Production and Revenue Accounting Training PDF

Production and Revenue Accounting Training Insert Date Prerequisites Crude Before taking this course, you should have Transportation...

Production and Revenue Accounting Training Insert Date Prerequisites Crude Before taking this course, you should have Transportation taken the following courses: and Storage 2020 Oil, Gas, and https://talentdevelopment.deloitte.com/sites/SpecialPro Chemicals Outlook Micro Learning Video jects/ITD/SitePages/Sector/Oil%20Gas%20and%20Che micals.aspx Oil and Gas Overview Drilling and Well Completions Copyright © 2020 Deloitte Development LLC. All rights reserved. Production and Revenue Accounting Training 2 Deloitte PRA Training for SAP “Core Courses” PRA M 01 PRA M 02 PRA M 03 Introduction to PRA Production (1 of 2): Production (2 of 2): Master Data, and Allocation Transactional Data, Rules Allocation, and Regulatory Reporting PRA M 04 PRA M 05 PRA M 06 Ownership (1 of 2): Ownership (2 of 2): Contracts and Master Data for Business Ownership & Funds Pricing & Associate, Venture, and Transfer, Production Sales and Balancing DOI Payment, and Reports PRA M 07 PRA M 08 PRA M 09 Revenue Accounting Revenue Accounting Revenue Accounting (1 of 3): PRA Chart of (2 of 3): Journal Entry, (3 of 3): Revenue Accounts, Valuation, and Accounts Receivables, and Distribution, and Revenue Check Input Revenue Accruals Accounting Reports PRA M 10 PRA M 11 Text Legend Tax Reporting Royalty Reporting Completed Current Coming Soon! Upcoming Copyright © 2020 Deloitte Development LLC. All rights reserved. Upstream Operations Production and Revenue Accounting Training 3 Management AGENDA Duration (minutes) Recap Activity 20 Course Introduction 20 Lesson 1: Chart of Accounts 50 Lesson 2: Division of Interest Accounting 50 Lesson 3: Valuation 210 Lesson 4: Alternative Dual Accounting 30 Course Summary 10 Copyright © 2020 Deloitte Development LLC. All rights reserved. Production and Revenue Accounting Training 4 AGENDA Duration (minutes) Course Introduction 20 Lesson 1: Chart of Accounts 50 Lesson 2: Division of Interest Accounting 50 Lesson 3: Valuation 210 Lesson 4: Alternative Dual Accounting 30 Course Summary 10 Copyright © 2020 Deloitte Development LLC. All rights reserved. Production and Revenue Accounting Training 5 Course Introduction Copyright © 2020 Deloitte Development LLC. All rights reserved. Presentation title 6 [To edit, click View > Slide Master > Slide master1] Learning Objectives In the Revenue Accounting (1 of 3): PRA Chart of Accounts, Valuation, and Check Input course, you will be introduced to the revenue accounting area of SAP’s Production and Revenue Accounting (PRA). You will understand the basic concepts of the COA, DOI accounting, and valuation process. At the end of the course, you will be able to:: o List the steps of the process flow for revenue accounting in PRA. o Understand the purpose of COA and the necessary steps to create a COA in SAP. o Explain how DOI accounting is used to define tax and revenue information for a DOI and how it is created in the system. o Identify the concept of the responsibility ID and how it is set up in the system. o Recognize the different methods of valuation and comprehend the necessary steps of the valuation process in SAP. o Understand the characteristics of the prior period notification (PPN) and its impact on revenue accounting. Copyright © 2020 Deloitte Development LLC. All rights reserved. Production and Revenue Accounting Training 7 Key Terms Settlement System Valued Check Layout Remitter Statement Data It is used to map the It identifies the It is one of the methods It is one of the remitter’s data into the customer who is used for valuation. The methods used for standard check input established as a settlement statement valuation. This fields for further remitter. This allocates units and/or method indicates processing. customer is computes state that production and responsible for production and contractual submitting a payment. severance taxes, if application areas are needed. A settlement used to value the statement is entered transactional data. directly into the system instead of system valued volumes. Copyright © 2020 Deloitte Development LLC. All rights reserved. Production and Revenue Accounting Training 8 Business Need The Revenue Accounting process, is an essential step to record the financial data & to update receivables, payables, & expenses. Revenue Revenue Revenue 2 3 1 Accounting Accounting Accounting Valuation Financial Data Calculation The revenue accounting process allows Revenue accounting provides all the Revenue valuation represents the processes the calculation of values for the required financial data to maintain the of valuing the volumes for all the products produced volumes. determines the books of accounts and is a critical and calculating the marketing deductions. relevant tax rate and the royalty component of the application. To execute the valuation process, the payable. Revenue accounting provides valuation application area requires the the option for manual or automated information from other application areas. interface CDEX (check data exchange) After summarizing the data, the valuation payment processing. application area transmits it to the revenue distribution, the tax, and the regulatory reporting application areas. Copyright © 2020 Deloitte Development LLC. All rights reserved. Production and Revenue Accounting Training 9 9 Revenue Accounting: Process Flow (1 of 2) Chart of 1 Revenue Accounting in PRA broadly covers the Accounts following processes This is dummy text it is not here to be read. The is just text to show where you could insert text. DOI of 2 Valuation of Volumes 3 Accounting 4 This is dummy text it This is dummy text it is not is not here to be here to be read. The is just text read. The is just text Revenue Accounting to show where you could insert to show where you Department text. This is dummy text it is could insert text. T not here to be read. This is This is dummy text it is not dummy text it is not here to be here to be read. The is just read. The is just text to show text to show where you where you could insert text. could insert text. This is This is dummy text it is not dummy text it is not here here to be read. to be read. Accounts Payment Revenue 5 6 7 Distribution Receivable Processing This is dummy text This is dummy text This is dummy text it is not here to be it is not here to be it is not here to be read. The is just read. The is just read. The is just text to show where text to show where text to show where you could insert you could insert you could insert text. text to be read. text. This is dummy text it is not here to be read. Note: The processes related to the setup of the COA, the valuation methods, and the check input are explained in detail as part of the current course. Copyright © 2020 Deloitte Development LLC. All rights reserved. Production and Revenue Accounting Training 10 10 Revenue Accounting: Process Flow (2 of 2) The current course will focus on the first three Chart of processes of revenue 1 Accounts accounting in PRA. This is dummy text it is not here to be read. The is just text to show where you could insert text. DOI of 2 Valuation of Volumes 3 Accounting 4 This is dummy text it This is dummy text it is not is not here to be here to be read. The is just text read. The is just text Revenue Accounting to show where you could insert to show where you Department text. This is dummy text it is could insert text. T not here to be read. This is This is dummy text it is not dummy text it is not here to be here to be read. The is just read. The is just text to show text to show where you where you could insert text. could insert text. This is This is dummy text it is not dummy text it is not here here to be read. to be read. Accounts Payment Revenue 5 6 7 Distribution Receivable Processing This is dummy text This is dummy text This is dummy text it is not here to be it is not here to be it is not here to be read. The is just read. The is just read. The is just text to show where text to show where text to show where you could insert you could insert you could insert text. textto be read. text. This is dummy text it is not here to Copyright © 2020 Deloitte Development LLC. All rights reserved. be read. Production and Revenue Accounting Training 11 11 AGENDA Duration (minutes) Course Introduction 20 Lesson 1: Chart of Accounts 50 Lesson 2: Division of Interest Accounting 50 Lesson 3: Valuation 210 Lesson 4: Alternative Dual Accounting 30 Course Summary 10 Copyright © 2020 Deloitte Development LLC. All rights reserved. Production and Revenue Accounting Training 12 Lesson 1 Chart of Accounts Copyright © 2020 Deloitte Development LLC. All rights reserved. Presentation title 13 [To edit, click View > Slide Master > Slide master1]  The Chart of Accounts: Outline The Chart of Accounts (COA) refers to a classification scheme that consists 1 2 3 Set up of several groups of G/L accounts. It Create COA Create the Accounting is used to record, consolidate, and in SAP FI Account ID Category report financial transactions of an organization. A record in a chart of accounts typically is comprised of an account number, account name, information which controls how the account functions, and how the G/L account is created for a particular company code. The COA must be assigned to a company code to post the accounting entries, which are related to a company code. These are the steps involved in the creation of a PRA 5 4 Set up COA Set up Account Account Entry Type Control Copyright © 2020 Deloitte Development LLC. All rights reserved. Production and Revenue Accounting Training 14 14 Create a COA in SAP FI A COA must be set up in FI G/L (Financial Accounting – General Ledger), before it can be created in PRA. This setup is necessary to transfer the posted data from PRA to the Financial Accounting application of SAP. Note: This step is done as a check for the pre-requisites & it is set up in the SAP Core system. This action cannot be executed in the PRA System. Copyright © 2020 Deloitte Development LLC. All rights reserved. Production and Revenue Accounting Training 15 15 Create the Account ID The account ID in the PRA COA should be the same as the account ID in FI. During the creation of the account ID in PRA, the system performs the validation run to ensure that the account already exists in FI. Menu path: SAP Easy Access Menu > Logistics > Production and Revenue Accounting > Revenue Accounting > Accounting Document > Master Data > Chart of Accounts Transaction code: /PRA/COA Step 1: Navigate to the Maintain PRA Chart of Accounts- Create screen. In the Company Code field, enter the company code. Step 2: In the Account ID field, enter the respective code. Step 3: In the Account Type field, select the relevant data from the drop-down list. Step 4: Click the save icon. Copyright © 2020 Deloitte Development LLC. All rights reserved. Production and Revenue Accounting Training 16 16 Set up the Account Category An account category is a grouping of one or more accounts. Each document that is used in PRA is linked with an account category. The account category provides the set of account parameters, which allows the creation of specific accounts in PRA. Example One account category is ‘accounts receivable’. Different accounts (each represented by an account ID) can be created under this accounts receivable category. Within the organizational structure, these accounts represent different situations for receivables. From a system perspective, an account category is a group of account numbers. Some fictitious values for this example: Account category = Accounts receivable Account ID = 1000 - Accounts receivable oil Account ID = 1001 - Accounts receivable gas Copyright © 2020 Deloitte Development LLC. All rights reserved. Production and Revenue Accounting Training 17 17 Set up the Account Type (1 of 4) The account type represents a type of account, such as payable taxes or accounts receivables. It determines the type of entries that will be posted to a certain account. Furthermore, it specifies the line-item table in the document to which the data will be posted. It is based on the type of data that will be saved to a table or account. Example The account type ‘TP Taxes Payable’ represents the type of expenses that can be posted by using the account IDs, which are assigned to the account category. Selecting the ‘Active’ checkbox means ‘setting the active flag’. In the system, an active flag means that this account maintenance record stands for an active account. As a result, this action allows the setup of the account for a data entry. Unselecting the active flag means turning off the account for any data entry. Copyright © 2020 Deloitte Development LLC. All rights reserved. Production and Revenue Accounting Training 18 18 Set up the Account Type (2 of 4) An account entry controls the account attributes and links these to a specific accounting category. The account entry allows the creation of more than one account per account category, which is differentiated by the parameters that were set up in the account category at the time of customizing. Menu path: SAP Easy Access Menu > Logistics > Production & Revenue Accounting > Revenue Accounting > Accounting Document > Master Data > Account Entry Control Transaction Code: /PRA/ACCT_ENTRY Step 1: Navigate to the Maintain Account Entry - Create screen. In the Company Code field, enter the company code. Step 2: In the Account ID field, enter the respective code. Step 3: In the Account Category field, select the relevant data from the drop-down list. Copyright © 2020 Deloitte Development LLC. All rights reserved. Production and Revenue Accounting Training 19 19 Set up the Account Type (3 of 4) Step 4: Enter additional information as required. Step 5: Click the SAVE icon. Copyright © 2020 Deloitte Development LLC. All rights reserved. Production and Revenue Accounting Training 20 20 Set up the Account Entry Control (4 of 4) Example The account entry allows the creation of a different account for the same account ID/account category, which is based on differentiators like the entity type and the product. These differentiators were set up in the accounting category transaction at the time of customizing. Some fictitious values for this example: Attributes PRA Account PRA Account Company code 0100 0100 FI Account 123456 123456 PRA Account 123456 123456 Account Type Owner Payable Owner Payable Account Category – Entity Type Federal State Product Condensate Condensate Copyright © 2020 Deloitte Development LLC. All rights reserved. Production and Revenue Accounting Training 21 21  Lesson Recap In this lesson, you have learned that: The COA records, consolidates, and reports financial transactions. The PRA COA is created to transfer the data from PRA to SAP FI. The creation of an account ID in PRA requires an existing account in SAP FI. The account type determines the type of entry and the line item table in the document to which the data will be posted. The account entry controls the account attributes and links these to a specific accounting category. Copyright © 2020 Deloitte Development LLC. All rights reserved. Production and Revenue Accounting Training 22 AGENDA Duration (minutes) Course Introduction 20 Lesson 1: Chart of Accounts 50 Lesson 2: Division of Interest Accounting 50 Lesson 3: Valuation 210 Lesson 4: Alternative Dual Accounting 30 Course Summary 10 Copyright © 2020 Deloitte Development LLC. All rights reserved. Production and Revenue Accounting Training 23 Lesson 2 Division of Interest Accounting Copyright © 2020 Deloitte Development LLC. All rights reserved. Presentation title 24 [To edit, click View > Slide Master > Slide master1] DOI Accounting: Outline DOI accounting is used to define tax and revenue information for a DOI. Each accounting record is set up for a major product code, which makes it possible to have multiple accounting records for the same DOI. In DOI accounting, the following steps are taken: Establish the revenue process: This step identifies the revenue process, such as system valued data, the settlement statement, or check input. Define the relationship of the venture, the DOI, and the cost center. Specify the accounting cycle (the recording time frame) for booking to the G/L Create DOI Accounting Select the check write attributes of the venture/DOI from the accounting cycle. Define the tax reporting requirements for a venture/DOI and product. Create Responsibility ID Copyright © 2020 Deloitte Development LLC. All rights reserved. Production and Revenue Accounting Training 25 25 Create DOI Accounting (1 of 4) Menu path: SAP Easy Access Menu > Logistics > Production and Revenue Accounting > Ownership > DOI Accounting > Create Transaction code: O3U_DP1 Step 1: On the Create DOI Accounting: Initial Screen, enter the relevant data in the Venture and DOI fields. Step 2: In the Company Code field, type the company code. Step 3: In the Major Product field, select the respective product code from the drop-down list. Step 4: In the Effective From field, specify the effective date to create the DOI accounting rules. Step 5: If the new DOI accounting is created with reference to an existing DOI accounting, navigate to the Reference section and enter the relevant data in the blank fields. Copyright © 2020 Deloitte Development LLC. All rights reserved. Production and Revenue Accounting Training 26 26 Create DOI Accounting (2 of 4) Step 6: Press Enter from the keyboard or click the Enter icon to navigate to the next screen. Step 7: On the Create DOI Accounting: Overview Screen, navigate to the Accounting tab. Step 8: In the Rev Process field, select the type of desired valuation method from the drop-down list. Step 9: In the Cost Center field, type the relevant data. Step 10: In the Current/Hist field, select from the drop-down list whether the billing is current (C Current) or historical (H Historical). Copyright © 2020 Deloitte Development LLC. All rights reserved. Production and Revenue Accounting Training 27 27 Create DOI Accounting (3 of 4) Step 11: In the Normal RTF field, select the relevant time frame from the drop-down list. Step 12: Navigate to the Tax (Net/Gross) section. In the Tax Amount and Tax Reimbursement field, select the relevant tax type from the drop-down list. Step 13: Navigate to the Check Write section. In the Record Payment field, select the relevant time frame from the drop-down list. Field Explanation Normal RTF (Normal It represents the expected time difference between the production date of a material and Recording Time Frame) the accounting period in the system. Copyright © 2020 Deloitte Development LLC. All rights reserved. Production and Revenue Accounting Training 28 28 Create DOI Accounting (4 of 4) Step 14: Navigate to the Severance Tax tab. In the Remitted column, select the respective tax remitter from the drop-down list. (In this case, the tax is remitted to the operator.) Step 15: In the Reporting column, select the relevant reporting details from the drop-down list (In this case, the reporting details refer to the purchaser). Step 16: Click the SAVE icon to post changes. Step 16: Click the save icon to save the changes. The following message will be displayed: Field Explanation It is the field where the remitter is specified. This person is responsible for paying (remitting) Remitted the severance tax. The tax details are automatically selected based on the customization for the given geographic location. Reporting This field specifies who will report the tax. Copyright © 2020 Deloitte Development LLC. All rights reserved. Production and Revenue Accounting Training 29 29 Responsibility ID: Outline In SAP, the responsibility ID is used for user-specific security measures. The responsibility ID provides user-specific data access privileges to certain key items, which are based on the assigned responsibility. This distinction allows the classification of specific items according to the organization’s responsibility relationships. A responsibility hierarchy can be created to allow access to specific items for certain responsibility groups. The responsibility is assigned at the user level and the object level. The responsibility ID consists of three parts: Global responsibility Group responsibility Individual responsibility Example A company is able to create an accounting responsibility group, a marketing responsibility group, and an engineering responsibility group. For each of these groups, individual responsibility IDs can be created. Copyright © 2020 Deloitte Development LLC. All rights reserved. Production and Revenue Accounting Training 30 30 Create the Responsibility ID (1 of 2) This transaction enables you to create the responsibility ID which is used for user-specific security measures. Menu path: SAP Easy Access Menu > Logistics > Production and Revenue Accounting > Ownership > Responsibility ID Transaction code: OIUH_SRDA Step 1: Navigate to the Responsibility ID: Initial Screen. In the Venture field, enter the relevant number for the Venture. Step 2: In the DOI field, type the respective DOI number. Step 3: In the Product Code field, select the relevant product from the drop-down list. Step 4: In the Responsibility ID field, select the responsible instance for the DOI from the drop-down list. Copyright © 2020 Deloitte Development LLC. All rights reserved. Production and Revenue Accounting Training 31 31 Create the Responsibility ID (2 of 2) Step 5: Click the CREATE icon to enter the necessary data. Step 6: On the Responsibility Id – Create screen, click the SAVE icon to save the data. The following message will be displayed: Copyright © 2020 Deloitte Development LLC. All rights reserved. Production and Revenue Accounting Training 32 32 Lesson Recap In this lesson, you have learned that: DOI accounting defines tax and revenues for a specific DOI. o DOI accounting identifies the revenue processes like the system valued process, the settlement statement, or the check input. o DOI accounting specifies the responsible persons who make the payment and submit the reports. In addition to the above, DOI accounting specifies the information related to: o The cost center o The accounting cycle o The tax reporting requirements for a venture/DOI and a product The responsibility ID provides user-specific data and security measures. It allows privileges which are based on global, group, and individual responsibilities. Copyright © 2020 Deloitte Development LLC. All rights reserved. Production and Revenue Accounting Training 33 AGENDA Duration (minutes) Course Introduction 20 Lesson 1: Chart of Accounts 50 Lesson 2: Division of Interest Accounting 50 Lesson 3: Valuation 210 Lesson 4: Alternative Dual Accounting 30 Course Summary 10 Copyright © 2020 Deloitte Development LLC. All rights reserved. Production and Revenue Accounting Training 34 Lesson 3 Valuation Copyright © 2020 Deloitte Development LLC. All rights reserved. Presentation title 35 [To edit, click View > Slide Master > Slide master1] Valuation: Outline (1 of 3) The valuation application area represents the process of valuing volumes for all the products. The valuation process uses product sales information from the production or CA application area, pricing information from contracts, ownership, venture, and DOI accounting information from division orders. After summarizing the data, the valuation application area transmits it to the revenue distribution, tax, and regulatory application areas. Valuation serves as the central point for processing prior period adjustments. Copyright © 2020 Deloitte Development LLC. All rights reserved. Production and Revenue Accounting Training 36 36 Valuation: Outline (2 of 3) Note: The two scenarios given below were explained as part of the system valued data: System valued data (regular scenario) System valued data with settlement diversity function System Valued Data Check Input Settlement Statement In the valuation process, the check The production and the contractual Settlement statements are entered input method is used by a non- application areas are used to value directly into the system instead of operator to enter the valuation transactional data. system valued volumes. These details received from the operator. allocate units and/or compute state production and severance taxes if needed. Prior Period Notification Copyright © 2020 Deloitte Development LLC. All rights reserved. Production and Revenue Accounting Training 37 37 Valuation: Outline (3 of 3) The integration of the valuation application area is shared below: Contractual Production Allocation Volumes Volumes Pricing Valuation Check Revenue Tax/Royalty Input Distribution Revenue Accounting Document Volumes and Values Copyright © 2020 Deloitte Development LLC. All rights reserved. Production and Revenue Accounting Training 38 38 System Valued Data: Outline (1 of 2) The system-valued data method retrieves data from the production and contractual application processes and values the volumes. The following steps are involved in executing the valuation process using the system valued data prerequisites: Check the Valuation Check the Pricing Check the Contractual Run Condition Allocation Results 1 2 3 Check if the Check if the pricing Check the valuation run has condition has been correctness of the CA been selected in the maintained for the results for the DN characteristics for contract. and the period for the Delivery Network which the valuation (DN) dated. has to be executed. Copyright © 2020 Deloitte Development LLC. All rights reserved. Production and Revenue Accounting Training 39 39 Valuation: Outline (2 of 3) The following steps are involved in executing the valuation process: Create the Valuation Create the Valuation Formula ID Formula Execute Valuation Post Valuation Formula Report Create Marketing Costs Create the Valuation Cross- Execute the Reference Combined Run Execute Valuation (VCR) Report Copyright © 2020 Deloitte Development LLC. All rights reserved. Production and Revenue Accounting Training 40 40 Check the Valuation Run Transaction code: O3U_DND3 On the Browse/ Display Delivery Network Dated: Overview screen, under the Valuation tab, ensure that the Run Valuation option has been selected, which is a prerequisite. Screenshot Copyright © 2020 Deloitte Development LLC. All rights reserved. Production and Revenue Accounting Training 41 41 Check the Pricing Condition Transaction code: VK13 On the Display PRA Fixed Price (EP01): Overview screen, In the PRA Pricing – Contract, Material section, check if the pricing conditions are correct and ensure their validity in the appropriate row. Screenshot Copyright © 2020 Deloitte Development LLC. All rights reserved. Production and Revenue Accounting Training 42 42 Check the Contractual Allocation Results Transaction code: O3U_RQST On the Graphical display of spool request 54823 in system LUR screen, check if the CA results for the DN are correct. (In this case, check if the details for DN 501 are correct. See the respective data for the CA from the period of 19. 10. 2014 for which the valuation needs to be executed.) Screenshot Copyright © 2020 Deloitte Development LLC. All rights reserved. Production and Revenue Accounting Training 43 43 Create Marketing Costs Marketing costs are broadly classified into internal and external marketing costs. Internal Marketing Costs: The Create Internal Marketing Rates transaction is used to establish internal marketing deduct information for the company-operated equipment or assess other internal charges. In general, these marketing rates apply only to the gas plants. These marketing rates represent the costs that the operator charges to the owners for the use of a facility. This transaction specifies the date when the marketing deduct information becomes effective, as well as the date when it will no longer be effective. External Marketing Costs: The relevant contract includes the following required base contract information: Venture Approved DOI Well and well completion (WC) or measurement point (MP), if applicable Copyright © 2020 Deloitte Development LLC. All rights reserved. Production and Revenue Accounting Training 44 44 Create Internal Marketing Rates (1 of 3) Menu path: SAP Easy Access Menu > Logistics > Production and Revenue Accounting > Revenue Accounting > Valuation > Internal Marketing Rates > Create Transaction code: O3U_MKT1 Step 1: On the Create Internal Marketing Rates: Initial Screen, In the Measurement Point section, enter the appropriate values for Well and Well Completion. Step 2: In the Major Product field, select the Screenshot respective product from the drop-down list. Copyright © 2020 Deloitte Development LLC. All rights reserved. Production and Revenue Accounting Training 45 45 Create Internal Marketing Rates (2 of 3) Step 3: In the Effective From field, enter the date from which the formula is valid. Screenshot Step 4: Click the continue icon to navigate to the Create Internal Marketing Rates: Overview screen which is on the next slide. Copyright © 2020 Deloitte Development LLC. All rights reserved. Production and Revenue Accounting Training 46 46 Create Internal Marketing Rates (3 of 3) Step 5: The Create Internal Marketing Rates: Overview screen is displayed. Enter the relevant data in the Mrktg Type Code, Deduct %, UOM, Company Code, Venture, DOI, and DOI Name columns. Step 6: Click the save icon to save the changes. Screenshot Field Explanation It refers to the cost involved in selling the products. Mrktg Type Code Note: It is actually more than just ‘marketing’ costs, and can include transportation, gathering, (Marketing Type Code) treating, and other costs. It is defined as per the contract. Deduct % It is the prescribed percentage to be deducted based on the volume. Mkting Deduction Rate (Marketing Deduction It is a flat rate representing the deduction amount, for example, 25 cents per barrel. Rate) UOM It is the measurement unit that is used to set the price of the product. Copyright © 2020 Deloitte Development LLC. All rights reserved. Production and Revenue Accounting Training 47 47 Create External Marketing Rates (1 of 4) The contract marketing costs can be created at various levels, such as contract, contract/WC, contract/MP, contract/WC/MP. Menu path: SAP Easy Access Menu > Logistics > Production and Revenue Accounting > Contracts and Pricing > Other Terms > Contract Marketing Costs Transaction code: O3UCP_MKT_CST0 In the screenshot below, Contract/WC is selected. So, the corresponding fields for this selection is displayed below. Step 1: Navigate to the Contract Marketing Costs: Initial Screen. In the Contract field, enter the contract number and in the Well Completion field, enter the appropriate value for which the external marketing rates are to be calculated. Screenshot Step 2: In the Additional Select Options section, in the Material field, enter the appropriate value. Copyright © 2020 Deloitte Development LLC. All rights reserved. Production and Revenue Accounting Training 48 48 Create External Marketing Rates (2 of 4) Step 3: In the Parameters section, in the From field, enter the date from which the formula is valid. Step 4: Click the create icon to define the external marketing rates. Screenshot Copyright © 2020 Deloitte Development LLC. All rights reserved. Production and Revenue Accounting Training 49 49 Create External Marketing Rates (3 of 4) Step 5: Navigate to the Entries section. In the Mrktg Type Code column, select the respective marketing type code from the drop-down list. Step 6: In the Deduction Reimbursement column, select deduct/reimbursement based on the business requirement. Screenshot Copyright © 2020 Deloitte Development LLC. All rights reserved. Production and Revenue Accounting Training 50 50 Create External Marketing Rates (4 of 4) Step 7: In the D/R Rate column, enter the rate (or percentage) at which the costs are to be deducted. Screenshot Step 8: In the Basis column, select the basis on which the rate or percentage is to be applied. Step 9: Click the save icon to save the data. Copyright © 2020 Deloitte Development LLC. All rights reserved. Production and Revenue Accounting Training 51 51 Create the Valuation Formula ID (1 of 3) Menu path: SAP Easy Access Menu > Logistics > Production and Revenue Accounting > Revenue Accounting > Valuation > Valuation Formula ID > Create Transaction code: O3U_FRML1 This transaction is used to set up an ID for a formula. The formula can change over time, because each formula has an effective date. The ID itself remains the same. Step 1: Navigate to the Create Formula Id – Initial Screen. In Screenshot the Formula ID field, enter the relevant data. To create the valuation formula ID from a reference, navigate to the Reference section and fill-in the Formula field. Step 2: Press Enter from the keyboard or click the continue icon to navigate to the next screen. Field Explanation It is an identification number code that identifies the valuation Formula ID formula. Copyright © 2020 Deloitte Development LLC. All rights reserved. Production and Revenue Accounting Training 52 52 Create the Valuation Formula ID (2 of 3) Step 3: On the Create Formula Id – Overview screen, navigate to the Products section. In the Major Product field, select the respective product from the drop-down list. Step 4: In the Material field, type the relevant material code. Step 5: In the Volume Type field, select the appropriate volume type based on the DN from the drop-down list for which the formula ID has to be created. Step 6: In the Volume Class field, select the relevant volume class from the drop-down list. Screenshot Copyright © 2020 Deloitte Development LLC. All rights reserved. Production and Revenue Accounting Training 53 53 Create the Valuation Formula ID (3 of 3) Step 7: In the Calculation Indicators section, select the desired indicator checkbox, based on the following guidelines:  Actual: Select this checkbox when the indicator has to specify that the formula calculates the actual volumes.  Entitled: Select this checkbox when the indicator has to specify that the formula calculates the entitled volumes. This indicator can only be set when the actual checkbox has been selected earlier.  Settlement: Select this checkbox when volumes have to be processed for owners with settlement diversity. Screenshot Step 8: Click the save icon to save the changes and to create the formula ID. The following message will be displayed: Copyright © 2020 Deloitte Development LLC. All rights reserved. Production and Revenue Accounting Training 54 54 Valuation Formula: Outline The valuation formula specifies the calculations that a formula carries out. Formulas, which have an effective date, define how the system values a product for a certain time frame. Formulas are critical components of the VCR relationship. Formulas define the calculation process to value any volume type or disposition, which is maintained for sales, production, on-lease, or off-lease. In the system, formulas provide the ability to use information from production, revenue allocation, contract creation, pricing, marketing cost/reimbursement information, ownership, and accounting. Copyright © 2020 Deloitte Development LLC. All rights reserved. Production and Revenue Accounting Training 55 55 Create the Valuation Formula (1 of 8) Menu path: SAP Easy Access Menu > Logistics > Production and Revenue Accounting > Revenue Accounting > Valuation > Valuation Formula > Create Transaction code: O3U_VLFR1 Step 1: Navigate to the Create Valuation Formula: Initial Screen. In the Formula Number field, enter the created formula ID. Step 2: In the Effective From date field, type the effective date of applicability for the formula. Screenshot Step 3: Press Enter from the keyboard or click the continue icon to navigate to the next screen. Copyright © 2020 Deloitte Development LLC. All rights reserved. Production and Revenue Accounting Training 56 56 Create the Valuation Formula (2 of 8) Step 4: On the Create Valuation Formula: Overview screen, navigate to the Products section. In the Major Product field, select the respective product from the drop-down list. Step 5: In the Material field, type the relevant material code. Step 6: In the Volume Type field, select the respective volume type (for which the formula ID is created) from the drop-down list. Step 7: In the Volume Class field, select the relevant volume class from the drop-down list. Step 8: Navigate to the Actual tab. Find the line item for the valuation formula ID to populate the fields where the calculation results will be stored. Screenshot Note: The assumed values are used for the illustration of a formula. Any other option from the list of reserved words can be chosen for the valuation formula. Copyright © 2020 Deloitte Development LLC. All rights reserved. Production and Revenue Accounting Training 57 57 Create the Valuation Formula (3 of 8) Step 9: In the Result column, enter ‘ACTVAL’, which stands for the actual value. Step 10: In the Factor 1 column, type ‘ACTVOL’, which stands for the actual volume. Step 11: In the Function column, select ‘Multiply’ from the drop-down list. Step 12: In the Factor 2 column, fill in the relevant description. Screenshot Field Explanation These reserved words are used to perform a binary operation for factors 1 and 2. The words Factor1/Factor 2 that contain the result of the binary operation are performed on factor 1 and factor 2. The function is the action to calculate the result. The valid functions are ‘+’ (add), ‘-’ (subtract), Function ‘*’ (multiply), ‘/’ (divide), and so on. Copyright © 2020 Deloitte Development LLC. All rights reserved. Production and Revenue Accounting Training 58 58 Create the Valuation Formula (4 of 8) Screenshot 1 By entering the values for Result, Factor 1, and Factor 2, a menu with several options (‘reserved words’) is displayed. An example of these reserved words is displayed in screenshot 1. Screenshot 2 shows that the formula has been created to compute the actual volume by multiplying the actual volume with oil price: ACTVAL = ACTVOL * OIL PRICE (Actual value = Actual volume multiplied by oil price) Screenshot 2 Copyright © 2020 Deloitte Development LLC. All rights reserved. Production and Revenue Accounting Training 59 59 Create the Valuation Formula (5 of 8) Similarly, a formula to calculate the marketing is also created as part of the scenario: The marketing costs can be calculated using the marketing costs formula as shared below:  Internal Marketing Cost of Quality Differentials (IRQADIF) = Internal Quality Differential Marketing type percentage to apply on the Actual Volume (ACTVAL)  External Location Difference Amount (ERLCDIFD) = External Location Differential rate to apply on the Actual Value (ACTVAL) Step 13: Click the save icon to save the formula. The following message will be displayed: Copyright © 2020 Deloitte Development LLC. All rights reserved. Production and Revenue Accounting Training 60 60 Create the Valuation Formula (6 of 8) The following steps explain how to approve the valuation formula. Menu path: SAP Easy Access Menu > Logistics > Production and Revenue Accounting > Revenue Accounting > Valuation > Valuation Formula > change Transaction code: O3U_VLFR2 Step 14: Navigate to the Change Valuation Formula: Initial Screen. In the Formula Number field, enter the relevant number. Step 15: In the Effective From field, enter the effective date of the Screenshot valuation formula. Step 16: Press Enter from the keyboard or click the continue icon to navigate to the next screen. Copyright © 2020 Deloitte Development LLC. All rights reserved. Production and Revenue Accounting Training 61 61 Create the Valuation Formula (7 of 8) Step 17: On the Change Valuation Formula: Overview screen, click the icon to approve the formula. Screenshot Copyright © 2020 Deloitte Development LLC. All rights reserved. Production and Revenue Accounting Training 62 62 Create the Valuation Formula (8 of 8) Step 18: Make sure that the Approval option is checked and is in grey. Step 19: Click the save icon to save the changes. Screenshot Copyright © 2020 Deloitte Development LLC. All rights reserved. Production and Revenue Accounting Training 63 63 Valuation Cross-Reference: Outline (1 of 2) A VCR establishes a set of data for a given time frame and for a product, which allows the product to be valued. A set of data includes:  Production entities: DNs, MPs, wells, and WCs  CAs: Marketing groups  Ownership entities: Unit properties, DOIs, DOI to MP/WC cross-reference  Approved contracts and approved formulas The VCR has to be approved to initiate the execution of the valuation process. Copyright © 2020 Deloitte Development LLC. All rights reserved. Production and Revenue Accounting Training 64 64 Valuation Cross-Reference: Outline (2 of 2) The VCR integration includes different aspects as shared below: Production Contractual Formulas VCR Allocation Contracts Ownership Copyright © 2020 Deloitte Development LLC. All rights reserved. Production and Revenue Accounting Training 65 65 Create the Valuation Cross-Reference (1 of 3) Menu path: SAP Easy Access Menu > Logistics > Production and Revenue Accounting > Revenue Accounting > Valuation > Valuation Cross Reference > Create Transaction code: O3U_VCR1 Step 1: Navigate to the Create Valuation Cross Reference: Initial Screen. In the Delivery Network field, enter the DN number. Step 2: In the Contract field, enter the respective number. Screenshot Step 3: In the Company Code field, type the company code. Step 4: In the Venture and DOI fields, fill in the relevant number for the venture and the DOI. Step 5: In the Well field, enter the code for the respective well. In the WCompl, enter the number for the WC. Copyright © 2020 Deloitte Development LLC. All rights reserved. Production and Revenue Accounting Training 66 66 Create the Valuation Cross-Reference (2 of 3) Step 6: In the Major Product field, select the respective product from the drop-down list. Step 7: In the Frequency field, select the relevant time frame for the VCR from the drop-down list. This can be either Daily or Monthly. Step 8: In the Effective From field, enter the date on which the cross-reference becomes effective. Step 9: Press Enter from the keyboard or click the continue icon to navigate to the next screen. In case the VCR has to be created with a reference to an existing VCR, enter the respective details of this existent VCR in the Reference section. Screenshot Copyright © 2020 Deloitte Development LLC. All rights reserved. Production and Revenue Accounting Training 67 67 Create the Valuation Cross-Reference (3 of 3) Step 10: Navigate to the Create Valuation Cross Reference: Overview screen. In the Formula ID field, enter the respective content. Step 11: Click the icon. The following validation status will be displayed: Step 12: Once the VCR is validated, click the icon. Step 13: Click the save icon to save the VCR. The following message will be displayed: Screenshot Copyright © 2020 Deloitte Development LLC. All rights reserved. Production and Revenue Accounting Training 68 68 Execute Valuation (1 of 3) Menu path: SAP Easy Access Menu > Logistics > Production and Revenue Accounting > Revenue Accounting > Valuation > Valuation Processing > Delivery Network Workplace Transaction code: /PRA/DN_WORKPLACE_V Step 1: On the DN Workplace – Selection by Process Item screen, enter the appropriate value for the delivery network in the Delivery Network field. Step 2: In the Production/Sales Dt field, enter the appropriate date. Screenshot Step 3: In the Process Area section, select the VL checkbox. Step 4: In the Initial View by: section, select the Detail Level Process Tree radio button. Step 5: Click the list selection icon. Copyright © 2020 Deloitte Development LLC. All rights reserved. Production and Revenue Accounting Training 69 69 Execute Valuation (2 of 3) The DN Workplace – Detail Level Process Explorer screen is displayed with the list that provides the status of the delivery network. Screenshot Step 6: Select the line item and click the process icon to view a drop-down list. Step 7: Select Run Valuation from the drop-down list. Screenshot Copyright © 2020 Deloitte Development LLC. All rights reserved. Production and Revenue Accounting Training 70 70 Execute Valuation (3 of 3) Step 8: Click the refresh icon to display the status of the valuation. Screenshot Copyright © 2020 Deloitte Development LLC. All rights reserved. Production and Revenue Accounting Training 71 71 Execute the Combined Run Report (1 of 5) The combined run report is used to verify the allocation results. The combined run report displays the records that have been processed through valuation and revenue distribution. The system matches the transaction history record with associated accounting documents, which have been created in the allocation process, to generate a detailed report of the allocation activity. Menu path: SAP Easy Access Menu > Logistics > Production and Revenue Accounting > Revenue Accounting > Valuation > Valuation Processing > Delivery Network Workplace Transaction code: /PRA/DN_WORKPLACE_V Screenshot Step 1: Navigate to the DN Workplace – Selection by Process Item screen. Click the list selection icon. Copyright © 2020 Deloitte Development LLC. All rights reserved. Production and Revenue Accounting Training 72 72 Execute the Combined Run Report (2 of 5) The DN Workplace – Detail Level Process Explorer screen is displayed with the list that provides the status of the DN. Screenshot Step 2: Click the show log icon and select Valuation Reports > Combined Run from the drop- down menu. Copyright © 2020 Deloitte Development LLC. All rights reserved. Production and Revenue Accounting Training 73 73 Execute the Combined Run Report (3 of 5) The Combined Run Details screen is displayed. Step 3: Select the required line item and click the button to display the results. Screenshot Copyright © 2020 Deloitte Development LLC. All rights reserved. Production and Revenue Accounting Training 74 74 Execute the Combined Run Report (4 of 5) The summary level of Header Details, Taxes, and Deducts, such as the marketing costs, if applicable are displayed as shared in the screenshot below. Screenshot Copyright © 2020 Deloitte Development LLC. All rights reserved. Production and Revenue Accounting Training 75 75 Execute the Combined Run Report (5 of 5) The accounting details and the owner summary are displayed as shared in the screenshots below: Screenshot Note : Once the valuation document is posted, the combined run report can also be accessed using the menu path and transaction code given below. Menu path: SAP Easy Access Menu > Logistics > Production and Revenue Accounting > Revenue Accounting > Valuation > Valuation Processing > Reports > New Combined Run Report Transaction code : O3URV_COMB_NEW Copyright © 2020 Deloitte Development LLC. All rights reserved. Production and Revenue Accounting Training 76 76 Execute Formula Calculation Report (1 of 4) The formula calculation report provides a step-by-step depiction of the calculations used in valuation formula. The report displays formula and results for both sales formula and settlement diversity formula. The report also displays each reserve word separately and depicts what values were used in each reserve word’s calculation. Menu path: SAP Easy Access Menu > Logistics > Production and Revenue Accounting > Revenue Accounting > Valuation > Valuation Processing > Delivery Network Workplace Screenshot Transaction code: /PRA/DN_WORKPLACE_V Step 1: Navigate to the DN Workplace – Selection by Process Item screen. Click the list selection icon. Copyright © 2020 Deloitte Development LLC. All rights reserved. Production and Revenue Accounting Training 77 77 Execute Formula Calculation Report (2 of 4) The DN Workplace – Detail Level Process Explorer screen displays the list that provides the status of the delivery network as shared in the screenshot below: Screenshot Step 2: Click the show log icon and select Valuation Reports > Formula Calculation from the drop-down menu. Copyright © 2020 Deloitte Development LLC. All rights reserved. Production and Revenue Accounting Training 78 78 Execute Formula Calculation Report (3 of 4) The Formula Calculation screen is displayed. It displays the formula that is used to calculate values for the delivery network 501. Step 3: Select the line item as shared in the screenshot below and click the Execute button to display the results. Screenshot The calculation details for the line item selected is displayed as shared in the screenshot below. Screenshot Copyright © 2020 Deloitte Development LLC. All rights reserved. Production and Revenue Accounting Training 79 79 Execute Formula Calculation Report (4 of 4) Menu path: SAP Easy Access Menu > Logistics > Production and Revenue Accounting > Revenue Accounting > Valuation > Valuation Processing > Reports > Formula Calculation Transaction code : /PRA/VL_FRML_CALC Note: Once the valuation document is posted, the formula calculation report can be accessed using the menu path and transaction code given below. Copyright © 2020 Deloitte Development LLC. All rights reserved. Production and Revenue Accounting Training 80 80 Post Valuation (1 of 5) The post valuation functionality posts the documents in the system and generates an accounting document. Once the combined run report is validated and found to be correct, the document can be posted. Menu path: SAP Easy Access Menu > Logistics > Production and Revenue Accounting > Revenue Accounting > Valuation > Valuation Processing > Delivery Network Workplace Transaction code: /PRA/DN_WORKPLACE_V Step 1: Navigate to the DN Workplace – Selection by Process Item screen. Click the list selection icon. Screenshot Copyright © 2020 Deloitte Development LLC. All rights reserved. Production and Revenue Accounting Training 81 81 Post Valuation (2 of 5) The DN Workplace – Detail Level Process Explorer screen is displayed. It displays the list that provides the status of the DN. Screenshot Step 2: Select the line item and click the execute process icon. Then, select Valuation Reports > Post VL Document from the drop-down list. Step 3: The DN Process Launch Confirmation window is displayed. Click the Yes button to confirm the posting process. Copyright © 2020 Deloitte Development LLC. All rights reserved. Production and Revenue Accounting Training 82 82 Post Valuation (3 of 5) Step 4: Click the refresh icon to display the status of the document. Screenshot Step 5: Ensure that the posting status is successful. Screenshot Copyright © 2020 Deloitte Development LLC. All rights reserved. Production and Revenue Accounting Training 83 83 Post Valuation (4 of 5) Step 6: Click the Detail tab. Screenshot Step 7: Select Process Actions > Show VL Document from the drop-down list. Copyright © 2020 Deloitte Development LLC. All rights reserved. Production and Revenue Accounting Training 84 84 Post Valuation (5 of 5) The VL Document Work List – Document Header screen is displayed. The document number that has been posted is displayed in the Doc. column. Screenshot The New RD column represents whether the process is executed using the legacy functionalities or roadmap functionality. Copyright © 2020 Deloitte Development LLC. All rights reserved. Production and Revenue Accounting Training 85 85 System Valued Data using Settlement Diversity Function (1 of 2) The settlement diversity functionality is used to handle owner-level transactions that require special accounting actions. The settlement diversity of the owner transactions refers to the transactions in which a non-working interest owner is to be valued and paid on a different basis than that upon which the volumes were sold. As mentioned earlier, the system valued data method retrieves data from production and CA processes and values the volumes. The following are the prerequisites for executing the valuation process using the system valued data: 1 2 3 Check the Check the Pricing Check the Valuation Run: Condition: Contractual Check if the valuation run Check if the pricing condition Allocation Results: has been selected in the has been maintained for the Check the correctness of the CA characteristics for the DN contract. results for the DN and period for dated. which the valuation has to be Copyright © 2020 Deloitte Development LLC. All rights reserved. executed. Production and Revenue Accounting Training 86 86 System Valued Data using Settlement Diversity Function (2 of 2) The key steps involved in the execution of system valued data using the settlement diversity function are: 1. Check the valuation run in the DN. 2. Display the production allocation. 3. Check the base DOI and DOI owners. 4. Create two oil sales contracts – one for regular oil sales and the other to maintain a different price other than the actual price. 5. Maintain pricing conditions for both the contracts. 6. Display CAs. 7. Display the valuation formula for regular price calculation and special price used for settlement diversity. 8. Maintain the settlement diversity override formula. 9. Maintain the VCR. 10.Execute the valuation run. Note: Only the key steps and the steps specific to the settlement diversity 11.Display the formula calculation report. are explained here. Other cross-references and master data are assumed to have been set up as per the previous courses. 12.Display the combined run report. Copyright © 2020 Deloitte Development LLC. All rights reserved. Production and Revenue Accounting Training 87 87 Delivery Network Check the valuation run in the DN: Transaction code: O3U_DND3 Ensure that the Run Valuation checkbox is selected under the Valuation tab of the Browse/Display Delivery Network Dated: Overview screen. Screenshot Copyright © 2020 Deloitte Development LLC. All rights reserved. Production and Revenue Accounting Training 88 88 Production Allocation Display the production allocation: Transaction code: /PRA/DN_WORKPLACE_P Screenshot Screenshot Copyright © 2020 Deloitte Development LLC. All rights reserved.