4103 sap transfer pricing solution overview at cmc
DESCRIPTION
SAP Transfer Pricing Solution Overview at CMCTRANSCRIPT
Orange County Convention Center
Orlando, Florida | June 3-5, 2014
SAP Transfer Pricing Solution Overview at CMCKumar Kalidindi
Utilize SAP standard solution to fulfill your companies transfer pricing requirements
Transfer Price Structures and their maintenance
Parallel valuation approach and its use for Transfer Pricing
Standard solution to support intra-company transfers
Master Data requirements and their maintenance
LEARNING POINTS
Americas Operating Locations
4
SAP Parallel Valuation Approach
Parallel Valuation Views
Legal View - Represents the transfer of goods and services between independent companies according to legal reporting requirements
Group View - Valuate the exchange of goods and services within the group using Cost Of Goods Manufactured eliminating internal profits between member companies
Profit Center View - Valuate the exchange of goods and services between Profit Centers using internal prices to determinate profitability of each Profit Center for Management Reporting
Each Valuation view is assigned to a single currency type
Valuation View + Currency Type = Valuation Approach
5
Parallel Valuation Approach
CMC decided to use the following two valuation approaches
Company Code Currency, Legal Valuation (10) Group Currency, Profit Center Valuation (32)
Valuation Approaches
10= Legal Valuation (0) + Currency Type (10) 32= Profit Center Valuation (2) + Currency Type (30)
Currency
types
Valuation
view 0
210 30
X
X
10
Leg.
32
PrCtr.
Transfer of Material For Intra-Company
L 100
G N/A
P 100
L 100
G N/A
P 120
Profit Center
Sender
Profit Center
Receiver
Company Code XXXX
Stock Transport Order
(STO)
Transfer Price
$120/TON
Legal Valuation - T-Account Entries
Plant xxxx
PC Sender
Plant xxxx
PC Receiver
Inventory
$100 $100
Intra-Company
Offset
$100 $100
Inventory
Intra-Company
Offset
Profit Center Valuation - T-Account Entries
$100$120
Intra-Company
Sales
$120
Intra-Company
COGS
$100
$120
$120
Plant xxxx
PC Sender
Plant xxxx
PC Receiver
Intra-Company
Offset InventoryInventory
Intra-Company
Offset
Conditions for SD Billing Documents
SD Conditions for Inter-Company Billing Documents (affiliated companies)
PC00 refers to IV01 condition and carries the same value
Type Valuation Condition Cond Cat COPA
Revenue
Legal IV01 Sales
Profit Center PC00 c Sales
COGS
Legal VPRS G COGS
Profit Center PCVP h COGS
Type Valuation Condition Cond Cat COPA
Revenue
Legal PR00 Sales
Profit Center PC00 c Sales
COGS
Legal VPRS G COGS
Profit Center PCVP h COGS
SD Conditions for External Billing Documents
PC00 refers to PR00 condition and carries the same value
Master Data
An Access sequence is assigned to each condition type which determines the priority of the condition record and its maintenance levels
The condition record
determines the amount or
percentage to be applied
for each set of values in the
condition table
Master Data – Upload Tool
Custom Program to upload transfer prices from excel spreadsheet
Excel Template for
loading transfer prices
Intra-Company STO
Stock Transport Orders are used as a vehicle to transfer stocks from plant to plant within the company
The goods Receipt can be planned in the receiving plant
The entire process can be monitored via the Purchase Order History
Post Goods Issue
Post Goods Issue transaction generates a material transfer document to track logistical movement of goods from sender to receiver plant
The material document also generates an accounting document to transfer the stock across valuation areas
Price Determination
The sending and receiving plants belong to different profit centers
Transfer across profit center invokes pricing procedure
The pricing procedure with different conditions determine the markup of the stock transfer
Accounting Document- Legal Valuation
Legal Valuation with currency type 10 transfers inventory from sender to receiver profit center
No Revenue and COGS postings in legal valuation
If the material is valuated in receiver plant with price control “S”, the difference between the sender and receiver valuation will post to a Variance account
Accounting Document- PC Valuation
Profit Center Valuation with currency type 32 transfers inventory from sender to receiver profit center and records markup
Revenue and COGS are posted in this valuation
If the material is valuated in receiver plant with price control “S”, the difference between the sender and receiver valuation will post to a Variance account
Reporting: Financial Reports
Standard Financial Reports: Use currency type “32” to report in Group Currency, Profit Center Valuation
Custom Report Painter/Writer
reports: Use basic key figure
KSL (Second Currency) in
FAGLFLEXT to report in
Group Currency, Profit Center
Valuation
Controlling Reports
Cost Center Accounting: Use Actual Valuation “2” to report on Profit Center Valuation for all cost center reporting
Product Cost Controlling:
Use Actual Valuation “2” to
report on Profit Center
Valuation for Product
Costing Reports
Controlling Reports
Profitability Analysis: Use Currency Types “B2” or “12” for Profitability Analysis reporting
Material Ledger: Use
Currency Type “32” to
report on Profit Center
Valuation for Material
Ledger Reports
Transfer Pricing in SAP is a valuation approach that will allow CMC to transfer inventory between Profit Centers within the Company Code (Intra-Company) using Stock Transport Orders
Maintenance and timing of transfer price conditions is critical; master data must be in place prior to post goods issue transactions
Adequate training and education for Accounting end users to fully understand concepts and approach prior to go live
Reporting and consolidation teams have to use the appropriate currency valuations based on the managerial objectives
Extensive testing and validation required prior to rolling out the solution
KEY LEARNINGS
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SESSION CODE: 4103
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