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Result Analysis – Part II – Valuation methods

Updated: Jun 21, 2020

Result Analysis in SAP

In the previous article, we tried to know the way system would behave if we do not use “Result Analysis” for Project. The article helped us understand how not using “Result Analysis” can cause inconsistency in profits.

In this article, we would start looking into the “Result Analysis” function available in SAP. We will start this with understanding what “Valuation Methods” are available for us to work with.

Types of Valuation methods

As we all know, SAP is an ERP that is used all over the globe. It hence becomes important on SAP’s part to provide solution that can be used throughout the world. It is due to this fact, SAP has provided various “Valuation Methods” as part of standard solution. The various methods available can be used to meet the business requirements.

Given below is the list of available “Valuation methods”

  1. 01 Revenue-Based Method – With Profit Realization

  2. 02 Revenue-Based Method – Without Profit Realization if Actual Revenue < Plan Costs

  3. 03 Cost-Based POC Method

  4. 04 Quantity-Based Method

  5. 05 Quantity-Based POC Method

  6. 06 POC Method on Basis of Revenue Planned by Period

  7. 07 POC Method on Basis of Project Progress Value Determination

  8. 08 Derive Cost of Sales from “Old” Resource-Related Billing of CO Line Items

  9. 09 Completed Contract Method

  10. 10 Inventory Determination, Without Planned Costs, Without Milestone Billing

  11. 11 Inventory Determination, Without Planned Costs, With Milestone Billing

  12. 12 Inventory Determination, Reserve for Follow-Up Costs, Without Milestone Billing

  13. 13 Inventory Determination “WIP at Actual Costs” for Objects Not Carrying Revenue

  14. 14 Derive Cost of Sales from Resource-Related Billing of Dynamic Items

  15. 15 Derive Revenue from Resource-Related Billing and Simulation of Dynamic Items

  16. 16 Cost-Based POC Method – Without Profit Realization if Plan Revenue > Plan Costs

  17. 17 Cost-Based POC Method – Without Profit/Loss Realization

All the above methods are readily available a part of standard solution delivered by SAP.

Conceptual understanding of “Valuation Methods” will help understand the way they work. This makes easier to configure them in the system

What Next?

We will try to look into as many Methods as possible in detail so that we can work on them. We would divide the understanding of these methods into following two sections:

  1. Conceptual Understanding

  2. Configuration

The section “Conceptual Understanding” contains information on how the method works. Examples are used to explain the concepts in effective way. This will help us understand the “Configuration” part effectively.


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