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EHP3 for SAP ERP 6.0. December 2008 English 182: Inventory Valuation for Year End Closing Business Process Documentation

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Page 1: FI-182 Inventory Valuation for Year End Closing-182_BPP_EN_ID

EHP3 for SAP ERP 6.0.

December 2008

English

182: Inventory Valuation for Year End Closing

SAP AGDietmar-Hopp-Allee 1669190 WalldorfGermany

Business Process Documentation

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Copyright

© Copyright 2008 SAP AG. All rights reserved.

No part of this publication may be reproduced or transmitted in any form or for any purpose without the express permission of SAP AG. The information contained herein may be changed without prior notice.

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SAP, R/3, mySAP, mySAP.com, xApps, xApp, SAP NetWeaver, Duet, PartnerEdge, and other SAP products and services mentioned herein as well as their respective logos are trademarks or registered trademarks of SAP AG in Germany and in several other countries all over the world. All other product and service names mentioned are the trademarks of their respective companies. Data contained in this document serves informational purposes only. National product specifications may vary.

These materials are subject to change without notice. These materials are provided by SAP AG and its affiliated companies ("SAP Group") for informational purposes only, without representation or warranty of any kind, and SAP Group shall not be liable for errors or omissions with respect to the materials. The only warranties for SAP Group products and services are those that are set forth in the express warranty statements accompanying such products and services, if any. Nothing herein should be construed as constituting an additional warranty.

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Icons

Icon Meaning

Caution

Example

Note

Recommendation

Syntax

External Process

Business Process Alternative/Decision Choice

Typographic Conventions

Type Style Description

Example text Words or characters that appear on the screen. These include field names, screen titles, pushbuttons as well as menu names, paths and options.

Cross-references to other documentation.

Example text Emphasized words or phrases in body text, titles of graphics and tables.

EXAMPLE TEXT Names of elements in the system. These include report names, program names, transaction codes, table names, and individual key words of a programming language, when surrounded by body text, for example, SELECT and INCLUDE.

Example text Screen output. This includes file and directory names and their paths, messages, source code, names of variables and parameters as well as names of installation, upgrade and database tools.

EXAMPLE TEXT Keys on the keyboard, for example, function keys (such as F2) or the ENTER key.

Example text Exact user entry. These are words or characters that you enter in the system exactly as they appear in the documentation.

<Example text> Variable user entry. Pointed brackets indicate that you replace these words and characters with appropriate entries.

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Contents

1 Purpose........................................................................................................................................ 5

2 Prerequisites................................................................................................................................ 5

2.1 Master Data........................................................................................................................... 5

2.2 Business Conditions..............................................................................................................6

2.3 Preliminary Steps.................................................................................................................. 7

2.4 Roles..................................................................................................................................... 7

3 Process Steps............................................................................................................................ 10

3.1 Stock Valuation for Raw Materials and Trading Goods.......................................................10

3.1.1 Procurement of Raw Materials and Trading Goods.....................................................10

3.1.2 Determination of Lowest Value for Raw Materials and Trading Goods, on the Basis of Market Prices.............................................................................................................................. 11

3.2 Stock Valuation of Semi finished and Finished Products – Determination of Lowest Value Using Inventory Costing.................................................................................................................13

3.2.1 Copying Inventory to Controlling Version.....................................................................14

3.2.2 Activity Price Planning - Planning Activity Based on Capacity (optional)......................15

3.2.3 Activity Price Planning - Plan Reconciliation................................................................16

3.2.4 Activity Price Planning - Change to Calculate Rates Based on Capacity (Optional)....18

3.2.5 Activity Price Planning - Plan price calculation.............................................................19

3.2.6 Inventory Costing.........................................................................................................20

3.2.7 Price Updating – Marking.............................................................................................21

3.3 Analyzing Stock Valuation for Materials Using Price Comparison for Each Material Stock Account/Material Type/Material......................................................................................................22

3.4 Stock Value Adjustment......................................................................................................24

4 Appendix.................................................................................................................................... 25

4.1 Reversal of Process Steps..................................................................................................25

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Inventory Valuation for Year End Closing

1 PurposeThis document outlines the process of inventory valuation at the end of the fiscal year. It provides end users with an example process description, which they can use as a template for their own valuation processes.

The business process procedure includes the following process steps:

Stock valuation, using lowest value principle for raw materials, packaging materials and trading goods

Additional devaluations by movement rate

Inventory costing for finished and semifinished products, in accordance with the lowest possible valuation principle

Stock value reporting in the form of a comparison analysis

Manual inventory value adjustment posting in the financial accounting component

These business process procedures can be used by all companies running an SAP ERP system that integrates the Materials Management (MM), Production Planning (PP), Financial Accounting (FI), and Controlling (CO) components.

The inventory cost estimate calculates tax-based or commercial prices for semifinished and finished products. After the inventory is cost, the costing results are transferred to the material master as tax-based and commercial prices.

Inventory valuation is carried out in accordance with local legislation (such as the German Commercial Code), including settings for the overhead structure, valuation variant, and stock valuation with devaluation on the basis of movement rate.

2 Prerequisites

2.1 Master DataYou have entered the master data required to go through the procedures steps of this scenario. Ensure that the following scenario-specific master data exists before you run this scenario:

Master data Value Selection Comment

Material master materials used for procurement and materials that are produces, for example materials with material type FERT/HALB/ROH/VERP/HAWA

no specific materials necessary, but transaction data must be available

Production master Data – BOM, Work

For all FERT and HALB, which are used

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Master data Value Selection Comment

center, routing for costing with quantity structure

Cost center * All cost centers in group 130

Activity types * All activity types All activity types used used for costing with quantity structure

Cost center group 130 Manufacturing cost center group

Activity type group YBMF_P00_AT Activity types used for manufacturing

Cost element All production-relevant cost elements in group 10_CE

2.2 Business ConditionsThe business process described in this Business Process Procedure is part of a bigger chain of integrated business processes or scenarios. Therefore you must have completed the following processes and fulfilled the following business conditions before you can start running this scenario:

Business condition Scenario

Before you can run this scenario you must have completed the following scenarios:

Procurement to stock (130)

Make-to-Stock Production – Discrete Industry (130) (for material F126)

or/and

Make-to-Stock Production – Process Industry (146) (for material F29)

or/and

Repetitive Manufacturing (149) (for material S21)

or and

Make-to-Stock – Process Industry (146)

Procurement-to-Stock (130)

Make-to-Stock Production – Discrete Industry (130) (for material F126)

Make-to-Stock Production – Process Industry (146) (for material F29)

Repetitive Manufacturing (149) (for material S21)

Make-to-Stock – Process Industry (146)

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2.3 Preliminary StepsFirst, check if purchase requisitions are available in transaction MD04. If no purchase requisitions are available, perform the following steps:

- In case of material planned by reorder point planning:

MRP does not create purchase requisitions, if the available quantity is bigger than the reorder point. In this case, reduce the stock of that material with MIGO and movement type 562.

- In case of material planned by MRP type PD (MRP):

MRP does not create purchase requisitions, if the available quantity is bigger than the current requirements. In this case, create planned independent requirements with MD61.

You need to complete the settings and configurations that are necessary for a standard cost estimate. For an example, refer to the Product Cost Planning (169) scenario.

2.4 Roles

UseTo run this scenario in the SAP Netweaver Business Client (NWBC), the following roles must already be installed. The roles in this Business Process Procedure must be assigned to the user or users running this scenario. You only need these roles if you are using the NWBC interface. You do not need these roles if you are using the standard SAP GUI.

PrerequisitesThe business roles have been assigned to the user who is running this scenario.

Business role Technical name Process step

Warehouse clerk SAP_BPR_WAREHOUSESPECIALIST-S Determination of lowest value

Warehouse clerk SAP_BPR_WAREHOUSESPECIALIST-S Analyze stock valuation

Enterprise controller SAP_BPR_Controller-K Copy inventory to CO-version

Enterprise controller SAP_BPR_Controller-K Post book depreciation

Enterprise controller SAP_BPR_Controller-K Revaluation

Enterprise controller SAP_BPR_Controller-K Activity price planning capacity (optional)

Enterprise controller SAP_BPR_Controller-K Plan reconciliation

Enterprise controller SAP_BPR_Controller-K Change rate base to capacity (optional)

Enterprise controller SAP_BPR_Controller-K Plan price calculation

Product cost controller

SAP_BPR_PRDCOST_CONTROLLER-K Costing (cost estimate)

Product cost Controller

SAP_BPR_PRDCOST_CONTROLLER-K Price update

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Business role Technical name Process step

Finance Manager SAP_BPR_FINACC-K Post stock revaluation

Process Overview Table

Process step External process reference

Business condition

Business role

Transaction code

Expected results

Stock Valuation for Raw Materials and Packaging Materials: Procurement of Raw Materials and Packaging Materials

See 130 - Procurement of Stock Material

See 130 - Procurement of Stock Material

See 130 - Procurement of Stock Material

Valuated Material movements

Stock Valuation for Raw Materials, packaging materials and trading goods: Determination of Lowest possible Value on the Basis of Market Prices

Warehouse clerk

MRN0 lowest value has been updated in the material master records

Stock Valuation of Semifinished and Finished Products: Copy Inventory Controlling Version

Enterprise Controller

KP98 Planned Values in CO version 003

Stock Valuation of Semifinished and Finished Products: Activity Price Planning - Plan Activity Based on Capacity

Enterprise Controller

Kp26 Capacity for activity type in

Version 003

Stock Valuation of Semifinished and Finished Products: Activity PricePplanning - Plan Reconciliation

Enterprise Controller

Kpsi Activity type reconciliation in Version 003

Stock Valuation of Semifinished and Finished Products: Activity Price Planning -

Enterprise Controller

Kp26 Activity type planning based on capacity in

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Change to Calculate Rates Based on Capacity (Optional)

Version 003

Stock Valuation of Semifinished and Finished Products: Activity Price Planning – Plan Price Calculation

Enterprise Controller

KSPI Calculated activity prices in Version 003

Inventory Costing Product cost controller

Ck11n Value for material as result of cost estimate

Price Update – Marking

Product cost controller

Ck24 Price update in material master

Analyzing Stock Valuation for Materials Using Price Comparison for Each Material Stock Account/Material Type/Material

Warehouse clerk

Mrn9

Stock Value Adjustment

Finance Manager

FB50, FB50L Value posted in accounting

3 Process Steps3.1 Stock Valuation for Raw Materials and Trading Goods

UseTo perform a material valuation for balance sheet purposes using the lowest value principle, physical inventory prices are required. These prices are used to calculate the value for balance sheet valuation. This scenario describes the procedures for lowest value determination on base of market price. The system determines a costing result that can differ from the costs of goods manufactured. This value is updated in the material master to determine the lowest value. The system compares the costing result with the current price in accordance with price control and the price from the previous period. The lowest value is then updated in the commercial price.

Prerequisites Materials of material type ROH, HAWA

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Stocks

Posted receipts and issues

To carry out the business processes in this scenario, the materials that should be considered must be available and assigned to the storage locations.

3.1.1 Procurement of Raw Materials and Trading Goods

UseIn a business, inventory is calculated at the end of a fiscal year. During the fiscal year, materials have been procured. The purchasing process can take place with several characteristics. For the purpose of the following handling the purchasing prices and the price-dependencies are in the focus, whatever the logistical characteristics are.

This step is not a prerequisite for inventory calculation, but provides the transaction data that is relevant for this process.

Process

Reference to Procurement of Stock Material (130) scenario

Also the physical inventory can be done, but it is even not a prerequisite for inventory calculation but normally it is one step in the year-end procedure that is done before the valuation process for the year-end started.

Process

Reference to Physical Inventory (137) scenario

3.1.2 Determination of Lowest Value for Raw Materials and Trading Goods, on the Basis of Market Prices

Use

Determining the lowest value based on market prices, the system searches for the lowest price (or alternatively the most recent price) among the various prices stored for each material.

The determination can be done on material level or based upon other selections, for example the material type used.

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Procedure

1. Access the transaction choosing one of the following navigation options:

Option 1: SAP Graphical User Interface (SAP GUI)

SAP ECC menu LogisticsMaterials ManagementValuationBalance Sheet ValuationDetermination of Lowest ValueMarket Prices

Transaction code MRN0

Option 2: SAP NetWeaver Business Client (SAP NWBC) via business role

Business role (name) Warehouse clerk < SAP_BPR_WAREHOUSESPECIALIST-S>

Business role menu Warehouse ManagementBalance Sheet ValuationDeter. Lowest Value: Market Prices

2. On the Determine Lowest Value: Market Prices screen, enter the following values:

Field name Description User action and values Comment

Company Code 1000

Key Date Period end

Plant 1000

Material Type ROH, HAWA

3. In the Price Comparison section, choose Market Price.

4. On the Overview tab page in the Select the Required Price Sources dialog box, choose the relevant comparison prices with a ranking.

Receipt Prices 2

Order Prices 1

Sched. Agmt Prices 3

Contract Prices 5

Info Record Prices 4

This ranking is an example and must be adjusted to the specific customer needs.

5. On the Receipts tab page, choose the posting date from for example, <current date> until the end of the current month for the receipt prices. Choose the strategy A Lowest Price of Receipts in Time Interval and the exchange rate comparison A Document Exchange Rate.

6. On the POs, Contracts, Sched. Agmts, and Info Records tab pages, adjust the purchase order date in the same way as the posting date on the Receipts tab page. The strategy and the exchange rate comparison are also defined in the same way as on the Receipts tab page.

7. Choose Enter on the dialog box and go back to the selection screen.

8. In the Price Comparison section, choose Comparison Price.

9. In the Select a Comparison Price dialog box, choose Lowest Val. Comparison. Below this box, specify the prices that the system will compare in order to determine the lowest value. Choose the following:

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Current Material Price

Current Standard Price

Current MAP

10. Confirm your entries and exit the dialog box by choosing Continue (Enter) (the icon with the green checkmark).

11. In the Update Material Master section, choose Database Update. Two additional pushbuttons appear on the selection screen: Change Material Prices and Update Prices.

12. To copy the lowest value to an inventory price field, choose Update Prices.

13. In the Update Prices – Select. dialog box, choose Commercial Price 1. Confirm your entry by choosing Continue (Enter).

14. Choose Execute (F8) to determine the lowest value.

The system warns you that you have not entered a material number interval. If you have large volumes of material master data, you should enter a material number interval.

The system outputs an evaluation for each material. This evaluation specifies the price that is used as the comparison price and shows whether a new price was determined for the valuation.

15. Open a second session by choosing Create a New Session or SystemCreate Session.

16. Call up transaction MM03 Display Material and enter a material number from the lowest value determination overview. Choose the Accounting 1 and Accounting 2 views and enter plant 1000.

17. Check the price according to price control and the commercial inventory price 1. Then compare the values with the lowest value determination log.

18. Exit the two transactions.

Result The lowest value has been updated in the material master records for material types ROH (raw material) and HAWA (trading).

3.2 Stock Valuation of Semi finished and Finished Products – Determination of Lowest Value Using Inventory Costing

UseBased upon the commercial prices of the material components and the adjusted prices of the activity types considering several valuation approaches, the system determines a costing result that differs from the costs of goods manufactured. This calculated value is updated in the material master in the procedure for determining the lowest value.

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Stock valuation of semifinished and finished products can only be done with production. If production is not activated this step must not to be executed.

This inventory costing might produce a value that is smaller than the released cost of goods manufactured estimate. In this case, you can carry out the stock valuation on the basis of the new calculated inventory costs.

Prerequisites Costing variant for inventory costing

Actual cost-accounting depreciation for the production cost center exists

Determination of lowest value with update in the material master records of the raw materials if the result of the valuation should be used for the local valuation for example the commercial price (see step above)

Adjusting/Planning activity prices for each cost center

The activity types for the machine hours that are used in the work centers to calculate the costs of goods manufactured can contain different depreciation cost for assets for local accounting. Costing for activity prices should include the expenses for depreciations of machines that are directly assigned to the work center.

If the expenses for depreciations included in the price cost estimate differ greatly, the prices should be calculated in accordance with local legislation in plan version 3 Plan Version Local Valuation.

In the following steps, you maintain prices for activity types in plan version 3. This process does not involve a complete price calculation with transfer of the depreciation values to plan version 3.

The process of the activity price calculation is also described in the AOP – Manufacturing Cost Center Planning (176) scenario

Reference to AOP – Manufacturing Cost Center Planning (176)scenario

The following steps are preliminary steps for reaching the activity price in consideration of the local requirements for valuation.

3.2.1 Copying Inventory to Controlling Version

UseThe current actual controlling version data are copied to the controlling version, which is used for inventory calculation. In further steps posting are to be adjusted to legal regulations.

Prerequisites The Controlling plan-version 3 (local valuation) exists and actual postings for the valuation period has been done.

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Procedure

1. Access the transaction choosing one of the following navigation options:

Option 1: SAP Graphical User Interface (SAP GUI)

SAP ECC menu AccountingControllingCost Center AccountingPlanningPlanning AidsCopyCopy Actual to Plan

Transaction code KP98

Option 2: SAP NetWeaver Business Client (SAP NWBC) via business role

Business role (name) Enterprise Controller< SAP_BPR_CONTROLLER-K>

Business role menu Overhead Cost ControllingPlanning: Cost CentersCopy Actual to Plan

2. On the “Copy Actual to Plan” Screen, enter the following data:

Field Name Description User Actions and values Comment

Controlling Area

1000

Target Cost Centers

cost centers X, Choose for example 1301

1302

Or the cost center group that is necessary for all cost centers with allocations. If there are distribution and/or assessment planned to be done, copy all cost centers that are involved in these allocation

Template Actual

Period 1-12

Fiscal Year <current year>

Target (Plan)

Version 003 Version used for inventory calculation

Period 1-12

Fiscal Year <current year>

Actual Data

All actual data

choose

Structure choose

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w/values

Processing options

Reset and overwrite

choose

Test Run Choose until error free

Detail list X

Result The planning report can be checked with transaction KSBL.

3.2.2 Activity Price Planning - Planning Activity Based on Capacity (optional)

Use

In this activity, you will plan activity based on capacity. If a business wants to calculate activity rates based on capacity this step is necessary. This also makes the change of the activity type Activity Price Planning - Change to Calculate Rates Based on Capacity (Optional) necessary. If not it is only a base for comparison.

This is an optional step.

Procedure

1. Access the transaction choosing one of the following navigation options:

Option 1: SAP Graphical User Interface (SAP GUI)

SAP ECC menu AccountingControllingCost Center AccountingPlanningActivity/Output pricesChange

Transaction code KP26

Option 2: SAP NetWeaver Business Client (SAP NWBC) via business role

Business role (name) Enterprise Controller< SAP_BPR_CONTROLLER-K>

Business role menu Overhead Cost ControllingPlanning: Cost CentersChange Activity Type/Price Planning

2. On the Change Activity Type/Price Planning - Initial Screen, make the following entries:

Field name Description User action and values Comment

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Version 3

From period 1

To period 12

Fiscal year <current year>

Cost Center Group

1000

Activity Type Group

YBMF_P01_AT Activity types used for manufacturing

Form-based X

3. Choose Overview.

4. Enter the number of hours calculated based on capacity in Capacity column.

5. The Plan Activity column must be zero or a contingency amount to adjust scheduled quantity.

If a third quantity is needed in the business, it can be entered in the Plan Activity column, but then Plan Reconciliation step should not be executed as this will add scheduled quantity to the planned quantity.

6. Choose Save.

Result The capacity is updated on cost center.

To generate a report, use transaction code S_ALR_87013647.

3.2.3 Activity Price Planning - Plan Reconciliation

UseIn this activity, you will plan reconciliation.

Prerequisites The activity requirements are transferred from LTP or other production planning scenarios to cost center accounting.

For the process of transfer reference to AOP – Manufacturing Cost Center Planning (176) scenario, perform step “Transfer Planned Activity Requirements for Production

” for planning version 3

Procedure

1. Access the transaction choosing one of the following navigation options:

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Option 1: SAP Graphical User Interface (SAP GUI)

SAP ECC menu AccountingControllingCost Center AccountingPlanningPlanning AidsPlan Reconciliation

Transaction code KPSI

Option 2: SAP NetWeaver Business Client (SAP NWBC) via business role

Business role (name) Enterprise Controller< SAP_BPR_CONTROLLER-K>

Business role menu Overhead Cost ControllingPlanning: Cost CentersExecute Plan Reconciliation

2. On the Execute Plan Reconciliation - Initial Screen, make the following entries:

Field name Description User action and values Comment

Cost Center group

1000

Version 003 CO planning version

From period 1

To period 12

Fiscal year <current year>

Detail lists <Choose>

Test Run <Choose as needed>

3. Choose Execute.

Result The scheduled activity is copied to plan activity and updated as plan on the cost center.

To generate a report, use transaction code KSBL (menu path AccountingControllingCost Center AccountingInformation SystemPlanning ReportsCost centers: Planning Overview).

The planned activity from the cost center (usually 0) is shown as well as the New plan activity, which adds the scheduled and the planned activity.

3.2.4 Activity Price Planning - Change to Calculate Rates Based on Capacity (Optional)

UseIn the normal flow of business, activity rates will be calculated based on planned activity. If a business wants to calculate activity rates based on capacity, execute this step.

Prerequisites

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To execute this activity, go to transaction KL02 Basic Data tabAllocation Default values, and enter 2 in the Price indicator – Plan price, automatically based on activity field.

This is an optional step.

Procedure

1. Access the transaction choosing one of the following navigation options:

Option 1: SAP Graphical User Interface (SAP GUI)

SAP ECC menu AccountingControllingCost Center AccountingPlanningActivity/Output pricesChange

Transaction code KP26

Option 2: SAP NetWeaver Business Client (SAP NWBC) via business role

Business role (name) Enterprise Controller< SAP_BPR_CONTROLLER-K>

Business role menu Overhead Cost ControllingPlanning: Cost CentersChange Activity Type/Price Planning

2. On the Change Activity Type/Price Planning - Initial Screen, make the following entries:

Field name Description User action and values Comment

Version 3

From period 1

To period 12

Fiscal year <current year>

Cost Center Group

1000

Activity Type Group

YBMF_P01_AT

Form-based X

3. Choose Overview.

4. Change planned price indicator column to 2 to calculate the rates based in the Capacity column.

The choice of quantity used for the rate calculation is a business decision. If the SOP/LTP accuracy is high then this is the logical choice. If SOP is a new concept and master data is inaccurate then capacity is a better choice.

5. Choose Save.

ResultThe plan is updated with the correct plan price indicator.

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3.2.5 Activity Price Planning - Plan price calculation

UseAutomatic calculation of plan price in inventory calculation version. The base for the rate calculation depends on the settings in the master data of the activity type. If the optional steps where not done the plan price will be calculated on the base of the plan activity. Otherwise on base of the capacity

Procedure

1. Access the transaction choosing one of the following navigation options:

Option 1: SAP Graphical User Interface (SAP GUI)

. SAP ECC menu AccountingControllingCost Center AccountingPlanningAllocationsPrice Calculation

Transaction code KSPI

Option 2: SAP NetWeaver Business Client (SAP NWBC) via business role

Business role SAP_BPR_CONTROLLER-K (Enterprise Controller)

Business role menu Overhead cost controllingPlanning: Cost CentersExecute Plan Price Calculation

2. On the Execute Plan Price Calculation – Initial Screen, make the following entries:

Field name Description User actions and values Comment

Cost Center Group

1000

Version 3 CO plan version

From period 1

To period 12

Fiscal year <current year>

Test Run x

Detail Lists x

3. Choose Execute.

Result The activity prices are calculated.

To generate a report, use transaction code KSBL (menu path AccountingControllingCost Center AccountingInformation SystemPlanning ReportsCost centers: Planning Overview).

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3.2.6 Inventory Costing

UseIn this activity, you will execute the costing run.

Prerequisites The single-level materials where updated with the commercial price 1 in the Material Master. The tariff in the Version 3 is available.

Procedure

1. Call up the transaction using one of the following options:

Option 1: SAP Graphical User Interface (SAP GUI)

SAP ECC menu AccountingControllingProduct Cost ControllingProduct Cost PlanningMaterial CostingCost Estimate with Quantity StructureCreate

Transaction code CK11N

Option 2: SAP NetWeaver Business Client (SAP NWBC) via business role

Business role (name) Product Cost Controller < SAP_BPR_PRDCOST_CONTROLLER-K>

Business role menu Product Cost ControllingProduct Cost Planning Create Materail Cost Estimate with Quantity Structure

2. On the Costing Data tab page on the Create Material Cost Estimate with Quantity Structure screen, enter the following values:

Field name Description User action and values Comment

Material Use a material with type HALB or FERT

For example, S21

Plant 1000

Costing Variant YB03 Inventory valuation variant

Costing Version 1

3. Choose Enter.

4. Choose the Dates tab page and enter the following data:

Costing Date from: current date

Costing Date to: Period end

Qty Structure Date: current date

Valuation Date: current date

Confirm your entries by choosing Enter. The system begins the cost estimate automatically.

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5. Check the values and compare the result with the prices in the material master (transaction MM03 Display Material).

6. Save the inventory cost estimate.

ResultThe saved inventory cost estimate can now be used to update the inventory price in the material master.

3.2.7 Price Updating – Marking

UseText

PrerequisitesCost estimate with the costing variant YB03 with the status “KA” exists.

Procedure

1. Access the transaction choosing one of the following navigation options:

Option 1: SAP Graphical User Interface (SAP GUI)

SAP ECC menu AccountingControllingProduct Cost ControllingProduct Cost PlanningMaterial CostingPrice Update

Transaction code CK24

Option 2: SAP NetWeaver Business Client (SAP NWBC) via business role

Business role (name) Product Cost Controller < SAP_BPR_PRDCOST_CONTROLLER-K>

Business role menu Product Cost ControllingProduct Cost PlanningPrice Update: Mark Standard Price

2. On the Price Update: Mark Standard Price screen, choose Other Prices.

The Price Update: Release Other Prices screen appears.

3. Enter data to restrict the cost estimates with the results you want to copy to the material master.

4. On the <screen name> screen, make the following entries:

Field Name Description User Actions and values Comment

Company Code 1000

Plant 1000

Material Use all materials with type HALB and FERT

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Costing Variant YB03

Costing Date Current date

Costing Version 1

5. In the Update Prices in Material Master Record group box, set the Commercial Price 1 checkbox.

6. Choose Execute (F8) to carry out the update.

On the Price Update screen, the system provides a short log for the test run. The log contains green traffic lights and the message Of 1 (or the number of materials that where chosen) materials, 1 (or the number of materials that where chosen) cost estimates were updated successful.

7. Choose Back until you get to the Price Update: Release Other Prices selection screen.

8. Use the same selection parameters as in the test run for the price release. Scroll down to the bottom of the screen. Deselect the Test Run indicator in the Processing Options group box.

9. Update the prices in update mode and choose Back.

10. Call up transaction MM03 and check that the prices have been updated in material master.

ResultThe lowest value is determined in inventory costing when the prices are updated in the material master record. The system compares the valuation price according to price control for the current period or previous period with the costing result. If the valuation price is lower, this price is updated, rather than the value determined in inventory costing, as the tax or commercial price.

Commercial price 1 has been updated in the Accounting 1 view in the material master.

3.3 Analyzing Stock Valuation for Materials Using Price Comparison for Each Material Stock Account/Material Type/Material

UseThe process of analyzing the material prices supports the valuation adjustment posting. The price comparison report supplies the current stock values and the lowest stock value at various aggregation levels: material stock account, material type, and material. The difference between the stock values can then be posted in FI as a stock value adjustment.

Prerequisites Material valuation

Stocks

Evaluation by material stock account only in the case of system integration (account determination) with FI

Physical inventory

Procedure

1. Access the transaction choosing one of the following navigation options:

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Option 1: SAP Graphical User Interface (SAP GUI)

SAP ECC menu LogisticsMaterials ManagementValuationBalance Sheet ValuationResultsBalance Sheet Value Per Account

Transaction code MRN9

Option 2: SAP NetWeaver Business Client (SAP NWBC) via business role

Business role (name) Warehouse clerk < SAP_BPR_WAREHOUSESPECIALIST-S>

Business role menu Warehouse ManagementBalance Sheet ValuationBalance Sheet Values by Account

2. On the Balance Sheet Values by Account screen, enter the following parameters:

Field name Description User action and values Comment

Company Code 1000

Key Date End of the month in current year

Plant 1000

The selection can be restricted further by material type or material number interval. If you are dealing with large volumes of material master data, you should always restrict the selection further.

If you do not restrict the selection by material/material type, the system outputs a message when you execute the report, informing you that you have not made any restrictions. In this example, you can confirm this message by choosing Enter.

ResultThe report presents the balance sheet values for each account, subdivided into valuation areas and material numbers, as follows:

For the stock value, the current material price according to price control is multiplied by the stock quantity.

The tax value is calculated from the stock quantity, multiplied by the tax price or the current material price.

The commercial value is calculated from the stock quantity, multiplied by the commercial price or the current material price.

The balance sheet value is the lowest value of the stock, tax, and commercial values.

For revaluation of products each material depending on material type has to be decided whether a value adjustment posting for year end closing is required.

3.4 Stock Value Adjustment

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UseTo carry out the stock revaluation, a posting must be made to the relevant stock adjustment accounts. A stock value adjustment represents a balance sheet valuation and should therefore not be posted to the material stock accounts for updating the goods movements.

Procedure

1. Access the transaction choosing one of the following navigation options:

Option 1: SAP Graphical User Interface (SAP GUI)

SAP ECC menu AccountingFinancial AccountingGeneral LedgerDocument EntryEnter G/L Account Document

Transaction code FB50 or FB50L(for ledger group)

Option 2: SAP NetWeaver Business Client (SAP NWBC) via business role

Business role (name) Finance Manager < SAP_BPR_FINACC-K>

Business role menu General LedgerDocument EntryPost G/L Account Document

2. On the Enter G/L Account Document: Company Code 1000 screen, enter the following values:

Field name Description User action and values Comment

Document Date Period end

Posting Date Period end

Currency IDR

Reference Stock Valuation

Doc. Header Text Revaluation Material types for example: ROH, HAWA, HALB, FERT

G/L Acct 12101020 Item 1

D/C Credit Item 1

Value Value from stock value comparison log

Item 1

G/L Acct 50051000 Item 2

D/C Debit Item 2

Value Value from stock value comparison log

Item 2

Cost Center 1201 Item 2

3. Choose Simulate to display and check the document.

4. If the document does not contain any errors, choose Post.

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This document is an example. Any other stock differences from the price comparison report must be posted in the same way. The various material stock accounts can be revaluated in a document.

If necessary, you can define a unique revaluation account for each material stock account.

In the balance sheet structure, the stock revaluation accounts must be assigned to the material stock account items. This ensures a complete view of the current stock on the balance sheet key date.

Result Revaluating stock in separate adjustment accounts is a simple way of keeping a record of revaluation postings and history. If MM and FI are fully integrated, it is usually not possible to post to the material stock accounts manually. The aim of this is to separate posting procedures in upstream components from standardizing entries and to ensure that system integration can be checked from a technical perspective.

Example In the system the following stock revaluation and expense accounts are available:

Material stock account (Materialtype) revaluation account

Expense Account

12001010 (ROH) 12101020 50051000

12001030 (ERSA) 12101020 50051000

12001020 (VERP) 12101020 50051000

12003010 (HAWA) 12101020 50051000

12201010 (HALB) 12101020 50051000

12002010 (FERT) 12101020 50051000

4 Appendix4.1 Reversal of Process StepsIn the following section, you can find the most common reversal steps, which you can take to reverse some of the activities described in this document,

Determination of Lowest Value

Transaction code ( SAP GUI) MRN0

Reversal: N/A

Transaction code ( SAP GUI)

N/A

Business role Warehouse clerk < SAP_BPR_WAREHOUSESPECIALIST-S>

Business role menu Warehouse ManagementBalance Sheet ValuationDeter. Lowest Value: Market Prices

Comment You can overwrite the updated prices

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Customization

EHP3 for SAP ERP 6.0

December 2008

English

Inventory Valuation for Year End Closing (182)Building Block Configuration Guide

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SAP AGDietmar-Hopp-Allee 1669190 WalldorfGermany

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Copyright

© Copyright 2008 SAP AG. All rights reserved.

No part of this publication may be reproduced or transmitted in any form or for any purpose without the express permission of SAP AG. The information contained herein may be changed without prior notice.

Some software products marketed by SAP AG and its distributors contain proprietary software components of other software vendors.

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SAP, R/3, mySAP, mySAP.com, xApps, xApp, SAP NetWeaver, Duet, PartnerEdge, and other SAP products and services mentioned herein as well as their respective logos are trademarks or registered trademarks of SAP AG in Germany and in several other countries all over the world. All other product and service names mentioned are the trademarks of their respective companies. Data contained in this document serves informational purposes only. National product specifications may vary.

These materials are subject to change without notice. These materials are provided by SAP AG and its affiliated companies ("SAP Group") for informational purposes only, without representation or warranty of any kind, and SAP Group shall not be liable for errors or omissions with respect to the materials. The only warranties for SAP Group products and services are those that are set forth in the express warranty statements accompanying such products and services, if any. Nothing herein should be construed as constituting an additional warranty.

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Icons

Icon Meaning

Caution

Example

Note

Recommendation

Syntax

External Process

Business Process Alternative/Decision Choice

Typographic Conventions

Type Style Description

Example text Words or characters that appear on the screen. These include field names, screen titles, pushbuttons as well as menu names, paths and options.

Cross-references to other documentation.

Example text Emphasized words or phrases in body text, titles of graphics and tables.

EXAMPLE TEXT Names of elements in the system. These include report names, program names, transaction codes, table names, and individual key words of a programming language, when surrounded by body text, for example, SELECT and INCLUDE.

Example text Screen output. This includes file and directory names and their paths, messages, source code, names of variables and parameters as well as names of installation, upgrade and database tools.

EXAMPLE TEXT Keys on the keyboard, for example, function keys (such as F2) or the ENTER key.

Example text Exact user entry. These are words or characters that you enter in the system exactly as they appear in the documentation.

<Example text> Variable user entry. Pointed brackets indicate that you replace these words and characters with appropriate entries.

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Contents

Inventory Valuation for Year End Closing.......................................................................................5

1 Purpose................................................................................................................................... 5

2 Preparation.............................................................................................................................. 5

2.1 Prerequisites..................................................................................................................5

3 Configuration........................................................................................................................... 5

3.1 Inventory Costing...........................................................................................................5

3.1.1 Maintaining Versions – General Version Definition...................................................5

3.1.2 Maintaining Versions – Controlling Area Settings......................................................5

3.1.3 Maintaining Versions – Settings for Each Fiscal Year...............................................6

3.1.4 Costing Type.............................................................................................................8

3.1.5 Definition of Valuation Variant...................................................................................9

3.1.6 Defining Costing Variants........................................................................................10

3.2 Stock Valuation............................................................................................................11

3.2.1 Defining the Document Types for Determining Market Prices.................................11

3.2.2 Defining the Movement Types for Determining Market Prices.................................11

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Inventory Valuation for Year End Closing

5 PurposeThis configuration guide provides the information you need to set up the configuration of this building block manually.

If you do not want to configure manually and prefer an automated installation process using BC Sets and other tools, refer to the installation guide of this building block.

6 Preparation

6.1 PrerequisitesBefore you start installing this scenario, you must install prerequisite building blocks. For more information, see the Building Block Prerequisites Matrix for SAP Best Practices Baseline Package.

7 Configuration

7.1 Inventory Costing

7.1.1 Maintaining Versions – General Version Definition

UseThe purpose of this activity is to define a Controlling Version for the purpose of creating a tariff that matches the requirements for the revision valuation.

Procedure1. Access the activity using one of the following navigation options:

Transaction code SPRO

IMG menu Controlling General Controlling Organization Maintain Versions

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2. On the General Version Definition screen, choose New Entries and enter the following value:

Version Name Plan Actual WIP/RA Variance Exclusive Use

3 Plan version: revision 3

Set Set

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3. Choose Save.

7.1.2 Maintaining Versions – Controlling Area Settings

Procedure1. Access the activity using one of the following navigation options:

Transaction code SPRO

IMG menu Controlling General Controlling Organization Maintain Versions

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2. On the General Version Definition screen, choose Version 3.

3. Choose Controlling area settings

4. The dialog box Confirm transfer from version appears. The system suggests transferring the Version 003 to the CO Area 1000 or our personalized value. Choose Yes.

7.1.3 Maintaining Versions – Settings for Each Fiscal Year

Procedure1. Access the activity using one of the following navigation options:

Transaction code SPRO

IMG menu Controlling General Controlling Organization Maintain Versions

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2. On the General Version Definition screen, choose Version 3.

3. Choose Controlling area settingsSettings for Each Fiscal Year.

4. If the Determine Work Area: Entry dialog box appears, enter controlling area 1000 or our personalized value.

5. On the Change View Settings for Each Fiscal Year: Overview screen, choose New Entries.

6. On the New Entries: Details of Added Entries screen, enter the following values:

Field name Description User action and values Note

Fiscal Year <previous year> for example, 2007

Version locked Not set

Integrated Planning set

Copying allowed set

Exchange rate type P Standard translation for cost planning

Value date for example, 1.1. from the selected fiscal year

Integrated planning with cost centers/bus. processes

set

Version for ind.act.alloc. 0 Plan/actual version

Purely Iterative Price set

(Plan) Method 2 Average price

Cost Component Structure

Y1

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6. Choose Save.

7. Repeat steps 5 and 6 for fiscal year <current year> (for example, 2008). On the New Entries: Details of Added Entries screen, enter the following values:

Field name Description User action and values Note

Fiscal Year <current year> for example, 2008

Version locked Not set

Integrated Planning set

Copying allowed set

Exchange rate type P Standard translation for cost planning

Value date for example, 1.1. from the selected fiscal year

Integrated planning with cost centers/bus.processes

set

Version for ind.act.alloc. 0 Plan/actual version

Purely Iterative Price set

(Plan) Method 2 Average price

Cost Component Structure

Y1

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8. Choose Save.

9. Repeat steps 5 and 6 for fiscal year <next year> (for example, the next 5 following years). On the New Entries: Details of Added Entries screen, enter the following values:

Field name Description User action and values Note

Fiscal Year <next year> For example, 2009

Version locked

Integrated Planning set

Copying allowed set

Exchange rate type P Standard translation for cost planning

Value date for example, 1.1. from the selected fiscal year

Integrated planning with cost centers/bus.processes

set

Version for ind.act.alloc. 0 Plan/actual version

Purely Iterative Price set

(Plan) Method 2 Average price

Cost Component Structure

Y1

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10. Choose Save.

ResultYou have configured:

Versions 3 only for planning for the revision valuation

The planning horizon for these versions is 5 years and you have assigned them to controlling area 1000 or our personalized value.

7.1.4 Costing Type

UseThe aim of this activity is to define settings for controlling the price update, the costing update, and the overhead to be applied. The settings are made in the costing type. In a second step, the costing type is assigned to a costing variant and, together with other components, forms the basis for carrying out product cost estimates.

PrerequisiteCosting type 11 is basis for the new costing type.

Procedure1. Access the activity using one of the following navigation options:

Transaction code OKKI

IMG menu ControllingProduct Cost ControllingProduct Cost PlanningMaterial Cost Estimate with Quantity StructureCosting Variant: ComponentsDefine Costing Types

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2. On the Change View Costing Types: Overview screen, choose costing type 11 Inv. Costing – Commer. Law.

3. Choose Copy As... and create the following Costing Type:

Costing Type Description Note

Y3 Inv. Costing: Comm. Law Costing type 11 can be copied

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4. On the Change View Costing Type: Details of Selected Set screen, make the following entries:

Field name Description User action and values Note

Tab: price update

Price Update 3 commercial price

Valuation view 0 legal valuation

Tab: save parameters

Cost estimates with quantity structure

3 with start of period

Additive cost estimates

1 without date

Tab: Misc.

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5. Choose Save.

7.1.5 Definition of Valuation Variant

UseThe aim of this activity is to define strategy sequences for valuating material components and services within a product cost estimate. These valuation strategies are assigned to a costing variant and provide the basis for carrying out product cost estimates/inventory costing.

Procedure1. Access the activity using one of the following navigation options:

Transaction code OKK4

IMG menu ControllingProduct Cost ControllingProduct Cost PlanningMaterial Cost Estimate with Quantity StructureCosting Variant: ComponentsDefine Valuation Variants

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2. Choose New Entries and enter header data. Then for each new entry choose Details and enter remaining data.

3. Overview of data record:

Valuation Variant Name

Y03 BP: Commercial Valuation

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Material Value

Prio Strategy sequence incl add co

Y03 1 B Valuation Price 1 Based on Commercial Law Not set

Y03 2 D Valuation Price 2 Based on Commercial Law Not set

Y03 3 F Valuation Price 3 Based on Commercial Law Not set

Y03 4 7 Valuation Price According to Price Control Not set

Activity Types/processes

Prio Strategy sequence CO Version

Y03 1 3 Plan price as average of remaining periods of fiscal year

3

Subcontracting: quotation in purchasing

Prio Strategy sequence Quot. Purchasing

Y03 No Empty Actual Quota Arrangement

External processing

Prio Strategy sequence

Y03 1 1 Price from Operation

Y03 2 3 Net quotation price

Overhead

Finished/Semi finished Materials

ComponentsOH on subc. Mat.

Y03 YPP-PC: BP: Costing Sheet Production.

Not set

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4. Choose Save.

ResultThe valuation variant is the main component for selecting the possible valuation approaches. Since it is the main component, it is assigned to a costing variant, together with the costing type, date and transfer control settings.

7.1.6 Defining Costing Variants

UseThe aim of this activity is to define a costing variant for balance sheet valuation according to local legislation. Costing variants include the following components: costing type, valuation variant, date control, quantity structure control, and transfer control.

Procedure1. Access the activity using one of the following navigation options:

Transaction code OKKN

IMG menu ControllingProduct Cost ControllingProduct Cost PlanningMaterial Cost Estimate with Quantity StructureDefine Costing Variants

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2. Choose New Entries and enter header data. Then for each new entry choose Details and enter remaining data.

3. Overview of data record.

Valuation Variant Name

YB03 BP: Inventory Valuation

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Control

Costing Type

Val. Variant Date Control Qty. Str. Ctrl Transf. Ctrl

YB03Y3 BP (Inv. Costing: Comm. Law)

Y03 BP:Commercial Valuation

PC01 Std.Cost Est. - Month

PC01 Qty. Structure Ctrl2

PC01 Transfer w/ Plant Change

Qty. Struct.

Pass on Lot size Ignore PCE TrCtrl can be chd

Transf. act. SCE

YB03 2 always not set not set not set

Additive Costs

YB03 1 Ignore; include AC with Stock Transfers: not set

Update

Saving allowed Save Itemization Save Error Log Defaults changes

YB03 set set set not set

Misc.

YB03 2 Log and save messages, Mail inactive

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7.2 Stock Valuation

7.2.1 Defining the Document Types for Determining Market Prices

Procedure1. Access the activity using one of the following navigation options:

Transaction code SPRO

IMG menu Materials ManagementValuation and Account AssignmentBalance Sheet Valuation ProceduresConfigure Lowest-Value MethodMarket PricesDefine Document Types

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2. The Change View Document Types: Overview contains a table of all the document types that the program is to use for determining the lowest value. If you have defined your own document types for goods movements, you need to add them to this table.

The following document types are to be provided:

1. RE Invoice – Gross

2. RN Invoice – Net

3. WA Goods Issue

4. WE Goods Receipt

5. WL Goods Issue/Delivery

3. Check your entries and exit the view by choosing Back.

7.2.2 Defining the Movement Types for Determining Market Prices

Procedure1. Access the activity using one of the following navigation options:

Transaction code OMWI

IMG menu Materials ManagementValuation and Account AssignmentBalance Sheet Valuation ProceduresConfigure Lowest-Value MethodMarket PricesDefine Movement Types

2. The Change View Movement Types: Overview contains a table of all the movement types that the program is to use for determining the lowest value. If you have defined your own movement types for goods movements, you need to add them to this table.

The table should contain at least the following values:

MovementType Movement Type Text

101 GR Goods Receipt

102 GR for PO Reversal

3. To add a movement type, proceed as follows:

On the Change View Movement Types: Overview screen, choose New Entries.

ResultAs a result of setting the document and movement types, the prerequisites for valuating raw materials, supplies, and consumables on the basis of market prices have been met.

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