Budgeting of Investment Programs

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Use
Once planning is finished, the next step is normally the budgeting process. During this process, the rolled up plan values are
corrected, if necessary, and then distributed top-down in the form of the budget.

Features
You enter and edit budget values for investment program positions from the top down. The system makes sure that no more budget
can be distributed to the lower positions than is available on the next higher position.

Increases/Reductions

It is possible to adopt the planned values of the investment program as the budget values. If needed, you can then correct these
values, either individually or across the board. There is a function provided for this purpose (choose Edit    Revaluate ).

Distribution of the Budget to Measures

You can distribute the budget from investment program end nodes to the measures assigned to them. This kind of budget distribution,
however, is only possible when the Budget dist. overall indicator is set in the program position (refer to Distributing the Budget from
the Program Position to the Measures ).

Otherwise, you have to budget the measures directly, using the appropriate budgeting transaction from either Project System (PS) or
Overhead Cost Controlling - Overhead Orders (CO-OM-OPA). When you use these non-IM transactions, the system does not update
the distributed values at the level of the program position to which the measure belongs.

Activities
Investment Program Budgeting (Top Down)

Distributing Budget to Investment Measures

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Distribution of Budget from the Program Position

to the Measures
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Use
The IM component provides a number of ways of controlling the relationship of individual measures to the investment program as
regards budgeting. The main purpose is to control how closely the budget at measure level is tied to the assignable budget at the
investment program level.
 Features
You can monitor the approved budget of an investment measure using an active availability control. This availability control prevents
the budget from being exceeded at the moment of posting. When you enter certain transactions, the system checks if there is
sufficient budget left. This budget could be the available project budget or order budget, or the available and released budget
(release). When making the availability control, the system uses tolerance limits you entered in Customizing. If you want to use the
active availability control at the investment measure level, you have to specify it in the budget profiles of the orders or WBS elements.

The system does not have an active availability control in this form for the budget of an investment program position , since the
budget is normally not as binding at this level. However, there is another system function that approximates the availability control.
You can set the Budget dist. overall indicator in the master data of the investment program position. Then the investment measures
assigned to this program position can receive their budget only through a direct distribution of the program position budget to the
investment measures (top-down budgeting). It is then no longer possible to budget the measures independently. This procedure
ensures that the total of the measure budgets cannot exceed the overall budget of the program position to which they are assigned.
Basically, this corresponds to an availability control at the investment program level for the measures assigned to it.

You can also set the Budget dist. overall indicator in Customizing for Investment Management at the level of the program type. The
result is that the Budget dist. overall indicator will be proposed as a default value in all program positions belonging to this program
type that are created subsequently. However, you can still change this indicator in the program position.

Caution
When you use budget categories (refer to Budget Categories ), you have to budget the measures yourself directly. It is not possible
for the system to distribute the budget from the program positions to which the investment measures are assigned.

You can carry out an active availability control for funds allotted for orders as compared to the budget of an investment program
position. However, you have to use a WBS element as an intermediate object. The WBS element has a 1:1 relationship to the
investment program position. The WBS element carries out the budget monitoring function.

The assignment of the order to the investment program position is then indirect, by means of the WBS element. As a result of the
assignment of the orders to the WBS element, it is no longer possible to budget the orders independently. When the availability control
is active on the WBS element, the system checks all assigned values from the orders against the budget of the WBS element.
Overall Values and Annual Values

Using the Budget dist. ann. vals. (budget distribution of annual values) indicator in the program type, you can specify if budget
distribution from the investment program position applies only to the overall values of the investment measures, or also to the annual
values of the investment measures. In combination with the Budget dist. overall indicator, this indicator can have the following
effects:

• If this indicator is set, a subordinate investment measure can receive its overall budget, as well as its annual budgets, only from the
program position above it.

• If this indicator is not set, you can distribute annual budgets directly at the level of the investment measure. The overall budget can
still be distributed only from the program position above the investment measure.

You can set a default value in the program type for both the Budget. dist. overall and Budget dist. ann. vals. indicators.

Separate Budgeting of the Individual Measures

If you do not set the Budget dist. overall indicator, you can budget investment measures separately. This method can be useful
when you want a periodic check of the total of the investment measure budgets against the budgets of the program positions using
reports, but it is not possible or desired to specify the exact measures on which the costs will come due from this approved budget.
When you use budget categories, this is the only method you can use (refer to Budget Categories ).

Caution
When you use separate budgeting of investment measures, an update of distributed values at program level is not possible.
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Blanket Asset Budgets
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Use
For capital investments that do not have an asset under construction, there is often the need to capitalize acquisitions directly in asset
accounting, while still managing plan values, budgets, actual values and commitments for cost accounting, in order to carry out target/
actual comparisons. The plan and budget values for these direct capitalizations are normally in blanket form, since they are not
related directly to the individual acquisitions. Instead they normally take the form of an overall estimate.

Features
Therefore, the S/4HANA Asset Accounting (FI-AA) component makes it possible to post asset transactions directly to assets, while it
posts the transactions automatically as statistics to an internal order or WBS element (refer to Statistical Budget Monitoring for Direct
Capitalization ).

You can attach the blanket investment budget for a statistical order or WBS element to an investment program position, just as you do
individual investment measures. The statistical order or WBS element then receives its budget from there.

Availability Control

At the level of the WBS element or order, you have the option of an active availability control in addition to the passive availability
control using reporting. This active control enables you to prevent assignments that would cause the budget to be exceeded. The
system checks the budget when certain transactions are entered. It determines if the available project budget or the available
released budget is still sufficient. When making the availability control, the system uses tolerance limits you entered in Customizing.

In order to use the active availability control, you have to enter it in the budget profile of the statistical order or WBS element.
Investment Program with Blanket Budgets

In order to be able to manage blanket budgets as individual investment program positions, you have to make sure there is a 1:1
relationship between the investment program end nodes involved and the statistical WBS elements or orders.

Fiscal Year Change

Blanket budgets are usually valid for only one year. Therefore, you should create new statistical WBS elements or orders for your
blanket budgets, and attach them to the investment program. WBS elements and orders allow you to manage plan values and budget
values by year, but it is generally not desirable to accumulate overall plan, budget and actual values for the order or WBS element
over the course of several years.
When you have a large number of blanket budgets, it makes sense to use a project for them rather than an order. You should define
the structure of the project so that it consists only of top WBS elements. Each of these top WBS elements manages a blanket budget.
At the fiscal year change, you can then copy the old project. You can rename the keys of the WBS elements belonging to the project
using the search and replace function.

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