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Actual Costing / Material Ledger Solution Management ERP Financials SAP AG

40737103 Actual Costing Material Ledger

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Actual Costing / Material Ledger

Solution Management ERP FinancialsSAP AG

© SAP AG 2009. All rights reserved. / Page 2

Part A – Inventory Accounting with Material LedgerPart B – Alternative Valuation RunPart C – Distribution of Usage VariancesPart D – Revaluation of Consumption at Actual CostsPart E – Revaluation of Cost of Goods Sold at Actual Costs

Agenda

Inventory Accounting with Material Ledger

Legal Disclaimer

This presentation is a preliminary versionand not subject to your licenseagreement or any other agreement withSAP. This document contains onlyintended strategies, developments, andfunctionalities of the SAP® product and isnot intended to be binding upon SAP toany particular course of business,product strategy, and/or development.Please note that this document is subjectto change and may be changed by SAP atany time without notice. SAP assumes noresponsibility for errors or omissions inthis document.

© SAP AG 2009. All rights reserved. / Page 5

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Agenda

© SAP AG 2009. All rights reserved. / Page 6

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2. Divider headline2.1. Subdivider headline2.2. Subdivider headline

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Agenda

Parallel CurrenciesParallel CurrenciesValuation with HistoricValuation with HistoricExchange RatesExchange Rates

Actual CostingMulti-level Periodic Material Prices

Parallel ValuationParallel ValuationTransfer pricesTransfer prices

Group Legal Profit Center

TransparencyTransparencyof Value Chainof Value Chain

Actual CostingActual CostingMultiMulti--levellevelPeriodic Material PricesPeriodic Material Prices

MaterialMaterialLedgerLedgerInventory ValuationInventory Valuation

External Procurement External Procurement

Production

Production

Mutli-Level Actual Costing

MultiMulti--Level Actual Costing allowsLevel Actual Costing allowsInventory valuation withInventory valuation withactual periodic material priceactual periodic material price

RollRoll--upup of price differencesof price differencesfrom raw materials tofrom raw materials tofinished materialsfinished materials

Integration ofIntegration ofMultiMulti--LevelLevelActual CostingActual Costing

Integration of Actual Costing

Product CostProduct CostPlanningPlanning

Standard Prices&Cost ComponentSplit

ProfitabilityProfitabilityAnalysisAnalysis

ContributionMargins

Cost CenterCost CenterAccountingAccounting

Actual Prices ofActivities andBusiness Processes

Actual Costing and Profitability Analysis

Actual values in Profitability AnalysisActual values in Profitability AnalysisContribution Margin AccountingContribution Margin AccountingCost of salesCost of sales split intosplit into cost componentscost componentsPlan/ActualPlan/Actual Variance analysisVariance analysis

PlanPlan ActualActual Var. %Var. % Var. Abs.Var. Abs.RevenuesRevenues:: 10,000 US$10,000 US$

Sales Quantity:Sales Quantity: 1,000 pc1,000 pc

50,00050,000 45,00045,000 5,0005,000 10 %10 %Raw MaterialsRaw Materials4,0004,000 5,0005,000 --1,0001,000 -- 25 %25 %Labor variableLabor variable4,0004,000 4,5004,500 -- 500500 -- 13 %13 %Machine variableMachine variable

10,00010,000 7,0007,000 3,0003,000 30%30%Logistic ProcessesLogistic Processes5,0005,000 5,5005,500 -- 500500 -- 10 %10 %Material OverheadsMaterial Overheads

6,0006,00027,00027,000 33,00033,000 22 %22 %Contribution Margin IContribution Margin I10,00010,000 10,00010,000 00 0 %0 %Labor fixLabor fix7,0007,000 7,0007,000 00 0 %0 %Machine fixMachine fix

10,00010,000 16,00016,000 6,0006,000 60 %60 %Contribution Margin IIContribution Margin II

Actual Costing and Cost Center Accounting/ABC

Production Material

Cost CenterActivities

BusinessProcesses

Actual ./. PlanActual ./. Plan

Actual ./. PlanActual ./. Plan

PlanPlan StandardStandard PricePrice

SettlementSettlement

Direct settlement to materials:Direct settlement to materials:ActualActual activity pricesactivity prices

Actual costs ofActual costs of businessbusinessprocessesprocesses

Actual Costing and Product Cost Planning

Variance AnalysisVariance Analysis

Actual Costing withActual Costing withCost ComponentsCost Components

BOMRouting

PP Master Data

Mat Proc OHLab

Standard PriceStandard Pricewithwith

Cost Component SplitCost Component Split

Product CostProduct CostPlanningPlanning

Cost Estimate

Material Movements

Mat Proc OHLab

Periodic Unit PricePeriodic Unit Pricewithwith

Cost Component SplitCost Component Split

MultiMulti--LevelLevelActual CostingActual Costing

Price Determination

Actual Quantity Structure

Same cost componentSame cost componentstructure as in planningstructure as in planning

No Cost EstimatesNo Cost Estimatesnecessary for Actualnecessary for ActualCostingCosting

Optional: Primary costOptional: Primary costcomponent splitcomponent split

The Actual Cost Component Split is a strategic tool for

Sourcing Decisions based on procurement alternatives

Analyzing the actual value added in each production level

Ending Inventory 400 32,400 21,800 4,000 2,200 1,460 81,00

Category Qty Value Material Labor Process OH PriceMachine

Trading Inc 200 18,000 18,000 90,00Best Price Ltd 100 8,000 8,000 80,00

Prod. Version1 500 38,500 20,000 7,000 4,000 2,500 77,005,000

Receipts 900 72,600 50,000 8,500 4,800 3,100 81,006,200Purchase Order 300 26,000 26,000 87,00

Production 500 38,500 20,000 7,000 4,000 2,500 77,005,000

Beginning Inventory 100 8,400 4,500 1,500 700 550 84,001,150

Cumulative Inventory 1,000 81,000 54,500 10,000 5,500 3,650 81,007,350Consumption 600 48,600 32,700 6,000 3,300 2,190 81,004,410

2,940

... 100 8,100 4,000 1,500 800 600 81,001,200

Actual Cost Component Split

Price Analysis for selected MaterialsPrice Analysis for selected MaterialsHuge number of monetary and quantity key-figuresMultiple sorting and summarization functionsEasy-to-customize to fit personal needsDirect drill-down tools to detailed views and documentsEasy error finding

Material Price Analysis

Material Plant Std.Price Act. Price Var.absVar. %

PC 600 Pentium London 3,500 3,920 420 12 %PC 500 Pentium London 2,500 2,900 400 16 %

PC 330 Pentium Frankfurt 1,500 1,635 135 9 %Monitor 17‘ London 400 432 32 8 %Digital Camera xms Frankfurt 750 805 55 7,5 %Digital Camera xms London 950 1020 70 7,4 %PC Pentium 200 Frankfurt 800 855 55 7 %

Total ... ... ... ... ...... ... ... ... ... ...

Material Price Analysis (2)

Price analysis for single MaterialsPrice analysis for single MaterialsPrice historyProcurement controllingPlausibility checks, and more

Category Quantity PrelValue PriceDif Price

Trading Inc 200 2,000 1,200 16,00Best Price Ltd 100 1,000 300 13,00

Prod. Version1 500 5,000 500 11,00

Receipts 900 9,000 2,340 12,60Purchase Order 300 3,000 1,500 15,00

Production 500 5,000 500 11,00

Beginning Inventory 100 1,000 160 11,60

Cumulative Inventory 1,000 10,000 2,500 12,50Consumption 600 6,000 1,500 12,50Ending Inventory 400 4,000 1,000 12,50

... 100 1,000 340 13,40

Actual Costing in the Workplace

Cost AccountantCost Accountant

Cost AccountingManager

Cost AccountingManager

InventoryAccountant

InventoryAccountant

Sales BusinessAnalyst

Sales BusinessAnalyst

Cost EstimatorCost Estimator

BusinessUnit AnalystBusinessUnit Analyst

InventoryAccountant

InventoryAccountant

ProcurementProcurement

Inventory Accountant: Areas of Responsability

ActualActualCostingCosting

PlanningPlanning

StockStock

BalanceBalanceSheet ValuationSheet Valuation

InventoryInventoryCountingCounting

Actual Costing in the Workplace

Represented in WorkplaceRepresented in WorkplaceInventory AccountantInventory Accountant

ActualActual periodicperiodicMaterialMaterial PricePrice

Integration withIntegration withProduct Cost PlanningProduct Cost Planning

Integration withIntegration withProfitability AnalysisProfitability Analysis

Integration withIntegration with ABCABC andandCost Center AccountingCost Center Accounting

MultiMulti--LevelLevel RollRoll--upupof Priceof Price VariancesVariances

© SAP AG 2009. All rights reserved. / Page 19

Part A – Inventory Accounting with Material LedgerPart B – Alternative Valuation RunPart C – Distribution of Usage VariancesPart D – Revaluation of Consumption at Actual CostsPart E – Revaluation of Cost of Goods Sold at Actual Costs

Agenda

Alternative Valuation RunNew Development in R/3 Enterprise in Actual Costing

Alternative Valuation Run (AVR) Concept

Reuses data collected in Periodic Actual Costing

Influencing Factors:Material prices based on longer time periods : CumulationParameters can be varied to calculate alternative results for actual material costs:Alternative valuation

Multiple (alternative) runs are possible for each period andmaterial (999)

Advantages of using the AVR

Cumulation:Smooth out seasonal or random changesFull absorbance of cost center costs although output is zero in some monthsDecrease influence of work in process, beginning, and ending inventory

Get an overview of how prices influence processes over a whole business year

Alternative Valuation:Support alternative valuation rules for stocks from IAS, US-GAAP, HGB, and so on.Use activity prices that differ from the operational activity prices

Sequential Cumulations

Periods

1 2 3 4 5 6 7 8 9 10 11 12

Quarters

Fiscal Years

Cumulation:

Year-To-Date Cumulation (YTD)

Periods

1 2 3 4 5 6 7 8 9 10 11 12

Cumulation Runs

Cumulation of Periods

Instead of actual costs only being based on a single period (month), all price relevanttransactions from a multitude of periods are calculated together.

This process uses the:Cumulated actual quantity structureCumulated single level differences from production or procurementCumulated activity pricesBeginning inventory from the first periodEnding inventory from the last period

Cumulation Average of Periods!Example follows...

Example: Average from Periods

Period 01 Period 02$1000

90KG 10KG

$100$900

$100

10KG 90KG

$90$10

Product A$19.10

$1100

100 KG 100 KG

$190$910

Product B$11.90

Product A$20

Product B$20

Product A$11

Product B$11

Period 1 + 2

Example: Cumulation

Period 01 Period 02$1000

90KG 10KG

$100$900

$100

10KG 90KG

$90$10

Product A$15.50

$ 1100

100 KG 100 KG

$550$550

Product B$15.50

Product A$20

Product B$20

Product A$11

Product B$11

Cumulated Calculation forPeriod 1 + 2

Alternative Valuation

Valuations can vary by run

For materials:Different split between valuation of ending inventory and consumption

Change ending inventory valuation and CCS using a BADI (ENDING_INVENTORY)Use an external price for ending inventory, for example, FIFO price determined in balancesheet valuation (Table CKMLPR_EB)

Manual change of material price and cost component splitManipulate cumulated data using a BADI (CKMLAVR_SIM)

For activities:Different types of activity prices

Planned activity prices (CO version > 0)Periodic actual activity prices (CO version = 0)Cumulative actual activity prices

Run Definition

A run consists of

Definition:A collection of parameters

Plants taking partBeginning and ending periodSettings

A name and a long text

Steps to complete all of the actual costing processes

ResultsReporting and analysisPostings: FI and cost centersUse in CO-PA

Definition: Period Data

Definition: Plant Assignment

Definition: Settings

Run processing Steps

A run consists of

Definition:A collection of parameters

Plants taking partBeginning and ending periodSettings

A name and a long text

Steps to complete all of the actual costing processes

ResultsReporting and analysisPostings: FI and cost centersUse in CO-PA

Processing Steps

Process Step: Determine Actual Prices

Without AVR:

The determination of actual activity prices in Cost Center Accounting (TransactionKSII) allows you to either calculate and store periodic or cumulated activityprices.

With Step „Determine Actual Prices“ in the AVR:

Cumulated actual activity prices can be stored additionally in their own version.Actual data is used from version 0, but the results are written to an additionalversion.

Aim:

Periodic ML uses periodic activity prices, AVR uses cumulated activity prices

Process Step: Posting

The Determine Delta Postings and Post Closing steps are optional steps. They areonly displayed if the run is defined as a ‚posting run‘

Postings can be previewed and controlled in the results part of the cockpit.

An explanation of the posting logic follows...

Preview Delta Postings

Posting entries can be previewed using the filter hierarchy

Run Results I

A run consists of

Definition:A collection of parameters

Plants taking partBeginning and ending periodSettings

A name and a long text

Steps to complete all of the actual costing processes

ResultsReporting and analysisPostings: FI and cost centersUse in CO-PA

Results: Reporting

AVR runs are stored separately from periodic data. The following reporting andanalysis tools can be used for AVR in the same way as for Periodic ML:

Price analysis on material level (CKM3)Valuated quantity structureData extraction to BWValue flow monitorCKMLAVRPERD allows you to compare data from multiple periods with the AVR data atprocurement alternative level

Reporting: Price Analysis at Material Level(CKM3)

Reporting: Valuated Quantity Structure(Multilevel)

Run Results II

A run consists of

Definition:A collection of parameters

Plants taking partBeginning and ending periodSettings

A name and a long text

Steps to complete all of the actual costing processes

ResultsReporting and analysisPostings: FI and cost centersUse in CO-PA

Results: Postings

Postings from AVR may include:Delta stock account adjustmentsCost center credits from actual activity pricesCost of single level consumption

The ‚posting run‘ flag determines if the results can be used forposting or not. This prevents double postings being made to sameaccount from different runs.

The flag can only be set once per ending period, plant, and accountmodification.

With Account Modification,alternative valuations can be postedin parallel to different sets ofaccounts

Posting from AVR is optional, not mandatory!SAP recommends posting from periodicactual costing!

with Accounting Principle, alternativevaluations can be posted in parallelto a Special Ledger

Delta Stock Account Postings

AVR results are compared, by material, with the current material valuation.

The difference is posted to a delta stock account with posting key BSD.

The offsetting posting uses key UMD.

To keep the operative valuation separate, the BSD account must not equal the BSXaccount.

The posting is automatically reversed in next period in order to allow Year-to-Date-Cumulations.

Per material in AVR:

BSD = ( stock value AVR) –(stock value material master)

UMD = - BSD

Example:

AVR periods 1 – 12, ending stock: 100 pieces,Price $ 1.20

Periodic valuation period 12: 100 pieces, V-Price1.00 (from periodic revaluation)

Posting:BSD 20UMD 20-

Cost Center Credits from Actual ActivityPrices

There are three alternatives for crediting cost centers:No crediting of cost centerCrediting triggered by periodic material ledger with periodic actual activity prices, not byAVRCrediting triggered by AVR with cumulative actual activity prices

Makes sense if, for example, cost centers would not be cleared in some periods due toseasonal fluctuations.

Offsetting posting (crediting cost center activity type inCO)

GBB / AUI

Lower level price differencesPRV

Posting date: Last day of ending period of AVR

In case of previous run, for example when using YTD:Previous cost center posting is reversed

Scenarios with Cost Center Postings

CustomizingActivityupdate

Rate in AVRDef. Periodic ML AVR

2 BlankUses periodicactual ratesCrediting CC

Actual valuation of periods will be recognizedin cumulationNo credit of CC

2 Actual RateUses periodicactual ratesCrediting CC

Determination of cumulated actual activityprices availablePickup of cumulated actual rate differencesNo credit of CC

1 Actual Rate +Flag 'credit CC'

Activity differencesnot used

Determination of cumulated actual activityprices is available

Pickup of cumulated actual rate differencesCC Credited

Revaluation of Consumption

Single-level consumption can be revaluated periodically, and can also be adjustedto the AVR price

Consumption value from AVR

Consumtion quantities are cumulated.Quantity x AVR price = consumption value

Periodic consumption value

Posting documents from revaluation ofconsumption are added together for therange of AVR Periods

AVR delta postings:Consumption value from AVR – periodic consumption value – posted inprevious periods by AVR

Posting is made in same way as posting in periodic valuation: posting madeto original consumption account (and CO object)

Example Posting

Closing entry AVR January to September 2000

Posting date 30.09.2000Credit cost center NSC1 100- GBB AUIPrice Diff. Lower levels 100 PRVFinished Goods Inv. Delta 50 BSDRevaluation Delta 50- UMDCost of sales 50 COGSPrice Diff. ML 50- PRY

Posting Date 01.10.2000Revaluation Delta 50 UMDFinished Goods Inv. Delta 50- BSD

Closing entry cumulation January to December 2000

Posting date 31.12.2000Credit cost center NSC1 100 GBB AUI <-reversal of former closingPrice Diff. Lower levels 100- PRV <-reversal of former closingCredit cost center NSC1 180- GBB AUIPrice Diff. Lower levels 180 PRVFinished Goods Inv. Delta 90 BSDRevaluation Delta 90- UMDCost of sales 40 COGS <-difference to former closing: 90 - 50*Price Diff. ML 40- PRY

Posting Date 01.01.2001Revaluation Delta 90 UMDFinished Goods Inv. Delta 90- BSD

In January to September, 1000 pieces of a semifinished good“FG1” were produced. 1000 hrs of activity “ac1” in cost center“NSC1” were consumed. The preliminary (frozen) price of ac1was 1 EUR/h. For periods 1 - 9 in 2000, the total costs forNSC1 were 1100 EUR and the total output was 1000 hrs of ac1.Therefore the actual activity price of ac1 is 1.1 EUR/hr

At 09.30.2000 the ending stock is 500, another 500 pieces weresold in January to September.

No other price differences occurred for FG1.

In the last quarter of the year,another 1000 pc wereproduced, again consuming1000 hrs of AC1. Thecumulated yearly costs forcost center NSC1 were 2180EUR, and the total output was2000 hrs. The price for AC1 is1.09 EUR/hr. The endingstock is now 1000 Pc.

Run Results III

A run consists of

Definition:A collection of parameters

Plants taking partBeginning and ending periodSettings

A name and a long text

Steps to complete all of the actual costing processes

ResultsReporting and analysisPostings: FI and cost centersUse in CO-PA

AVR values in Profitability AnalysisCustomizable strategy to select AVRCost of sales split into cost componentsPlan/Actual/AVR variance analysis

Using AVR prices in CO-PA

Plan Actual (AVR) Var. % Var. Abs.Revenues: 100,000 US$

Sales Quantity: 1,000 pc

50,000 45,000 5,000 10 %Raw Materials4,000 5,000 -1,000 - 25 %Labor variable4,000 4,500 - 500 - 13 %Machine variable

10,000 7,000 3,000 30%Logistic Processes5,000 5,500 - 500 - 10 %Material Overheads

6,00027,000 33,000 22 %Contribution Margin I10,000 10,000 0 0 %Labor fixed7,000 7,000 0 0 %Machine fixed

10,000 16,000 6,000 60 %Contribution Margin II

Setup CO-PA Revaluation

IMG:- Controlling- Product Cost Controlling- Actual Costing/Material Ledger- Actual Costing- Set-up transfer of cost component

split to CO-PA

IMG:- Controlling- Profitability Analysis- Master Data- Valuation- Set up valuation using material

cost estimate- Define access to Actual

Costing/Material Ledger

Summary

Features

AVR works as an add-on to Periodic Actual Costing

AVR can determine actual costs for a range of periods (cumulation)

You can choose between different valuations of stocks and activities

Results

AVR provides material prices, cost component splits, and actualquantity structures

Reporting in BW, CO-PC, and CO-PA

Valuation for stocks, consumption, and activity consumption can beposted to G/L accounts and cost centers

© SAP AG 2009. All rights reserved. / Page 53

Part A – Inventory Accounting with Material LedgerPart B – Alternative Valuation RunPart C – Distribution of Usage VariancesPart D – Revaluation of Consumption at Actual CostsPart E – Revaluation of Cost of Goods Sold at Actual Costs

Agenda

Distribution of Usage VariancesNew Development in R/3 Enterprise in the Area of Actual Costing

The Idea

Adjust confirmations to orders to „almost actual“ quantities without the inconvenienceof manually entering actual confirmation quantities individually by order.

1. Confirmation is completed using target quantities.

2. Stock is counted regularly.

3. Inventory differences are distributed to the orders relating to previously postedconsumption quantities.

Entering Consumption Quantities

Efficiency

Backflushing is used. Nomanual interaction. Quantitiesaccording to planned datafrom Bill of Material (BoM)and routing.

Accuracy

Manual confirmations by order.Users enter quantities as takenfrom stock.

Compromise:

1. Backflushing.2. Counting – daily, weekly, monthly.3. Difference distribution.

Period 2Period 1

Goods Issues

Prod.Order 1

Yoghurt

Prod.Order 2

Yoghurt

Prod.Order 3

Milkshake

1000 KG 400 KG

50 KG 50 KG 200 KG 200 KG100 KG

500 KG

Physical Inventory: Strawberries, storage location 1 1000 KG

1. ‘Traditional’ goods issues to the order during order production

Period 2Period 1

DUV for Material Consumption

1000 KG 400 KG

50 KG 50 KG 200 KG 200 KG100 KG

500 KG

Physical Inventory: Strawberries, storage location 1 1000 KG

Yoghurt Yoghurt MilkshakeProd.Order 1

Prod.Order 2

Prod.Order 3

20 KG40 KG 40 KG

2. Distribution of usage variances (DUV) after physical inventory

Usage variances postedas additional goods issueswith special movement type

Period 2Period 1

Confirmation of Activities

Yoghurt Yoghurt Milkshake

2 Mvmts 3 Mvmts2 m3 4 m3

Prod.Order 1

Prod.Order 2

Prod.Order 3

1. ‘Traditional’ activity allocations and goods issues,for example, using backflushing

DUV for Activity Allocation

Period 2Period 1

Actual activity quantities (for example, from time sheets or machine counters)

Prod.Order 1

YoghurtProd.Order 2

YoghurtProd.Order 3

Milkshake

2 Mvmts3 Mvmts2 m3 4 m3

2. DUV after entering actual activities (and physical inventory)

Entering Differences

Materials:

Uses existing physical inventory functions. Gets differences from posted physicalinventory documents.

Create PIDocument

RecordCounting

Post PIDifference

Distributeto Orders

Activities:

New Transaction (CKMDUVREC) for entering actual output of anactivity, determined from timesheet, machine hour counter, and soon.

Enter ActualQuantities

DistributeDifferences

Mark checkbox‚Relevant forDUV‘

Possible Receivers for Differences

Materials:Production OrdersProduct Cost CollectorProduced MaterialConsumed materialNone (leave in physical inventorydifference account)

Activities / Processes:Production OrdersProduct Cost CollectorProduced MaterialNone (leave on cost center)

FI, ML, Price Change,CO

CostsMaterial

MM, FI, ML, COQuantities & CostsOrder & Cost Collector

Type of postingWhat is distributedReceiverSender

COQuantities & CostsOrder & Cost Collector

Mat.

Act.

Mat./Act

Searching DUV Receiver Objects

Materials:

Receiving orders are searched by material documents (MSEG) by:Posting date in the period beween current and last PI counting.Relevant movement type (set up in Customizing).Material, plant, storage location, batch, valuation type, stock type the same as thematerial to be distributed.BADI

Activities:

CO Documents of confirmations are searched by:Posting date in the period beween current and last PI counting.Cost center and activity type, the same as the activity to be distributed.

FI Postings for DUV Materials

Post physical inventory differenceMM

BSXStock

GBB/INVPI Differences

x x

GBBOrder

GBB/INVPI Differences

x x

PRDPrice Difference

GBB/INVPI Differences

x x

BSXStock

GBB/INVPI Differences

x x

Post distribution to order

Post distribution to material(standard price)

Post distribution to material(moving average price)

1

2a

2b

2c

1

2

3

Activation in Customizing

Activation is completed per plant/storage location. Checkbox only appears whenactivation takes place during creation of PI documents.PI documents (created in background by Warehouse Management and so on) can beused for DUV, if DUV is activated in the plant concerned and the distribution indicator1 is binding.

Movement Types

Receiver SearchMovement types recognized during receiver search:

Set up in Table TDUVN156 using transaction SM31, for example: 261, 262

DistributionMovement types used for getting quantities back from PI account to stock

Set up by copying movement types in MM Customizing. See DUV online documentationMovement types for posting PI differences to order

By default: 261, 262. Can be set to new ones for example: Z61, Z62

Screenshot: Selection of Mvmt. Types

Customizing Follow-on Mvmt. Types – OMJJ

Z11 DUV Z62Z12 DUV Z61

PI-Posting

Reversal of PI-Posting

Posting to Order

Creating Physical Inventory (PI) Documents

PI Document: Details

Checkbox as set up inDUV Customizing

Entering Inventory Count

Entering Inventory Count: Details

Posting PI Differences

Distributing Inventory Differences(CKMDUVMAT)

Create distribution

Viewing/Editing Distribution Receivers

save edited distribution

post movements / debits

Change Type of Receiver

Proposed Distribution

Entering Activity Differences

Entering Activity Differences

1. Enter quantity.2. Mark item as OK.3. Save.

Distributing Activity Differences

Create Distribution

CKMDUVACT - Distributing ActivityDifferences

Proposed Distribution

Save Edited Distribution

Post Movements/Debits

Displaying Distributions

CKMDUVSHOW - Displaying Distributions

Selection options from last slide were entered here.

DUV and Actual Costing

DUV can be used with or without Actual Costing

DUV was developed by the actual costing development team ina joint project with a customer from process industry

DUV is assigned to the component CO-PC-ACT-DUV

Integration with Actual Costing

Original PI posting

DUV: Getting stock back

DUV: Difference to order

Price Determination Schema

No impact on procurementquantity and value-

Adjusted consumptionquantity-

Actual Quantity Structure.

See Notes510692, 510273

Setting up ML Update Structure

By default, positive PI quantities (701) aretreated as „other Receipts“, and negative PIquantities are collected in (702) consumption.

Recommendation: Assign all PI movement typesto a movement type group and assign this toprocess category VP

See Note 510692 for the procedure

701

701702Z11Z12711 etc

702

Beginning InventoryReceiptsOther Receipts/ConsumptionCumulative Inventory

Ending InventoryConsumption

Beginning InventoryReceiptsOther Receipts/ConsumptionCumulative Inventory

Ending InventoryConsumption

BADI for Receiver Determination

BADI CKMLDUVN_CHOOSE_RECV

The automatic search for receivers of material differences (orders that consumed thematerial) can be influenced by:

Method SET_PARAMETERS_RELEVANT: Implementation can decide which of the materialparameters should be used for receiver determination:

Storage locationType of stockBatchValuation type

Method SUBSTITUTE_PARAMETERS: Implementation can substitute parameters for thereceiver search:

Material numberPlantbatchValuation typeStorage locationType of stock

Example: A difference for material 4711 in recorded atstorage location 0001 (warehouse) shall be distributed toorders which consumed the material from storage location0002 (production line)

Example: A difference for material 4711 with batch xy shallbe distributed to all orders which used material 4711 fromthe same storage location and stock type, without respectto the batch number

Movement Types (Special Topics)

In order to find possible receiver objects, DUV relevant goods issue mvmnt types(for example: 261) must be maintained in table TDUVN156 (Transaction SM31).

During a DUV posting based on a physical inventory, the following goodsmovements occur:The inventory goods movements (movement types 701/702) are reversed. There are noreversal goods movements for these movements in the standard. Therefore new reversalmovement types for the reversal of positive and negative inventory postings must be createdas copies of 711 and 712 (Z11 and Z12). You must not set the flag ‚inventory posting‘ forthese movement types.After the inventory goods movements have been reversed,material usage variances areposted to the receiving orders. In order not to take these goods movements into accountduring a second distribution, special goods movements types should be created for theseDUV goods issues , e.g. Z61 and Z62 (as copies of 261 and 262).The reference movement types for the copied movement types should be set to 999 so thatWarehouse Management ignores them.Z61 and Z62 can then be defined as follow-up movements for Z11 and Z12 respectively withfunction code ‚DUV‘.The corresponding order should be entered as the follow on movement type for the functioncode ‚DUV‘ for the inventory reversal movement types Z11 and Z12.

Release

DUV is included as part of the SAP R/3 EnterpriseFinancials Extension 1.10 and will, therefore, bereleased to all customers

A downgrade to 4.6c is technically possible but would results in chargeable extrawork

Distribution of Usage Variances (DUV) - Tables

DUV for Materials:CKMLDUVN - Information from inventory documents.CKMLDUVNCO- Line items from distribution.TDUV156 – DUV relevant movement types.

DUV for Activity TypesCKMLDUVACT- Total activity quantities to be distributedper DUV interval.CKMLDUVACTCO - Line items from distribution.

© SAP AG 2009. All rights reserved. / Page 89

Part A – Inventory Accounting with Material LedgerPart B – Alternative Valuation RunPart C – Distribution of Usage VariancesPart D – Revaluation of Consumption at Actual CostsPart E – Revaluation of Cost of Goods Sold at Actual Costs

Agenda

Revaluation of Consumption at Actual CostsNew Developments in R/3 Enterprise

External Procurement External Procurement

Production

Production

Multilevel Actual Costing

MultiMulti--Level Actual Costing allows:Level Actual Costing allows:Inventory valuation usingInventory valuation usingactual periodic material priceactual periodic material price

RollRoll--upup of price differencesof price differencesfrom raw materials tofrom raw materials tofinished materialsfinished materials

The gap to close

In 4.6, price differences are distributed to multilevel consumption and the endinginventory:

Production

Transfer plant to plant

Transfer material to material

Sales

Cost center, internal order, project, PA segment etc.

Scrap, physical Inventory, quality inspection

However, no revaluation of single level consumption takes place:

Ending inventory

Revaluation of Cost of Goods Sold (COGS)

1000 kg

Ending Inventory

500kg

Cafeteria

100kg

Sales

400kg

Revaluation ofConsumption

ML Price Determination:Roll Up of Variances

Customizing

Setting up the MaterialLedger Update of GoodsMovements forRevaluation

Different Types of Single-Level Consumption

Sales Cafeteria Quality Inspection

? ? ?

Revaluation Types

CF Collection with reference to the consumption accountnumber. Revaluation is posted to same account (original

account).

CC Collection with reference to the consumption accountnumber plus CO-Object (cost center number etc.)Revaluation is posted to original account and CO-Object.

COC Collection on process category. Revaluation isposted to COC collective account.

Creating Movement Type Groups

Assigning Movement Type Groups

Tracing Movements Relevant to Revaluation

Material: chocolate

Beginning Inventory 0 Kg

Receipts 1000 Kg

Production 1000 Kg

Cumulative Inventory 1000 Kg

Consumption 500 Kg

Sales 400 Kg

Account 890000 250 Kg

Account 895000 150 Kg

Cost Center 100 Kg

Cafeteria 100 Kg

Ending inventory 500 Kg

Consumption alternatives relevant for revaluation:

FI Account is key for consumption alternative

Revaluation in CO

Sales Cost Center: Cafeteria Quality Inspection

To revaluate both the CO-Object and the FI-account, you need to assign the movementtype group CC (instead of CF).

Movement type Movement type group

251 - Sales CF (Revaluation FI)

201 - Cost Center (Cafeteria) CC (Revaluation FI and CO)

331 - Quality Inspection

Setup for Revaluation in CO

Tracing Movements with CO-Objects

Material: chocolate

Beginning Inventory 0 Kg

Receipts 1000 Kg

Production 1000 Kg

Cumulative Inventory 1000 Kg

Consumption 500 Kg

Sales 400 Kg

Account 890000 250 Kg

Account 895000 150 Kg

Cost Center 100 Kg

Acc.850000, CC. Cafeteria 100 Kg

Ending inventory 500 Kg

The CO Object - and the FI Account - are keys for theconsumption alternative, relevant for revaluation in CO

Revaluating Other Consumption (COC)

Sales Cost Center: Cafeteria Quality Inspection

COC AccountCost of Other Consumption

If the movement type is not assigned to CCor CF, differences are posted to COCaccount

Material: chocolate

Beginning Inventory 0 Kg 0 USD 0 USD

Receipts 1000 Kg 10000 USD 1000 USD 11 USD

Production 1000 Kg 10000 USD 1000 USD 11 USD

Cumulative Inventory 1000 Kg 10000 USD 1000 USD 11 USD

Consumption 500 Kg 5000 USD 500 USD 11 USD

Sales 400 Kg 4000 USD 400 USD 11 USD

Account 890000 200 Kg 2000 USD 200 USD 11 USD

Account 895000 150 Kg 1500 USD 150 USD 11 USD

Cost Center 100 Kg 1000 USD 100 USD 11 USD

Acc.850000 CC. Cafet. 100 Kg 1000 USD 100 USD 11 USD

Other Consumptions 50 Kg 500 USD 50 USD 11 USD

Ending inventory 500 Kg 5000 USD 500 USD 11 USD

Example

Reval. FI + COCOC Posting

Reval. FI

Costing Cockpit

Example Screenshot after Revaluation

Output list from Revaluation Step

Posting the Closing Entries

New Parameters for Revaluation ofConsumption

Postings in FI

Preliminary Valuation: 10 USD / kg

Variances calculated by price determination: 1 USD / kg

Material stock Price difference Consumpt. SalesProduction1000 kg

Sales400 kg

Pricedetermination

RevaluationInventory

RevaluationCOGS

10000USD

1000USD

500USD

500USD

4000USD

4000USD

400USD

400USD

Consumption to Cost Center:Iteration Problem

1) Cost Center Closing

Cost Center Cost Center

Cost Center

2) Order Settlement

3) Multi-LevelActual Costing

Procedure

Set up CustomizingCreate movement type groupsAssign movement types to groupsMaintain COC acount determination

Record Movements during the period

Perform step ‚revaluation of consumption‘ in costing cockpit after single- and multi-level settlement

Post closing entries with revaluation

© SAP AG 2009. All rights reserved. / Page 112

Part A – Inventory Accounting with Material LedgerPart B – Alternative Valuation RunPart C – Distribution of Usage VariancesPart D – Revaluation of Consumption at Actual CostsPart E – Revaluation of Cost of Goods Sold at Actual Costs

Agenda

Revaluation of Cost of Goods Sold at Actual Costs

© SAP AG 2009. All rights reserved. / Page 114

1. Introduction2. Modification of the Material Ledger Update of Goods Movements for

Revaluation of COGS3. How the old program worked4. How to implement and use the new program

Agenda

Example: Consumption of a Finished Product

1000 kg

Ending Inventory

500kg

Sales

400kg

Cafeteria

100kg

Price Determination

1000 kg

Ending Inventory

500kg

Sales

400kg

Cafeteria

100kg

ML Price Determination:Roll Up of Variances

Revaluation of Ending Inventory

1000 kg

Ending Inventory

500kg

Sales

400kg

Cafeteria

100kg

ML Period Closing:Revaluation of EndingInventory

Revaluation of Cost of Goods Sold (COGS)

1000 kg

Ending Inventory

500kg

Cafeteria

100kg

Revaluation of

COGS

Sales

400kg

Postings in FI

Preliminary Valuation: 10 USD / kg

Variances calculated by price determination: 1 USD / kg

Material stock Price difference Consumpt. SalesProduction1000 kg

Sales400 kg

Pricedetermination

RevaluationInventory

RevaluationCOGS

10000USD

1000USD

500USD

500USD

4000USD

4000USD

400USD

400USD

© SAP AG 2009. All rights reserved. / Page 120

1. Introduction2. Modification of the Material Ledger Update of Goods Movements for

Revaluation of COGS (COGS SAPRCKML_COGSZSAPRCKML_COGS)

3. How the old program worked4. How to implement and use the new program

Agenda

Types of Consumption Relevant to Revaluation

Sales Cafeteria Quality Inspection

? ? ?

Movement type Movement type group

251 - Sales CF (Revaluation FI)201 - Cost Center (Cafeteria)

331 - Quality Inspection

It is specified in Customizing which movement types are relevant torevaluation(by assigning special movement type groupsCF and CC).

Types of Consumption Relevant to Revaluation

Tracing of Movements Relevant to Revaluation

Material: chocolate

Beginning Inventory 0 Kg

Receipts 1000 Kg

Production 1000 Kg

Cumulative Inventory 1000 Kg

Consumption 500 Kg

Sales 400 Kg

Account 890000 250 Kg

Account 895000 150 Kg

Cost Center 100 Kg

Cafeteria 100 Kg

Ending inventory 500 Kg

Consumption Alternatives relevant to revaluation:

FI Account is a key of of the Consumption Alternative

Revaluation in CO

Sales Cost Center: Cafeteria Quality Inspection

To revaluate also the CO-Object (besides the FI-account) incustomizing you assign the movement type group CC (instead CF)

Movement type Movement type group

251 - Sales CF (Revaluation FI)

201 - Cost Center (Cafeteria) CC (Revaluation FI and CO)

331 - Quality Inspection

Revaluation in CO

Consumption to Cost Center:Iteration Problem

1) Cost Center Closing

Cost Center Cost Center

Cost Center

2) Order Settlement

3) Multi-LevelActual Costing

Tracing of Movements Relevant to Revaluation

Material: chocolate

Beginning Inventory 0 Kg

Receipts 1000 Kg

Production 1000 Kg

Cumulative Inventory 1000 Kg

Consumption 500 Kg

Sales 400 Kg

Account 890000 250 Kg

Account 895000 150 Kg

Cost Center 100 Kg

Acc.850000, CC. Cafeteria 100 Kg

Ending inventory 500 Kg

The CO Object - besides the FI Account - is a key of aConsumption Alternative relevant to Revaluation in CO

Revaluation of Other Consumption (COC)

Sales Cafeteria Quality Inspection

COC Account

Example

Material: chocolate

Beginning Inventory 0 Kg 0 USD 0 USD

Receipts 1000 Kg 10000 USD 1000 USD 11 USD

Production 1000 Kg 10000 USD 1000 USD 11 USD

Cumulative Inventory 1000 Kg 10000 USD 1000 USD 11 USD

Consumption 500 Kg 5000 USD 500 USD 11 USD

Sales 400 Kg 4000 USD 400 USD 11 USD

Account 890000 250 Kg 2500 USD 250 USD 11 USD

Account 895000 150 Kg 1500 USD 150 USD 11 USD

Cost Center 100 Kg 1000 USD 100 USD 11 USD

Cafeteria 100 Kg 1000 USD 100 USD 11 USD

Ending inventory 500 Kg 5000 USD 500 USD 11 USD

Revaluation COGS Revaluation COC

© SAP AG 2009. All rights reserved. / Page 130

1. Introduction2. Modification of the Material Ledger Update of Goods Movements for

Revaluation of COGS3. How the old program worked (PRCKML_COGS SAPRCKML_COGS

ZSAPRCKML_COGS)4. How to implement and use the new program

Agenda

Problems of standard Material Ledger update

In standard Material Ledger update of goods movements consumption to sales doesnot always appear in the correct process type (Example: If goods are sold via acost center the consumption appears as ‚Consumption to Cost Center‘)

Reversal movements sometimes appear as procurement (above the cumulative line)and thus cannot be revaluated

Reading of material and accounting documents is needed to determine the COGSaccounts that have to be revaluated

The Old Program SAPRCKMN_COS

The old program …

makes no use of the material ledger update to identify the quantities consumes forsales (Reason: goods issues to sales are not always updated under the correctprocess type in ML)

identifies goods issues to sales by existence of a billing document in the Sales &Distribution Module

obtains all information needed to revaluate the movements (consumed quantities,accounts etc.) by reading the document flow of the Sales & Distribution Module

Document Flow

Material

Delivery MaterialdocumentInvoice

Quantities, Accounts

Accountingdocument

Problems of the Old Program

Use of Sales & Distribution Module required!

Performance: Reading of the document takes very long time in systems where

Use of Sales & Distribution Module required!

High Complexity of Processes in SD. Reading of the document flow can bevery complicated. This difficulty has caused many errors in the oldprogram.

Performance: Reading of the document takes very long time in systems wheremuch transaction data exists!

Time dependency: Sales movements are only recognized if the billing hasalready been posted and if it has been posted in the same period!

The old program had poor performance andoften determined wrong consumptionquantities for the sales movement

Posting Logic

Material BCOGS Account: 850000Revaluation Amount: 300,-

Material BCOGS Account: 850000Revaluation Amount: 300,-Business Area: 6100Profit Center: PC 2

Material ACOGS Account: 850000Revaluation Amount: 500,-

COGS Account: 850000Revaluation Amount: 800,-

AccountingInterface

Material ACOGS Account: 850000Revaluation Amount: 500,-Business Area: 6000Profit Center: PC 1

Old Program:

Cumulated Posting perAccount.

New Program:

Separate Posting foreach Material.Material specific data isprovided to Acc. Interface

Material specific data

Conclusion

Conclusion:SAP recommends not to usethe old program anymore!!!

© SAP AG 2009. All rights reserved. / Page 137

1. Introduction2. Modification of the Material Ledger Update of Goods Movements for

Revaluation of COGS3. How the old program worked4. How to implement and use the new program (ZSAPRCKML_COGS)

Agenda

Implementation of the New Program

Step 1: Modification of the Material Ledger Update.For this step follow the instructions of OSS-NOTE 305056.It has to be done BEFORE the start of the period, for which the new program shall be usedThis step includes the settings in customizing for all movement types that shall be revaluatedat period‘s end

Step 2: Installation of the new reportFor this step follow the instructions of OSS-NOTE 320152.In customizing you have to assign accounts for transaction key COC, if you want to revaluateCost of ‚Other Consumption

Settings in Customizing

Movement type Movement type group

601 - delivery CF

602 - GI to delivery (Reversal) CF

201 - Cost Center CC

202 - Cost Center (Reversal) CC

261 - Production Order

301 - Stock Transfer

Never forget toassign the reversalmovement !!

Never assign multi-levelmovements!!

Test each movement type, you assigned to CF or CC!!

General Understanding:Single- and Multi-Level Consumption

MaterialsMaterialsCost Center

CustomersMulti-Level Consumption

Single-Level Consumption

The new Program: Advantages/Disadvantages

Higher performance, because allrelevant data is collected duringthe period. No reading ofdocuments needed.

S & D Module is not required

Higher reliability because reading ofthe document flow is avoided

Revaluation of other single levelconsumption types possible

Revaluation of original CO-Objectspossible

All reversal movements can berecognized correctly

Material Ledger update of goodsmovements needs to be modifiedbefore period starts. Otherwiseprogram can not be used atperiod‘s end.

Advantages Disadvantges

© SAP AG 2009. All rights reserved. / Page 142

Thank you!

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