Valuation and Account determination

Valuation and Account Assignment:

This is fully integrated with FI. Material Valuation: Stock value = Stock Qty X Price

The material valuation will update the G/L accounts in Financial Accounting.

Material Valuation features:

  • It allows you to evaluate the materials
  • You can evaluate the materials differently based on sub stocks.
  • It allows you to evaluate the balance sheet.

Material Valuation control:

This valuation is controllable by

  • System settings (where valuation has to be done)
  • Material master records (As a rule for each material has to be evaluated under a material type). If this material type is evaluated or not

For every material, you are assigning a valuation class.

  • You are grouping a material type under the 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 the same valuation class.

Valuation Structure

1. Valuation Area: Valuation areas are possible at

Company code level

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.

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

3. Valuation category: If you want to evaluate the materials differently based on certain criteria you can use the valuation category.

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. Import Local Procurement.

5. Material type: Internal External Status.

6. Account category reference: Grouping of valuation classes for automatic account determination. This is attached to a material type.

7. Movement type: which material movement

8. Valuation grouping code: is used to group the valuation areas. With in the same valuation area, you can determine different G/L accounts. VGC is also called valuation modifier

9. 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

10. Account modifier: It is a finer account determination.

It is a subdivision of finer account determination. (These or subdivision of accounts) 

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

They are defined for GBB, PRD & KON only.

Note:

  • For GBB account modifier is activated by default
  • For KON & PRD – it is not activated. In case if we want it can be activated.
  • For GBB you can create new account modifiers whereas 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

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

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

  • Define Valuation Control (OMWM)
  • Group Together Valuation Areas
  • Define Valuation Classes
  • Define Account Grouping for Movement Types (OMWN)
  • 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 the 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.

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 the plant level. However, if using the 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 the 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 an 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 an 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

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

 

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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 a 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 Checkup- 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)