Example of Using Effective-Dated Rate Sets in Variance Pricing

The Effective-Dated Rate Definitions topic, provides an example of using effective-dated rate sets. The example used a rate set with two active effective-dated rows as shown in this table:

Rate Set Rows	Effective Date	Source Analysis Type	Target Rate Option	Target Rate	Target Analysis Type
SET1 Row 1	January 1, 2004	TLX (incoming time report)	AMT (quantity x target rate	25.00 USD	ACT (actual cost transaction)
SET1 Row 2	January 1, 2005	TLX	AMT	50.00 USD	ACT

In the example, a source transaction row contained a quantity and unit of measure of 8 MHR, with a transaction date, accounting date, and currency effective date of June 1, 2005. The Pricing process created an actual transaction row in the amount of 400.00 USD by using the rate set named SET1 with an effective date of January 1, 2005, and multiplying 8 MHR by a target rate of 50.00 USD.

Now assume that on July 1, 2005 you want to retroactively apply a new rate of 100.00 USD to existing actual transaction rows that were created after January 1, 2005. The target rate that was previously applied to these actual transactions was 50.00 USD, thus the Variance Pricing process needs to apply the net difference of 50.00 USD. You enter the new rate in a pending status on the Rate Variance History page for the SET1 rate set. When you run the Variance Pricing process, the system inactivates the existing active rate and changes the new rate to an active status, as shown in this table:

Rate Set	Effective Date	Variance Pricing Row Status	Target Rate Option	Target Rate
SET1	January 1, 2005	Inactive	AMT	50.00 USD
SET1	January 1, 2005	Active	AMT	100.00 USD

To run Variance Pricing on the transaction row that was originally priced at a rate of 50.00 USD, select the SET1 rate set with an effective date of January 1, 2005 on the Variance Pricing run control page. The process creates a new row against the original transaction based on the net difference of 50.00 USD. In this example, you select an accounting date of July 1, 2005 on the run control page that the system applies to the new transaction row, as shown in this table:

Accounting Date	Project	Activity	Quantity	Rate	Analysis Type	Amount
July 1, 2005	PROJ1	ACT1	8 MHR	50.00 USD	TLX	400.00 USD

The Variance Pricing process ignores transactions that have an accounting date (or specified date type) that are outside of the effective date range of the selected rate set.

Now assume that later you add a new SET1 rate set row with an effective date of July 1, 2006. You discover that you need to calculate pricing variances again on the output rows from the original transaction dated June 1, 2005. Because the system matches the specified date type of the priced costing row to the effective date range of the rate set to determine eligible transactions, you select the rate set effective date of January 1, 2005 for this Variance Pricing run control.

For additional information relating to government contracts and variance pricing, see PeopleSoft Contracts for Government Contracting: Understanding Variance Pricing