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Author's profile photo Paulo Vitoriano

Results Analysis – Completed Contract Method (CCM)

     Results analysis (RA) was developed for companies with long-term projects/orders. Normally projects/orders are regarded as long-term if it takes more than one year to complete.  For controlling requirements or for balance sheet purposes (refer to accounting principles), such objects need to be valuated at regular intervals (normally monthly).  With large quantities of objects, for mid-year statements, or for the requirements of Controlling, however, results analysis for objects with shorter life cycles may be required.

     For long-term projects the actual postings recorded in FI may not necessarily reflect the current valuation and progress of the project.  If revenue is billed in advance of actual job progress, the profit can be overstated for a period.  Conversely, if progress has been recorded for a project in advance of billing, the profit can be understated for the period.  The purpose behind RA is to analyze the project and calculate revenues and costs. Any differences between calculated results and the postings previously reported in FI can be posted automatically.

     Result Analysis can generate FI-GL postings for the object (ex.: project) only when this object is settled.  Therefore the condition to generate FI postings for the object is the object settlement.  System also updates CO/PS with a special value types available in the CO/PS info system that has no precondition (such as settlement) in order to be calculated.


      The RA data is stored in the system by period; therefore it is not possible to have RA postings more than once in the same month.  The RA simulation can be done at any time, but only saved data is the basis for respective postings.

     The Result Analysis is performed at the object (ex.: billing WBS-element) level, and not at the customer level.  This is also reflected by the fact that respective FI postings are not generated at customer account level.  Therefore the multi-customer projects are valuated at totals level, disregarding the revenue flows from different customers unless this is reflected by the project structure.

There are 3 major types of projects that can be classified from the accounting (and business) perspective:

1. CAPEX (can be also CAPEX/OPEX mix)


3. Customer Projects (Services, Make to Order, or whatever that involves revenue postings)

The Completed Contract Method (CCM) is probably one of the most simple (and easy to understand for non-accounting person) methods for Result Analysis.

This method applies to Customer Projects (or Revenue based projects).

With the Completed Contract Method, the costs and revenues affecting the net income are calculated as follows:

The object does not have the status X

Costs affecting net income = 0

Revenue affecting net income = 0

and therefore

Capitalized Costs (WIP) = Cumulative Actual Costs

Revenue Surplus (Deferred Revenue) = Cumulative Actual Revenues

The object has the status X

Costs Affecting Net Income = Cumulative Actual Costs

Revenue Affecting Net Income = Cumulative Actual Revenue


Capitalized Costs (WIP) = 0

Revenue Surplus (Deferred Revenue) = 0

Other words the revenue is recognized only upon completion of the project (complete contract).

            Status X is usually the status Final Billing or Technically Completed. But it can be any other status also.  The quantity-based POC method is represented by results analysis method 09 or results analysis type E with profit indicator C.


Or in the expert view:


For the CCM method the planned data is not relevant for the RA calculation, but only object’s system status and actual postings.

Below I present the following posting example to illustrate the logic of this method:


1. January 2014: IT equipment (from stock) and Salary cost is posted to Project Expenses 70,000

2. 31/01/2014: RA calculates WIP as 70,000; Unbilled Revenue is not calculated

3. February 2014: Invoicing the customer for 90,000; no expenses for the period

4. 28/02/2014: RA calculates Deferred Revenue (Billed Revenue in Excess of Recognized Revenue) 90,000

5. March 2014: Change the project status to TECO (interpreted as Contract Completed)

6. 31/03/2014: RA posting: Clear WIP, Clear Deferred revenue.

The example of FI posting keys for Result Analysis corresponding to the above:

RA Category


P&L Account

BS Account


Work in Process
(Requirement to capitalize)

WIP Change

WIP from which Revenue can be generated


Revenue surplus
(Deferred revenue)

Deferred Revenue
Change Account

Deferred Revenue


     For simplicity purpose I will not distinguish between different WIP categories such as Requirement to Capitalize WIPR, Optional to Capitalize WIPO, Not to be capitalized WIPP.  The RA can calculate these 3 WIP categories that also can be used.

Thank you for reading!

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      Author's profile photo arturo senosain
      arturo senosain

      Thanx for share!

      Author's profile photo Franco Novello
      Franco Novello

      Hi it is a great document on this topic.

      but i think there is last accounting entry is missing regarding capilization.

      could you explain about it.

      Thanks in advance


      Author's profile photo Paulo Vitoriano
      Paulo Vitoriano
      Blog Post Author

      Hi Franco,

      In OKG5 you have 5 most right columns to distribute between Reqired/Optional/Cannot be capitalised.

      Next in OKG8 you can use different GL accounts for respective RA categories (that are system predefined).  Note that WIP, Reserves, Cost of Sales all have the split into these 3 sub-categories.

      For Customer projects usually there is nothing to be capitalized into Asset Accounting in the own books, so I do not see it as a good example for Customer projects. I see that rather as an opportunity to be more detailed on GL account determination in this case to subdivide WIP categories.



      Author's profile photo mallavarapu vijay
      mallavarapu vijay

      Hi Paulo,

      Thanks a lot for your immediat reply. I understand CCM(09) is used to recongize revenue only after Tech closing or Final billing

      Other words the revenue is recognized only upon completion of the project (complete contract).

      in the 6 step it is cleard Deferred revenue and WIP

      Actually my confusion is that as this method should recognzie the revenue after upon completion of the project i see only reverse entries in the 6th step.

      Actually my client requirement is that until closing of the project they dont want to recongize the revenue. they even reverse the customer advances at the month end. I thought method 09 could be better option for this.

      Thanks in advance


      PS: before i have used my previous project id which is saved in my PC i was not able to log out. since it is not good to use previous project id i tried with explore using my id.

      Author's profile photo Paulo Vitoriano
      Paulo Vitoriano
      Blog Post Author

      Customer advances are liability for the company and not a revenue, I see no point to reverse them actually.  It is just reflecting the fact of advance payment and it is a balance sheet item.  You can ignore them within RA calculation.

      RA method should be compliant with local GAAP and companies accounting policy.

      Author's profile photo Former Member
      Former Member

      Dear Paulo,

           I have maintained this method to customer but my new requirement is to make Non current WIP for WBS elements (sold unite) that will be sold after 3 years.

      WIP current for WBS elements (sold unite) that will be sold within the current year.

      WIP ready for sale for WBS elements (sold unite) thats ready for sale.

      How can I make this ????

      Author's profile photo Paulo Vitoriano
      Paulo Vitoriano
      Blog Post Author

      Hi Ahmed,

      I would not use article comments to ask questions, because that restricts very much the audience and therefore limits your chances to get good answers.

      Honestly, I have not understood your question, maybe you need to explain it like for dummies, since I am not familiar with terminology you used in your question.

      Thank you,


      Author's profile photo RAHUL SURI
      1. Method 9 does not post to deferred revenue when project is in REL status. As per your documents POCS RA category does the posting to deferred revenue.
      2. It does not work. Please advise any other specific configuration
      Author's profile photo Paulo Vitoriano
      Paulo Vitoriano
      Blog Post Author

      Most likely, either you have not done complete configuration, or missing steps for the month-end process.  As a starting point you need to see POCS category when running RA.

      Author's profile photo Kehkashan Anis Ahmed Jamadar
      Kehkashan Anis Ahmed Jamadar

      Thanks for sharing.