Work in Process

The system calculates work in process to determine what costs have been incurred for materials that have not yet been delivered to stock. The work in process is calculated on the basis of the quantities confirmed at the reporting points. The work in process calculated is passed to Financial Accounting by period and included in the balance sheet and the profit and loss statement.

The work in process calculated is updated to the production cost collector under the results analysis cost elements and can be analyzed in the information system and transferred to Financial Accounting and Profit Center Accounting. To establish the control parameters for WIP calculation, you define the following:

The results analysis key contains the control parameters for WIP calculation. It forms the links between the application and Customizing.
The Financial accounting indicator means that this version is relevant for the balance sheet and the profit and loss statement.
If you are operating is more than one country, you can define multiple results analysis versions to meet the legal requirements of the different countries.
The work in process is updated on the production cost collectors by version and can be analyzed in the information system and settled to the G/L accounts of the balance sheet and profit and loss statement.
The system generates a valuation method for this entry that controls the valuation of the reporting point quantities. The system sets the status of the production cost collector to "released" automatically when you create it.
You use this valuation variant to control which costs are used to valuate work in process and scrap. You can enter a strategy sequence that allows you to valuate the actual costs at:
The work in process and scrap are valuated on the basis of the preliminary cost estimate for a production order or process order, or on the basis of the version-specific cost estimate.
The valuation at planned costs can be regarded as the most realistic valuation.
You enter the costing variant and the costing version of the corresponding cost estimate. For example, you could valuate on the basis of a modified standard cost estimate that you recalculate in each period.
Note that the costs upon which WIP calculation is based must be updated as cost elements.
You specify the results analysis cost elements under which the results analysis data (such as work in process and reserves) is updated on the production cost collector for each line ID.
You assign the line IDs to a category.
You assign the cost elements under which the costs are updated to line IDs and specify how the work in process should be capitalized.
You assign the results analysis cost elements to G/L accounts in Financial Accounting.

You can calculate the work in process in up to three currencies in parallel.