Ramifications of setting valuation level to company

Hello,
Our company is using an actual cost system in our current ERP system that works somewhat like the material ledger in SAP. However, one of our requirements is that we valuate COGS transactions for the month at the actual average material price across all plants. In our current system, we revaluate our inventory in such a way that the the total inventory value of each material in all plants remains unchanged, but the unit price of each material in each plant becomes the average price.
It seems to us that the most obvious way of filling this requirement is to set the "valuation level" to the company code level, However, the documentation recommends against this and says that this will disable the built-in costing functionality. I could not find any details as to what specific functionality that this prevents.
Can anyone tell me what the actual ramifications are for setting the valuation level to company?

There is a feature of special procurement key which can be set for material in a given plant. This will refer another plant for fetching the material price. One manufacturing plant can calculate the price. This can be made the single plant that determine the material price. The other plants can have their material refering to the master plant through special procurement key.
This way you can address the consistency of material price across plants.
When you have valuation at plant level, it gives more operating efficiency for period end closing, costing runs etc without diversified load on the system. With company code level of valuation, significant disadvantages include lack of flexibility. Additionally, SAP advises that you should define the valuation area at plant level if: you wish to use the application component PP or product costing and order costing, which is essential for managing production.

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Valuation Area at Company Code level

Hi,
In what ideal business case/industry one should set valuation area at company code level when SAP recommends valuation area must be set at Plant level ? in other words..what is the practical purpose of Valuation area at company Code level?

Hi
Think that valuation area link with records in table MBEW. So, if you have a company with 3 plants, and you have a single valuation for all company, in 3 plants the valuation of materials are the same, with their implications in valuation of stock and valuation of margin in sales (remember that this value can flow -really, use to flow- to condition VPRS in SD, well see SAP Note 1365939 - VPRS logic and Customizing settings in SD and SAP Note 547570 - FAQ: VPRS in pricing for more details). If you do a valuation different by plant, stock and margin calculations are different.
What are the elements that you must considerer?
1. If the materials is purchased, think if the same material have different conditions (different conditions in MM, for instance, indirect costs as shipment costs, different vendor with meaningful differences in prices or discounts). It's indiferent that it is a raw material or a material that you can sell. The raw material will work in product costing as an item in BOM. First of all, considerer the impact in stock value, second think how is delivered the materials to customer from plants and their impact in profitability analysis. If there are meaningful differences for the same material between different plants and you give the same value in all company, depending of the mix perhaps your customer is fooling himself about this issue.
2. If the material is manufactured, talk with your CO consultant and what kind of impact could have different routings, BOM and prices of raw materials between plants. Same considerations for valuation of stocks and margin.
Finally, in the page 10 of the document you can read
Valuation must be at Plant level in the following cases:
u2022If you want to use the application component Production Planning (PP) or Costing
u2022If your system is a SAP Retail system
I hope this helps you
Regards
Eduardo
PD: I forgot, talk this with the CFO of the company, taking in account the restrictions (when it must be plant level).
Edited by: E_Hinojosa on Nov 23, 2011 9:23 AM
Edited by: E_Hinojosa on Nov 23, 2011 9:24 AM

OX14 - Valuation Level Configuration

Hi Gurus,
Standard SAP by default gives the Valuation Level at Plant. According to our business requirement we have to change the valuation Level to company code. But this change does not generate an automatic transport request. How Do I handle this? What ever I configure in this client has to be transported to rest other clients.
Regards
SS

Define valuation level
You define the valuation level by specifying the level at which material stocks are valuated. You can valuate material stocks at the following levels:
     o Plant level
        Valuation must be at this level in the following cases:
        - If you want to use the application component Production Planning (PP) or Costing
        - If your system is a SAP Retail system
     o Company code level
The decision you make is valid for the whole client. You are recommended setting material valuation at plant level.
Important
Once set, it is not possible to switch the valuation level from plant to company code, or vice versa. If absolutely necessary to subsequently change the valuation level, contact your SAP consultant because a data conversion is required.
Your choice of valuation level affects the following:
     o Maintenance of material master records
        Depending on the valuation level chosen, accounting data (in particular the valuation price) is maintained for each plant or for each company code in the material master record.
     o G/L accounts in which material stocks are managed
        - If material stocks are valuated at company code level, all plant stocks of a material are managed in a joint stock account for each company code.
        - If material stocks are valuated at plant level, the material stocks for each plant can be managed in different accounts. You can define a separate account determination for each plant.
           If several plants are to use account determination, you can group them together in Customizing for Valuation and Account Assignment in the section Account Determination .
     o G/L accounts to which transactions are posted in Materials Management
        (See under G/L accounts in which material stocks are managed.)

Company valuation level

Dear experts
Is it possible to set valuation by company for IS Retail? Is there new version of IS Retail to support the company valuation level?
Please advise.
Hengki

Hi,
In SAP Retail, the valuation area must always correspond to a site.
In retailing it is common practice to record the retail price of inventory (retail method). Since it is extremely time-consuming to determine all the costs associated with the procurement of an article without the use of modern IT systems, it is all the more difficult to determine the delivered cost of merchandise. In view of this, the delivered cost of an article is usually taken as an average price calculated on the basis of the retail value.
(a) Valuating inventory at delivered prices (cost inventory method)
You can only apply this method if you can ensure that all changes involving an article can be accurately recorded. What is known in the trade as the u201Ccost inventory methodu201D or the u201Ccost methodu201D involves valuating stocks at delivered prices and assigning costs to individual articles.
(b) Valuating inventory at retail (retail inventory method)
What is known in the trade as the u201Cretail inventory methodu201D or the u201Cretail methodu201D involves valuating stocks at retail, often aggregated at merchandise category or departmental level. Stock is updated at retail for every merchandise category and department. For balance sheet valuation purposes on the balance sheet key date, the delivered cost of the stock is worked out based on a gross margin between cost and retail.
Both the cost method and the retail method can be used in SAP Retail.
Bye and all the best,
Muralidhara

Valuation at plant level and company code level

Hi,
Can someone explain me the difference between the valuation at plant level and company code level with a real world example?
Regards,
Malsha Kalubowila

Hi,
Inventory can be valuated at two levels either at company code level or at plant level. If you select valuation at company code level, all materials across all the plants will have same material price since valuation is at only company code level.
Say for example Company code 1000 is buying a material which unit price is Rs. 10 from a vendor who supplies to two different plant A & B of company code 1000. Assume Plant A is situated near vendor premises itself (so freight cost is Re 1 extra) whereas plant B is situated at far away from vendor place (so freight cost rs 2 extra) and both cases freight cost is borne by the company and not by vendor.
Assuming you have selected valuation at plant level, now in plant A same material will be valauted at Rs. 11 (10 +1) whereas at plant B it is valuated at Rs. 12 (10+2).
Whereas if you have selected valuation at company code level, price will not be valuated at plant level rather at company code level which will get updated at moving average price in this case.
So it is always best practice to select valuation at plant level rather than at company code level.
Reg
Karthikeyan G

Valuation area is company code

Hi experts,
In our scenario, we have 2 plants and one storage location. only one balance sheet is preparing for both the plants( as is ).
My question is, if only one balance sheet preparing for both the plants, can I select the valuation area as "COMPANY CODE'" ?
If I change the valuation area as company code level, then, what are the changes I find when compared to plant level.
Also tell me how can I change the valuation area.
can anybody tell step by step.
Thanks in advance
kishore

In SAP, you need to choose either Plant Level or Company code level to valuate your material stocks. Once you've set, it is not possible to switch the valuation level from plant to company code or vice-versa unless data conversion (material master's accounting data) is carried out again.
We recommend to setting material valuation at Plant level because you can have separation set of account determination and stock type at each plant.
Also it is important that stocks must be valuated at Plant level,
when u implement the PP module the default valuation level will be PLANT
plz read the note at this SPRO > Enterprise structre> Definition>Logistics - General>Define valuation level (at left to valuation level)
u will get clear idea
hope it clears
regards
kunal

Valuation Level Correction

Hi All,
One Company Code is valuated at Plant Level and the other Company Code at Company Code Level. Both belong to a Company (Group) in SAP.
Could you let me know briefly the approach to take to get both Company Codes valuated at Company Code Level.

Hi
Is this the current set up in your client.
As the config for valution level is either plant or Company code.
This is a radio button , so if you switch on plant then company code is deactivated.
you can find the Config under SPRO-> Enterprise Structure-> Definition-> Logistics - General-> Define valuation level
Thanks & regards
Kishore

Valuation level change

Hello all
We are at realization stage - having created some master test data (materials, BOMs and routings), as well as some test documents (POs, receptions and test financial documents), but valuation was wrongly set at company level, and we must change it to plant level.
Can anyone please tell me the necessary steps to make this change? I have read in many places that it is possible, though difficult.
Is it sufficient to archive all the created data before unassigning plants to society, or do we need to reverse all the movements before archiving? And does this even work?
Are all customizations "in danger" or is it possible to maintain the already made customization?
Thank you in advance
APINTO

Hey
I feel u can change the valuation level before go live. After go live it is possible, but not advisible.
First think to be ensured account determination settings.
Valuation area and valuation grouping code settings.
and OBYC and g/l account assignemnts.
Then check with FI, before doing the change.
Regards,
Raman

Valuation Level

Hello,
I was wondering, when you select company code as valuation area instead of plan level it is supposed to override all plan prices and just take those that the company register.
But which are the effects ?
For example:
Lets say I purchase a row material for the first time with MAP activated and since company code level is activated no price will be registered ? Which means that I will have to first post the price at t-code MR21 in order for the sistem to recalculate each time there is a price change ?
What happens to Standar price when company code level is activated ?
Thanks very much.

Once you define your valuation level you cannot change it.
see
Define valuation level
You define the valuation level by specifying the level at which material
    stocks are valuated. You can valuate material stocks at the following
    levels:
o   Plant level
        Valuation must be at this level in the following cases:
-   If you want to use the application component Production Planning
            (PP) or Costing
-   If your system is a SAP Retail system
o   Company code level
The decision you make is valid for the whole client. You are recommended
    setting material valuation at plant level.
Important
        Once set, it is not possible to switch the valuation level from
        plant to company code, or vice versa. If absolutely necessary to
        subsequently change the valuation level, contact your SAP consultant
        because a data conversion is required.
Your choice of valuation level affects the following:
o   Maintenance of material master records
        Depending on the valuation level chosen, accounting data (in
        particular the valuation price) is maintained for each plant or for
        each company code in the material master record.
o   G/L accounts in which material stocks are managed
-   If material stocks are valuated at plant level, the material
          stocks for each plant can be managed in different accounts. You
          can define a separate account determination for each plant.
          If several plants are to use account determination, you can
          group them together in Customizing for Valuation and Account
          Assignment in the section Account Determination .
o   G/L accounts to which transactions are posted in Materials
      Management
      (See under G/L accounts in which material stocks are managed.)

Define Valuation Level (Ref: Q4-8)

Dear Sirs,
The u201CValuation Levelu201D is defined either at u201CCompany Code Levelu201D or at u201CPlant Levelu201D. If the Client (Group) has more than one Company, must this option be applied for all Companies (Company Codes). For example, is it possible for Company A to select the Valuation Level defined at Company Code Level and Company B to select the Valuation Level defined at Plant Level ?
Tks,
KH Fong

Hi Friend,
In SAP R/3 system, there are two possible organizational level at which material is valuated:
Plant.
When stock is valuated at plant level, we can valuate a material in different plants at different prices. Valuation must be at this level in the following cases:
If we want to use the application component Production Planning (PP) or Costing
If our system is a SAP Retail system
Company Code.
When stock is valuated at company code level, the valuation price of a material is the same in all of a company's plants (that is, in a company code).
SAP recommends that we set material valuation at Plant level.
Regards
Pramod

Changing valuation level

We have maintained our valuation level is at Company Code Level. But now as per business need we want to set it at Plant Level .
System does not allow to change it . Is there any way to change valuation level

Hi Bhushan,
Important
Once set, it is not possible to switch the valuation level from
    plant to company code, or vice versa. If absolutely necessary to
    subsequently change the valuation level, requires data conversion.
Your choice of valuation level affects the following:
o   Maintenance of material master records
    Depending on the valuation level chosen, accounting data (in
    particular the valuation price) is maintained for each plant or f
    each company code in the material master record.
o   G/L accounts in which material stocks are managed    -
If material stocks are valuated at company code level, all pl
        stocks of a material are managed in a joint stock account for
        each company code.
    -   If material stocks are valuated at plant level, the material
        stocks for each plant can be managed in different accounts. Y
        can define a separate account determination for each plant.
        If several plants are to use account determination, you can
        group them together in Customizing for Valuation and Account
        Assignment in the section Account Determination .
o   G/L accounts to which transactions are posted in Materials
    Management
Thanks & REgards
Anand

Valuation differs from company code to company code

Dear Experts,
I need to create a material wgich will be valuated on a company code and will not be valuated on another company code
how can i do such a thing ... could I use Split Valuation for example ??
Thanks

I need to create a material wgich will be valuated on a company code and will not be valuated on another company code
how can i do such a thing ... could I use Split Valuation for example ??
Whether a material is valuated or not is determined by the value update setting. Value update setting is controlled trough material type.
SPRO > Logistics - Genral > Material Master > Basic Settings > Material Types > Define Attributes of Material Types
Here select the material type and choose "Quantity/value updating" in the left navigation section. Now, you can carry out your settings for the desired plants.
You can see, that the setting is valid for a material type and not for a separate material master. Via split valuation you cannot set a material to "not valuated".
As a "workaround" you can use standard price control ("S") under the desired company code / plants (based on your valuation level) and maintain the lowest possible price for your product...
Regards,
Csaba

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Storage Location valuation level

Hello all,
We are using moving average price (MAP) at plant level valuation. We have several Storage Locations assigned to the same plant. We have several Client non-valuated goods-receipt at Storage location. That increases the quantity, but not the value. Therefore, of course those actions
changes the MAP. We are not using batches or WM module.
How can we not change the MAP without using batches? Is that possible to put a valuation level at storage location?
Can anyone help us to solve this problem?
Thank you in advance very much!
Best regards,
Pedro Grabulho.

No you do not have to change OU which is plants in your case.
1. The procedure is to activate split valaution using OMW0(zero) t-code, which is active in your case, I guess.
2. Define Global Valuation Type. You can define Storage locations here or it can be any thing else. Use T-code OMWC. (BTW, every time you add one storage location, you have to make appropriate changes here also, It is not like your storage location becomes valuation type)
3. Define Global Valuation Categories.
4. Attach Categories to OU. (OU can either be Plant or Company code, there is no 3rd option). You can atttach in one or more OU(plant)where you want it active. 3rd & 4th steps are in the same T-code OMCW.
5. Using the MM01 now extend the material to the newly created Valuation Types. (Accounting 1 view)
Thanks,
Ashish

Ramifications of setting valuation level to company

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