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 Material Valuation Area

Definition

The

material valuation area is an organizational unit within Logistics.

Use

You conduct a valuation of materials for each material valuation area to determine valuation prices and values.

You may valuate material stocks either at plant or company code level:

  • At plant level, one plant corresponds to one material valuation area
  • At company code level, one company code corresponds to one material valuation area

Material stocks within one material valuation area have the same value. If necessary, you may differentiate the stocks according to material valuation area - valuation type. Material stocks in different material valuation areas may have different values.

Determining the valuation level

You may valuate material stocks either at plant or company code level. You define the valuation level at the client level. It then applies to all companies and plants in the client. (We recommend that you define the valuation area at plant level). It is not possible to create several valuation areas in one client.

You should define the valuation area at plant level if:

  • You wish to use the application component PP or product costing and order costing
  • You are working with a retail system
  • You wish to use different values for materials for each plant

You may conduct a separate valuation if you wish to use different values for materials under the material valuation area level using.

It takes a lot of time and effort to change the level at which the valuation of material stocks is carried out.

Integration

You must conduct the valuation at plant level if you wish to carry out product and order costing. For example, material valuation data may only be created once for the company or for each plant.

Many functions within materials management depend on whether you decide to valuate material stocks at plant or at company code level. Your decision also affects:

  • Maintenance of material master records (for example, accounting data)
  • The G/L accounts in which the material stocks are entered

You determine the valuation area at enterprise level. You must use the valuation area for all enterprises and plants within this client.