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Material valuation helps to determine the price of material and for which
general ledger account it needs to be posted in financial accounting.
Material valuation can happen at company code level or plant level.
Material can be valuated based on different types of procurement and this is
known as split valuation. Normally split valuation is used to valuate material
in same valuation area (company or plant) differently. Split valuation is
described in detail in below context.
Q2.What is split valuation?
Split valuation means managing a material as several partial stock. Each partial stock
is valuated separately in the same valuation area (company or plant). Some of the
examples where split valuation is required are as follows.
Stock that is procured externally from vendor has a different valuation price
than the stock of in-house production.
Stock obtained from one vendor is valuated at a different price than stock
obtained from another vendor.
Same material having different batch may have different valuation prices.
Example:
Without split valuation, materials are valued at plant level. With split valuation,
the same material number at a plant can have different stock quantity and value for
different groupings (called valuation types).
Scenario:
Suppose, Averydenison Ltd manufactures packet in-house and also procures from an
external vendor.
The cost of manufacture of packet in-house (in plant 2006) is 200 BDT per PC. The
cost of procured packet (from vendor 1000012) is 240 BDT per PC.
Thus, the same product packet has different valuation due to different source of
procurement. Different valuation for the same material is only possible by using split
valuation functionality.
We will use valuation category B (Procurement type) and create two valuation type
under B. They are:
1. In-house proc
2. External proc
A material is activated by entering the valuation type in the accounting view of the
material master.
For example:
Valuation at plant level: Suppose you have two plants one in Dhaka and one in
Chittagong, Then of course you would like to valuate the raw materials at plant level
as because you have got transportation cost and taxes etc to account for.
Valuation at company code level: Here you valuate all your material in same way.
In One client valuation areas can either be set to plant level or company code level.
Once you have made this setting this cant be changed.
Valuation classes are linked to valuation class in Tcode OBYC. If your valuation
area is at plant level then in OBYC you will find a coloumn for Valuation modifier
you can provide your plant there.
For example:
Valuation Mod Valuation class Account
plant 1 3000 200130
Steps to set it up
CONFIGURATION
1. Activate Valuation
2. Create Valuation Category
3. Create Valuation Types
4. Link Categories > Types
5. Link valid Valuation Categories to Plant
MASTER DATA
-------------DETAIL------------------
In this example we want to group material in the same plant based on AGE
(valuation category). We will have two "groups" (valuation types): OLD and
NEW.
Configuration
IMG: Material Management > Valuation > Split Valuation
The Purchase Orders attributes option indicate if PO's are allowed or not.
1 - Not allowed
2 - Allowed but with warning
3 - Allowed