Replacement Cost Valuation for Chile

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Replacement Cost Valuation for Chile 1

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Replacement Cost Valuation for Chile

Document Version: 7025 – November 2013

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Table of ContentsReplacement Cost Valuation for Chile ............................................................................................ 5

Legacy Data Transfer .................................................................................................................. 6Replacement Cost Determination (Chile) .................................................................................... 7

Algorithm for Replacement Price Determination ...................................................................... 8Legal Requirements .............................................................................................................. 9Market Price Determination ................................................................................................ 12

Market Price Determination: Example 1 ......................................................................... 17Market Price Determination: Example 2 ......................................................................... 20

Replacement Prices for Finished Goods ................................................................................... 21Parallel Inventory Valuation ....................................................................................................... 22

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Replacement Cost Valuation for ChileCompanies in Chile that use Chilean peso as local currency are required to valuate theirinventories for tax purposes once a year in addition to the valuation according to IFRS. The taxvaluation takes into account market prices, inflation, and the effects of foreign currency exchangerates (correccion monetaria existencias).

Activities1. If you use inflation management for Chile for the first time, use program J_1ARCVN_LDT

to transfer legacy data for the previous fiscal year.

For more information, see Legacy Data Transfer on page 6.

2. Use transaction J1ARC (Replacement Cost Determination (Chile)) in order to determinethe replacement cost (costo de reposición) for purchased materials according to Chileantax regulations. You must run it at the end of the fiscal year. However, you can also run itduring the year.

For more information, see Replacement Cost Determination (Chile) on page 7.

3. Calculate replacement prices for finished goods using one of the following:

o Inventory cost estimates

o Single-level or multilevel actual costing

For more information, see Replacement Prices for Finished Goods on page 21.

4. Assuming that the leading inventory valuation is according to IFRS, material valuationprices (standard price or moving average price) are left unchanged. Perform a parallelinventory valuation using one of the following:

o Balance sheet valuation

o Alternative valuation run

For more information, see Parallel Inventory Valuation on page 22.

Customizing Activities for Replacement Cost DeterminationBefore executing the replacement cost determination for purchased materials for the first time,perform the following Customizing activities under Materials Management Valuation andAccount Assignment Balance Sheet Valuation Procedures Set Up Replacement CostValuation (Inflation) . Activities under this node that are not listed below are not relevant.

Maintain Inflation IndexesMaintain Time Base and Exposure to Inflation VariantsMaintain Inflation MethodsAssign Inflation Methods to Company CodesMaintain Material Inflation ClassesMaintain Movement Types for Replacement Cost Determination (Chile)

For more information about these activities, see the documentation available from the selectionscreen for program Replacement Cost Determination (Chile) (transaction J1ARC).

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Legacy Data TransferProcedureThe program J_1ARCVN_LDT creates the inflation view of the material master based on a tab-delimited text file.

Run this program if you do not want to create the inflation view for each material manually. Theprogram validates the import data.

More InformationFor more information, see the documentation available from the selection screen for programJ_1ARCVN_LDT.

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Replacement Cost Determination (Chile)You use Replacement Cost Determination (Chile) (transaction J1ARC) to determine thereplacement cost (costo de reposición) for purchased materials according to Chilean taxregulations.

You must run it at the end of the fiscal year. You can optionally run it for any period during thefiscal year.

In addition to the replacement price in the inflation view of the material master, the transactionupdates price fields in the Accounting 2 view of the material master as well as valuationalternatives. In the inflation view, only the replacement cost for the last valuation period as well asthe previous fiscal year are kept.

After you run Replacement Cost Determination (Chile) for a new fiscal year, you can nolonger run it for the previous fiscal year if there were no purchases in that year. This isbecause the replacement cost of the year before the previous fiscal year is no longeravailable.

PrerequisitesBefore executing the replacement cost determination for purchased materials for the first time,you must perform Customizing activities under Materials Management Valuation and AccountAssignment Balance Sheet Valuation Procedures Set Up Replacement Cost Valuation(Inflation) .

ProcedureTo access the program, from the SAP Easy Access screen, choose Logistics MaterialsManagement Valuation Balance Sheet Valuation Replacement Cost Valuation (Inflation)Replacement Cost Determination (Chile) . Alternatively, execute transaction J1ARC.

More InformationFor more information, see the documentation available from the selection screen for programReplacement Cost Determination (Chile) (transaction J1ARC).

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Algorithm for Replacement Price Determination See Legal Requirements on page 9

See Market Price Determination on page 12

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Legal RequirementsTwo parameters are important when determining the replacement price of a purchased material:the market price and the latest purchasing date.

Market Price

This is derived from the material prices of all eligible purchasing documents. Chilean lawtreats purchased materials differently, depending on if they were purchased domesticallyor if they were imported. For domestic materials, the highest price from all eligiblepurchasing documents is to be used as market price, while for imported materials thelatest price from all eligible purchasing documents is to be used. The inflation class of thematerial (more precisely the revaluation method) and not the currency of the purchasingdocument determines if the material is to be treated as domestic or imported material.For more information about purchasing document selection and price determination, seeMarket Price Determination on page 12.

Latest Purchasing Date

This is determined from the latest document date of all eligible purchasing documents. Incertain cases, a purchasing document might be used for determining the latestpurchasing date, but not for determining the market price. For example, this is the casewhen the highest price of a domestic material is not the latest price or when the vendorinvoice of an imported material precedes the corresponding goods receipt. For moreinformation, see Market Price Determination on page 12. The latest purchasing datedetermines the purchase semester of a material (last purchase in first half or second halfof the year).

Replacement Price for Domestically Purchased MaterialsAssume the replacement price of a purchased material is to be determined for the year 2013. Themarket price is determined by the highest material price from all relevant purchasing documentsin 2013. Depending on the latest purchasing date the inflation index is either applied or notapplied.

1. No relevant purchasing documents in the fiscal year

In this case, the inflation index is applied to the replacement price of the previous year2012 using the index values from 30 November 2012 up to 30 November 2013. Theindex is only applied if there was inflation (that is, the index value from 30 November2013 is higher than the index value from 30 November 2012).

Apply index from 30 November 2012 up to 30 November 2013

No relevant purchasing documents in fiscal year 2013

Figure 1: No relevant purchasing documents in the fiscal year

Generally, if the replacement price is determined for period p of fiscal year y, the inflationindex is applied using the index values from 30 November of fiscal year y-1 up to the lastday of period p-1 in fiscal year y. The applicable dates for applying the inflation index are

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defined in the corresponding Time Base and Exposure to Inflation Variant in Customizing.The index is only applied if there was inflation in the considered index interval.

2. Relevant purchasing documents in the first semester of the fiscal year, but not in thesecond semester

In this case, the inflation index is applied to the highest purchasing price found in the firstsemester of 2013 using the index values from 31 May 2013 up to 30 November 2013.The index is only applied if there was inflation (that is, the index value from 30 November2013 is higher than the index value from 31 May 2013).

Market price found (highest)in 1st semester 2013

No relevant purchasing documentsin 2nd semester 2013

Apply index from 31 May 2013up to 30 November 2013

Figure 2: Relevant purchasing documents in the first semester of the fiscal year, but not inthe second semester

Generally, if the replacement price is determined for period p of fiscal year y and the lastday of period p is after 30 June, the inflation index is applied using the index values from31 May of fiscal year y up to the last day of period p-1. The applicable dates for applyingthe inflation index are defined in the corresponding Time Base and Exposure to InflationVariant in Customizing. The index is only applied if there was inflation in the consideredindex interval.

3. Relevant purchasing documents in the second semester of the fiscal year

In this case, the inflation index is not applied, independently of whether the highestpurchasing price was found in the first semester or the second semester. The inflationindex is not applied since there was a relevant purchasing document in the secondsemester.

Market price found (highest),relevant purchasing document in 2nd semester 2013

Figure 3: Relevant purchasing documents in the second semester of the fiscal year

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Replacement Price for Imported MaterialsAssume the replacement price of a purchased material is to be determined for the year 2013. Inthe case of imported materials, the market price is determined by the latest price from all relevantpurchasing documents in 2013. Depending on the semester of the latest purchasing date,currency exchange rates are either applied or not applied. The purchase semester logic is thesame as for domestic materials. The dates are not to be shifted by one month since up-to-dateexchange rates are available (differently from the application of an inflation index).

No relevant purchasing documents in the fiscal year

In this case, exchange rates are applied to the replacement price of the previous year2012 as follows:

The replacement price in Chilean pesos is converted into the original foreign currencyusing the corresponding exchange rate from 31 December 2012. Afterwards, the foreigncurrency amount is calculated back into Chilean pesos using the exchange rate from 31December 2013. Exchange rates are always applied, even if the resulting replacementprice is lower than the previous replacement price.

No relevant purchasing documents in fiscal year 2013

Apply exchange rates from 30 Dec 2012 and 30 Dec 2013

Figure 4: No relevant purchasing documents in the fiscal year

Generally, if the replacement price is determined for period p of fiscal year y, thereplacement price from fiscal year y-1 is converted into the original foreign currency withthe exchange rate from 31 December y-1. Afterwards the foreign currency amount isconverted back into Chilean pesos using the exchange rate from the last day of period pin fiscal year y. The applicable dates for applying the exchange rates are defined in thecorresponding Time Base and Exposure to Inflation Variant in Customizing.

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Market Price DeterminationMarket prices are determined from different types of source documents. You always need to takevendor invoices and goods receipts into account. After consulting your tax auditor, you may alsoconsider prices from contracts and info records. This section discusses price determination frominvoices and goods receipts.

Like the material valuation price, the market price is always determined in the base unit ofmeasure of the material master and in the price unit from the Accounting 1 view that is valid forthe period for which replacement price determination is executed. However, all quantities ingoods receipts and invoicing documents are in the order unit of measure, which may be differentfrom the base unit of measure. If the order unit is different from the base unit, conversion rulesare maintained in the material master. These rules are applied during market price determination.Once a goods receipt or an invoice has been posted, the order unit can no longer be changed. Allgoods receipts and invoices of a purchase order item make use of the same order unit.

TerminologyTechnically, invoice or goods receipt (GR) prices for a material are always on item level (GR item,invoice item, credit memo item, and so on), and items refer to other items. For simplicity, “item” isomitted in the following discussion.

Definitions:

Price source

Goods receipt, invoice, contract, or info record with a price. The valuation method (latestprice or highest price) is applied to all considered price sources per valuated material.Considered price sources are typically a subset of all selected price sources.

Period under consideration

Period from the first day of a fiscal year up to the last day of the valuation period specifiedin the selection screen (for instance 1/1/13 – 31/12/13)

Invoiced quantity

Sum of all quantities that have been invoiced minus the sum of all quantities from creditmemos within a certain period.

Received quantity

Sum of all quantities that have been received minus the sum of all quantities that havebeen reversed within a certain period.

Prices from Invoicing DocumentsThere are multiple ways of posting vendor invoices in SAP ERP.

Invoices posted by MM Invoice Verification

o Invoices with reference to a purchase order (PO) item, using GR-based invoiceverification: GR-based invoice verification requires that a GR is posted before aninvoice is posted. All invoicing documents refer to both a PO item and a GR item.

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o Invoices with reference to a PO item, not using GR-based invoice verification: Allinvoicing documents refer to a purchase order item only.

o Invoices without reference to a purchase order item

Invoices posted by FI

o FI only supports invoices without reference to a purchase order item

Market price determination only takes invoices with reference to a PO item into account, with orwithout GR-based invoice verification.

In particular for imported materials, invoices may precede goods receipts. However, invoices arenot to be considered as long as the goods have not been received yet. Therefore, an invoiceprice is only considered if at least one corresponding goods receipt was posted in the periodunder consideration or before.

If there is at least one invoicing document or one goods receipt in the period under consideration,then all invoicing documents and goods receipts for the same PO/GR that were posted up to theend of the period under consideration are taken into consideration. In particular, if there is a GRwith a posting date in the period under consideration and no invoice, all invoices for the samePO/GR from before the period under consideration are also selected as price sources.

In the case of invoicing documents in foreign currency, the amount in local currency that wascalculated when the document was posted is used.

Canceled invoicing documents are not selected, even if they were canceled after the period underconsideration.

Invoicing Documents in Purchasing (MM-PUR)

There are different types of invoicing documents in SAP ERP Purchasing (MM-PUR):

Invoice

Each item contains an invoiced material, its quantity, and the corresponding invoiceamount. If the invoice refers to a PO item, the material is taken from the PO item. Theinvoice can contain two different types of items:

o Goods items

These contain the costs of the goods themselves. They increase the invoicedquantity.

o Planned delivery costs

These contain additional costs related to the delivery of the goods like freight andcustoms. Different types of delivery costs are distinguished by condition types.Delivery costs may refer to a subset of the invoiced quantity from the goodsitems. They do not refer to individual GR items, even if GR-based invoiceverification is used. An invoice may contain items with planned delivery costsonly (for example, invoice from freight forwarder).

Credit Memo

Each item contains an invoiced material, its quantity, and the corresponding creditamount. The invoiced quantity is reduced. A credit memo does not necessarily refer to an

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individual invoice. The credited price for an individual material need not be the same asone of the previously invoiced prices.

Subsequent debit

Each item contains an invoiced material, its quantity, and the corresponding debitamount. The quantity of the invoiced materials is not increased. Only the overall invoiceamount for the given material is increased subsequently. Thus, the price of the invoicedmaterial increases. A subsequent debit does not necessarily refer to an individual invoice.

Subsequent credit

Like subsequent debit, but the overall invoice amount for the given material is decreasedand likewise the invoiced material price.

Cancellation document

All of the above mentioned documents can be cancelled.

The general term invoicing document refers to invoices, credit memos, subsequent debits andsubsequent credits. The term follow-on document refers to credit memos, subsequent debits andsubsequent credits only. Follow-on documents are not linked to invoices, but only to PO items orGR items. Follow-on documents can only be entered after a vendor invoice has been entered.However, posting date and/or document date of a follow-on document can precede thecorresponding dates of the vendor invoice.

Credit memos, subsequent debits, and subsequent credits may optionally have an “invoicereference” that is entered in the payment tab.

The purpose of an invoice reference is to take over the payment terms from the invoicereference and pay both invoicing documents together.

You can use any open invoice from the vendor as reference invoice. A creditmemo/subsequent credit would just be deducted from that invoice amount, even thoughinvoice and credit memo are not related to each other despite the fact that they are fromthe same vendor.

You cannot enter an invoice as reference that has already been paid for.

Thus, price determination is not always straightforward. Sometimes you need to calculate aninvoice price by taking both the invoices and all related documents into account. However, thesystem does not indicate which invoicing documents belong together.

Aggregate Prices

Market price determination calculates aggregate invoice prices per PO or GR whenever thereexists a follow-on invoicing document in or before the period under consideration. The invoiceamounts from all invoicing documents related to the PO or GR are aggregated. This is whyinvoicing documents without reference to a PO or GR are not supported.

The invoice amounts from all invoicing documents related to the PO or GR are even aggregated ifthere are multiple vendor invoices for a PO or GR and there is at least one follow-on invoicingdocument. The reason is that follow-on invoicing documents do not refer to individual vendorinvoices, but only to the PO or GR.

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The aggregate invoice price is calculated per PO or GR by dividing the sum of all invoicingdocument amounts by the invoiced quantity. All invoicing documents are selected that have beenposted up to the end date of the period under consideration. That is, they may even have beenposted before the period under consideration.

Subsequent debits and credits have an impact on the invoice amount, but not on the invoicedquantity. However, they have a reference quantity. If the reference quantity is higher than theinvoiced quantity, only the proportional amount is considered.

Invoiced Planned Delivery Costs

Invoiced planned delivery costs are included in the invoice price when configured accordingly inthe inflation method – this is mandatory according to Chilean tax regulations. Invoices for planneddelivery costs do not refer to individual invoices or GRs. A price is calculated (amount divided byquantity) per condition type and then aggregated to a delivery price. This price is added to thegoods prices calculated from invoices before.

The quantity for which delivery costs exist might be higher or lower than the invoicedquantity. This does not have any impact on the calculated delivery price.

It is still necessary to distinguish two cases:

1. Delivery costs that are part of an invoice with goods items: The calculated delivery priceis only added to goods prices of the very same invoice. All amounts and quantities for thesame condition type are added up before the price is calculated, even if they are fromdifferent delivery cost items of the invoice.

2. Delivery costs that are not part of an invoice with goods items: As these invoices onlyrefer to a PO, the calculated delivery price is added to all goods prices from invoices thatrefer to this PO. All amounts and quantities for the same condition type are added upbefore the price is calculated, even if they are from different delivery cost items anddifferent invoices without goods items.

Prices from Goods ReceiptsIn the case of GRs in foreign currency, the amount in local currency that was calculated when thedocument was posted is used.

Canceled GRs are not selected, even if they were canceled after the period under consideration.

A GR price is only considered if there is no corresponding invoice.

For GR-based invoice verification the algorithm is simple, as there can only be one GRper invoicing document. It suffices to compare invoiced quantity and received quantity perGR.

For non-GR based invoice verification, as GRs and invoices are not linked, a heuristic isapplied. Whether a received quantity has been invoiced or not, is calculated based on thefollowing assumptions:

o Assumption 1: Oldest GR are invoiced first. The order is determined by theposting date.

o Assumption 2: In the case of GR reversal, the immediately preceding GR isreversed (or the immediately following GR if there is no preceding GR). The

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posting date determines the order. Prices from reversed GRs and reversal GRsare ignored. See Market Price Determination: Example 2 on page 20.

Date for Latest PriceThe relevant date for latest price determination for imported goods is determined as follows:

1. For a price from a vendor invoice, the relevant date is the document date of the vendorinvoice.

2. For an aggregate price from multiple invoicing documents, the relevant date is the latestdocument date of the involved vendor invoices. Document dates from follow-ondocuments and invoices for delivery costs are not considered – even if the documentdate of the vendor invoice is in the previous fiscal year. For example, the currentvaluation period is 12/2013, the only invoicing document in 2013 is a subsequent debitreferring to a vendor invoice from 30/6/2012. The inflation index would be applied from31/5/2012 to 30/11/2013. If it is an imported material, a similar approach is used forforeign currency conversion.

3. For a GR, the relevant date is the document date of the GR.

4. For a price from a contract, the relevant date is the minimum of the valid-to date and thelast day of the valuation period.

5. For a price from an info record, the relevant date is the minimum of the valid-to date andthe last day of the valuation period.

Purchase Semester DeterminationThe relevant date for purchase semester determination (for subsequent application of inflationindex or currency exchange rate) is the latest date of one of the following dates:

1. If invoices are selected as price source: The document date of a vendor invoice whoseprice was considered during market price determination (either as individual price or aspart of an aggregate price).

2. If GRs are selected as price source: The document date of a GR that was posted duringthe period under consideration and which is neither reversed nor a reversal.

3. If contracts are selected as price source: The minimum of the last day of the valuationperiod and the valid-to date of a contract that is valid in the period under consideration.

4. If info records are selected as price source: The minimum of the last day of the valuationperiod and the valid-to date of an info record that is valid in the period underconsideration.

More InformationMarket Price Determination: Example 1 on page 17

Market Price Determination: Example 2 on page 20

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Market Price Determination: Example 1

All GRs and invoicing documents refer to the same PO. For reasons of simplicity, it is assumedthat posting and document date are the same.

Document Document Type Posting/Doc. Date Quantity Amount

Purchase order PO 15/10/2013 20 PC 20 PC

Goods receipt 1 GR 20/10/2013 10 PC 1.010.000 CLP

Invoice 1 Invoicing 25/10/2013 5 PC 800.000 CLP


Credit Memo 1 Invoicing 5/11/2013 -5 PC 830.000 CLP

Subsequent Debit 1 Invoicing 5/11/2013 10 PC 10.000 CLP

Invoice 3 Invoicing 15/12/2013 10 PC 1.200.000 CLP

Goods receipt 2 GR 15/1/2014 10 PC 1.010.000 CLP

Subsequent Debit 2 Invoicing 1/2/2014 10 PC 20.000 CLP


Example 1.1: Price determination for 1/1/2013-31/10/2013 Invoiced quantity: 10 PC; received quantity: 10 PC

Follow-on document: no => no aggregated invoice price, each invoice consideredseparately

Price sources:

o Invoice 1, price 160.000 CLP – invoice considered since there is a GR

o Invoice 2, price 110.000 CLP – invoice considered since there is a GR

o (GR price not considered since fully invoiced)

Latest purchasing date: 30/10/2013


Follow-on document: yes => calculate one aggregate invoice price for the complete PO

Invoice amount: 800.000 CLP + 550.000 CLP – 830.000 CLP + (10.000/10)*5 CLP =525.000 CLP (proportional amount of subsequent debit 1 used since invoiced quantity <reference quantity)

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Price sources:

o Aggregate invoice price 105.000 CLP – aggregate invoice price considered sincethere is a GR

o GR 1, price 101.000 CLP – considered since not fully invoiced




Invoice amount: 800.000 CLP + 550.000 CLP – 830.000 CLP + 10.000 CLP + 1.200.000CLP = 1.730.000 CLP (amount of subsequent debit 1 now fully considered since invoicedquantity >= reference quantity)

Price sources:

o Aggregate invoice price 115.333 CLP – aggregate invoice price considered sincethere is a GR

o (GR 1 not considered since fully invoiced)



Follow-on document: yes (in 2013) => calculate one aggregate invoice price for thecomplete PO

Invoice amount: 800.000 CLP + 550.000 CLP – 830.000 CLP + 10.000 CLP + 1.200.000CLP = 1.730.000 CLP (same as before)

Price sources:

o Aggregate invoice price 115.333 CLP

o GR 2, price 101.000 CLP – GR 2 considered since not fully invoiced

o (GR 1 not considered since fully invoiced)




Invoice amount: 800.000 CLP + 550.000 CLP – 830.000 CLP + 10.000 CLP + 1.200.000CLP + 20.000 CLP + 650.000 CLP = 2.400.000 CLP

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Price sources:

o Aggregate invoice price 120.000 CLP

o (GR prices not considered since fully invoiced)


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Market Price Determination: Example 2All GRs and invoicing documents refer to the same PO. For reasons of simplicity it is assumedthat posting and document date are the same.

Document Document Type Posting/Doc. Date Quantity Amount

Purchase Order PO 10/12/2013 50 PC 5.050.000 CLP

Goods Receipt 1 GR 15/12/2013 5 PC 505.000 CLP

Invoice 1 Invoicing 20/12/2013 10 PC 1.100.000 CLP

Goods Receipt 2 GR 20/12/2013 30 PC 3.075.000 CLP

Goods Receipt 3 GR 21/12/2013 10 PC 1.010.000 CLP

Goods Receipt Reversal 1 GR 22/12/2013 -20 PC -2.040.000 CLP


Price sources

o Invoice price 110.000 CLP

o GR price 102.500 CLP (from GR 2, is considered since 5 PC still to be invoiced)

o (GR 1 is not considered since invoiced)

o (GR 3 is not considered since fully reversed)

o (Goods Receipt Reversal 1 reverses GR 3 and a subset of GR 2)


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Replacement Prices for Finished GoodsProcedureYou calculate replacement prices for finished goods using inventory cost estimates or single-/multilevel actual costing. Results are stored in price fields in the material master or in valuationalternatives. Finished goods are to be valuated for inflation accounting purposes only based onthe direct costs. These include raw materials and direct labor. The raw material portion in thefinished goods has to be valuated at the inflation price of the period to be reported. The labor hasto be valuated at a special rate that will differ from the rate used for standard cost estimate andactual costing purposes.

You calculate replacement prices for finished goods using one of the following:

Inventory Cost Estimates (CO-PC-PCP)

To calculate the replacement prices for finished goods using inventory cost estimates,proceed as follows:

1. For the relevant activity types manually enter prices that only contain direct costsusing Change Activity Type/Price Planning (transaction KP26). Use a versionfrom Controlling that can be used to write planning data (in Customizing under

Controlling General Controlling Multiple Valuation Approaches/TransferPrices Basic Settings Create Versions for Valuation Methods ).

2. Create a costing variant in Customizing under Controlling Product CostPlanning Material Cost Estimate with Quantity Structure Define CostingVariants ). Use a costing type that allows the update of a price field other thanthe standard price. Use a valuation variant that reads prices from one of thematerial price fields in the Accounting 2 view into which you updated thereplacement cost.

3. Create a costing run using Edit Costing Run (transaction CK40N).

4. For the finished goods, update the same price fields that you used for purchasedgoods using Price Update: Mark Standard Price (transaction CK24). ChooseOther Prices in the menu bar.

For more information see, Inventory Cost Estimates [External] (CO-PC-PCP).

Single-/Multilevel Actual Costing (CO-PC-ACT)

You use actual costing if you want to calculate the replacement cost of a finished goodbased on the actual quantity structure.

For more information, see Actual Costing/Material Ledger [External] (CO-PC-ACT).

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Parallel Inventory ValuationAssuming that the leading inventory valuation is according to IFRS, material valuation prices(standard price or moving average price) are left unchanged. You perform a parallel inventoryvaluation in order to post the inventory value according to Chilean tax regulations to a differentgeneral ledger account and/or to a different ledger if using New General Ledger.

ProcedurePerform a parallel inventory valuation using one of the following:

Balance sheet valuation

If you post the valuation adjustment using Balance Sheet Values by Account (transactionMRN9), undo the valuation adjustment from the previous period using Balance SheetValuation Delta Run (transaction MRN9DELTA).

For more information, see Balance Sheet Valuation (MM-IM-VP) [External].

Alternative valuation run

For more information, see Alternative Valuation Run [External].