Relevancy Test for Valuation According To the New Principle of Averages

Purpose
When calculating average values, the SAP System uses the average bases that are stored for each employee. You can flag payroll results and average periods as relevant or irrelevant for the calculation of averages, based on particular criteria. Starting at the current period, the system performs a relevancy test for the current and previous periods. If the average period is relevant, cumulation takes place in a secondary wage type.
If you use Off-Cycle Activities in your system, you can use the new method of calculating averages to exclude certain off-cycle payroll runs from averages valuation if there is an off-cycle reason.

Prerequisites
In Customizing for Payroll you determine via Time Wage Type Valuation ® Averages New ® Create Calculation Rules for Averages the following default values:

• Number and unit of relevant average periods

Taking the current period as the starting point, the number of previous periods that the system must deem relevant and use to calculate averages. This is independent of payroll periodicity.

• Maximum number of average periods

The maximum number of periods that the system checks to determine the required number of relevant average periods.

Process Flow
The decision as to whether an average period is relevant for the calculation of averages is made in two steps:

1. Taking the current period as the starting point, the system checks if a payroll result is relevant. It does this for all payroll results that were marked as being potentially relevant.
2. The periodicity of payroll results and average periods can be different, for example, if you have weekly payroll results but use monthly average periods. Using the payroll results that were flagged as being relevant or irrelevant, the system checks if the average period is relevant. You can make the following settings in Customizing for this:

• An average period is only relevant when all the payroll results assigned to it are relevant.
• An average period is only relevant when at least one of the payroll results assigned to it are relevant.

Result
The relevancy test can have the following results:

• A period is relevant for the calculation of averages.

In this case, the average calculation bases for the period are cumulated according to the cumulation rule stored in table T51AV_B (Cumulation Rules for Average Calculation Bases).

• A period is not relevant in the calculation of averages.

In this case, the average bases are not cumulated which means that they are not included in the calculation of averages.

Example
The number of relevant average periods is two. The maximum number of average periods is four. The calculation of the averages takes place in period 8. You have monthly average periods but run payroll on a weekly basis. An average period is relevant if all the payroll results assigned to it are relevant. The current period should not be taken into consideration in the calculation of averages.

1. Checking the payroll results:

The system checks all the results of the weekly payroll run, which are assigned to the average periods 7, 6, 5 and 4 and decides if these payroll results are relevant or not.

2. Checking the average periods:

The system finally checks the average periods until it has found at least two that are relevant. For example, if a payroll result, which is assigned to the average period 6 was flagged as being irrelevant, the average period is, according to the specifications, also irrelevant.

The system checks a maximum of four previous periods, in this example the periods 7, 6, 5 and 4. If the desired number of periods is not found after the check, the calculation of averages is carried out with the least number of periods. If the system checks the maximum number of previous periods but fails to find a single relevant period, the average value is 0.