Regional Value Content Method

This page is accessed via Master Data > Power Data > Trade Agreements > Regional Value Content Method.

Regional value content rules require that a product includes a certain percentage of originating content to take advantage of a trade agreement. The origin of the good’s components and the location where the goods are produced can affect the percentage of originating content. There are a variety of different regional value content methods used to determine the percentage of originating content.

When calculating regional value content for a multi-level bill of material (BOM), originating costs take into account the values at the intermediate sub-assemblies level along with the values at the bottom most level of leaf components. Non-originating costs consider only the values at the level of leaf components.

Note: When qualifying an item, the system goes through the following steps to obtain the required values to calculate the regional value content:
1. Considers the formula IDs against the reference number qualifiers "RVC METHOD1-EXTENDED VALUE FORMULA" and "RVC METHOD1-COMPONENT EXTENDED VALUE FORMULA" in a trade agreement.
2. Calculates the extended costs of the finished good and the components using the formulas of step 1.
3. Calculates the added value of each component and the finished good.
4. Calculates the value of originating material by considering the value of all the originating components in the multi-level BOM and saves it against the value qualifier "VALUE OF ORIGINATING MATERIAL".
5. Calculates the value of non-originating material by considering the value of the non-originating leaf components in the multi-level BOM and saves it against the value qualifier "VALUE OF NON-ORIGINATING MATERIAL".
6. Calculates the regional value content values from the formulas mentioned in the trade agreement.

Adding a Regional Value Content Method

1. Enter a unique identifier in the Regional Value Content Method ID field. You will use this ID when you refer to this regional value content method on other pages.
2. Enter a specific name in the Name field.
3. Enter regional value content method details in the Description field.
4. Enter a code that is externally used for the regional value content method in the External Reference Code field.
5. Enter a Rules of Origin rule type in the Rule Type ID field.
6. Select a domain in which this regional value content method will be active from the Domain Name drop-down list.
7. Click Finished.