Valuation and Account Assignment In SAP MM

Valuation and Account determination

Valuation and Account Assignment: This is fully integrated with FI.

Material Valuation: Stock value = Stock Qty X Price

Material valuation will updates the G/L accounts in Financial Accounting.

Material Valuation features:

1. It allows you to revaluate the materials

2. You can evaluate the materials differently based on sub stocks.

3. It allows you to evaluate the balance sheet.

Material Valuation control:

This valuation is controllable by

1. System settings (where valuation has to be done)

2. Material master records (As a rule for each material has to be evaluated under a material type. If this material type is valuated or not

For every material you are you are assigning valuation class.

- You are grouping a material type under valuation class.

- All materials of a material type can have a one material valuation class.

- Under a material type you can have different valuation class for different materials

- Materials under different material types can have same valuation class.

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Valuation Structure

1. Valuation Area:

a. Valuation areas are possible at

i. Company code level

ii. Plant level

Note: SAP Recommends Valuation at Plant level

2. Valuation class: Grouping of similar properties of materials for the purpose of automatic accounts determination.

a. If you don’t give valuation class to material it will be posted to a consumption account

3. Valuation category:

a. If you want to valuate the materials differently based on certain criterion you can use the valuation category.

b. For example based on origin, procurement, based on status (new, rework, repaired material). You can maintain tender wise also

4. Valuation type: It is the characteristics of the valuation category

    Valuation Category                                                           Valuation type

Origin                                                                                            Import

Local

Procurement                                                                                Internal

External

Status                                                                                             New

Reworked

Repaired

5. Material type

6. Account category reference:

7. Grouping of valuation classes for automatic account determination. This is attached to a material type.

8. Movement type: which material movement

9. Valuation grouping code: is used to group the valuation areas.

a. With in the same valuation area you can determine different G/L accounts.

b. VGC is also called valuation modifier

10. Transaction/Event Key:

-It is an internal processing Key.

-It is used for the purpose of automatic account determination

  Examples:

- Inventory posting                                                    BSX

- Offsetting entry for inventory posting                GBB

- Cost (price) differences                                          PRD

- GR/IR clearing accounts                                       WRX

- Consignment liabilities                                          KON

11. Account modifier:

- It is a finer account determination.

- It is a sub division of finer account determination. (These or sub division of accounts)

- Account modifiers are pre-defined in the system for GBB, PRD & KON.

- They are defined for GBB, PRD & KON only.

Note:

1) For GBB account modifier is activated by default

2) For KON & PRD – it is not activated. In case if we want it can be activated.

3) For GBB you can create new account modifiers where as for KON and PRD you can’t create the same

Ex: for account modifier for GBB:

AUF: GR with production orders with account assignment

BSA: Internal entry for stock balance

INV: Expenses or revenues from the inventory differences

Customization:

1. SPRO -> Material Management -> Valuation and Account Assignment -> Define Price Control for Material Types

2. SPRO -> Material Management -> Valuation and Account Assignment -> Account Determination -> Account Determination Without Wizard

a. Define Valuation Control (OMWM)

b. Group Together Valuation Areas

c. Define Valuation Classes

d. Define Account Grouping for Movement Types (OMWN)

e. Configure Automatic Postings

Define Valuation Control (OMWM)

• Choosing the valuation level is one of the first steps we will perform while customizing the system.

• If using the PP Production module, the valuation area must be set at the plant level.

• For account determination, you can group together valuation areas by activating the valuation grouping code. This makes the configuration of automatic postings much easier.

Group Together Valuation Areas

- Valuation areas are grouped together with the objective of simplifying management of the standard accounts table by minimizing the number of entries.

- Along with other factors, the valuation grouping code determines the G/L Accounts, to which a goods movement is posted (Automatic Account Determination).

- The valuation grouping code makes it easier to set the automatic account determination.

- Within the chart of accounts, we assigned the same valuation grouping code to the valuation areas.

- Since we want to assign to the same G/L account, we assigned the same valuation grouping code to the valuation areas.

Valuation Area    Company Code      Chart Of Accounts        Valuation Group Code

TPL1                            TMOT                             INT                                        0001

Grouping of Valuation Areas

Grouping-Valuation

Define Valuation Classes

- The Valuation class is a group of material with the same G/L account.

- When you create a material master record, you must assign the material to a valuation class. The valuation class is assigned to a material at plant level. However, if using split valuation, the valuation class will be assigned at the valuation type level.

- The choices for valuation class are dependent on the material type. In general, several valuation classes can be allowed for one material type. Also, the same valuation class could be allowed for different material types.

- The link between the valuation class and the material type is the account category reference. The account category reference is assigned to a material type.

- The G/L account determined for a material is carried out according to the settings for its valuation class.

Step1:

• Account Category Reference

Account Category Reference (4 Char): Group of valuation classes that’s the system uses to check whether the valuation class you have entered is allowed when you maintain accounting data in a material master record.

Step2:

• Valuation Class

Here The Valuation Class is defined and a Account Category Reference is attached to a Valuation Class.

Example: 3000 (Raw Materials) -> 0001 (Reference for Raw Materials)

Step3:

• Material Type / Account Category Reference

Here the Material Type can be assigned to a Account Category Reference.

Example: ROH (Raw Materials) -> 0001 (Reference For Raw Materials)

Account-Catagery-reference

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Define Account Grouping for Movement Types

- Movement type

- Special stock indicator

- Value updating

- Quantity updating

- Movement Indicator

- Consumption posting

- Posting string for values

- Counter

- Transaction/event key

- Account modification

- Check

account-grouping

The following diagram shows the relation between Chart of account, Transaction, account modifiers, accounts posting keys.

Account Determination Procedure Overview

account-determination

TRANSACTION / EVENT KEYS IN SAP

AUM Stock transfers are there between plants and from one movement type to another with split valuation. The difference between the price at the delivering plant and the receiving point is booked at the later.

Account to be opened:

Loss – Stock Transfer

Gain – Stock Transfer A/c

BO1 Check up Subsequent settlement of Provisions (e.g.: volume based rebate)

BO2 Check up. Subsequent settlement of revenues -conditions in inv. Verification

BO3 Check up Provision Differences

BSV The Company sends materials for subcontract work, this transaction is considered. Accounts to be opened

Materials Consumed/Trading Goods w/o cost element -- for ROH

Inventory Change – Cost of Goods sold w/o Cost element -- for FERT s

BSX All stock postings to Stock Accounts due to Goods receipts & goods issues in Inventory Management. B/s Inventory A/c s 11101 to 11111

DIF Small Differences that may arise during invoice verification in the invoice amount not exceeding tolerance.

Accounts to be opened:

Loss—Inventory Differences A/c

Gain---Inventory Differences A/c

FRx These are used for posting delivery costs when goods and invoices are received for purchase orders

FR1 Freight Clearing                                                   69002 Separate A/c s is required

FR2 Provisions for freight Charges                          69002

FR3 Customs Clearing                                                69002

FR4 Provisions for Customs Clearing

FRL Services are performed for the company externally.

Account to be opened:

Purchased Services A/c

FRN  Services are performed for the company externally and hence delivery costs

Account to be opened:

External Procurement Costs A/c

GBB  Offsetting Entries for Inventory Postings

AUA For Order settlement

68005 (Factory output for Production)

AUF  For GRs for orders (w/o account assignment)

68005

BSA  For initial entry of stock balances

11199

 INV  Expenditure/Income from Inventory differences

68004 – Raw Material Consumption A/c

  VAX  For goods issues for sales orders with no assignment object

The account will not be cost element

68002 –Raw Material Indigenous

72001 – Stores & Spares

VAY  For goods issues for sales orders with assignment object

The account is a cost element

VBO  Consumption from stock provided to vendor

68002 –Raw Material Indigenous

VBR  For internal goods issues (e.g.: to a cost center)

68005—Factory output for Production

72001 – Stores & Spares

VKA  For consumption in Sales Order without SD (Mvt. Type 231)

68005—Factory output for Production

VNG  For Scrapping & destruction

68004 – Raw Material Consumption – Others

VQY  For sampling with account assignment

ZOB For goods issues with no Purchase order reference (Mvt 501)

ZOF  For goods issues with no production order reference (Mvt 521)

KBS  Account - assigned Purchase Order ie. account assignment taken from PO

Account need not be assigned in OBYC

KDR  Exchange rate rounding differences in case of foreign currency invoices

80029 -- Exchange Rate Difference - Valuation 1

KDM Exchange rate rounding differences for open items (invoice posting with a Different exch. rate than the                          GR/due to Std price difference/insufficient stock coverage)

80028 --Exchange Rate Difference - foreign currency to local

KDV  Material ledger from low levels E/R diff.

KON  Consignment payables

KTR  Offsetting entry for price differences in cost object hierarchies

68005—Factory output for Production

LKW  Accruals and deference. acct (material ledger)

PRD  Price Differences

Loss/Gain Inventory Differences (Two A/cs to be opened & assigned)

68004 – Raw Material Consumption – Others A/c is assigned

PRK  Price Differences in cost object hierarchies

Loss/Gain Inventory Differences (Two A/cs to be opened & assigned)

RKA  Inv. reductions from logistic invoice verification

UMB  Gain/loss from revaluation Check up- 68004 is found attached (Raw Material Consumption – Others A/c )

UPF Unplanned delivery costs

VST Input Tax

WGI  Goods issue inflation revaluation

WGR Goods receipt inflation revaluation

WRX  GR/IR clearing account

40051 – GR/IR Clearing A/c

WRY  GR/IR clearing acct (mat. ledger) (old)