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Former Member

Cost Recognition based on Percentage of Completion

Dear Expert,

Nowadays, we are implementing SAP PS to handle Plantation and Farming Business Operation.

One Block of Plantation area is defined as 1 WBS. All of operational Cost in this Block will be recorded in Network Activity which is part of the WBS and at the end of month will be settled to WBS. One cycle of plantation upkeep take around 20 months starting from Land Preparation until Harvesting. During upkeep period, all of cost in WBS will be recognized as Work In Process (WIP) by using Result Analysis Methods. After 20 months, the Plants will start to be harvested. Harvesting process for one Block take 2 or 3 Month or the other words, one Block of Plantation always be partially harvested for several months. After harvesting process completed (100%), this block will be started to Land Preparation for New Cycle of Plantation Upkeep. It means, Product Cost for each month is calculated by percentage of harvested product of the block at particular Month.

How can we use the Percentage of Completion in WBS to handle Cost Recognition form WBS for Product Cost Calculation ?

Thanks for advice

Adi Prasetya

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