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cost based POC

Former Member
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in OKG3, we use RA method 3, which is cost based percentage of completion, but our RA type is E (revnue based with profit realization), is the setting correct?

I remember for revenue based, it is complete contract method, which should use RA method 1, is it true?

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Answers (1)

Answers (1)

Former Member
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Hi Robin,

For CCM

RA type: "E"-->Revenue-Based Results Analysis

Profit indicator:"C" -->Completed-Contract (100% Results Reserve

For POC

RA type: "E"-->Revenue-Based Results Analysis

Profit indicator:"Q" -->Percentage-of-Completion

Thanks,

Rau

Former Member
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Hi Rau,

Thank you. my profit indicator is M in OKG3, so is it CCM or POC? if it is M, calculated revenue is based on POC or complete contract?

also I notice that RA method can be 3 (cost based) or 1 (revenue based), if these two methods are used, is RA type always E? so cost based and revenue based both can be used in POC or CCM?

Former Member
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Robin,

Thank you. my profit indicator is M in OKG3, so is it CCM or POC? if it is M, calculated revenue is based on POC or complete contract?

Completed contract method with REL status

RA type: "E"-->Revenue-Based Results Analysis

Profit indicator:"C" -->Completed-Contract

Completed contract method with TECO/FNBL status

RA type: "E"-->Revenue-Based Results Analysis

Profit indicator:"M" -->With Profit Realization

also I notice that RA method can be 3 (cost based) or 1 (revenue based), if these two methods are used, is RA type always E? so cost based and revenue based both can be used in POC or CCM?

Revenue-based results analysis allows you to:

  • Create reserves for unrealized costs
  • Create reserves for imminent losses

With the cost-based POC method you can:

  • Calculate revenue affecting net income on the basis of the actual costs. This enables you to report a profit before any revenue has actually been received. 
  • Determine the revenue in excess of billings

Thanks,

Rau