Upstream Accounting: JVA Overhead Costs (PCO)

[Former Member]

Hi all,

Iu2019m working in a Project where my client belongs to Upstream Industry.

This client has a setup where we have 2 company codes in a European country that are the owners of 3 licences but itu2019s their African branch that operates those licenses.

We work with JVA and PSA and the African branch operates the 3 Joint Ventures.

The European entities were settled has partners on those ventures so, at the month end, after the cutback the P/L accounts of the African branch have the amount down to zero (since all will be billable and so all the costs will be transferred to the partners).

Iu2019m quit new to JVA and my client has a requirement regarding the Overhead Costs (PCO).

The requirement is that they need, for each JV two calculations (2 operator fee calculations running in SAP)

One for the normal Operators overhead which will be a debit in JV books and a credit in the operators books (ie European entity).

The other calculation will have both legs in the JV books. A debit to a BR WBS and a credit to a BN WBS.

Can you guys help me on understanding how the overhead costs calculation process ? The postings that it generates in FI and how it is customized ?

Is this requirement possible with standard customization ?

I think that the PCO just considers the billable part and not the recover part..but I donu2019t know this process very well

Help will be truly appreciated.

Many thanks in advance.

[Former Member · Accepted solution]

Hi There,

PCO customisation can be done using transaction code GJ85 for the transaction key JIE and JIO, in here you can specify the overhead expense account and offset account. at the time of PCO system should pass following accounting entry

JV PCO overhead expense account Dr

JV PCO overhead offset acccount Cr

(This can be charged to cost object if specified in JV master, if cost object is left blank in the JV master above entry will be charged to original cost object. Recovery indicator for the debit will be BI and credit will be NB. However same can be manipulated using substitution rule.

PCO inclusion of cost objects and GL will be done using Set and should be specified in the JOA master.

I hope this helps you in terms of configuration.

Thanks & Regards

Kalpesh Chavda

[former_member215587]

Hi Kalpesh,

Could you please advise if we want to have several G/L accounts for PCO (one is international PCO [JIE/JIO], one is construction PCO[J6E/J6O]), how we do the customizing? I implement both these 2 places in below IMG, but in the front end access menu, there is only one GJ94 for international PCO, and the resualts after run GJ94 the documents generated only have the International overhead expense account and offset account but no construction expense account and offset account.

Thanks and regards,

Annika WANG

[Former Member]

Hi  Kalpesh,

Could you please advise if we want execute GJ94 report for all  WBS with one equity group. " Is it possible to make settings to transaction GJ94 only for costs with Equity group E01 and excluding E02?

Thanks in Advance,

Regards,

Prasad

[Former Member]

Hi Morbis,

Just to update PCO offset entry is generally charged to corporate venture with NB recovery indicator. Since in this case there will be cross venture posting, interventure account also get hit.

However this behavior can be managed via writing substitution rules.

Thanks & Regards

Kalpesh Chavda

[Former Member]

Hi,

So, in that sense, according to business requirements above, is it possible to have 2 Operators fee ?

First,

Will debit the P/L of JV and a credit to the P/L (of European Entity) ? As i understand, the debit will have RI=BI and the credit the RI=CP

Second,

In the same JV, we will debit the WBS P/L of JV (with RI = BR) and a credit to the WBS P/L (with RI = BN) ?

Both calculations should occour simultaneasly in order not to include the result of the first calculation into the cost base for the second calculation.

Thanks in advance.

[Former Member]

Hi Morbius,

You can try to put WBS element of European entity in the JV master data PCO tab and test out whether it gives you desired results or not

Thanks & Regards

Kalpesh Chavda

[ravi_gurram2]

Standard SAP JVA allows for multiple PCO rules to be set up and assigned. PCO (Parent Company Overheads)

However, the structure of master data and configuration for PCO is such that only one set of General Ledger accounts and cost objects are identified for PCO, meaning that even where multiple PCO rules are maintained and configured for use, all PCO will post using the same coding. This is not a viable solution for our company, where Management and R&D PCO postings are separated and require to be reported separately to JV Partners. They want to automate the process. In GJ94, it is posting to one set of Accounts only. Is there any one can help me to Defice Multiple PCO for one company please. Thank you