In profitability and sales accounting, it is particularly important to have quick access to recent profitability information for sales-related business transactions, and this information should be as complete as possible. To this end, you use valuation for cost-of-sales accounting purposes, completing the information on units sold as well as the price and discount information for your marketing system.
Valuation can be used, for example, to calculate:
How do you perform valuations? What can you valuate without having to post it? Here too, in the supreme module CO-PA, you can customize the spectrum in which a controller has free reign individually.
There are three types of valuation:
Every profit-based company will cost the products that it sells. This type of costing, at least for determining the cost of goods sold for a product, is offered by CO-PC, Product Cost Accounting, in the SAP module CO. Within these costings, you can create cost components that you can use to differentiate the individual stages of your product costings. Classic cost components are direct material costs and material overhead costs, direct production costs and production overhead costs, and external activities. These cost components make up the cost of goods sold, that is, the costs that you should achieve as a minimum when selling your product if you want your business to survive in the long-term. For the cost of goods sold, your finished product stocks in the balance sheet are also valuated.
A valuation strategy is essential if you want to undertake valuations. Depending on how many steps you build into your valuation strategy, they are run for every CO-PA valuation operation in the predefined sequence. For our customizing, we will build up the valuation strategy successively. Initially, we will only show the step that we need for the valuation via material costing.
In our example customizing, in the CO-PA Implementation Guide (transaction ORKE), via MASTER DATA • VALUATION • DEFINE AND ASSIGN VALUATION STRATEGY, define strategy Z01, which you fill as shown in Figure below.
In this step, place a checkmark in the MAT. CSTG column. This tells CO-PA that you want to perform material costing for this valuation step. As a quantity field, enter the quantity field with which the cost components of the material costing are to be multiplied for the valuation. In our example, this is the quantity field ABSMG.
Assign this valuation strategy to a point of valuation (PV, see Figure below): you do this under the same customizing item as for defining the valuation strategy.
Assignment of the valuation strategy to actual points of valuation
Point of valuation 01 is the actual valuation; it is combined with individual transaction types. For example, valuation strategy Z01 is run for an incoming sales order (transaction type A) in SD.
You must now set up the valuation via material costing (that is, via CO-PC) in customizing, using the customizing structure as per Figure 4.3. You have to process the points illustrated here in sequence.
Customizing structure for valuation via CO-PC
Define Access to Standard Cost Estimates First, make an entry in this table for the costing key; in our example, this entry is Z01 (see Figure below).
Definition of the costing key I
For a valuation with material costing, the costing key defines the access parameters used for the search for a valid product costing (see Figure below).
Details of the costing key
For our example, we define that we want to access standard cost estimates. The system searches for standard cost estimates of costing variant PPC1 for costing version 1 and ongoing standard cost estimates from the entry in the material master of the product to be sold are accessed. The product costings are plant-specific; we will use the plant from the CO-PC line item.
We assign the defined costing key Z01 to material type FERT (see Figure below). The sales products A1 to A6, used in our example have all been created for material type FERT in MM.
Assignment of the costing key to the material type
What do these entries in above figure mean? The material costing of the finished product is found for the actual point of valuation 01 in combination with record type A and F, and for planned points of valuation 03 and 04, but let us look at them later.
To be able to access a material costing at all, you must first create the material costing, for example, with a quantity structure — you do this using transaction CK11 or CK11N in CO-PC. For a costing lot size, a bill of material and a routing are processed for a finished product, for example, and various cost components are filled. CO-PA value fields were assigned to these cost components in the FIELD NAME 1 column under ASSIGN VALUE FIELDS (see Figure below).
Assigning value fields for CO-PC
What happens now? For product A1, for example, we have a material cost rate of EUR 1500 per unit. For a sales quantity of 10 units, the MATERIAL INPUT value field is valuated with EUR 15000 (see Figure below).
Evidence of the valuation of material input via CO-PC
A further example that also proves the valuation using the valuation strategy for production costs is shown in the figure below. For product A5, a production cost rate of EUR 2 per unit is assumed.
Evidence of the valuation of production costs
Now you may say: He’s got a lot to say, but is it reliable? However, if you have created material costings for your products in CO-PC (e.g., via transaction CK11N with costing variant PPC1), and have then flagged and released these costings, this cost of goods sold rate is updated as the standard price in your product master record provided you maintain the product by standard price. In our simple example, for product A5, we have a material input of EUR 2 per unit and production costs of EUR 1 per unit. This means that we update a standard price of EUR 3 per unit in the material master (see Figure below). If the material costing is released, this standard price is used to valuate your product stock and therefore has a direct impact on the inventory valuation in your balance sheet.
Accounting view 1 for product A5
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