Inter company COGS and Cost Components in COPA

[Former Member]

Looked at so many threads but couldn't find a proper answer.

Scenario: Company B in Canada books a sales order, delivering from a Plant in Company A in US. US bills Canada at Cost + Mark up.

In US:

On Goods issue COGS is booked based on std in US (say $10)

On Inter company billing - (Cost + 20% mark up) Inter company receivable is $12, this triggers a payable on Canada side.

In Canada:

We can have $12 booked as COGS when Payable entry is created in Canada through IDOC. so Accounting is OK.

How can I have this COGS of $12 posted in COPA ? Somewhere I read to use two condition types for VPRS, but unfortunately we cant do that as we have revenue recognition activated. only VPRS condition values comes through revenue recognition lines.

Since Delivering plant in US has a Standard cost of $10, VPRS is $10 in sales order and COPA gets the cost components from US plant, which is not correct. How can I have the mark up of $2 reflected in Cost components in COPA ?.

Assuming that I create a standard Cost estimate in a virtual Plant in Canada for $12 with two cost components for $10 and $2. Is it possible to manipulate VPRS on sales order to point to standard cost from this virtual plant and create a costing key to bring the cost split from this virtual plant into COPA. Has anybody tried this ?

Thanks in advance.

Krishna

[ajaycwa1981 · Accepted solution]

Hi Krishna

1. Does this material always necessitates a supply from US company??

If yes, then your task is easy.. Create a Costing Key and assign to such materials in KE4H... In this Costing Key, do not tick the radio button "Use Line Item Plant as Cost estimate Plant".... Instead, You can specify the default PLANT to be used for reading the Cost Estimates in the field "Specify Cost estimate PLant"

You can use the above solution in case you go with Virtual Plant also

2. Are you saying that the VPRS in Sales order punched in Canadian comp code is 10 USD because the Delivery Plant is in US comp code?

I dont know how does Revenue recog behave in your case and when does VPRS (COGS) flow to COPA.... As you said, VPRS gets the feed from RR, so will manually manipulating the VPRS in sales order help you??

Anyways, the 2nd solution is as below... Few companies have used it

There is an output type in SD called RD04... I may not be fully right here, you can take it as RD0*... Ask your SD guy to identify the right output type

Using this, When you do the PGI in Canadian Comp code,

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................. All this happens in background automatically...............

you can create a Virtual STO on USA Comp code....

USA does PGI and the stock virtually comes in Canadian Comp code

Then PGI happens from Canadian Comp code

................. All this happens in background automatically...............

-

---

This is a change in your process... The delivery plant for all practical purposes becomes Canadian Plant (only on paper)... Your Physical process can continnue as Delivery from USA...

This solution was adopted when both the companies were in same country.... Check with your business how far is it possibie for you

3. Last option would be to use valuation exit COPA0002.... I dont know how you would use it considering you have RR in place....

Be very careful in doing this

br // Ajay M

[Former Member · Accepted solution]

Thanks Ajay and Waman

1. Does this material always necessitates a supply from US company?? Answer is Yes, but it can happen two ways A) Through STO, stock moved to Canada and then sold. In this case there is no problem as the delivering plant in the Sales order is a Canada Plant VPRS is picked from std. price in Canada Plant. The std price in Canada Plant is US cost + Mark up separated into two cost components. I am getting the mark up into separate cost component through an additive cost..

B) Sales order booked in Canada with delivering plant from US. in this case, system picks up VPRS value from US plant ( I will have to double check on this) and consequently gets the cost component split from US plant. This is where I need to do two things i) Manipulate the VPRS value by pointing to Std.Price in Canada plant for the same material. do you see any issues here? ii) Through COPA002, modify the costing key to bring the cost components from std.cost estimate in Canada Plant. Please share your thoughts.

Values from revenue recognition flow to COPA just similar to value flow from billing document.

Thanks

Krishna

[ajaycwa1981 · Accepted solution]

Hi Krishna

I guess you can try your hand @ KEPC before going for Exit COPA0002.... Also note that COPA0002 does not modify the VPRS value in the Sales order... COPA0002 will calculate COGS based on the value you specify

Here is what you can try in KEPC

1. Create a Step in KEPC using method "Assignment rule"

2. SOURCE Fields

GLOBAL --BWFKT

GLOBAL --VRGAR

GLOBAL --VERSI

COPA -- BUKRS

COPA --MATNR

TARGET Fields

GLOBAL -- KALAW1 (Specify the Canadian Plant as the Valuation Plant in this costing key)

GLOBAL -- WERKS

3. While Maintaining the Assignment Values in the tab "Maintain Rule Values", you will maintain as below

PV=01, Record Type = F, Plan Versoin = BLANK, BUKRS = CANADIAN Comp Code, MATNR = Mat No of the Sales Order

With this, the system will always use the specified Plant as the Valuation plant whenever this Mat is sold from Canadian Comp code

br // Ajay M

[Former Member · Accepted solution]

Sorry for this late response -

Ajay - I have tried costing key to bring cost components from a particular plant, it works fine. The issue was to book the matching COGS in Ordering company at the time of billing / Revenue recognition. So what we have done is at the time of Sales order creation, we have manipulated VPRS. Instead of Delivering company's cost, we brought in the cost from Ordering company code. For this purpose, We had to extend the material in ordering company plant and have a cost estimate with inter company mark up in a separate cost component.we used this VPRS value to post COGS in ordering company offsetting to GR/IR from inter company payable posting ( it was possible through an user exit in revenue recognition area, not sure if its possible at the time of regular billing). I have mapped costing key to to the ordering company's plant to bring the split into COPA.

Hi Waman -

In your intercompany billing (US selling to Canada) i suppose the GI has a COGS of 10 USD which then reflects in the VPRS condition in the intercompany invoice. How does the markup of 2 USD reflect in the intercompany invoice ? Is there a seperate SD condition for this ? If so you can map this SD condition to the required value field via KE4I.

Answer to your question is Yes - we have a separate condition type and mapped to a value field.

Thanks

Krishna

Edited by: krishna Mohan Pasumarthi on May 24, 2011 3:04 PM

[ajaycwa1981 · Accepted solution]

Hi Krishna

Nice to know that your issue is resolved...or close to resolution

Did you use any exit to manipulate VPRS??

Also, which exit you used during RR to make the posting COGS dr and Gr/Ir as offsetting posting?? Since GR/IR is meant for auto posting, how did you manage to post to GR/IR? And does this posting happen @ RR?

br, Ajay M

[Former Member · Accepted solution]

Hi Ajay - I am not really sure how our developers manipulated VPRS what exits they used. In RR area there are standard exits available to accounting interface. GR/IR for IC billing is not a true GR/IR a/c with automated posting only. Its actually assigned in IDOC posting configuration not in OBYC. thats why we were able to manipulate postings.

Thanks

Krishna

[waman_shirwaicar]

Hi,

In your intercompany billing (US selling to Canada) i suppose the GI has a COGS of 10 USD which then reflects in the VPRS condition in the intercompany invoice. How does the markup of 2 USD reflect in the intercompany invoice ? Is there a seperate SD condition for this ? If so you can map this SD condition to the required value field via KE4I.

regards

Waman