Intercompany Trade Agreement (tcitr1600m000)

	Intercompany Trade Agreement (tcitr1600m000) Use this session to view and maintain intercompany trade agreements. To define an intercompany trade agreement: Specify a code and a description. The format of the code is free. Select the intercompany trade scenario to which the trade agreement applies. Select a currency origin. Click New in the Transfer Pricing Rules tab and select one or more pricing origins. The available price origins depend on the selected intercompany trade scenario. Note To add a text about a trade agreement, select the trade agreement and click Text in the toolbar. This prompts you to add an agreement text or a trade order text. The agreement text is a general text about the trade agreement, which you can view if you click Text in the toolbar. The trade order text is also displayed on the intercompany trade order related to the selected intercompany trade agreement. For intercompany trade scenario Subcontracting Depot Repair, in addition to the price origins you must define one or more of these time and material subscenarios: Internal Material Delivery Labor/ Expenses Other Related topics Intercompany trade setup - overview Intercompany trade - introduction Intercompany Trade Agreement An attribute that includes the intercompany trade details for an intercompany trade scenario. An intercompany trade agreement is linked to an intercompany trade relationship, together with the intercompany trade scenario. For the applicable intercompany trade scenario and trade relationship, an intercompany trade agreement: Determines whether internal invoicing is used. Determines whether intercompany trade orders must be approved before they can be processed. Includes the transfer pricing rules that determine the amounts of the intercompany trade transactions. Determines the amounts of the internal invoices, if internal invoicing is specified. Example Sales office S1 and warehouse W1 are part of organization A, but are located in different countries. To fulfill a sales order to an external customer, S1 instructs W1 to deliver the goods to the customer. W1 sends an internal invoice to S1 to cover the costs for the goods and the delivery. The amount of the internal invoice is based on the sales order price. Scenario The intercompany trade scenario to which the trade agreement applies. Internal Invoice If this check box is selected, internal invoicing is applicable to intercompany trade transactions. Adopt Selling Cost Structure If this check box is selected, the cost structure of the selling entity is adopted by the buying entity. This is used for various types of cost and profit margin analyses. Note This check box is: Selected and unavailable for scenario WIP Transfer Cleared and unavailable for scenarios Freight and Subcontracting Depot Repair. For the other scenarios, the setting of this check box is defaulted from the Adopt Selling Cost Structure in the Intercompany Trade Parameters (tcitr0100m000) session. The setting of this check box is defaulted to the Adopt Selling Cost Structure check box of the intercompany trade order sessions. Related topics Adopt selling cost structure Cost Component Scheme in Manufacturing COGS Cost Component The cost component to which the intercompany trade COGS ( cost of goods sold) is charged. Note This field is enabled only if the Adopt Selling Cost Structure checkbox is cleared. You can only specify a cost component for which the cost type is material. This field is disabled if the Scenario field is set to Freight, Subcontracting Depot Repair, Labor, Expenses or WIP Transfer. Description The description or name of the code. Margin Cost Component The cost component on which to book the intercompany trade margin of the selling entity. Note This field is disabled if: The Adopt Selling Cost Structure check box is cleared. The Adopt Selling Cost Structure check box is selected, and the Scenario is WIP Transfer. This field is enabled and mandatory only if: The Adopt Selling Cost Structure check box is selected or, The COGS Cost Component field is specified. If the Adopt Selling Cost Structure check box is selected, this field is mandatory for these intercompany trade scenarios: External Material Delivery Sales External Material Delivery Purchase External Material Direct Delivery Internal Material Delivery Project (PCS) Delivery The value of this field is defaulted to the Margin Cost Component field of the intercompany trade order sessions. Related topics Adopt selling cost structure Specifying a margin cost component Cost Component Scheme in Manufacturing Description The description or name of the code. Currency Origin The origin of the currency of the internal invoice or intercompany settlement transaction. Allowed values Intercompany Currency Origin Currency A generally accepted medium of exchange such as coins, treasury notes, and banknotes. The following currency types are available in LN: Home currency, which is used internally by companies to calculate costs, record budgets, and register tax amounts Transaction currency, which is used in transactions with business partners, such as orders and invoices Agreement Text A general text about the current intercompany trade agreement. Trade Order Text A text about the current intercompany trade agreement. This text is also displayed on the intercompany trade order related to the current intercompany trade agreement. Intercompany Margin Billable in Project If this check box is selected, the intercompany margin is added to the project costs of the project to which the current intercompany trade agreement applies. The intercompany margin is the difference between the intercompany transfer price and the actual costs, such as the valuation price in the issuing warehouse. This implies that in case of a cost plus contract, this margin is billable to the customer. This parameter is used for intercompany trade within a project using project cost pegs. For example, in a project pegged warehouse transfer within a logistic company with an internal invoice. This value is defaulted from the Intercompany Margin Billable in Project check box in the Intercompany Trade Parameters (tcitr0100m000) session. Approve (Selling) If this check box is selected, the selling part of the intercompany trade orders based on the current intercompany trade agreement is approved automatically when the intercompany trade order is created. This value is defaulted from the Approve (Selling) check box in the Intercompany Trade Parameters (tcitr0100m000) session. If this check box is cleared, the selling part of the intercompany trade order is approved using the Seller Approve Intercompany Trade Orders (tcitr3200m000) session. Approve (Buying) If this check box is selected, the buying part of the intercompany trade orders based on the current intercompany trade agreement is approved automatically when the intercompany trade order is created. This value is defaulted from the Approve (Buying) check box in the Intercompany Trade Parameters (tcitr0100m000) session. If this check box is cleared, the buying part of the intercompany trade order is approved using the Buyer Approve Intercompany Trade Orders (tcitr3200m100) session. Release to Invoicing If this check box is selected, and an internal invoice is required, transaction lines based on the current intercompany trade agreement are automatically released to Invoicing when the transaction lines are created. This value is defaulted from the Release to Invoicing check box in the Intercompany Trade Parameters (tcitr0100m000) session. If this check box is cleared, transaction lines are released using the Release to Invoicing (tcitr3210m000) session. Post Transactions (without Invoice) If this check box is selected, and no internal invoice is required, transaction lines based on the current intercompany trade agreement are posted to Financials automatically after the transaction lines are created. This value is defaulted from the Post Transactions (without Invoice) check box in the Intercompany Trade Parameters (tcitr0100m000) session. An internal invoice is not required for an intercompany trade agreement if the Internal Invoice check box is cleared. If this check box is cleared, transaction lines without invoicing are posted to Financials using the Post Transactions (tcitr3210m100) session. Submit for Approval If this check box is selected, intercompany trade orders based on the current intercompany trade agreement are submitted to Workflow for approval. If this check box is cleared, the intercompany trade orders must be manually submitted. This setting is defaulted from the Submit for Approval check box in the Intercompany Trade Parameters (tcitr0100m000) session. This check box is available if approval is applicable for the current intercompany trade agreement and if Workflow is implemented for intercompany trade orders. For more information, refer to Workflow Management System. 1 Use the search path fields to set the priority for retrieving the labor rate that is used to determine the Commercial Price in intercompany trade scenario Labor. Labor rates can be retrieved from an employee, an employee's department, or an employee's trade group. The value specified in level 1 is where the application looks first to retrieve the labor rate. If not found, the application looks in level 2 and if not found there, in level 3. Not Applicable means that the level is not searched. The priorities specified in these fields are defaulted from the 1, 2, and 3 fields in the Intercompany Trade Parameters (tcitr0100m000) session. Related topics Intercompany trade scenario Labor