Material Valuations

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Material Valuations

  1. 1. MATERIAL VALUATIONS IN SAP
  2. 2. Stock value = stock quantity x material price The stock value increases in goods receipt, decreases in goods issue
  3. 3. Valuation area <ul><li>Valuation area is the organizational level in which the material is valuated </li></ul><ul><li>SAP recommends valuation area at plant level </li></ul><ul><li>Generally valuation area is already assigned to plant in customizing as default </li></ul>
  4. 4. Valuation area <ul><li>Valuation area in plant level is mandatory for production planning and or product cost accounting </li></ul><ul><li>Once decided the valuation level in customizing it is difficult to revise </li></ul>
  5. 5. Valuation class <ul><li>Valuation class is used to determine which stock account need to be updated during goods movement </li></ul><ul><li>A valuation class is assigned to a material type in customizing </li></ul><ul><li>Valuation class can also be assigned to several material types </li></ul>
  6. 6. Valuation class <ul><li>Valuation class enables to manage the stock of several material in a stock account </li></ul><ul><li>Valuation class is a mediator to access the General ledger account </li></ul>
  7. 7. Standard price <ul><li>Stanard price is a constant price of material. </li></ul><ul><li>Will not update the price in material master records, after calculation of each and every invoice. </li></ul><ul><li>The difference in standard price and actual invoice price will be posted to price differences account </li></ul>
  8. 8. Standard price <ul><li>Even if standard price selected, system calculates moving average price for analysis </li></ul><ul><li>Material type determines which valuation procedure is selected </li></ul><ul><li>We can analyze the price difference account and make necessary changes in standard price based on merit and requirement </li></ul>
  9. 9. Moving average price <ul><li>The system calculates price after every movement of the material </li></ul><ul><li>Updates value in the master records </li></ul><ul><li>The difference of value if any after procurement, the same is directly posted to the stock account </li></ul><ul><li>This process will amend the existing price </li></ul>

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