“group currency and valuation” table of contents …...browse the book in this chapter, you’ll...

Browse the BookIn this chapter, you’ll explore group currency and valuation with the Ma-terial Ledger in SAP S/4HANA. You’ll learn how to set up group currency, calculate a standard cost using group valuation, configure cross-compa-ny purchasing, and more.

Paul Ovigele

Material Ledger in SAP S/4HANA:Functionality and Configuration540 Pages, 2019, $89.95 ISBN 978-1-4932-1825-7

www.sap-press.com/4863

First-hand knowledge.

“Group Currency and Valuation”

Table of Contents

Index

The Authors

https://www.sap-press.com/material-ledger-in-sap-s4hana_4863/?utm_source=AWS&utm_medium=readingsample&utm_campaign=Browse%20the%20Book&utm_content=1825

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3

Chapter 3

Group Currency and Valuation

Group currency translates material costs for a group into a unified cur-

rency. Group valuation allows for the exclusion of intercompany prof-

its from transactions that occur between affiliated companies.

In this chapter, we’ll discuss group currency, group valuation, and how they can be

set up and used. The terms group currency and group valuation are usually concate-

nated to become group currency/group valuation, as we mentioned a few times in

the previous chapter. However, many companies that use group currency don’t use

group valuation because many companies that used group currency in SAP ERP may

not have used the Material Ledger. Now that the Material Ledger is mandatory with

SAP S/4HANA, they may want to know how group currency works with the Material

Ledger, but not necessarily activate group valuation. Therefore, we want to treat the

two concepts separately to start with.

We’ll first look at how to set up group currency alone with the Material Ledger in Sec-

tion 3.1, and then we’ll show how group currency and group valuation can be used in

conjunction. We’ll then show how to calculate standard cost in the group valuation

view Section 3.2, including how to set up a costing variant with settings that are spe-

cific to group valuation, and configuring a delta cost component split. In Section 3.3,

we’ll demonstrate the configuration that is needed for cross-company purchasing,

and walk through a detailed scenario.

3.1 Group Currency

We mentioned in the previous chapter that group currency is the currency that is set

up for the client. This means that all company codes in the same client will have the

same group currency. We also said that it’s advisable to make the controlling area

currency the same as the group currency to smooth the integration between the con-

trolling (CO) and financial accounting (FI) functionalities. Even if you have the group

currency enabled in FI and CO, this doesn’t necessarily mean that it’s automatically

3 Group Currency and Valuation

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available in the Material Ledger. In this section, we’ll first recap a few configuration

steps that were shown in Chapter 2, Section 2.1.1, to demonstrate how group currency

is set up in the Material Ledger for a specific company code. Then, we’ll walk through

some key transactions you can use with group currency.

3.1.1 Setting Up Group Currency for a Company Code

First, let’s look at the currency of the company code EU10. To do this, go to Transac-

tion OX02, and double-click Company Code EU10, as shown in Figure 3.1.

Figure 3.1 Currency for Company Code EU10

As you can see in Figure 3.1, Company Code EU10 has a Currency of EUR. Now view the

group currency that is set up for this company code by going to Transaction FINSC_

LEDGER, selecting Ledger 0L, and double-clicking the Company Code Settings for the

Ledger folder. You’ll arrive at the screen shown in Figure 3.2.

Figure 3.2 Currency Settings for Company Code EU10

As you can see in Figure 3.2, Company Code EU10 has two currency types: company

code currency (Local Curr. Type) 10 and group currency (Global Curr. Type) 30. You’ve

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already seen that the company code currency is EUR. Now you can see the group cur-

rency by double-clicking on the Currency Conversion Settings for Company folder

shown in Figure 3.2, which will take you to the screen shown in Figure 3.3.

Figure 3.3 Group Currency Settings for Company EU10

You can see in Figure 3.3 that the group Currency Type 30 with Currency USD is

enabled for Company Code EU10. This group currency is based on the Company Code

Currency as a Source currency type, and the Exch. Rate Type M (Standard translation

at average rate) is used to convert the company code currency to the group currency.

This conversion between the company code currency EUR and the group currency

(USD) is set up in the exchange rate tables in Transaction OB08, as shown in Figure

3.4.

Figure 3.4 Exchange Rate between EUR and USD

Here, the exchange rate between EUR and USD is 1 EUR to 1.25 USD.

Now take a look at the Material Ledger settings for any plants assigned to company

code EU10 by going to Transaction OMX3 and looking at the Material Ledger type

assigned to the plant in Company Code EU10 (see Figure 3.5).

Figure 3.5 The Material Ledger Type for Company Code EU10

As you can see in Figure 3.5, the plant (Valuation area) 101O, which is assigned to Com-

pany Code EU10, is assigned to Mat. ledger type 9300.


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To see the currency types that are assigned to this Material Ledger, go to Transaction

OMX2, select Mat. Ledger Type 9300, and double-click the Define individual charac-

teristics folder to view the data shown in Figure 3.6.

Figure 3.6 Currency Types for Material Ledger Type 9300

You can see in Figure 3.6 that the Mat. Ledger Type 9300 has two currency types

assigned to it: Company code currency (10) and Group currency (30). We showed how

this is done in Chapter 2, Section 2.1.2. Assign this Material Ledger type 9300 to the

plant (171O) in company code EU10 to enable the group currency in the Material Led-

ger for this company code.

To now see how the material master in this plant looks with the company code cur-

rency and group currency, go to Transaction MM03 and select the Accounting 1 view

for material HAWA-123 in plant 101O (see Figure 3.7).

Figure 3.7 Material Master in Company Code and Group Currency

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3.1 Group Currency

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You can see in Figure 3.7 that the material HAWA-123 has a Company code currency of

1.00 EUR. This is translated into the group currency (USD) using the exchange rate

that we saw in Figure 3.4 of 1 EUR to 1.25 USD. Therefore, the Group currency for this

material is 1.25 USD.

Note: Standard vs. Per Unit Price

You’ll notice that there are two price fields shown in Figure 3.7: Standard Price and

Per. unit price. Because the price control (Prc. Ctrl) of this material is V, the Per. unit

price is the valuation price, and the Standard Price is statistical.

You’ll also notice that the currency types shown in the material master don’t specify

which valuation view is used. When this happens, it means that the currencies are at

legal valuation. You can therefore say that the material has a valuation approach of

company code currency/legal valuation and group currency/legal valuation. For con-

venience in this section, we’ll only mention the currency type, as it’s assumed that

the valuation view is legal, unless specified otherwise.

3.1.2 Changing Material Cost

Let’s now perform a few transactions for this material. The first transaction we’ll

show is the changing of the cost of this material. Because the material is valued at

moving average price (indicated by a price control of V in Figure 3.7), you can change

the material price using Transaction MR21, as shown in Figure 3.8.

Figure 3.8 Price Change for Material HAWA-123


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You enter the new price in the New price column. In Figure 3.8, the material price has

been changed from 1.00 EUR to 1.20 EUR.

Note that there are two tabs in the screen, which are EUR Co.Code and USD Group. If

you’ve used Transaction MR21 without the Material Ledger active, you may not be

familiar with these two tabs in this screen. They appear because the price change will

need to be done in both the company code currency (EUR) and the group currency

(USD). You can do this in one of the following ways:

� Click the USD Group tab, and directly enter the equivalent USD amount in New

Price field of that tab.

� Click the USD Group tab, highlight the line with the material, and click the Trans-

late Selected Objects button (highlighted in Figure 3.8). This will lead to the popup

box shown in Figure 3.9.

Figure 3.9 Translation of Currency Type during Price Change

You can see in Figure 3.9 that the system is proposing the translation from EUR Com-

pany code currency. It also gives the option of the type of price you want to change.

The Valuation Price is the price the inventory is valued at (the moving average price,

in the example), whereas the Statist. Price is the standard price. Click the Confirm

Entry button to save your changes.

Now you can go back to the Accounting 1 view for this material and see what has

changed, as shown in Figure 3.10.

You can see in Figure 3.10 that the Company code currency price has changed to 1.20

EUR, while the Group currency price has changed to 1.50 USD, which is the USD trans-

lation of the EUR amount at the exchange rate shown earlier in Figure 3.4.

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3.1 Group Currency

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Figure 3.10 Material Master after Price Change

3.1.3 Making a Purchase

Now, you can make a purchase for this material to see how it affects the material mas-

ter and relevant reports. For a purchase of 1,000 pieces at a price of 1.80 EUR, the pur-

chase order is shown in Figure 3.11.

Figure 3.11 Purchase Order for Material HAWA-123

After performing a goods receipt for the purchase order, the Company code currency

and Group currency for material HAWA-123 will look like that in Figure 3.12.


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Figure 3.12 Material HAWA-123 after Purchasing 1000 PC

The material HAWA-123 now has a price of 1.80 EUR in Company code currency, which

was translated into 2.25 USD in Group currency, and a Total Stock value of 1,000 PC.

Let’s see what the posting looks like in the Universal Journal (table ACDOCA), as shown

in Figure 3.13.

Figure 3.13 Table ACDOCA Showing Company Code and Group Currency

You can see that the company code and group currencies are shown in table ACDOCA

for this material. In SAP ERP, these values will normally be viewed in the material val-

uation table MBEW, but in SAP S/4HANA, these values are shown in the Universal Jour-

nal. You’ll also be able to view the values in the SAP Fiori reports for inventory, such

as the Material Inventory Values – Balance Summary report, shown in Figure 3.14.

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3.2 Group Valuation

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Figure 3.14 SAP Fiori Report for Material HAWA-123

You can therefore see that for every inventory posting, you’ll be able to track both the

company code and group currency on a material level. Without the Material Ledger,

if you had group currency activated, you would have been able to see this informa-

tion on a general ledger (G/L) basis and not a material basis as well.

We’ll now take a look at the other valuation approach segment for group reporting,

which is group valuation.

3.2 Group Valuation

Group valuation creates a separate view that can be used to display the inventory

results of a group of affiliated companies as if they were a single entity. It’s not a

requirement that you activate group valuation in SAP S/4HANA, even if you’re a mul-

tinational organization. For example, if an organization has multiple entities, but the

transactions between entities occur at cost (meaning that no profit is being made

from the sale between entities), then there may not be a use for group valuation. It’s

simply an option that you can use if you want to view inventory data on a group basis

by eliminating any intercompany profit in inventory.

Group valuation should not be confused with consolidation. While consolidation

involves the reporting of financial statements of multiple companies as if they were

a single entity, group valuation does this on a more granular level, for each individual

material. Consolidation involves the elimination of more than just inventory profit,

such as the elimination of payables and receivables, elimination of intercompany

debt, and elimination of revenues and expenses. Group valuation information can be

used to feed the data that is needed for consolidation, but it’s unlikely that consolida-

tion data is used in group valuation.

Let’s begin by looking at one of the key determinants for group valuation: transfer

pricing. We’ll then explain how to calculate a standard cost with group valuation by

creating a costing variant for group valuation and activating cross company costing.


96

We’ll discuss how to configure a delta cost component split and a special procure-

ment key for transfers between plants in different company codes. We’ll also show

how an intercompany markup is included in the standard cost by using an additive

cost and how this looks in a standard cost calculation.

3.2.1 Transfer Pricing with Group Valuation

With the advent of globalization, mergers, and acquisitions between companies in

different countries, many organizations operate in regions with varying fiscal

requirements. Therefore, organizations need to be aware of the legal and fiscal impli-

cations of establishing a price for buying and selling products in the affiliated entities

in these countries.

A key factor to having a smooth intercompany process is setting up a pricing struc-

ture that conforms with the requirements of all countries involved but also leads to a

sufficient redistribution of profit from countries in high tax jurisdictions to coun-

tries in low tax jurisdictions. Transfer pricing is the method of establishing this pric-

ing structure. Because the transfer price is usually set by the organization itself, as

opposed to an external supplier, it’s important for the organization to keep track of

the original cost of the product because this is what (when compared with the reve-

nue from an external sale) constitutes the real profit to the organization. Group val-

uation aids with the tracking of this original cost because it eliminates any of the

intercompany profit between the entities, which, while useful from an internal prof-

itability point of view, doesn’t contribute to the overall gross margin of the organiza-

tion.

Figure 3.15 shows a supply chain with transfer pricing relationships between affiliated

companies with legal and group valuation values. In this example, three companies

(A, B, and C) belong to the same group. Company A is a manufacturing entity that pro-

duced a product at a cost of $100. This product was then sold to Company B (a distri-

bution entity) at a transfer price of $110. Company B then sold the product to

Company C (a selling entity) at a transfer price of $150. You see that while the legal val-

uation shows the transfer price of the product that is sold from one entity to the next,

the group valuation still shows the original cost of $100. If company C sold the prod-

uct to an external customer for, say, $200, then the profit in company C will be $50

($200 – $150) based on legal valuation, but the profit to the group as a whole will be

$100 ($200 – $100). You can therefore see how you can report two different profits in

parallel depending on who the audience is.

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3.2 Group Valuation

3

If you want to treat each company as an autonomous entity and report their profit

separately, then the legal valuation view will be used. If you want to report the overall

profit of the group, then the group valuation view will be used.

Figure 3.15 Internal Supply Chain with Legal and Group Valuation

3.2.2 Group Valuation with Standard Cost

Now let’s look at how you can create a standard cost estimate for group valuation,

which represents a cost that excludes the intercompany profit included in the trans-

fer price. Although this process isn’t mandatory, if you already calculate a standard

cost estimate (in the legal view), and you now have group valuation activated (as we

discussed in Chapter 2), you’ll also need to perform a standard cost calculation for the

group valuation view. The process for calculating a standard cost for group valuation

is called group costing. It’s basically a way of calculating a standard cost of materials

for the whole group, which can be used in parallel with the standard cost of the mate-

rials in a particular company. For a multinational organization, it may make sense for

the company code-specific standard cost estimate to be calculated by the specific

entity, while the group cost is calculated by the parent company.

Several configuration steps are required for this. Let’s walk through these steps and

then show the results of the cost estimate in both the legal and group views and how

they differ.

Costing Variant for Group Valuation

First, you need to define a costing variant for group valuation. A costing variant con-

trols all the settings for calculating a standard cost estimate. If you already use cost

estimates, then you probably already have one set up for the legal view (although,

without the Material Ledger, it may not be apparent that the costing variant is for a

Company C

• Legal: $150• Group: $100

Company B

• Legal: $110• Group: $100

Company A

• Legal: $100• Group: $100


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specific view). The standard costing variant for legal valuation is normally PPC1, but

some companies tend to define their own costing variant with a different name.

The costing variant has the following five components:

� Costing types

This specifies to which field in the material master the costing results are trans-

ferred.

� Valuation variants

This contains the parameters that are required for calculating the cost estimate.

� Date control

This controls the dates on which the quantity and valuation structure are created.

� Quantity structure control

This specifies how the system searches for valid alternative bills of material (BOM)

and routings.

� Transfer control and reference variants

This setting prevents the system from creating a new cost estimate for a material

when one already exists.

For group valuation purposes, you only need to create two of these components:

costing types and valuation variants. The other components can be the same as the

ones for the legal view.

Let’s start with creating a costing type for group valuation. The costing type specifies

which field in the material master the costing results will be transferred to. To con-

figure a costing type for group valuation, go to the configuration menu path Con-

trolling • Product Cost Controlling • Product Cost Planning • Material Estimate with

Quantity Structure • Costing Variant: Components • Define Costing Types or use

Transaction OKKI. In the subsequent screen, click the New Entries button to access

the screen shown in Figure 3.16.

Enter a value for Costing Type and a short description (in this example, Costing Type

G1 – Standard Cost (Group)). In the Price Update tab, choose a Price Update of Stan-

dard Price and a Valuation View of Group Valuation. This means that when the stan-

dard cost for group valuation is released, it will be stored in the Standard Price field of

the material master. Now, click the Misc. tab to open the screen shown in Figure 3.17.

Create a Calculation Base by selecting Cost of Goods Manufactured from the drop-

down. This means that any overhead will be calculated using the cost of goods man-

ufactured (COGM) value as a basis. The Partner Version shows the value-added chain

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3.2 Group Valuation

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for every stage of the internal procurement process. By defining a Partner Version,

you’re specifying which organizational unit represents a partner. Because you’re

doing group costing, use a Partner Version that has the organizational unit of Com-

pany Code.

Figure 3.16 Costing Type for Group Valuation

Figure 3.17 Misc. Tab of Group Costing Type

To create the partner version that you’ll assign to the costing type, click the Create

icon highlighted in Figure 3.17. The screen shown in Figure 3.18 appears.

Name your partner version, and select the Partner type. In this example, a Partner

Version is created called “Company Code,” and the Company Code checkbox is

selected in the Partner tab. This Partner Version is then assigned to the costing type

shown previously in Figure 3.17. Click the Save button to save the costing type.


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Figure 3.18 Partner Version for the Costing Type

Next, you’ll create a valuation variant for group valuation. The valuation variant con-

tains the parameters that are required to calculate the standard cost. To configure a

valuation variant for group valuation, go to configuration menu path Controlling •

Product Cost Controlling • Product Cost Planning • Material Estimate with Quantity

Structure • Costing Variant: Components • Define Valuation Variants or use Transac-

tion OKK4. In the subsequent screen, click the New Entries button to access the

screen shown in Figure 3.19.

Figure 3.19 Valuation Variant for Group Valuation

Here, you can create a name for your valuation variant (in this example, Z01 –

Planned Valuation: GRP). Copy all the settings from the valuation variant of the legal

view because you want most of the costing parameters of the legal and group view to

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3.2 Group Valuation

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be the same. The only thing that is different is that in the legal view, you want to be

able to include additive costs in the cost estimate (because the additive costs will rep-

resent the intercompany markup), whereas you don’t want to include additive costs

in the group view. Therefore, don’t select the Incl. Additive Costs checkbox.

There are several ways to add an intercompany markup to your cost estimate, such as

the following:

� Using an overhead costing sheet

� Using a condition type from a purchasing info record

� Using additive costs or a user exit

In the example we’ll show later in this section, you’ll use an additive cost to add the

intercompany markup. However, depending on which method you choose, you need

to make sure that the group valuation variant doesn’t include this setting because

you don’t want the intercompany markup to be included in the group valuation

view. Click the Save button to save your settings for the valuation variant.

Now that you’ve created a costing type and valuation variant for group valuation,

you’ll create costing variants for group valuation and add these components to it. To

do this, go to configuration menu Controlling • Product Cost Controlling • Product

Cost Planning • Material Estimate with Quantity Structure • Define Costing Variants

or use Transaction OKKN. In the subsequent screen, click the New Entries button to

go to the screen shown in Figure 3.20.

Figure 3.20 Defining the Group Costing Variant


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Here, you can provide a name for your costing variant (we’ve created Costing Variant

ZPC1 for group valuation). Assign the Costing Type to Standard Cost (Group) and the

Valuation Variant to Planned Valuation: GRP using the dropdowns. Select the Date

Control and Qty Struct. Control settings that are used for the legal valuation costing

variant. These settings already exist in the standard system, so we’ll adopt them.

However, if your group valuation cost has different Date Control and Qty Struct. Con-

trol settings, then you can create your own and change them accordingly. Click the

Save button to save this costing variant.

Activating Cross-Company Costing

In a transfer pricing scenario, it’s very likely that you transfer products between com-

pany codes. In that case, you’ll want to activate cross-company costing. This means

that the standard cost calculation can access information in more than one company

code. This activation is only done on the legal valuation view because the group val-

uation view already accesses costing information across company codes. In addition,

by activating cross-company costing, you can transfer the cost from the sending

company to the receiving company and, if relevant, add a markup in the receiving

company.

To activate cross-company costing, go to configuration menu path Controlling •

Product Cost Controlling • Product Cost Planning • Selected Functions in Material Cost-

ing • Activate Cross Company Costing or use Transaction OKYV. In the subsequent

screen, click the New Entries button to access the screen shown in Figure 3.21.

Figure 3.21 Activating Cross Company Costing

Select the Cost Across Company Codes checkbox to activate cross-company costing.

As you can see in Figure 3.21, cross-company costing has been activated in Controlling

Area A000 for the legal valuation Costing Type 01 and Valuation Variant 001. This

means that a product in one company code can access the cost of a lower-level prod-

uct in a separate company code. Click the Save button to save your settings.

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3.2 Group Valuation

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Configuring a Delta Cost Component

When you use transfer prices in group costing, you’ll most likely want to identify the

profit that is made between companies. This way, you can easily recognize the amount

of intercompany profit that is included in the cost of inventory of a company that

bought a product from an affiliate company. To achieve this, you’ll need to create a

delta cost component.

You create this cost component by going to configuration menu path Controlling •

Product Cost Controlling • Product Cost Planning • Basic Settings for Material Costing •

Define Cost Component Structure or using Transaction OKTZ. Click the cost compo-

nent structure Y1, and then double-click the Cost Component with Attributes folder.

Click New Entries to access the screen shown in Figure 3.22.

Figure 3.22 Delta Cost Component


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Create Cost Comp. 999 in Cost Comp. Str. Y1. This delta cost component will be avail-

able in the group valuation view in the standard cost component reports. Following

are descriptions of the key fields highlighted in Figure 3.22:

� Roll up Cost Component

By clicking on this field, the delta cost component value will be retained through

the supply chain if there are transfers between multiple companies.

� Not Relevant

This option means that although the delta cost component will be available, it

won’t be relevant for inventory valuation or any other category specified.

� Delta Profit for Group Costing

Checking the Company Code box enables the delta profit to show up in this cost

component. This indicator can only be set up for one cost component in the cost

component structure.

Now double-click the Cost Component Views folder to see the cost component views

shown in Figure 3.23.

Figure 3.23 Cost Component View Selection

In Figure 3.23, you can see the different views on the right part of the screen. Each of

these views can represent a different way to look at the cost components of the stan-

dard cost. Double-click the Cost of Goods Sold view to arrive at the screen shown in

Figure 3.24.

Select the filter you want to use. For this example, select Delta Profit Comp. Code to

be able to see the delta profit when you click on the Cost of Goods Sold view for the

group valuation standard cost. Save the settings by clicking the Save button.

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3.2 Group Valuation

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Figure 3.24 Cost of Goods Sold Cost Component View

Configuring a Special Procurement Key

In this step, you’ll configure a special procurement key so that the cost of a receiving

product can access the cost from a sending product in a different plant. The special

procurement key can be used to access the cost from an alternative plant that is in

the same or different company code as the receiving plant. In this scenario, the send-

ing plant will be in a different company, and, in conjunction with cross company

costing, the special procurement key will allow the receiving plant (1710) to access the

cost of the sending plant (1010) that is in a different company.

To set up the special procurement key, go to configuration menu path Controlling •

Product Cost Controlling • Product Cost Planning • Material Cost Estimate with Quan-

tity Structure • Settings for Quantity Structure Control • Material Data • Check Special

Procurement Types. In the subsequent screen, click New Entries to access the screen


Set up special procurement type (Sp.Pr.Type) Z2 in Plant 1710, which is set for External

procurement (F), and specify a Special procurement of Stock transfer (U) from Plant

1010. Click the Save button to save your settings.


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Figure 3.25 Define Special Procurement Key

Next, add this special procurement key to the Costing 1 view (heading not shown) of

the material in the receiving plant by entering “Z2” in the SpecProcurem Costing field,

as shown in Figure 3.26.

Figure 3.26 Adding the Special Procurement Key to the Material Master

Now that the special procurement key Z2 has been added to the material master of

the receiving plant (1710), this material can access the cost of the material in the send-

ing plant 1010.

Using Additive Cost for Intercompany Markup

Now let’s add a markup to the receiving company’s material. We mentioned earlier in

this chapter that there are several ways to include a markup in the standard cost esti-

mate. In this scenario, you’ll use the additive cost functionality. Additive cost allows

you to add an extra cost into the calculated standard cost. To enable the additive cost

for stock transfers, you first need to make a configuration change to the costing variant

of the legal view. To do this, go to the costing variant Transaction OKKN, and double-

click Costing Variant PPC1 to arrive at the screen shown in Figure 3.27.

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3.2 Group Valuation

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Figure 3.27 Enabling Additive Costs for Stock Transfers

Check the Include Additive Costs with Stock Transfers checkbox for Costing Variant

PPC1. This means that the additive costs will be included in the cost estimate that is

calculated from a cross company stock transfer. Click the Save button to save your

settings.

To create the additive costs, go to Transaction CK74N to open the screen shown in

Figure 3.28.

Figure 3.28 Selection Screen for Creating Additive Costs

Enter your Material (in this example, “RAW-123”) in Plant 1710, and specify the Costing

Variant as PPC1 (for the legal valuation view) and the Costing Version as 1. Press the

(Enter) button twice to access the screen shown in Figure 3.29.


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Figure 3.29 Entry Screen for Creating Additive Costs

Enter a Price - Total of “0.25”, which represents the intercompany markup for

Material RAW-123. This amount will be added to the standard cost estimate of this

material.

Standard Cost Calculation

Now that you’ve made all the relevant configuration settings for group costing, you

can calculate the standard cost for material RAW-123 in the legal and the group views.

Start with calculating the standard cost in the legal view by going to Transaction

CK11N; entering the Material as “RAW-123”, the Plant as “1710”, and the Costing Vari-

ant as “PPC1”; and pressing the (Enter) key twice. This will take you to the screen


Figure 3.30 Cost Estimate in Legal View

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3.2 Group Valuation

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As you can see in Figure 3.30, the cost estimate for material RAW-123 in plant 1710 is

$1.50. This is made up of the cost estimate of $1.25 from material RAW-123 in plant

1010 and the additive cost of $0.25, which represents the intercompany markup.

Now you can look at the standard cost in the group view. To do this, go back to the

selection screen of Transaction CK11N; enter the Material as “RAW-123”, the Plant as

“1710”, and the Costing Variant as “ZPC1”; and press the (Enter) button twice. This will

take you to the screen shown in Figure 3.31.

Figure 3.31 Cost Estimate in the Group View

As you can see in Figure 3.31, material RAW-123 in plant 1710 has a standard cost of 1.25

USD. It doesn’t include the additive cost because that represents the intercompany

markup, which isn’t part of the group valuation cost. However, you can also see that

the Cost of Goods Sold view shows a cost of 1.50 USD. This is the cost in the legal view,

which includes the intercompany markup. Double-click the Cost of Goods Sold view

to go to the Cost Components screen, as shown in Figure 3.32.

As you can see in Figure 3.32, the cost components of the Cost of Goods Sold view

shows a breakdown of the material’s standard cost as well as the Delta Profit (0.25

USD) that is contained in the transfer price from the sending company. This profit

will be viewable on any cost component report as long as you select the Cost of Goods

Sold view, and it will help you identify any intercompany profit in inventory.


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Figure 3.32 Delta Profit in Cost Component Split

Now take a look at the released standard cost in the material master by going to

Transaction MM03 and viewing the Accounting 1 view, as shown in Figure 3.33.

Figure 3.33 Material Master after Releasing Standard Cost

As you can see in Figure 3.33, material RAW-123 has a Standard Price in legal valuation

(Company code currency) of 1.50 USD, and in group valuation (Group currency, group

val) of 1.25 USD. The parallel view will be reflected with every material movement and

thereby provide multiple approaches for valuing this material.

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3.3 Cross-Company Purchasing

3


Now we’ll look at a scenario where there is a cross-company purchase between two

companies to see the impact on the legal and group valuation views. First, look at the

sample data of the selling and buying companies you’ll be using in this scenario, as

shown in Table 3.1.

As you can see in Table 3.1, the scenario involves two companies, one in the United

States (1710), which is the selling company, and the other in Germany (1010), which is

the buying company. The standard cost in the legal view is represented in their

respective local currencies, while the standard cost in the group view is the same for

both companies. The US company is set up as an intercompany vendor (100071),

whereas the German company is set up as an intercompany customer (100070). In

this scenario, the US company will sell 1 EA of material FG-100 to the German com-

pany for 30 USD, which is 24 EUR.

Let’s walk through both the setup and the steps to complete a cross-company pur-

chasing scenario.

Field Selling Buying

Company Code 1710 1010

Country US Germany

Material FG-100 FG-100

Plant 1710 1010

Exchange Rate 1.25 USD 1 EUR

Standard Cost – Legal 20 USD 16 EUR

Standard Cost – Group 20 USD 20 USD

Intercompany Vendor/Customer 100071 100070

Sales/Purchase Price 30 USD 24 EUR

Table 3.1 Data for Materials in an Intercompany Scenario


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3.3.1 Intercompany Setup

Note that for the intercompany process to work correctly with group valuation, an

IDoc needs to be used to post the intercompany billing document, which will auto-

matically post an intercompany vendor invoice. Most of the settings that are needed

for this to work are done in the logistics functionality (as described in SAP Note 31126),

so we won’t go through them here. Instead, we’ll walk through the main settings that

are relevant for group valuation to function properly.

Valuation Difference Account

First, you’ll define a valuation clearing account for both companies 1010 and 1710.

This account records the difference between the transfer price and the selling com-

pany’s cost. Therefore, it represents the intercompany profit that was made from the

sale.

To configure this account, go to configuration menu path Controlling • General Con-

trolling • Multiple Valuation Approaches/Transfer Prices • Level of Detail • Define Val-

uation Clearing Account or use Transaction 8KEN. This will take you to the popup


Figure 3.34 Company Code for Valuation Clearing Account

In the Posted in company code field, enter “1010”, which means that this is the com-

pany code that you want to configure the account for. Now press the (Enter) key, and

click New Entries in the subsequent screen to arrive at the screen shown in Figure

3.35.

Enter trading partner (Tr.prt) “1710” and assign account “23000500” as the debit and

credit valuation clearing accounts. This means that when an intercompany transac-

tion is done in company code 1010 with a customer or vendor with the trading part-

ner 1710, this will be considered a business transaction between group companies.

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3

This account will be shown only in the group (or profit center) valuation view as a dif-

ference between the payable/receivable to the vendor/customer and the cost of the

product in the group valuation view.

Figure 3.35 Valuation Clearing Account Setup for Company Code 1010

Now click the Save button to save your settings for company 1010, and make the

same setting for company 1710, which is shown in Figure 3.36.

Figure 3.36 Valuation Clearing Account Setup for Company Code 1710

Set up the valuation clearing account for company code 1710 with a trading partner of

company 1010 so that when an intercompany transaction is done in company code

1710 with a customer or vendor with the trading partner 1010, this will be considered

a business transaction between group companies. Click the Save button to save your

settings.

Trading Partner and Plant in the Vendor Master

Next, you’ll assign the trading partner to the master data of the intercompany ven-

dor. Table 3.1 listed the intercompany vendor in this scenario as 100071, which will be

set up in company code 1010 (i.e., the buying company code). You can access the mas-

ter data of this vendor by going to Transaction BP and entering the vendor number

as a business partner.


114

Note: Transaction BP

In SAP S/4HANA, Transaction BP is used to create and change the vendor and cus-

tomer master data. Transactions XK01/FK01/MK01 and XK02/FK02/MK02 are now

obsolete.

Then, select the Change in BP role as Supplier (Fin.Accounting) (defined), and enter

the Trading partner as “1710” in the Control tab, as shown in Figure 3.37.

Figure 3.37 Trading Partner in the Vendor Master

Now change the Change in BP role field to Supplier (defined), and enter the Plant in

the Vendor: General Data tab, as shown in Figure 3.38.

Figure 3.38 Plant in the Vendor Master

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As you can see in Figure 3.38, Plant 1710 has been assigned in the master data of ven-

dor 100071 to define this vendor as the shipping plant in an intercompany transac-

tion. Click the Save button to save your settings.

Trading Partner in the Customer Master

Now you’ll assign the trading partner to the master data of the intercompany cus-

tomer. Table 3.1 listed the intercompany customer in this scenario as 100070. This

customer is set up in company code 1710 (i.e., the selling company code), so you can

access the master data of this customer by going to Transaction BP. Enter the cus-

tomer number as a Business Partner, and select the Change in BP role as Customer

(Fin.Accounting) (New). Enter the Trading partner in the Control tab, as shown in

Figure 3.39.

Figure 3.39 Trading Partner in the Customer Master

As you can see in Figure 3.39, the trading partner for company 1010 has been assigned

in the master data of customer 100070, which represents the buying company.

Intercompany Pricing Procedure Conditions

Now let’s consider the intercompany pricing procedure, and make sure that the rele-

vant condition for group valuation is set up. To do this, go to Transaction V/08, select

the standard Intercompany Pricing Procedure ICAA01, and double-click the Proce-

dures – Control Data folder. This will take you to the screen shown in Figure 3.40.


116

Figure 3.40 Intercompany Pricing Procedure with Group Valuation

As you can see in Figure 3.40, the Condition KW00 is present in the intercompany

pricing procedure, which means that the group valuation cost of the selling company

will be stored in this condition and will be posted to the revenue account in the group

valuation view when the intercompany billing document is posted.

Note: Intercompany Pricing Procedure

This condition is normally available in the standard intercompany pricing procedure

ICAA01. However, if it’s not present in your system, you’ll need to create it as a statis-

tical condition with condition category b (transfer price for group valuation) in Trans-

action V/06.

You’ll also notice that there are two other conditions shown in the screen:

� PC00

This represents the revenue in the profit center view. It’s a statistical condition

with condition category c (transfer price for the profit center) in Transaction V/06.

If profit center valuation is active, a condition record needs to be set up for this

condition to store the sales price of the selling profit center. This condition record

is set up in Transaction VK11, where you can enter the sales price in the Amount

field, as shown in Figure 3.41.

� PCVP

This condition represents the cost in the profit center view. It’s a statistical condi-

tion with condition category h (transfer price for the profit center) in Transaction

V/06. It’s an automatic condition and therefore doesn’t need a condition record.

We’ll discuss profit center valuation in Chapter 4.

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Figure 3.41 Condition Record for Condition Type PC00

3.3.2 Intercompany Scenario

Now we’ll walk through the cross-company process using the data that we’ve set up

for this scenario.

Creating an Intercompany Purchase Order

First, you’ll create a purchase order for the intercompany process. To do that, go to

Transaction ME21N to arrive at the screen shown in Figure 3.42.

Figure 3.42 Creating an Intercompany Purchase Order

Enter the Purch. Org. as “1010”, the Purch. Group as “001”, and the Company Code as

“1010” in the header section. Then go to the line item section, and enter the line item

number (Itm) as “10”, the Material as “FG-100”, and the PO Quantity as 1 EA. Then

enter the Deliv. Date as “01/07/2019”, the Net Price as “24.00” EUR, and the Plant as

“1010”. Now click the Save button to create the purchase order.


118

Creating a Delivery

Now you need to deliver the purchase order. To do this, go to Transaction VL10B,

enter the purchase order number, and click the Execute button. This will take you to

the screen shown in Figure 3.43.

Figure 3.43 Creating the Delivery for Intercompany Purchase Order

Select the line with the purchase order, and click the Background button (not shown)

at the bottom of the screen. This will create a line with the delivery document num-

ber, as shown in Figure 3.44.

Figure 3.44 Delivery Document Created

Next, click the delivery document number to arrive at the screen shown in Figure

3.45.

Figure 3.45 Entering the Picked Quantity

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Enter a Picked Qty of “1” EA in the delivery document, which will represent the quan-

tity of material FG-100 that will be picked from plant 1710. Click the Save button to

save the delivery.

Now that the quantity has been picked, go back into the delivery document, and click

on the Post Goods Issue button highlighted in Figure 3.45. This will create a material

document that you can see by clicking on the Document Flow button on the same

screen, which will lead to the screen shown in Figure 3.46.

Figure 3.46 Document Flow after Goods Issue

You can see in Figure 3.46 that a material document number 4900000519 has been

created from the goods issue. Navigate from this document to the accounting docu-

ments by going to Transaction MIGO, entering the material document number, and

clicking on FI Documents in the Doc Info. tab. This will take you to the popup screen


Figure 3.47 List of Accounting Documents after Goods Issue

You can see in Figure 3.47 that there are two accounting documents created, one for

each company code. Let’s look at each document separately. First, double-click the

4900000109 Accounting document in company code 1010. This will take you to the



120

Figure 3.48 Goods Receipt Accounting Document in the Legal View

As you can see in Figure 3.48, the accounting document in company 1010 is a goods

receipt document because company 1010 is the buying company. You’ll notice that

the amount posted to the inventory account 13400000 is 16 EUR, which is the legal

view standard cost in plant 1010; the amount posted to the GR/IR account is 24 EUR,

which is the purchase/transfer price, and the variance is 8 EUR. This represents the

legal valuation view of the accounting document. You’ll also notice that there is a

cross-company number with this document (Cross-Comp.No). This indicates that it’s

an intercompany transaction, based on the simultaneous goods receipt (in company

1010) and goods issue (in company 1710).

Now go to the group currency/group valuation document by clicking the Display Cur-

rency button shown in Figure 3.48. This will take you to the Display Currency for Doc-

ument popup screen shown in Figure 3.49.

Figure 3.49 Selecting the Group Currency Group Valuation View

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3

Select the Group Crcy/Grp Valuation view. Click the Continue/Confirm button, which

will take you to the screen shown in Figure 3.50.

Figure 3.50 Goods Receipt Accounting Document in Group View

The group view of the goods receipt document shows a debit to inventory and a

credit to the GR/IR of 20 USD. This represents the group standard cost in plant 1010.

You’ll notice that the variance which showed up in the legal view is 0.00 in the group

view because the purchase price is equal to the group cost.

Now go back to the List of Documents in Accounting popup screen (refer to Figure

3.47), and double-click document number 4900000167 in company code 1710. This

will take you to the screen shown in Figure 3.51.

Figure 3.51 Goods Issue Accounting Document in Legal View

You can see that the accounting document in company 1710 is a goods issue docu-

ment because company 1710 is the selling company. You’ll notice that the amount

credited to the inventory Account 13400000 and debited to the cost of goods sold

(COGS) Account 50300001 is 20 USD, which is the legal view standard cost in plant

1710. This represents the legal valuation view of the accounting document. You’ll also

notice the same cross-company number (Cross-Comp.No) that you saw earlier in

Figure 3.48.


122

Now go to the group currency/group valuation document by clicking the Display Cur-

rency button shown in Figure 3.51, selecting the Group Crcy/Grp Valuation option,

and clicking on the Continue/Confirm button. This will take you to the screen shown

in Figure 3.52.

Figure 3.52 Goods Issue Accounting Document in Group View

As you can see in Figure 3.52, the group view of the goods issue document shows a

credit to inventory and a debit to the COGS account of 20 USD. This represents the

group standard cost in plant 1710.

Now that you’ve seen the goods movement document in the legal and group views in

both company codes, let’s create the intercompany billing document.

Creating an Intercompany Billing Document

To create the intercompany billing document, go to Transaction VF01, and enter the

delivery Document “8000123” (see Figure 3.53).

Figure 3.53 Billing Document Entry Screen

Press the (Enter) key to go to the billing document details screen shown in Figure

3.54. As you can see in Figure 3.54, the intercompany billing document will be created

for 30 USD and represents the sale of 1 EA of Material FG-100 to customer (Payer)

100070, which represents company 1010.

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Figure 3.54 Billing Document Detail Screen

Click the Save button to post the billing document. Now you can view the accounting

document by going go Transaction VF03, entering the Billing Document number just

created, and clicking on the Accounting button, as shown in Figure 3.55.

Figure 3.55 Accessing the Accounting Document from a Billing Document

When you click the Accounting button, the subsequent screen will show the account-

ing document number of the billing document that you created. By double-clicking

on the accounting document number, you’ll be taken to the screen shown in Figure

3.56.

Figure 3.56 Accounting Document of the Billing Document in the Legal View

As you can see in Figure 3.56, the accounting document shows a debit to the cus-

tomer reconciliation Account 12300000 (representing plant 1010) and a credit to the


124

revenue Account 41000000 of 30 USD, which is the sales price. This represents the

legal view of the accounting document.

Now go to the group currency/group valuation document by clicking on Display Cur-

rency (not shown), selecting the Group Currency/Group Valuation option, and click-

ing on the Continue/Confirm button. This will take you to the screen shown in Figure

3.57.

Figure 3.57 Accounting Document of the Billing Document in the Group View

As you can see in Figure 3.57, the group view of the accounting document shows a

debit to receivables account 12300000 of 30 USD (representing the sales price), a

credit to revenue account 41000000 of 20 USD (representing the group cost), and the

difference of 10 USD goes to valuation clearing account 23000500, which we defined

earlier in Figure 3.36. This represents the intercompany profit.

Now that you’ve created the intercompany billing document, let’s create the inter-

company payable document.

Creating an Intercompany Payable Document

To create the intercompany payable document, you’ll need to create an IDoc by going

to Transaction VF31, which is the transaction to create an output document from a

billing document, arriving at the screen shown in Figure 3.58.

Figure 3.58 Entry Screen for Creating the IDoc

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Enter your Billing Document number (shown in Figure 3.55), and check the Intercom-

pany billing checkbox. Then, click the Execute button (not shown), which will take

you to the screen shown in Figure 3.59.

Figure 3.59 Output from the Billing Document

Select the Bill. Doc. number, and click the Process button at the bottom of the output

screen (not shown). If the document was processed successfully, a message at the bot-

tom of the screen will appear, as shown in Figure 3.60.

Figure 3.60 Message from Processing Output

You can now view the intercompany payable document that was created by the IDoc.

Although there are several ways to do this, you can simply go to the accounting doc-

ument that was created previously in Figure 3.57 and choose Environment • Docu-

ment Environment • Relationship Browser from the menu bar. A very useful

document appears that shows all the documents connected to your intercompany

scenario, as shown in Figure 3.61.

Figure 3.61 Relationship Browser of the Intercompany Scenario


126

As you can see, all the connected documents in your intercompany scenario are

shown in the relationship browser. Navigate to the intercompany payable document

by double-clicking on the highlighted Accounting document 5100000037 in com-

pany 1010, which will take you to the document shown in Figure 3.62.

Figure 3.62 Intercompany Payable Document in the Legal View

The accounting document shows a debit to the COGS account 50300001 and a credit

to the intercompany payable account 21300000 of 24 EUR, which is the purchase

price. This represents the legal view of the accounting document.

Now go to the group currency/group valuation document by clicking on the Display

Currency button (not shown), selecting the Group Currency/Group Valuation option,

and clicking on the Continue/Confirm button. This will take you to the screen shown

in Figure 3.63.

Figure 3.63 Intercompany Payable Document in the Group View

As you can see in Figure 3.63, the group view of the accounting document shows a

debit to COGS account 50300001 of 20 USD (representing the group cost), a credit to

intercompany payables account 21300000 of 30 USD (representing the purchase

price), and the difference of 10 USD goes to the valuation clearing account 23000500,

which we defined much earlier in Figure 3.36. This debit of $10 offsets the credit of $10

posted in the intercompany receivables document (refer to Figure 3.57) and thereby

eliminates the intercompany profit when reported with the group valuation view.

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3.4 Summary

3

3.4 Summary

In this chapter, we looked at a key valuation approach: group currency and group val-

uation. First, we looked at how group currency is defined and assigned to a company

code and the Material Ledger. We also showed how the group currency can be

changed when updating a material’s cost. We walked through how to define a costing

variant for group costing and how to track the delta profit made between companies

when calculating the group standard cost. Looking at a detailed intercompany sce-

nario, we showed the Material Ledger configuration and master data settings that

need to be made in an intercompany transaction, and then we looked at the materials

movement, intercompany sales, and intercompany purchase documents that are

created both in the legal and the group valuation views.

In the next chapter, we’ll discuss the profit center valuation view.

7

Contents

Preface ..................................................................................................................................................... 15

1 Introduction to the Material Ledger in SAP S/4HANA 21

1.1 What Is the Material Ledger? ......................................................................................... 21

1.2 The Before: The Material Ledger in SAP ERP ........................................................... 26

1.2.1 Inventory Valuation ............................................................................................. 28

1.2.2 Multiple Valuation Approaches ....................................................................... 35

1.2.3 Actual Costing ....................................................................................................... 40

1.3 The After: The Material Ledger in SAP S/4HANA .................................................. 47

1.3.1 SAP S/4HANA Finance ......................................................................................... 47

1.3.2 Why Is the Material Ledger Mandatory? ...................................................... 53

1.3.3 Inventory Valuation in SAP S/4HANA ............................................................ 54

1.4 Summary ................................................................................................................................. 58

2 Configuring Currency Types, Ledgers, and Valuation Views 61

2.1 Defining Currency Types for the General Ledger .................................................. 62

2.1.1 Standard SAP Currency Types ........................................................................... 62

2.1.2 Defining Standard Currency Types in the Universal Journal ................. 66

2.2 Currency Conversion Settings for Company Codes .............................................. 69

2.3 Defining the Currency and Valuation Profile .......................................................... 71

2.3.1 Maintaining the Currency and Valuation Profile ....................................... 72

2.3.2 Assigning the Currency and Valuation Profile to the

Controlling Area .................................................................................................... 73

2.3.3 Creating Versions for the Valuation Methods ............................................ 73

2.3.4 Activating the Currency and Valuation Profile ........................................... 74

Contents

8

2.4 Defining Ledgers for Valuation Views ....................................................................... 75

2.4.1 Multi-Valuation Ledger ...................................................................................... 76

2.4.2 Single Valuation Ledger ..................................................................................... 78

2.5 Defining Ledgers for Controlling Versions ............................................................... 79

2.6 Material Ledger Activation for Currencies and Valuations .............................. 80

2.6.1 Defining Material Ledger Types and Assigning Currency Types .......... 81

2.6.2 Assigning Material Ledger Types to Valuation Areas .............................. 82

2.6.3 Activating Material Ledgers for Valuation Areas ...................................... 83

2.7 Summary ................................................................................................................................. 85

3 Group Currency and Valuation 87

3.1 Group Currency .................................................................................................................... 87

3.1.1 Setting Up Group Currency for a Company Code ..................................... 88

3.1.2 Changing Material Cost ..................................................................................... 91

3.1.3 Making a Purchase .............................................................................................. 93

3.2 Group Valuation .................................................................................................................. 95

3.2.1 Transfer Pricing with Group Valuation ......................................................... 96

3.2.2 Group Valuation with Standard Cost ............................................................ 97

3.3 Cross-Company Purchasing ............................................................................................ 111

3.3.1 Intercompany Setup ........................................................................................... 112

3.3.2 Intercompany Scenario ...................................................................................... 117

3.4 Summary ................................................................................................................................. 127

4 Profit Center Valuation 129

4.1 Transfer Pricing Logic with Profit Center Valuation ............................................ 130

4.1.1 Defining the Currency Type for Profit Center Accounting ..................... 130

4.1.2 Defining Transfer Pricing for Profit Center Valuation ............................. 131

4.1.3 Settings for Internal Goods Movement ........................................................ 139

4.2 Standard Cost and Profit Center Valuation ............................................................. 143

4.2.1 Defining a Costing Variant for Profit Center Valuation .......................... 143

9

Contents

4.2.2 Assigning Transfer Price Variant to the Costing Version ........................ 148

4.2.3 Configuring a Delta Cost Component .......................................................... 148

4.2.4 Configuring a Special Procurement Key ....................................................... 150

4.2.5 Calculating Standard Cost ................................................................................. 152

4.3 Cross-Profit Center Purchasing ...................................................................................... 157

4.4 Manufacturing Orders with Profit Center Valuation .......................................... 161

4.4.1 Material Consumption in a Different Profit Center .................................. 162

4.4.2 Goods Receipt in a Different Profit Center .................................................. 165

4.5 Summary ................................................................................................................................. 169

5 Configuring Actual Costing 171

5.1 Material Ledger Activation for Actual Costing ....................................................... 172

5.1.1 Maintaining Number Ranges for Material Ledger Documents ............ 172

5.1.2 Configuring Dynamic Price Changes ............................................................. 175

5.2 Material Update ................................................................................................................... 175

5.2.1 Defining Movement Type Groups of the Material Ledger ...................... 176

5.2.2 Assigning Movement Type Groups of the Material Ledger .................... 177

5.2.3 Defining the Material Update Structure ...................................................... 178

5.2.4 Assigning Material Update Structure to the Valuation Area ................ 180

5.3 Actual Costing ....................................................................................................................... 181

5.3.1 Activating Actual Costing .................................................................................. 181

5.3.2 Creating User-Defined Names for Receipts/Consumption .................... 183

5.3.3 Assigning User-Defined Names for Receipts/Consumption ................. 184

5.3.4 Activating Actual Cost Component Split ...................................................... 186

5.3.5 Activating Work in Process at Actual Cost ................................................... 187

5.4 Account Determination .................................................................................................... 188

5.4.1 Cost/Price Differences for the Material Ledger .......................................... 189

5.4.2 Materials Management Exchange Rate Differences ............................... 191

5.4.3 Revaluation of Other Consumables .............................................................. 193

5.4.4 Accruals and Deferred Accounts for the Material Ledger ....................... 194

5.4.5 Activity Price Differences .................................................................................. 196

5.4.6 Material Ledger Cost Center Absorption ..................................................... 197

5.4.7 Work In Process from Price Differences—Material ................................... 198

Contents

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5.4.8 Work in Process from Price Differences—Activity Types ....................... 199

5.4.9 Differences of Canceled WIP—Materials ..................................................... 200

5.4.10 Differences of Cancelled WIP—Activity Types .......................................... 202

5.5 Summary ................................................................................................................................. 203

6 Actual Costing Run and Analysis 205

6.1 Actual Costing Cockpit ...................................................................................................... 206

6.2 Actual Costing Run ............................................................................................................. 207

6.2.1 Setup ........................................................................................................................ 208

6.2.2 Selection .................................................................................................................. 210

6.2.3 Preparation ............................................................................................................ 212

6.2.4 Settlement .............................................................................................................. 218

6.2.5 Post Closing ............................................................................................................ 222

6.2.6 Mark Prices ............................................................................................................. 225

6.2.7 Additional Options .............................................................................................. 228

6.3 Alternative Valuation Run .............................................................................................. 232

6.4 Material Price Analysis ..................................................................................................... 239

6.4.1 Navigating the Material Price Analysis ......................................................... 240

6.4.2 Price Determination Structure ........................................................................ 245

6.4.3 Price History ........................................................................................................... 250

6.4.4 Material Price Analysis for Old SAP ERP Data ............................................. 252

6.4.5 Actual Cost Components ................................................................................... 253

6.4.6 Valuated Quantity Structure ............................................................................ 256

6.5 Activity Consumption Analysis ..................................................................................... 258

6.6 Value Flow Monitor ........................................................................................................... 262

6.6.1 Not Distributed Differences ............................................................................. 263

6.6.2 Not Allocated Differences ................................................................................. 265

6.6.3 Using the Value Flow Monitor ......................................................................... 267

6.7 General Ledger Postings Made by the Material Ledger ..................................... 269

6.7.1 Closing Document of the Material Ledger .................................................. 269

6.7.2 Analyzing General Ledger Postings Made by the Material Ledger ...... 270

6.8 Summary ................................................................................................................................. 274

11

Contents

7 Actual Costing and Peripheral Transactions 275

7.1 Changing Standard Cost Mid-Month .......................................................................... 275

7.1.1 Restriction on Changing the Standard Cost Mid-Month in SAP ERP ... 276

7.1.2 Changing the Standard Cost Mid-Month in SAP S/4HANA ................... 277

7.2 Debiting/Crediting Material ........................................................................................... 279

7.2.1 Debiting/Crediting a Material Directly ......................................................... 280

7.2.2 Defining Reasons for the Price Change ......................................................... 282

7.2.3 Debiting/Crediting a Material with an Alternative

General Ledger Account ..................................................................................... 284

7.2.4 Debiting/Crediting a Material to a Specific Cost Component .............. 285

7.3 Distributing Consumption Variances ......................................................................... 289

7.3.1 Activating Distribution of Consumption Variances .................................. 289

7.3.2 Distributing Differences for Materials .......................................................... 294

7.3.3 Distributing Differences for Activities ........................................................... 299

7.4 Manually Changing Cost Components ...................................................................... 303

7.4.1 Price Difference Account for Cost Component Change .......................... 303

7.4.2 Changing the Cost Component ....................................................................... 304

7.5 Deactivating Statistical Moving Average Price ...................................................... 307

7.6 Summary ................................................................................................................................. 310

8 Parallel Cost of Goods Manufactured 311

8.1 What Is Parallel Cost of Goods Manufactured? ..................................................... 311

8.2 Activating the Business Function ................................................................................. 313

8.3 Maintaining the Valuation View .................................................................................. 315

8.4 Defining Ledgers and Accounting Principles ........................................................... 317

8.5 Configuring Parallel Valuation ...................................................................................... 319

8.6 Calculating a Parallel Activity Rate ............................................................................. 321

8.6.1 Calculating the Depreciation in Different Accounting Principles ........ 322

8.6.2 Posting Activity Consumption to a Production Order .............................. 325

Contents

12

8.7 Calculating with Multiple Costing Runs ................................................................... 332

8.7.1 Actual Costing Run .............................................................................................. 332

8.7.2 Alternative Valuation Run ................................................................................. 333

8.8 Summary ................................................................................................................................. 338

9 Balance Sheet Valuation 339

9.1 What Is Balance Sheet Valuation? .............................................................................. 339

9.2 Configuring Balance Sheet Valuation ........................................................................ 341

9.2.1 Activating FIFO/LIFO Valuation ....................................................................... 341

9.2.2 Defining Valuation Level ................................................................................... 342

9.2.3 Defining FIFO/LIFO-Relevant Movement Types ........................................ 343

9.2.4 Defining FIFO/LIFO Methods ............................................................................ 343

9.2.5 Configuring FIFO/LIFO Valuation Areas ....................................................... 344

9.2.6 Defining LIFO Layer Versions ............................................................................ 345

9.2.7 Defining Document Types for the Lowest Value Method ...................... 346

9.2.8 Defining Movement Types for the Lowest Value Method ..................... 346

9.2.9 Defining Key Figure Scheme ............................................................................ 347

9.2.10 Setting Up Valuation Alternatives ................................................................. 347

9.2.11 Defining the FIFO Variant ................................................................................. 348

9.3 FIFO Valuation ...................................................................................................................... 349

9.3.1 Creating a Purchase Order and Goods Receipt .......................................... 349

9.3.2 Activating a FIFO Material ................................................................................. 353

9.3.3 Calculating Periodic Receipt Values ............................................................... 355

9.3.4 Calculating the FIFO Price ................................................................................. 356

9.3.5 Updating the Material Price ............................................................................. 360

9.4 LIFO Valuation ...................................................................................................................... 361

9.4.1 Creating Purchase Orders and Goods Receipts .......................................... 362

9.4.2 Activating a LIFO Material ................................................................................. 364

9.4.3 Calculating the LIFO Price .................................................................................. 367

9.5 Lowest Value Determination ......................................................................................... 368

9.6 Using Balance Sheet Valuation in Actual Costing ................................................ 372

9.7 Summary ................................................................................................................................. 374

13

Contents

10 The Material Ledger and Peripheral Applications 375

10.1 Split Valuation ...................................................................................................................... 375

10.1.1 Configuring Split Valuation .............................................................................. 376

10.1.2 Creating a Material Master with Multiple Valuation Types .................. 379

10.1.3 Procuring Split Valuated Materials ................................................................ 382

10.1.4 Calculating Actual Cost for Split Valuated Material ................................. 383

10.2 Actual Costing for Make-to-Order Products ............................................................ 385

10.2.1 Make-to-Order Production Process ................................................................ 385

10.2.2 Calculating the Actual Cost ............................................................................... 388

10.3 Daily Actual Costs ................................................................................................................ 392

10.3.1 Creating Actual Costing Runs for Future Periods ...................................... 392

10.3.2 Creating Variants for Actual Costing Steps ................................................. 395

10.3.3 Creating and Sequencing Background Jobs ................................................ 400

10.4 Exchange Rate Differences .............................................................................................. 403

10.4.1 Configuring the Treatment of Exchange Rate Differences .................... 404

10.4.2 Purchasing a Material with Exchange Rate Differences ......................... 406

10.4.3 Exchange Rate Differences in the Material Price Analysis ..................... 410

10.5 Actual Costing across Company Codes ...................................................................... 412

10.5.1 Cross-Company Scenario ................................................................................... 413

10.5.2 Setting Up Actual Costing across Company Codes ................................... 415

10.5.3 Material Price Analysis before the Actual Costing Run ........................... 416

10.5.4 Material Price Analysis after the Actual Costing Run ............................... 420

10.6 Profitability Analysis .......................................................................................................... 425

10.6.1 COGS Account Split by Cost Components .................................................... 426

10.6.2 Production Variance Account Split by Variance Categories ................... 437

10.7 Summary ................................................................................................................................. 443

11 Reporting 445

11.1 ABAP List Viewer Reports ................................................................................................. 445

11.1.1 Prices and Inventory Values .............................................................................. 446

11.1.2 Materials with Largest Moving Price Differences ...................................... 451

Contents

14

11.1.3 Materials with Highest Inventory Value ...................................................... 452

11.1.4 Display of Work in Process for Actual Costs ................................................ 453

11.2 Drilldown Reports ............................................................................................................... 457

11.3 SAP Fiori Applications ....................................................................................................... 461

11.3.1 Trial Balance App .................................................................................................. 462

11.3.2 Material Inventory Values Apps ...................................................................... 471

11.4 CDS Views ............................................................................................................................... 480

11.5 Summary ................................................................................................................................. 482

12 Conclusion 483

12.1 What You’ve Learned ........................................................................................................ 483

12.2 Potential Areas for Innovation ...................................................................................... 486

Appendices 489

A Transitioning to the Material Ledger in SAP S/4HANA ...................................... 491

B General Ledger Line Item Texts from Material Ledger Postings .................... 519

C Material Ledger Comparison: SAP ERP versus SAP S/4HANA ......................... 523

D Bibliography .......................................................................................................................... 525

E The Author ............................................................................................................................. 527

Index ........................................................................................................................................................ 529

529

Index

A

ABAP List Viewer reports ................................... 445

highest inventory value ................................. 452

largest moving price differences ................ 451

prices and inventory values ......................... 446

WIP for actual costs ........................................ 453

Account determination ..................................... 188

table ....................................................................... 188

Account modification ......................................... 283

Account-based CO-PA ............................... 426, 439

Accounting principle ........................................... 311

assigning ............................................................. 319

defining ................................................................ 317

Accounts approach .............................................. 312

Accounts payable ..................................................... 23

Accounts receivable ................................................ 23

Accruals .................................................................... 194

Activity consumption analysis ....................... 258

activity adjustment ......................................... 299

CO document ..................................................... 261

cost components .............................................. 262

header fields ....................................................... 259

price determination view .............................. 260

Activity consumption update ......................... 182

Activity price differences ................................... 196

Activity price report .................................. 260, 330

Activity quantity distribution ......................... 302

Activity rate ............................................................. 321

Actual activity price ................................... 207, 328

Actual cost components .................................... 253

Actual costing ............................................................ 24

across company codes ................ 412, 413, 415

activating ............................................................ 181

activating WIP ................................................... 187

activities .............................................................. 497

analysis ................................................................ 205

assigning user-defined names .................... 184

balance sheet valuation ................................ 372

calculation .......................................................... 205

configuring ............................................... 171, 181

cost component split ...................................... 186

Actual costing (Cont.)

creating user-defined names ....................... 183

daily ....................................................................... 392

group valuation ............................................... 413

material transactions .................................... 176

moving average price .................................... 307

MTO ....................................................................... 385

new ........................................................................ 207

peripheral transactions ................................. 275

SAP ERP ............................................................ 40, 42

split valuation ................................................... 383

steps ...................................................................... 207

Actual costing cockpit ........................................ 206

accessing ............................................................. 208

buttons ................................................................. 228

mark prices ......................................................... 225

post closing ........................................................ 222

preparation ........................................................ 212

prerequisites ...................................................... 206

SAP ERP ................................................................... 42

settlement ........................................................... 219

Actual costing run ....................................... 205, 207

additional options ........................................... 228

creating variants .............................................. 395

daily ....................................................................... 403

future periods ........................................... 392, 394

mark prices ......................................................... 225

MTO ....................................................................... 388

parallel COGM ................................................... 332

post closing ........................................................ 222

preparation ........................................................ 212

results .......................................................... 229, 231

selection ............................................................... 210

settlement ........................................................... 218

setup ...................................................................... 208

timing ................................................................... 225

valuation alternative ..................................... 373

Actual transfer price ............................................ 136

Additive costs ................................................ 101, 106

creating ................................................................ 107

Aggregate tables ....................................................... 55

Alternative price ................................................... 220

Index

530

Alternative valuation run (AVR) ............ 209, 232

classic ................................................................... 233

cockpit .................................................................. 238

creating ................................................................ 233

parallel COGM ......................................... 333, 335

results ................................................................... 238

SAP ERP ................................................................... 44

settings ................................................................. 236

uses ........................................................................ 232

Assets ............................................................................ 23

B

Backflushing ........................................................... 289

Background job ..................................................... 400

daily ...................................................................... 400

Background processing ...................................... 224

Balance sheet ............................................................. 23

Balance sheet valuation .............................. 30, 339

actual costing .................................................... 372

configuring ......................................................... 341

FIFO ....................................................................... 349

LIFO ....................................................................... 361

Bill of materials (BOM)

actual .................................................................... 243

Business add-ins (BAdIs) .................................... 429

Business function

activating ............................................................ 313

LOG_MM_SIT .................................................... 415

Business partner ...................................................... 50

C

Calculation base ....................................................... 98

CDS views ................................................................ 480

Characteristics ....................................................... 457

Chart .......................................................................... 475

Closing document ................................................ 269

Closing history ...................................................... 244

COGS account ........................................................ 426

COGS configuring splitting .......................... 428

revaluation of consumption ....................... 435

split by cost components .............................. 426

split from PGI .................................................... 432

Company .................................................................... 65

Company code .......................................................... 65

Company code currency ...................................... 62

Comparison price .................................................. 369

Compatibility view ................................................. 58

Condition record ................................................... 133

Condition type ....................................................... 132

creating ...................................................... 132, 135

fixed ....................................................................... 136

linking ......................................................... 134, 135

percentage ........................................................... 132

Consolidation ........................................................... 95

Consumption variance ....................................... 289

distributing ......................................................... 289

Contracts .................................................................. 369

Controlling (CO) functionality ......................... 425

Controlling (CO) module ............................... 24, 27

Controlling area ....................................................... 73

Controlling area currency .................................... 63

Controlling level .................................................... 183

Controlling object currency ................................ 66

Convergence cycle ................................................ 220

Cost center absorption ........................................ 197

Cost center report ................................................. 326

Cost component

activity consumption analysis .................... 262

costing lot size ................................................... 255

direct material ................................................... 285

manually changing ............................... 303, 304

MTO ....................................................................... 389

structure ..................................................... 186, 320

view .............................................................. 254, 418

Cost component split ...................... 110, 154, 186

activating ............................................................ 186

changing .............................................................. 304

material price analysis ................................... 253

MTO ....................................................................... 390

Cost element ........................................................... 186

Cost estimate ................................................ 109, 152

Cost of goods sold (COGS) ........................ 427, 431

Cost splitting profile ............................................ 429

Costing levels .......................................................... 216

Costing type .............................................................. 98

group valuation .................................................. 98

profit center valuation ................................... 144

Costing variant

group valuation ......................................... 97, 101

profit center valuation ......................... 143, 146

531

Index

Costing-based CO-PA ................................. 425, 427

Credit of cost centers ........................................... 183

Crediting ................................................................... 279

Cross-company costing ...................................... 102

activating ............................................................ 102

Cross-company purchasing .............................. 111

scenario ................................................................ 117

setup ...................................................................... 112

Cross-profit center purchasing ....................... 157

Cumulate data ........................................................... 44

Currency and valuation profile ................ 71, 315

activating ............................................................... 74

assigning to controlling area ......................... 73

maintaining .......................................................... 72

Currency conversion

company code ...................................................... 69

currency type ........................................................ 70

global ....................................................................... 69

Currency key .............................................................. 62

Currency type

assigning ................................................................ 81

configuring ............................................................ 61

defining for the G/L ............................................ 62

naming .................................................................... 69

profit center accounting ............................... 130

reporting .............................................................. 448

single valuation ledger ..................................... 79

standard .................................................. 62, 66, 67

user-defined .................................................... 67, 68

D

Daily actual costs .................................................. 392

Data migration ....................................................... 494

activities .............................................................. 495

run .......................................................................... 494

Date control ............................................................... 98

Debit/credit material ................................ 279, 420

alternative G/L account ................................ 284

directly .................................................................. 280

reasons for price change ............................... 282

specific cost component ................................ 285

Debiting .................................................................... 279

Deferred accounts ................................................ 194

Definition level ......................................................... 69

Delivery document .............................................. 118

Delta cost component

group valuation ............................................... 103

profit center valuation .................................. 148

settings ........................................................ 104, 149

split ........................................................................ 413

Delta posting .......................................................... 233

Depreciation area .......................................... 70, 322

assigning ............................................................. 319

Depreciation run .................................................. 324

Determine delta postings .................................... 44

Determine sequence .............................................. 43

Distribution of usage variances (DUV) ........ 289

activating ............................................................ 289

activities .............................................................. 299

material price analysis .................................. 298

materials ............................................................. 294

specifying movement types ......................... 290

Document currency ............................................... 62

Document table .................................................... 309

Document type

lowest value method ...................................... 346

mapping .............................................................. 432

Drilldown report ................................................... 457

classic ................................................................... 459

material breakdown ....................................... 461

multiple characteristics ................................. 460

Dynamic price release ..................... 175, 226, 276

E

Exchange rate differences ........................ 191, 403

AVR ........................................................................ 237

causes ................................................................... 404

configuring treatment ................................... 404

material price analysis .................................. 410

purchasing material ....................................... 406

settings ................................................................. 404

Exchange rate type .............................................. 405

Exchange rate variance ...................................... 206

Extension ledger ...................................................... 75

External procurement ............................... 377, 382

F

Financial Accounting (FI) module ............. 24, 27

Finished goods .......................................................... 22

Index

532

First in, first out (FIFO) ......................... 31, 32, 340

activating ............................................................ 341

activating material ......................................... 353

alternative price ............................................... 359

calculating price ............................................... 356

configuring valuation areas ....................... 344

defining method ............................................... 343

defining movement types ............................ 343

periodic receipt values ................................... 355

updating material price ................................ 360

value ..................................................................... 358

variant ................................................................. 348

Fixed assets ................................................................ 23

Future cost estimate ........................................... 429

Future price ............................................................. 226

G

G/L account splitting .......................................... 439

General Ledger ...................... 23, 27, 284, 269, 519

classic ...................................................................... 27

currency types ...................................................... 62

exchange rate difference .............................. 412

line items ............................................................. 519

new .......................................................... 27, 51, 312

posting ........................................................ 269, 270

General modification .......................................... 283

Generally Accepted Accounting

Principles (GAAP) ............................................ 311

Global category ..................................................... 378

Global company currency ................................... 64

Global types ............................................................ 376

creating ................................................................ 377

Goods issue .............. 119, 325, 351, 353, 364, 411

group view .......................................................... 122

legal view ............................................................ 121

Goods receipt ........... 93, 350, 351, 362, 363, 382,

387, 407

accounting document ................................... 166

different profit center ..................................... 165

group view .......................................................... 121

profit center view ............................................. 167

Group costing ........................................................... 97

Group currency ................................................. 64, 87

changing material cost .................................... 91

making a purchase ............................................ 93

setting up for company code ......................... 88

settings ................................................................... 89

Group valuation .............. 38, 71, 87, 95, 413, 424

AVR ......................................................................... 237

costing variant .................................................... 97

delta cost component ..................................... 103

standard cost ....................................................... 97

Group valuation view ............................................ 97

Group view .............................................................. 109

buying company ..................................... 419, 424

cost components .................................... 420, 425

delta cost component split ........................... 413

H

Hard currency ........................................................... 64

HelpDesk .................................................................. 506

administration .................................................. 517

AVR ......................................................................... 514

balance sheet valuation ................................ 513

cost component split ....................................... 511

master data ........................................................ 509

miscellaneous .................................................... 512

next architecture tables ................................. 516

overview ............................................................... 507

production orders ............................................ 512

purchase order history ................................... 513

transaction data ............................................... 508

WIP ......................................................................... 515

I

IDoc ............................................................................. 112

Index-based currency ............................................ 64

Intercompany billing document .................... 122

group view ........................................................... 124

Intercompany customer .................................... 115

Intercompany markup ....................................... 101

additive costs ..................................................... 106

Intercompany payable document ................. 124

group view ........................................................... 126

legal view ............................................................. 126

Intercompany pricing procedure ................... 115

533

Index

Intercompany purchase order ........................ 117

delivering ............................................................. 118

Intercompany transactions .............................. 416

Intercompany vendor ......................................... 113

Internal goods movement ................................ 139

settings ................................................................. 140

Inventory adjustment ........................................ 294

DUV ....................................................................... 296

Inventory Management (IM) module ............. 54

Inventory valuation ................................................ 28

attributes ................................................................ 32

SAP Fiori apps ....................................................... 55

SAP S/4HANA ........................................................ 54

scenarios ................................................................. 31

subledger ................................................................ 53

tables ................................................................. 34, 55

Inventory value ........................................................ 23

Invoice receipt ....................................................... 409

Invoice verification .............................................. 404

J

Job overview ........................................................... 228

K

Key figure ................................................................. 457

Key figure scheme ................................................ 347

defining ................................................................ 347

L

Last in, first out (LIFO) ........................... 31, 32, 340

activating ............................................................ 341

activating material ......................................... 364

calculating price ............................................... 367

configuring valuation areas ........................ 344

defining method ............................................... 343

defining movement types ............................. 343

layer versions ..................................................... 345

valuation ............................................................. 361

Late price change .................................................. 276

Leading ledger .................................................... 51, 75

Lean manufacturing ............................................ 385

Ledger .................................................................... 23, 51

CO versions ............................................................ 79

Ledger (Cont.)

configuring ............................................................ 61

defining ......................................................... 75, 321

Ledger approach ................................................... 312

Ledger group .......................................................... 318

Legacy System Migration

Workbench (LSMW) ........................................ 393

Legal valuation .................................................. 38, 71

Legal valuation view ..................................... 97, 102

Legal view ............................................. 108, 146, 159

buying company ..................................... 418, 422

cost components ..................................... 418, 423

delta cost component split .......................... 413

selling company ............................................... 416

Liabilities ..................................................................... 23

LIFO layer ................................................................. 345

Line Items report .................................................. 480

Local currency ............................................... 407, 409

Lower of cost and market (LCM) ........................ 31

Lowest value determination ............ 31, 340, 368

output ................................................................... 371

update prices ..................................................... 370

Lowest value method .......................................... 346

Lowest value principle ................................. 32, 340

M

Main costing run .................................................. 232

Make-to-order (MTO) .......................................... 448

actual costing .................................................... 385

production process .......................................... 385

Make-to-stock (MTS) ........................................... 385

actual costing .................................................... 390

Manual checkbox .................................................... 81

Manufacturing order .......................................... 161

Mark material prices .............................................. 43

Mark prices .............................................................. 225

AVR ........................................................................ 238

parameters ......................................................... 226

Material ....................................................................... 21

Material consumption ....................................... 162

accounting document .................................... 164

cost ........................................................................ 163


Material cost .............................................................. 91

Index

534

Material Inventory Values apps ..................... 471

balance summary ............................................ 472

line items ............................................................. 479

rounding differences ...................................... 477

Material Ledger

activating actual costing ............................. 172

activating currencies and valuations ......... 80

benefits ................................................................... 26

conversion tables ................................................ 45

definition ................................................................ 21

HelpDesk ............................................................. 506

limitations ............................................................. 26

mandatory ............................................................ 53

misconceptions ................................................... 24

periodic tables ...................................................... 56

SAP ERP ............................................................ 26, 46

SAP S/4HANA ....................................................... 47

Material Ledger conversion ............................. 491

data migration ................................................. 494

existing customers .......................................... 491

new customers .................................................. 498

Material Ledger type ........................................... 498

assigning ................................................................ 82

defining ................................................................... 81

Material master ........................................................ 22

actual costing ....................................................... 40

company code and group currency ............ 90

FIFO ....................................................................... 354

LIFO ....................................................................... 366

MTO ....................................................................... 386

price change .......................................................... 93

split valuation ................................................... 381

standard cost ............................................ 110, 155

Material movement tables .................................. 56

Material period ...................................................... 207

Material price analysis .............................. 231, 239

accounting postings ....................................... 272

actual cost components ................................ 253

after actual costing run ................................ 420

AVR ........................................................................ 239

before actual costing ...................................... 416

changed standard cost .................................. 278

consumption ..................................................... 185

cost component change ................................ 306

debit/credit material ...................................... 281

display buttons ................................................. 242

Material price analysis (Cont.)

drilldown .............................................................. 258

DUV ........................................................................ 297

exchange rate difference ..................... 410, 411

FIFO ........................................................................ 360

header buttons .................................................. 240

header fields ............................................. 240, 241

inventory adjustment ..................................... 295

MTO ....................................................................... 389

MTS ........................................................................ 391

not allocated ...................................................... 266

not distributed ................................................... 263

parallel COGM AVR ......................................... 338

period status ....................................................... 241

price determination structure ..................... 245

price history ........................................................ 250

prices and inventory values ......................... 450

revaluation of consumption ........................ 435

SAP ERP ................................................................... 44

SAP ERP data ...................................................... 252

split valuation .................................................... 384

valuated quantity structure ......................... 256

valuation alternatives .................................... 373

Material update ...................................................... 175

assigning movement type groups ... 177, 180

defining movement type groups ................ 176

defining structure ............................................. 178

Material valuation .................................................. 32

Material valuation table .............................. 56, 308

Materials management (MM) .......................... 341

Measures ................................................................... 467

Movement type

defining ................................................................ 142

FIFO/LIFO ............................................................. 343

lowest value method ....................................... 346

reversal ................................................................. 292

Movement type group ........................................ 176

options .................................................................. 177

Moving average costing ................................ 29, 31

statistical ............................................................... 42

Moving average price ............................................ 91

deactivating ....................................................... 307

Multilevel price determination ......................... 43

Multiple valuation approaches ......................... 35

Multiple valuations ......................................... 71, 73

535

Index

Multi-valuation ledger ........................................... 76

currency types ...................................................... 77

setting up ............................................................... 77

N

Negative price .............................................. 220, 265

Nonleading ledger ............................................ 51, 75

Not allocated differences ................................... 265

Not distributed differences .............................. 263

causes ................................................................... 264

Number range ........................................................ 172

accounting document .................................... 174

Material Ledger documents ......................... 173

O

Offsetting account ................................................ 431

Origin group ........................................................... 286

P

Parallel activity rate ............................................. 321

calculating deprecation ................................ 322

posting activity consumption ..................... 325

Parallel cost of goods manufactured ... 233, 311

accounting principles ..................................... 317

creating a version ............................................ 316

creating an AVR ................................................ 335

ledgers .................................................................. 317

multiple costing runs ..................................... 332

valuation view .................................................. 315

value flow ............................................................ 312

Parallel currencies ................................................... 36

derive in SAP ERP ................................................ 36

Parallel ledger approach ....................................... 51

Parallel valuation .................................... 24, 38, 311

configuring ......................................................... 319

Partner version ......................................................... 98

group valuation ................................................... 99


Period status ........................................................... 276

Period totals table ................................................. 309

Period-end ............................................................... 206

Periodic receipt values ........................................ 355

Periodic unit price (PUP) ................... 40, 205, 246

Peripheral application ........................................ 375

Planned transfer price ........................................ 132

Plants .................................................................. 80, 502

Post closing ............... 43, 188, 189, 192–194, 196,

198–200, 206, 222, 269, 392

AVR ........................................................................ 238

future periods .................................................... 394

output ................................................................... 225

parameters ......................................................... 223

processing options .......................................... 224

Post goods issue (PGI) ......................................... 426

document ............................................................ 433

Preliminary valuation ........................................ 254

Preparation ............................................................. 212

background jobs ............................................... 402


errors ..................................................................... 217

output .......................................................... 216, 218

parameters ......................................................... 214

previous period ................................................. 215

Price change

defining reasons ............................................... 282

Price control .......................... 30, 40, 250, 380, 504

Price determination ........................................ 40, 84

changing ............................................................. 504

mutlilevel ................................................... 219, 247

single/multilevel .............................................. 189

single-level ................................................. 219, 247

Price determination structure ........................ 245

activity consumption analysis ................... 260

columns ............................................................... 246

rows ....................................................................... 245

Price difference account .................................... 303

Price history ............................................................ 250

columns ............................................................... 251

Price variance ......................................................... 206

Pricing procedure .............................. 134, 135, 138

Processing type ..................................................... 223

Product Cost Controlling module .................... 24

Production order ............................... 163, 165, 325

calculating variances ..................................... 167

cost analysis ................................... 165, 326, 387

production variance ....................................... 440

settlement ........................................................... 168

zero delivery ....................................................... 265

Index

536

Production startup .............................................. 500

output log ........................................................... 501

Production variance ................................... 141, 437

account configuration ................................... 438

configuring accounts ..................................... 439

settlement ........................................................... 442

Profit center ............................................................ 129

Profit center currency ........................................ 130

Profit center valuation ......................... 38, 71, 129

AVR ........................................................................ 237

currency types ................................................... 130

delta cost component .................................... 149

manufacturing order ..................................... 161

standard cost ..................................................... 143

transfer pricing ................................................. 131

Profit center view ........... 139, 159, 164, 167, 169

cost ........................................................................ 116

revenue ................................................................ 116

standard cost ..................................................... 155

Profitability analysis (CO-PA) .......................... 425

Purchase info records ......................................... 369

Purchase orders .................................................... 369

Push logic ................................................................ 271

Q

Quantity structure control .................................. 98

R

Raw materials ............................................................ 22

Relationship browser .......................................... 125

Reporting .......................................................... 49, 445

ALV ........................................................................ 445

CDS views ............................................................ 480

drilldown ............................................................. 457

SAP ERP ................................................................... 52

SAP Fiori apps ................................................... 461

SAP S/4HANA ....................................................... 52

Retroactive enablement ....................................... 73

Revaluation .................................................... 193, 194

WIP ........................................................................ 198

Revaluation of consumption ................... 43, 219,

224, 248

COGS split ........................................................... 435

Revaluation reason ..................................... 287, 303

Reversal posting .................................................... 273

Reverse goods movements ............................... 290

Run reference ......................................................... 234

creating ................................................................ 333

parallel COGM ................................................... 333

S

Sales cost estimate ................................................ 428

SAP ERP ....................................................................... 26

accounting structure ........................................ 24

inventory valuation .......................................... 28

old data ................................................................ 252

parallel cost of goods manufactured ....... 312

reporting ................................................................ 52

restrictions ................................................ 275, 276

versus SAP S/4HANA ....................................... 523

SAP Fiori ............................................................. 52, 461

SAP Fiori apps ........................................... 50, 52, 461


SAP HANA ........................................................... 49, 55

SAP S/4HANA ............................................................ 47

actual costing .................................................... 207

AVR ......................................................................... 232

conversion ........................................................... 491

CO-PA .................................................................... 425

evolution ................................................................ 47

financial reporting ............................................. 52

flexibility .............................................................. 275


ledger approach ................................................ 312

material price analysis ................................... 239

variances .............................................................. 263

versus SAP ERP .................................................. 523

SAP S/4HANA Finance .......................................... 47

core areas .............................................................. 48

SAP Simple Finance ................................................ 47

Schedule Manager ................................................ 228

Scrapping .................................................................. 142

Selection ............................................................ 42, 210

background jobs ............................................... 402


Semifinished goods ................................................ 22

Server group ............................................................ 214

Settlement ...................................................... 208, 218

background jobs ............................................... 402

537

Index

Settlement (Cont.)


legal view ............................................................. 168

output ................................................................... 222

parameters ......................................................... 219


Settlement document ......................................... 244

Simulation ledger .................................................... 76

Single source of truth ................................... 50, 426

Single valuation ledger .......................................... 78

setting up ............................................................... 78

Single-level price determination ....................... 43

Source document ................................................. 244

Special procurement key

group valuation ................................................ 105


Special purpose ledger .................................... 51, 66

Special stock .................................................. 388, 504

Split valuation ........................................................ 375

calculating actual cost .................................. 383

configuring ......................................................... 376

creating a material .......................................... 379

procuring materials ........................................ 382

Splitting profile ............................................ 439, 440

Standard cost .......................................................... 205

changing mid-month ........................... 275, 277

group valuation ................................................ 108

group view .......................................................... 109


SAP ERP ................................................................ 276

SAP S/4HANA ..................................................... 277

Standard cost estimate

group valuation ................................................... 97


Standard costing ............................................... 28, 31

Standard ledger ........................................................ 75

Stock coverage check ........................................... 220

Stock value ................................................................. 23

Strategy sequence ................................................. 429

Subledger .................................................................... 23

Supply chain .............................................................. 97

T

Table

ACDOCA ......................... 50, 56, 67, 94, 436, 502

Table (Cont.)

ACDOCA_M_EXTRACT ..................................... 56

CKMLCR ............................................................... 309

CKMLKEPH ............................................................ 57

CKMLMYMP ....................................................... 356

CKMLPR_EB .............................................. 358, 372

EBEW(H) ............................................................... 308

FCML ..................................................................... 480

MATDOC ................................................... 48, 56, 58

MBEW ........................................................ 34, 56, 94

MBEW(H) ............................................................. 308

MKPF ................................................................. 56, 58

MLCR ..................................................................... 309

MLDOC .......................................... 56, 57, 239, 263

MLDOCCCS ..................................................... 56, 57

MLDOCCS ............................................................ 239

MLKEPH .................................................................. 57

MSEG ................................................................. 56, 58

MYMLM ............................................................... 368

OBEW ....................................................................... 56

OBEW(H) .............................................................. 308

QBEW ....................................................................... 56

QBEW(H) .............................................................. 308

TDUVN156 ........................................................... 290

TVARVC ................................................................ 396

Trading goods ........................................................... 22

Trading partner ..................................................... 112

assigning to customer ................................... 115

assigning to vendor ........................................ 113

Transaction

0KE5 ...................................................................... 130

8KEM .............................................................. 39, 315

8KEN ...................................................................... 112

8KEP ......................................................................... 74

8KEZ ............................................................. 131, 162

ABZON .................................................................. 322

AFAB ...................................................................... 323

BP .................................................................. 113, 115

BSD ........................................................................ 233

BSX ......................................................................... 270

CK11N ................................................. 108, 152, 155

CK40N .................................................................. 152

CK74N ................................................................... 107

CKM3 ........... 180, 185, 240, 252, 281, 295, 297,

373, 383, 450

CKM3A ......................................................... 259, 299

Index

538

Transaction (Cont.)

CKM3N ................................................................. 240

CKM3OLD ............................................................ 252

CKMCCC ..................................................... 241, 304

CKMDUVACT ..................................................... 300

CKMDUVMAT .......................................... 294, 296

CKMDUVREC ..................................................... 299

CKME .................................................................... 226

CKMHELP ............................................................ 506

CKMLBB_AGGREGATE .................................. 355

CKMLBB_FIFO_CALCULAT .......................... 357

CKMLBB_PRICES_CHANGE ......................... 360

CKMLBB_PRICES_LIST ................................... 359

CKMLCP ............... 208, 233, 333, 373, 383, 388,

393, 422

CKMLCPAVR ......................................................... 44

CKMLQS ...................................................... 182, 256

CKMM ............................................................ 85, 504

CKMSTART ................................................... 45, 500

CKMTOPPRICEDIF ........................................... 451

CKMTOPSTOCKVAL ........................................ 452

CKMVFM ............................................................. 264

CKR1 ...................................................................... 277

CO03 .................................................. 163, 165, 386

COMLWIPDISP .................................................. 454

CON2 ..................................................................... 182

FAGL_FCV ....................................................... 70, 76

FAGLL03 .............................................................. 269

FB50 .............................................................. 207, 279

FB60 ...................................................................... 282

FCML_FILL .......................................................... 480

FCML4H_STARTUP ......................................... 497

FCMLHELP .......................................................... 506

FINS_MIG_STATUS ................................ 494, 496

FINSC_LEDGER ........................ 67, 75, 77, 78, 88

FS00 ...................................................................... 140

KALC ......................................................................... 27

KB21N .................................................................... 325

KBK6 ..................................................................... 261

KDM ...................................................................... 412

KKF1 ....................................................................... 325

KKF3 ...................................................................... 326

KKML0 ................................................................. 458

KKML1 .................................................................. 458

KKML5 .................................................................. 458

KKS1 ....................................................................... 388

Transaction (Cont.)

KKS2 .......................................... 167, 332, 383, 440

KO88 ............................................................ 168, 442

KSB5 ....................................................................... 261

KSBT ............................................................. 260, 330

KSII ............................................................... 261, 328

LKW ........................................................................ 270

M107 ...................................................................... 295

ME11 ....................................................................... 369

ME21N ............................. 117, 350, 351, 362, 407

MIGO .......... 119, 157, 325, 350, 351, 362, 364,

387, 407

MIRO ...................................................................... 282

ML4HVFM ................................................. 263, 267

MLCCSPD ......................................... 241, 255, 389

MM01 .................................................................... 379

MM02 .................................................................... 151

MM03 ... 90, 110, 155, 226, 241, 352, 361, 365

MMPV ......................................................... 207, 245

MR21 ............................................................... 91, 276

MR22 ...................... 207, 279, 284, 287, 303, 420

MRF4 ...................................................................... 353

MRL1 ...................................................................... 367

MRL6 ...................................................................... 364

MRL9 ...................................................................... 365

MRN0 .................................................................... 370

OABT ........................................................................ 70

OB08 ............................................................... 89, 406

OB52 ....................................................................... 207

OBYC ..... 88, 188, 281, 303, 412, 427, 438, 497

OKEQ ..................................................................... 320

OKG8 ..................................................................... 199

OKK4 ............................................................ 100, 146

OKKI ................................................................ 98, 144

OKKN ................................................. 101, 106, 146

OKKP ....................................................................... 63

OKTZ .................................................. 103, 148, 186

OKYV ..................................................................... 102

OMJJ ....................................................................... 290

OMW3 .................................................................... 345

OMW4 ................................................................... 343

OMWE ................................................................... 341

OMWEB ................................................................. 373

OMWL ................................................................... 342

OMWP ................................................................... 343

OMWT ................................................................... 345

539

Index

Transaction (Cont.)

OMX1 ..................................................................... 504

OMX2 ....................................................................... 90

OMX3 ....................................................................... 89

OX02 ........................................................................ 62

OX15 .......................................................................... 64

OY01 ......................................................................... 64

PRD-MAC ............................................................. 307

PRM ....................................................................... 201

PRY ......................................................................... 191

S_ALR_87013611 ................................................ 326

S_P99_41000062 ............................................. 446

SCC4 .......................................................................... 64

SE16N ..................................................................... 161

SE38 ........................................... 308, 395, 397, 398

SFW5 ............................................................ 313, 415

SM30 ........................................................... 290, 294

SM36 ...................................................................... 400

SM37 ...................................................................... 228

TRS ......................................................................... 271

UMD ...................................................................... 233

V/06 ...................................................................... 116

V/08 ....................................................................... 115

VF01 ....................................................................... 122

VF31 ........................................................................ 124

VK11 ........................................................................ 116

VL10B .................................................................... 118

XK01/FK01/MK01 ............................................. 114

XK02/FK02/MK02 ........................................... 114

Transaction key

COC ........................................................................ 273

GBB ........................................................................ 426

GBB-AUI ..................................................... 196, 497

KDV ........................................................................ 497

LKW ........................................................................ 194

PRA ......................................................................... 202

PRD ..................................................... 281, 303, 438

PRL ............................................................... 196, 497

PRV ......................................................................... 497

UMB ....................................................................... 281

WPM ............................................................ 198, 200

Transfer control and reference variant ........... 98

Transfer price variant .......................................... 148

Transfer pricing ................................................. 73, 96

company codes ................................................. 102

defining ................................................................ 131

Transfer pricing (Cont.)

markup ................................................................ 134


simulation ....................................... 153, 155, 157

Trial Balance app ................................................... 462

dimensions ......................................................... 468

filters ..................................................................... 463

materials ............................................................. 466

measures ............................................................. 467

navigating to activities ................................. 470

parameters ......................................................... 462

U

Universal Journal ............. 49, 53, 79, 94, 312, 498

CO-PA ................................................. 426, 436, 443

currency types ...................................................... 67

key features ........................................................... 50

ledgers ..................................................................... 75

profit center document ................................. 161

settings .................................................................... 61

Update control ....................................................... 293

User-defined name .............................................. 183

assigning ............................................................. 184

V

Valuated quantity structure ............................ 256

Valuation alternatives ........................................ 347

Valuation approach ................................................ 72

Valuation area .......................................... 32, 82, 180

activating ..................................................... 83, 499

currency type statuses ...................................... 83

FIFO/LIFO ............................................................ 344

Valuation category .................................................. 33

Valuation class .......................................................... 33

Valuation clearing account .............................. 112

Valuation level ....................................................... 342

Valuation methods ................................................. 55

creating versions ................................................. 73

Valuation type ....................................... 33, 377, 380

Valuation variant ..................................................... 98

group valuation ............................................... 100


Valuation view

configuring ............................................................ 61

Index

540

Valuation view (Cont.)

maintaining ....................................................... 315

multi-valuation ledger ..................................... 77

parallel COGM .................................................. 316

setting up ............................................................... 71

single valuation ledger ..................................... 78

Value flow monitor .............................................. 262

using ..................................................................... 267

Variance categories .......................... 438, 439, 441

W

Work in process (WIP) ......................................... 187

actual cost .......................................................... 187

actual cost values ............................................ 453

Work in process (WIP) (Cont.)

canceled materials ........................................... 200

cancelled activities ........................................... 202

consumption ...................................................... 248

detailed report ................................................... 456

multilevel variance .......................................... 250

reduction .................................................... 244, 249

revaluation ........................................ 43, 212, 219

revaluation from activities ........................... 199

revaluation from material ............................ 198

standard report ................................................. 456

First-hand knowledge.

We hope you have enjoyed this reading sample. You may recommend or pass it on to others, but only in its entirety, including all pages. This reading sample and all its parts are protected by copyright law. All usage and exploitation rights are reserved by the author and the publisher.

Paul Ovigele has worked as an SAP financials consultant since 1997 in both North America and Europe, specializing in implementing the financial accounting and controlling modules along with their integrated areas for companies in the consumer goods, chemicals, logistics, pharmaceuticals, apparel, and entertainment industries. Paul has delivered numerous training sessions to finance professionals at both

the functional and managerial levels and has presented at various SAP financi-als conferences around the world. Paul is the founder of the consulting plat-form ERPfixers, which provides on-demand SAP consulting expertise in various modules.

Paul Ovigele

Material Ledger in SAP S/4HANA:Functionality and Configuration540 Pages, 2019, $89.95 ISBN 978-1-4932-1825-7

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