COPA V vs. S

7/31/2019 COPA V vs. S

1/10

Copyright 2007 Accenture All Rights Reserved. Accenture, its logo, and High Performance Delivered are trademarks of Accenture.

Copyright 2007 Accenture All rights reserved. Accenture, its logo, and High Performance Delivered are trademarks of Accenture.

CO-PA

Accounting and reporting with standard price vs. MAP

7/31/2019 COPA V vs. S

2/10

CO-PAChallenge in current scenario

Currently HOBI have two different legal entities one is HOBI and another is RA

All the manufacturing activities taking place in HOBI only

All the Domestic sales taking place in RA only, and there is no direct domestic sale

from HOBI

HOBI is transferring the Finished goods to RA with some margin on it, also SCTand VAT charged on the transfer price.

For RA the cost of product is transfer price from HOBI to RA plus the SCT charged

on transfer price.

With this scenario, in COPA reports system is showing the inflated figures forRevenue as well as Cost.

7/31/2019 COPA V vs. S

3/10

CO-PAChallenge in current scenarioExample

HOBI RACost of product 80 TL per Piece Cost of product 110 TL per PieceHOBI to RA Selling Price 100 TL per Piece RA Selling Price 150 TL per PieceSCT Applicable 10 TL Per PieceVAT Payable 10 TL Per Piece VAT Payable 10 TL per Piece

Total 120 TL Per Piece Total 160 TL per piece

COPA Document & Reporting for profitability (Sales price minus cost and SCT orVAT)a)Cost 80 TL a) Cost 110 Tb) Revenue 100 TL b) Revenue 150 TLc) Profit (b-a) 20 TL c) Profit (b-a) 40 TL

Group Profitabilitya)Cost 190 TL (Inflated Cost)b) Revenue 250 TL (Inflated Revenue)c) Profit (b-a) 60 TL

7/31/2019 COPA V vs. S

4/10

CO-PAAccounting with price control V

vs. S (RA Finished goods price)

Example: Cost in HOBI 800

Margin in HOBI 200

Sale Price 1000

SCT 200

VAT 200

Total Invoice Value 1400

At the time of goods issue from HOBI to RA :

In HOBI:

COS a/c Dr. 800

To Inventory a/c Cr. 800

In RA:

Inventory a/c Dr. 1200

To GR/IR a/c Cr. 1200

Example: Cost in HOBI 800

Margin in HOBI 200

Sale Price 1000SCT 200

VAT 200

Total Invoice Value 1400

At the time of goods issue from HOBI to RA :

In HOBI:

COS a/c Dr. 800

To Inventory a/c Cr. 800

In RA:

Inventory a/c Dr. 800

Price Diff a/c Dr. 400

To GR/IR a/c Cr. 1200

Moving Average Price Standard Price

7/31/2019 COPA V vs. S

5/10



At the time of Invoice ;

In HOBI

Customer a/c (RA) Dr. 1400

Sales a/c Cr. 1000

To SCT Payable a/c Cr. 200

To VAT Payable a/c Cr. 200

In RA

GR/IR a/c Dr. 1200

Input VAT Dr. 200

To Vendor a/c(HOBI) Cr. 1400

At the time of Invoice ;

In HOBI

Customer a/c (RA) Dr. 1400Sales a/c Cr. 1000

To SCT Payable a/c Cr. 200

To VAT Payable a/c Cr. 200

In RA

GR/IR a/c Dr. 1200

Input VAT Dr. 200

To Vendor a/c(HOBI) Cr. 1400


7/31/2019 COPA V vs. S

6/10



At the time of standard cost estimate run ;

In HOBI:

Revaluation a/c Dr./Cr.

To Inventory a/c Dr./Cr.

In RA:

In RA no need of standard cost estimate run, so noaccounting entry will happen

At the time of standard cost estimate run ;

In HOBI:

Revaluation a/c Dr./Cr.To Inventory a/c Dr./Cr.

In RA:

Revaluation a/c Dr./Cr.

To Inventory a/c Dr./Cr.


7/31/2019 COPA V vs. S

7/10

CO-PA

With Price Control V With Moving average price, additive cost calculation and updation will not be required in RA

With Moving average price, profitability analysis will be available at the group level and alsoat the company code level.

With Moving average price, Cost analysis will be available at HOBI company code only,itemization of cost will not be available in RA .

With Moving average price, to get a consolidated report of profit analysis and cost analysis,excel work will be required.

With Moving average price, Price difference hit will not come at the time of moving the goods

from HOBI to RA

With Moving average price, Revaluation hit will not come in RA at the time of standard costestimate run

7/31/2019 COPA V vs. S

8/10

CO-PA

With Price Control S With Standard price, additive cost calculation and updation will be required in RA everymonth for all the materials. (Additive cost will be equal to margin at HOBI and SCT charged byHOBI from RA)

Additive cost calculation will be done out of system manually

With standard cost, Price difference a/c hit will come with every transaction at the timetransfer of goods from HOBI to RA ( If transfer value not equal to the standard price in RA)

With Standard price, revaluation a/c hit will come every month in RA also at the time ofstandard cost estimate run.

With Standard cost, Profitability analysis and cost analysis reports will be available from thesystem without manual work in excel.

7/31/2019 COPA V vs. S

9/10

CO-PA

Proposed Solution Finished goods should be managed at moving average price in RA

It would be preferred if HOBI margin could be fixed in terms of percentage.

HOBI margin will be captured in one of the condition in SD at the time of transferring the

finished goods from HOBI to RA

COPA Consolidation report will have the total sale (excluding inter-company) total COGS(excluding inter-company)

7/31/2019 COPA V vs. S

10/10

CO-PA

Proposed Solution (Example)HOBI RACost of product 80 TL per Piece Cost of product 110 TL per PieceHOBI to RA Selling Price 100 TL per Piece RA Selling Price 150 TL per PieceSCT Applicable 10 TL Per PieceVAT payable 10 TL Per Piece VAT Payable 10 TL per Piece

Total 110 TL Per Piece Total 160 TL per piece

COPA Document & Reporting for profitability (Sales price minus cost and SCT or VAT)No COPA Document created here Customization is done at this levelb) SCT 10 TL a) Cost of HOBI 80 TL

b) SCT applicable in HOBI 10 TL

c) Revenue 110 TL c) Revenue in RA 150 TLd) Profit (c-(a+b)) 20 TL d) Profit (c-(a+b)) 60 TL

Group Profitability a) Cost 80 TLb) SCT 10 TLc) Revenue 150 TLd) Profit (c-(a+b)) 60 TL

Documents

COPA V vs. S