Material valuation by Company and Plant

The valuation area is the organizational level at which the material is valuated. Plant and company code are two possible valuation areas in the SAP system. When the stock is valuated at the plant level, you can valuate a material in different plants at different prices. When you valuate stock at company code level, the valuation price of a material is the same in all of a company’s plants (that is, in a company code). Valuation at the plant level is mandatory if you want to use either of the Production Planning or Product Cost Accounting components. Maintaining material valuation at plant level allows for different valuation at different plants

The valuation of the material can be done under one of the following areas.

  • Company Level
  • Plant Level.

 

When the Company code is set as the Valuation area, the valuation price of the material is same in all plants of the company code.

Material valuation depends on upon the price control procedure set in the material master as below

Moving Average price (V) – The moving average price procedure is used for externally procured material. The Goods Receipt from Purchase Order is posted at Purchase Order price (Quantity X Purchase Order Price). The system modifies the material price in the material master according to delivered price. The system automatically calculates the goods issue by dividing total value by total stock value (that means current price of material). Differences between purchase order price and the invoices are posted directly to the relevant stock account if there is sufficient stock coverage. If sufficient stock of material is not available, then the difference (for balance quantity which is not in stock) is posted to the “Expenses / revenue from price difference”. The data used for cost accounting / controlling purpose, therefore, contains fluctuations. The price can be changed if required, generally at the end of the period. This causes the system to reevaluate the total stock for the valuation area.

Standard Price (S) – The standard price procedure is used for in-house produced material. The system calculates all stock postings at price defined in the material master. Variances are posted to account “Expenses / revenue from price difference”. Exact values are available for cost accounting / controlling purpose. The material price can be changed if required at the end of the period. This causes the system to revaluate the total stock in the valuation area. All goods issues (such as issue to production order) are valuated at a same standard price. This allows better analysis of the cost of production orders. A receipt from Production Order is posted at the standard price.

Maintain Plant Parameters for Material Management

From the IMG Screen: Materials Management–> Consumption-Based Planning -> Plant Parameters -> Carry Out Overall Maintenance of Plant Parameters


  • Click on the Create button
  • Enter your Plant: PT_ _
  • Click on the Create button
  • Select Create again to get past information window
  • Click on the Maintain button twice

  • Under the Environment section Click on the Number ranges button
  • Then click on the Planned orders button
  • Assign no. range 01 to your plant

  1. Click Save
  2. Hit the back button
  3. Click on the Reserv./depend.reqmts button
  4. Assign no. range 01 to your plant
  5. Click Save
  6. Hit the back button
  7. Click on the Purchase requisitions button
  8. Assign no. range 01 to your plant
  9. Click Save
  10. Hit the back button
  11. Click on the MRP lists button
  12. Assign no. range 01 to your plant
  13. Click Save
  14. Hit the back button
  15. Click on the Sim. Dependent reqmts button
  16. Assign no. range 01 to your plant
  17. Click Save
  18. Hit the back button twice
  19. Click on MRP controllers button under the Master data section
  20. Click on the New Entries button
  21. Enter your Plant PT_ _

Next you will create an MRP controller (example C_ _) and input a description in the field beside your MRP controller (example Controller C_ _)

  1. Click save
  2. Click exit to return to the maintain plant parameters screen.
  3. Click on the Floats button
  4. Click on the New Entries button
  5. Enter your Plant: PT_ _ and complete the form as shown below:

  • Op.Pd: 1 (Workdays prior to order start)
  • FlBefrePr: 1 (Workdays between order start and scheduled start)
  • FlafterPr: 1 (Workdays between order due date and scheduled finish date)
  • ReleasPer: 1 (Workdays in release period)

Click Save

 

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