2nd level WBS elements [with activities] with ofcourse one 1st level WBS.

Case 1. When there's need to buy a new machine for development of prototype, client buys it.

Case 2. They manufacture the prototype with the existing machines only.

Am trying settlement with the default settlement profile.

For case 2: I used 1st level WBS as receiver for all the four 2nd level WBS elements. And for the 1st level WBS i used a cost center as receiver. Then i executed settlement through CJ88, it says settlement executed. And there are no errors.

I doubt if this is the right way to settle. Please advise and let me know how can i see the report of this settlement.

For Case 1: Am not sure on how to settle. When the new machines are bought it should be considered as asset. How can i settle for this case?

Please guide me in this matter and correct me. If you need any clarifications, please let me know.

Thanks & Regs,

Kabir

[virendra_pal · Accepted solution]

Case 1 - machine bought and part of prototype development

Settlement is required to be done to 2 assets

Asset 1 - prototype development

Asset 2 - machine cost

I would have settlement to AuC from the second level WBS (do not send to the first level)

One of the 4 second level WBS I would call procurement

I would then settle to AuC

Create the two assets

Finally settle the 3 second level wbs's to asset called prototype development

and settle the 4th seconbd level wbs for procurement to asset called machine etc - there could be more than one assets here if there are more than one machines procured

Case 2 - no machines bought

Structure as you have suggested - here the settlement is required for one asset only (prototype development)

settle lower level WBS to higher level (level 1) and the level 1 WBS to AuC

Create the asset

settle AuC finally to asset

Alternatively use source structures to set up multiple AuC to allow for machine to be bought by segraritng structures on cost elements, this way in one set up both your cases will be addressed

Reporting

CJID for settlement line items

CJI3 - project cost line items - settlement will appear as credit on WBS

KOSRLIST_PR for list of settlement rule

[Former Member · Accepted solution]

Hi Virendra,

Thank you so much. It was a nice explanation. Full points awarded. I will follow accordingly.

I want to tell you that this prototype is an automobile component. After the approval of this prototype sample by my client's customer, the continuous production starts. In this case, can i consider this prototype as asset? . Please advise.

@Nitin..Thank you. Points awarded

Best Regards,

Kabir

[nitin_patoliya]

For the Case 1 : When business buys machine & after completing your prototype /order, It will be available with your client. So, Idealy it should be AUC. Take input from FI /CO.

Fort the case 2 : it's correct.

Settlement report : CJID.

Regards

Nitin