Use this screen to establish the Cost of Goods Sold (COGS) calculation method for your project. You can select from nine COGS calculation methods.
You can create a COGS entry for work-in-process projects using the Compute Cost of Goods Sold Entry screen (Projects\Process\Project). That entry is created using the calculation method and other variables that are set up in this screen. Work-in-process projects are used when the project’s costs should be capitalized on the balance sheet and portions of the capitalized costs are periodically transferred to the income statement using one of the calculation methods in the screen. You should enter data in this screen only if the selection in the Project Classification field in the Basic Info or Maintain Project Master screen is "Work In Process" or "Common Inv."
You must be sure that any COGS setup made at this level of a project coincides with the setup of account numbers that have a function code of "Cost Goods Sold" and "WIP Trans Out" in the project’s account group. COGS will be posted at the level of a project where the formula resides, and account numbers and related function codes must be available for that posting at the same level. You cannot enter data in this screen unless accounts with the function codes of "Cost Goods Sold" and "WIP Trans Out" have been set up for the project. Failure to do so will result in an error message during the Compute Cost of Goods Sold Entry process. You can review the accounts and their related function codes in the Project Account Groups screen. The account group for the project is assigned in the Account Group field in the Basic Info or Project Master screen.
Use this screen during the initialization of a project, whenever a Cost of Goods Sold calculation is required. Additional maintenance of the data in this screen is required only when one of the variables changes.
Enter, or use Lookup to select, a valid project for which to enter data. This is a required field. The non-editable field to the right displays the project name.
Use the fields in this block to enter the calculation method and the basis for COGS transfer.
Use this drop-down box to select one of the methods for calculating COGS:
Billed Amount & Estimate at Completion – Use this calculation method to base the COGS entry on billed amounts and the estimated costs at completion. You must have an estimate of the inception-to-date loss expected and the total estimated cost at completion in order to use this method. You should update these values each time you compute the COGS entry. The Compute Cost of Goods Sold Entry process (Projects\Process\Project) uses the amount in the Estimated Costs (EAC) field and subtracts the amount in the ITD Loss Recognized field, and the result is divided by the amount in the Estimated Total Value field to arrive at the cost percent. The cost percent is multiplied by the amount in the ITD Amount Billed field (from the Maintain Project Bill Summary screen) to arrive at COGS Before Loss. Then it adds the COGS Before Loss to the ITD Loss Recognized to arrive at ITD COGS. The ITD COGS amount is compared to the ITD COGS amount that has been previously posted to the General Ledger. The previously posted ITD COGS transfer amount is found by selecting the balance in the GL_POST_SUM table, including period 0, of the account that has a function code of WIP TRANS OUT in the project’s account group. The difference between these amounts becomes the basis for the journal entry.
Billed Amount, Estimate at Completion Less G&A - Use this calculation method to base the COGS entry on billed amounts and the estimated costs at completion, minus G&A. The Compute Cost of Goods Sold Entry process (Projects\Process\Project) sums the YTD billed transactions, excluding G&A pools, from BILLING_DETL_HIST and sums the prior year billed transactions, excluding G&A pools, from BILLING_SUM to get the ITD billed amount. It subtracts the amount in the ITD Loss Recognized field from the Estimated Costs (EAC) field and divides the result by the amount in the Estimated Total Value field to arrive at the cost percent. It multiplies the cost percent by the ITD billed amount and then adds back the ITD Loss Recognized. It compares this amount to the balance in the account that has a function code of WIP TRANS OUT in the project’s account group. The difference is the amount to post.
Billed Amount & Estimate to Complete – Use this method to base the COGS calculation on the estimated costs to complete and the inception-to-date billed amount. You must have an estimate of the costs to complete the project in order to use this calculation method. The Compute Cost of Goods Sold Entry process (Projects\Process\Project) adds the amount in the Estimated Costs (ETC) field to WIP costs incurred on the project to arrive at Total Costs at Completion. The amount in the ITD Loss Recognized field is subtracted from the Total Costs at Completion and the result is divided by the amount in the Estimated Total Value field to arrive at the cost percent. The cost percent is multiplied by the ITD Amount Billed field in the Maintain Project Bill Summary screen to arrive at COGS Before Loss. The COGS Before Loss amount is added to the amount in the ITD Loss Recognized field to arrive at the inception-to-date COGS amount. The ITD COGS amount is compared to the ITD COGS amount that has been previously posted to the General Ledger. The previously posted ITD COGS transfer amount is found by selecting the balance in the GL_POST_SUM table, including period 0, of the account that has a function code of WIP TRANS OUT in the project’s account group. The difference between these amounts becomes the basis for the journal entry.
Delivery Amount & Estimate at Completion – Use this calculation method to base the COGS computation on the estimate at completion and the delivery amount. You must have an estimate of the costs at completion and the estimated loss. You must also have delivery amounts that have been billed and posted. This method is usually selected by projects that bill using progress payments. The Compute Cost of Goods Sold Entry process (Projects\Process\Project) subtracts the amount in the ITD Loss Recognized field from the amount in the Estimated Costs (EAC) field and divides the result by the amount in the Estimated Total Value field to arrive at the cost percent. The cost percent is multiplied by the amount in the ITD Delivery Amount field in the Maintain Project Bill Summary screen to arrive at COGS Before Loss. The COGS Before Loss amount is added to the amount in the ITD Loss Recognized field to arrive at ITD COGS. The ITD COGS amount is compared to the ITD COGS amount that has been previously posted to the General Ledger. The previously posted ITD COGS transfer amount is found by selecting the balance in the GL_POST_SUM table, including period 0, of the account that has a function code of WIP TRANS OUT in the project’s account group. The difference between these amounts becomes the basis for the journal entry.
Delivery Amount & Estimate to Complete – Use this calculation method base the COGS computation on estimated costs to complete and the ITD delivery amount. The Compute Cost of Goods Sold Entry process (Projects\Process\Project) adds the amount in the Estimated Costs (ETC) field and WIP costs to arrive at Total Estimated Costs at Completion. The amount in the ITD Loss Recognized field is subtracted from the Total Estimated Costs at Completion and divides the result by the amount in the Estimated Total Value field to arrive at the cost percent. The cost percent is multiplied by the amount in the ITD Delivery Amount field in the Maintain Project Bill Summary screen to arrive at ITD COGS Before Loss. It adds the COGS Before Loss to the amount in the ITD Loss Recognized field to arrive at ITD COGS. The ITD COGS amount is compared to the ITD COGS amount that has been previously posted to the General Ledger. The previously posted ITD COGS transfer amount is found by selecting the balance in the GL_POST_SUM table, including period 0, of the account that has a function code of WIP TRANS OUT in the project’s account group. The difference between these amounts becomes the basis for the journal entry.
Percent of Costs – Use this calculation method to use the amount in the Estimated Costs field times a percent to calculate the COGS transfer amount. You must have an estimated total cost of the project in order to use this method. The Estimated Costs field is manually entered and there is no automatic calculation for this field. Enter the percentage that you want to use for this calculation in the Percent of Estimated Cost field.
Fixed Monthly Amount – Use this calculation method to use the same amount each month to create the COGS transfer. This is the easiest method to maintain. Enter the amount you want to use for the COGS transfer in the Fixed Monthly Amount field.
Revenue Greater Than Zero – Use this calculation method to transfer the ITD WIP costs each month if the revenue for the project is greater that zero. If the revenue is equal to zero, no JE will be generated. If the amount is greater than zero, the total WIP costs will be used as the ITD COGS amount. The system will subtract the ITD WIP TRANS OUT amount from the total calculated WIP costs each period to arrive at the COGS transfer for the period.
Revenue Greater Than Zero Less G&A - Use this calculation method to transfer the ITD WIP costs each month if the revenue for the project is greater that zero, but exclude G&A pools. The Compute Cost of Goods Sold Entry process (Projects\Process\Project) sums YTD revenue from PROJ_SUM and prior year revenue from PSR_PY_SUM. If the total is greater than zero, it sums the YTD burden amounts, excluding all G&A pools, from PROJ_BURD_SUM and adds the direct costs from PROJ_SUM. It then sums the prior year burden amounts from PSR_PY_BURD_SUM, excluding all G&A pools, and adds the direct costs from PSR_PY_SUM. (The calculation includes only function codes of LABOR (2), NON-LABOR (3), UNALLOW LABOR (11), UNALLOW NON-LABOR (12), and UNITS (13). You can select function codes in the Project Account Groups screen.) This is the ITD Cost of Goods Sold amount. The application compares this amount to the balance in the account that has a function code of WIP TRANS OUT in the project’s account group. The difference is the amount to post.
Percent of ITD Revenue – Use this formula to calculate the COGS transfer amount using a percentage of the Inception-to-Date (ITD) revenue. The Compute Cost of Goods Sold Entry process derives the Year-to-Date (YTD) revenue at target or actual, depending on the selected rate type (Actual or Target) in the Select Rate Type group box of the Compute Cost of Goods Sold Entry screen (Projects\Process\Project), by selecting the TOT_REV_ACT_AMT or TOT_REV_TGT_AMT columns from the PROJ_SUM table. The process includes all rows in the PROJ_SUM table up to and including the fiscal year/period/subperiond entered in the Compute Cost of Goods Sold Entry screen. This amount is added to the amount in the Total Revenue field of the Prior Year Cost and Revenue screen for all fiscal years prior to the fiscal year entered in the Compute Cost of Goods Sold Entry screen. The resulting amount is the ITD revenue. The ITD revenue amount is then multiplied by the percentage in the Percent of Revenue field to produce the ITD COGS transfer amount. The ITD COGS transfer that has already been posted is subtracted from the ITD COGS transfer amount to produce the amount of COGS transfer to include in the current posting. The previously posted ITD COGS transfer amount is found by selecting the balance in the GL_POST_SUM table, including period 0, of the account that has a function code of WIP TRANS OUT in the project’s account group.
Percent of Current Year Revenue - Use this formula to calculate the COGS transfer amount using a percentage of the Year-To-Date (YTD) revenue. The Compute Cost of Goods Sold Entry process (Projects\Process\Project) derives the YTD revenue at target or actual, depending on the rate type (Actual or Target) in the Select Rate Type group box of the Compute Cost of Goods Sold Entry screen, by selecting the TOT_REV_ACT_AMT or TOT_REV_TGT_AMT columns from the PROJ_SUM table. The process includes all rows in the PROJ_SUM table up to and including the fiscal year/period/subperiod entered in the Compute Cost of Goods Sold Entry screen. The YTD revenue amount is then multiplied by the Percent of Revenue field to produce the YTD COGS transfer amount. The YTD COGS transfer that has already been posted is subtracted from the calculated YTD COGS transfer amount to produce the amount of COGS transfer to include in the current posting. The previously posted YTD COGS transfer amount is found by selecting the balance in the GL_POST_SUM table, excluding period 0, of the account that has a function code of WIP TRANS OUT in the project’s account group.
Use the fields in this group box to enter estimated total value, estimated costs, ITD loss recognized, fixed monthly amount, and percent of estimated costs. The values entered in these fields are used in the calculation of COGS.
Use this field to enter the estimated total value of the project. You must enter an amount in this field if you are using the “Billed Amount, Estimate at Completion,” “Billed Amount, Estimate to Complete,” “Delivery Amount, Estimate at Completion,” or the “Delivery Amount, Estimate to Complete” COGS calculation method. The system will assume that you want the estimated total value to equal the total modifications entered for the project and will automatically update this field with all new modifications if you enter the same total value amount that is displayed in the Project Values table. The system will not perform this automatic update if you enter an amount that is different from the total values amount in the Project Values table, and you will have to manually update this field whenever you enter a new modification.
Use this field to enter the total estimated costs of the project. You must enter an amount in this field if you are using the “Billed Amount, Estimate at Completion,” “Billed Amount, Estimate to Complete,” “Delivery Amount, Estimate at Completion,” “Delivery Amount, Estimate to Complete,” or “Percent of Costs” COGS calculation method. The system will assume that you want the estimated total value to equal the total modifications entered for the project and will automatically update this field with all new modifications if you enter the same total value amount that is displayed in the Project Values table. The system will not perform this automatic update if you enter an amount that is different from the total values amount in the Project Values table and you will have to manually update this field whenever you enter a new modification.
Use this field to enter the ITD loss recognized for the project. You must enter an amount in this field if you are using the "Billed Amount, Estimate at Completion," "Billed Amount, Estimate to Complete," "Delivery Amount, Estimate at Completion," or the "Delivery Amount, Estimate to Complete" COGS calculation method. This amount is used to calculate the COGS Transfer when a loss is to be recognized up-front, instead of being pro-rated throughout the life of the project. This field is not required.
Use this field to enter the fixed monthly amount that you want to use for the COGS transfer each month. This field is available only when you have selected the "Fixed Monthly Amount" Calculation Method.
Percent of Estimated Costs/Percent of Revenue
Use this field to enter the percent of estimated costs or percent of revenue to be used for the COGS calculation. This field is available only when you have selected the "Percent of Costs," "Percent of ITD Revenue," or "Percent of Current Year Revenue" Calculation Method.
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Note: The title of this field varies according to the calculation method. |
Use the fields in this group box to review the original modifications and modification increases.
This non-editable field displays the signed contract cost value that was entered into the Enter Project Modifications screen (Projects\Transactions\Project) for mod ID number "0000."
This non-editable field displays the signed contract fee value that was entered into the Enter Project Modifications screen (Projects\Transactions\Project) for mod ID number "0000."
This non-editable field displays the signed total contract value that was entered into the Enter Project Modifications screen (Projects\Transactions\Project) for mod ID number "0000."
This non-editable field displays the signed contract cost value that was entered into the Enter Project Modifications screen (Projects\Transactions\Project) for mod ID numbers greater than "0000."
This non-editable field displays the signed contract fee value that was entered into the Enter Project Modifications screen (Projects\Transactions\Project) for mod ID numbers greater than "0000."
This non-editable field displays the signed total contract value that was entered into the Enter Project Modifications screen (Projects\Transactions\Project) for mod ID numbers greater than "0000."
This non-editable field displays the sum of the signed contract cost value that was entered into the Modifications screen for all mod IDs.
This non-editable field displays the sum of the signed contract fee value that was entered into the Enter Project Modifications screen (Projects\Transactions\Project) for all mod IDs.
This non-editable field displays the signed total contract value that was entered into the Enter Project Modifications screen (Projects\Transactions\Project) for all mod IDs. It is the sum of the total value for Original and Modifications.
* A red asterisk denotes a required field.
Changes to this screen update the PROJ_COGS (Project Cost of Goods Sold) table.
