Fixed Percent Method
Overhead amount can be a fixed percentage of the indirect costs that must be charged on the basis of inception-to-month, month, or year-to-month. The percentage to be charged is specified in the joint operating agreement. You can also mention the minimum overhead chargeable amount that must be charged. For example, if 10% of the indirect cost charges equals 250 USD and the minimum overhead chargeable amount is 400 USD, then you charge 400 USD as the overhead amount.
In this method, general ledger transaction of specific account or range of accounts are retrieved from the general ledger table (F0911), and the fixed percentage specified on the method is applied on the accumulated amount. If you want to use a single account, then the account must be specified in the method. If you want to use group of accounts then the account group must be created using the Account Group program (P09J53), and the account group name must be specified in the method.
Calculating Overhead on Month Basis
If the calculation is based on the month basis, the general ledger transaction for the calculating month is retrieved based on the general ledger date, and it is summed up. Then, the percentage specified on the method is applied. The system verifies the currency for the minimum overhead chargeable amount currency. If the currency is different from the joint venture currency, the system converts the minimum overhead chargeable amount to the joint venture currency, and then consider overhead amounts, whichever is greater: either the calculated overhead amount or the minimum overhead chargeable amount.
Calculating Overhead on Year-to-Month Basis
If the calculation is based on year-to-month, the general ledger transaction from the beginning of the year, method effective from date, or inception date whichever is greater than the beginning of the year until the calculation month specified in the processing options in the Overhead Calculation program (R09J408) is retrieved based on the general ledger date and it is summed up. Then, the percentage specified on the method is applied. The system checks against the overhead that has previously been applied for this method for the business unit and then applies the difference as the overhead for the calculation month. The system verifies the currency for the minimum overhead chargeable amount currency. If the currency is different from the joint venture currency, the system converts the minimum overhead chargeable amount to the joint venture currency, and then consider overhead amounts, whichever is greater: either the calculated overhead amount or the minimum overhead chargeable amount.
Calculating Overhead on Inception-to-Month Basis
If the calculation is based on inception-to-month, the general ledger transaction from the inception date or method effective date whichever is greater of a joint venture or business unit, until the calculation month specified in the processing options in the Overhead Calculation program (R09J408) is retrieved based on the general ledger date and it is summed up. Then the percentage specified on the method is applied. The system checks against the overhead that has previously been applied for this method for the business unit and then applies the difference as the overhead for the calculation month. The system verifies the currency for the minimum overhead chargeable amount currency. If the currency is different from the joint venture currency, the system converts the minimum overhead chargeable amount to the joint venture currency, and then consider overhead amounts, whichever is greater: either the calculated overhead amount or the minimum overhead chargeable amount.
Consider the following example for a joint venture:
In the above example, the Basis to calculate the overhead = Month, and Fixed Percent = 10%.
The sum of the accumulated transactions for the calculation month = 5000 USD
In this case, the overhead amount will be10% of 5000 = 500 USD
