Hi,
We managed to get this resolved with SAP's help. It turns out that if a BEX Query contains even a single pair of Key figures with identical descriptions, the Add Advanced Calculation (AAC) will get disabled for the entire Query. It perhaps makes sense, since when defining an AAC in AO, we only see the descriptions of the Keyfigures and not the technical names.
We verified this by creating a copy of a BEx Query (where AAC was disabled) and renamed a column so that all columns had distinct descriptions. Thereafter, we found that the AAC was enabled for the new Query.
SAP inform me that they will include this prerequisite for AAC in future documentation.
I will close this discussion. Hope this solution helps other seeing the same problem.
Cheers
Zubin