Overheads is a month end process in Joint Venture Accounting. To understand the master data setup and other important concepts, refer back to the joint venture accounting page
Many joint venture operators apply overhead charges, some of which must be calculated, to cover the indirect costs incurred in operating ventures. After these overhead charges are determined by the SAP Joint Venture Accounting (JVA) Cost Calculations process, the SAP JVA Cutback and Billing processes assign them to the appropriate venture partners.
There are different kinds of overheads
1. Construction (MCO) and Catastrophe stepped rate rules
2.Drilling OH percentage or fixed rate basis
3.Production OH percentage or fixed rate basis
4. Payroll Burden
There are many project types setup. These project types determine the behavior of overheads for WBS elements.
E.g. the JV project type 02 is for producing overhead.
The JV overhead type is setup as producing overhead.
This JV Project Type is tied to the cost object.
The percentage for overhead then needs to be updated in the JOA
A posting was made for $100, so the overheads should be 5% of that i.e. $5.
The next step is to run Overheads. The transaction code is GJ95
1. Company Codes– Enter the company code for which you want to run overheads.
2.Joint Operating Agreement– Enter the JOA(s) for which you want to run overheads or leave it blank if you are running it for company codes.
3- Year– The year for which you want to run Overheads.
4- Period– The period for which you want to run Overheads.
5-Update– Check this box if you want to run this in a real run.
6-Keep Batch Input– Check this box if you’re going to keep the batch input session.
The next screen will show the overhead that is being calculated
Once the output looks correct, go back and check the boxes to update and keep batch input session
Once you execute GJ95 with these checkboxes, you will see a session being created
Go to Sm35 to process the session.
and process this session in display errors only
View the document in FB03. The crucial thing to note is the billing indicator is BI as these charges need to be passed back to the partner.
When we run cutback for this JV in GJCB, we see that the $5 charge has been added to the partners.
Tcode GJ98 can be run to view overhead details.
Enter the company code JOA and period and hit execute.
Stepped-rate overhead is calculated on a sliding scale where the rate varies based on the amount.
There are different step rate rules, and each of these rules has different thresholds
The time frame determines whether the thresholds apply for the current period, YTD or ITD.
In the above screen shot, no overheads are calculated until the postings on the wbs are less 999,999.99 or under. When the postings exceed a million dollars, then 2% is calculated.
Note- that 2% is only calculated on the amount over the threshold. E.g., if the postings are 1.5 million, then 2% isn’t calculated on 1.5 million but rather, it is calculated on the amount over the threshold of 1 million, i.e., 500,000.
Stepped rates are applicable for construction, catastrophe, exploration, and drilling.
Enter the stepped rate rule in the JOA.
Enter the wbs elements for which this stepped rate is applicable.
The wbs master should have the right JV object type that corresponds to this stepped rate type. E.g., the stepped rate type for this wbs element is for construction, i.e. type 6.
Below is a posting of 1.5 million dollars.
Run tcode GJ95 to calculate overheads.
The overheads that are calculated
The overheads that are calculated are 10,002.10.
If 2% were applied to the entire amount, the overheads would have been 30002.1
But the 2% is applied to the amount over the threshold, so it is 1,500,105-1,000,000 = 500105
Once the amount looks right, check the boxes to run overheads in a real run.
Payroll Burden is calculated on a specific set of accounts. The Payroll burden sets are created, and we assign certain G/L accounts on which we want to calculate Payroll Burden.
Step1- Create the set in GS01 and assign the accounts.
Payroll burden will only be calculated for the above accounts
The payroll set needs to be assigned to the JOA, and a percentage needs to be assigned to the JOA.
The posting below is to one of the accounts specified in the Payroll set.
The posting is for $100 and the burden percentage is 7, so a 7$ overhead needs to be calculated.
To run Overheads, run the tcode GJ96
Enter the JOA, period and year for which you want to run overheads.
SAP calculated the 7% that was assigned to the JOA
Once everything looks good, check the boxes for update and keep batch input session and execute the tcode.
And then process the batch input session created in SM35.
Check the posting in FB03 and ensure that is posted the 7$ with a BI indicator.
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