WIP settlement does not get reversed ..

[Former Member]

Dear Experts,

We have capital projects where we use result analysis and settlement to FI to capitalize costs. We do not use IM and Fixed asset here.

During the periodic process, we run result analysis which calculate WIP, and then settlement. The FI document would be genereated for incremental balance in WBS. At the end when we capitalize the costs, we set 'TECO' to a WBSE, after we run result analysis and settlement. Costs get settled to a balance sheet account correctly and a PL account and WBS got credited. However, the WIP calculated and FI documents previously generated did not get reversed automatically. We will have to run settlement another time to get this WIP reversed. I believe that this reversal should occur at the same time of the first settlement run(correct me if i am wrong).

What did i do wrong?? What are necessary steps that i need to take in getting this issue resolved? Your timely help is appreciated.

Please help!

Monica.

[virendra_pal]

Your basic process is incorrect.

Why are you carrying out results analysis in a capital project?

The whole point of settling to AuC is to reflect the costs of acquisition of asset to the balance sheet account in the asset side.

RA should essentially be used in a revenue project and for that there is config OKG1 to OKG8 to determine the FI postings. These FI postings are reversed when once the project is TECO. These postings do not hit the WBS and are only to reflect in the trail balance for the respective month.

[Former Member]

Virendra,

For now, we do not use IM and AA yet, we use WIP to mimick the process if we were to have AuC.

You're correct.Those postings do not hit WBS. So, at the end at TECO status, we settle to an asset GL account. however, i think once we run the settlement 2 things should happen at the same time - costs are settled to a GL account and credit WBS; the other is FI documents should get reversed. Currently, only the first step occurs. We need to run settlement another time to get the FI documents(which do not hit WBS) reversed.

Do you know why it is so??

Monica.

[virendra_pal]

OK so that is fine - instead of asset you are using settlement to GL which is the asset account anyway.

Still this does not answer why you need to calculate WIP - I would assume that the actual costs incurred in the month would be settled to the GL account - why does it have to be on TECO and till TECO why use WIP?????

[Former Member]

Virendra,

The reason we need to calculate WIP is because a capital WBS is not completed yet. We do not set status 'TECO' until it is completed and asset is ready to be put in service. With WIP, we create a provision for asset under construction. Therefore, when we are ready to capitalize, we settle a WBS to a GL account. And, the FI documents previously generated by the system needs to be reversed. Now it's not happening at the same time.

Monica

[virendra_pal]

Monica

OK now I understand what you are trying to do albeit not in line with the SAP best practice. Use settlement processing type - automatic

In that case your configuration for WIP calculations needs to be reviewed. It is not possible for me to go through the complete configuration but you need to revisit transactions OKG1 to OKG8

Especially note

Choose currect valuation method - choose cancel at TECO

for the TECO in expert mode make sure that final RA is ticked for reversal to happen

when defining posting rules make sure the correct RA category is chosen