Hi Raja, 

I am happy to help! 

Financials are heavily dependent on the set up of your system settings and the way your organization uses financials. There will be some testing required on your end, but here are some ideas to get you started with how out-of-the-box (standard) financials work in regard to Work Item state. 

Budgeted Costs:

Regarding calculating a Project’s budgeted cost, anything in a Cancelled state will not be rolled up into the budgeted costs. In the image below, you can see I have a task in each Work Item State, but when we look at the Financial Planning, the Budgeted Cost doesn’t consider my Cancelled Task. 

Actual Costs

Regarding Actual Cost calculations, you may want to check your ‘Time Tracking’ settings to be sure they are set properly. In my system, I can only report time to an Active task, so I set my On Hold, Cancelled, and Completed, tasks to Active (so I can report time), then changed the state back respectively. 

You can see in the image below, regardless of the state of the work item, if there are actual costs incurred (by timesheets in this example), the actual costs roll up. 

Revenue

Lastly, regarding Revenue, we can see in my sample below, when I set all my Tasks to Billable, only the Cancelled item is excluded from Revenue roll ups. 

I encourage you to create some sample projects of typical scenarios you would encounter to see how this behavior plays into your processes. 

Hope this helps!

Mikayla 

Thanks a lot, Mikayla.
I have tested the same in our system and find it is the same as you have explained. This has now enlightened the knowledge on this topic. Thanks again.