Transfer prices are used to valuate the transfer of goods and services between the business units of a corporate group. The value of a good can be updated in up to three different valuation views.
The valuation views provides different perspectives on business transactions from the point of view of the individual company, of the corporate group, and of the profit center. You can define the following views in multiple valuation:
- Legal view
- Group view
- Profit center view
Maintain the central versions in Customizing for General Controlling.
To update inventory values in your actuals, you must be using the component Actual Costing/Material Ledger.
To calculate work in process at actual costs, make the relevant settings in Customizing for Product Cost by Order under Period-End Closing ® Work in Process ®Define Results Analysis Versions.
If you are not using transfer prices, the data relevant to cost accounting is updated in the R/3 System in the operational valuation view. The operational valuation view is normally the legal view.
If you are using transfer prices, certain data can be updated in parallel with the operational valuation view in the group view and in the profit center view.
Transfer prices can be used in Cost Object Controlling in the following manufacturing environments:
- Make-to-stock production
- Sales-order-related production with a valuated sales order stock
The following functions of Cost Object Controlling support transfer prices:
- Preliminary cost estimates for manufacturing orders
The planned costs calculated in a preliminary cost estimate for a manufacturing order can be updated in up to three valuation views. You create preliminary cost estimates for manufacturing orders in Product Cost by Order.
- Work in process at actual cost
You can update work in process at actual costs in up to three valuation views in parallel. You can calculate work in process at actual costs in Product Cost by Order.
- Distribution of actual costs for cost object hierarchies
The actual costs updated to a cost object hierarchy can be distributed to the single objects assigned to the cost object hierarchy (such as product cost collectors) in the period-end closing activities of Product Cost by Period. You can perform this distribution in multiple valuation views.
Note that the distribution is only based on one target cost version for target cost calculation. This means that all valuations are distributed on the basis of the same target costs.
- Distribution for co-products
The costs of a joint production process collected on the order header of a manufacturing order are distributed to the co-products at the end of the period. You can perform this distribution in multiple valuation views.
- Collective orders with automatic goods movements
Cost controlling of collective orders with automatic goods movements is carried out in the Product Cost by Order component.
- Sales order costing
When you create a sales order cost estimate in Product Cost by Sales Order, the calculated planned costs can be updated in multiple valuation views.
- Results analysis
When you perform results analysis in Product Cost by Sales Order, the calculated results analysis data can be updated in multiple valuation views.
The planned costs used to calculate the results analysis data are not always available in multiple valuation views. For example, if the results of a sales order cost estimate updated to the sales order item are used to calculate the planned costs, these planned costs are on the sales order item only in the operational valuation view.
- Update of inventory values of finished products
When products are received into inventory (goods receipt posting) and when the difference between the debit and credit of orders is settled, the values can be updated in multiple valuation views.
At the end of the period, the difference between the debit and credit of manufacturing orders and product cost collectors can be settled to Financial Accounting (FI), Profit Center Accounting (EC-PCA), Profitability Analysis (CO-PA), and Actual Costing/Material Ledger (CO-PC-ACT). You can perform this settlement in multiple valuation views.
Variances on production orders result automatically from the inventory receipt for each valuation approach (CO version). These variances are posted to the price difference account.
The variance calculation function, which breaks down the total variance into variance categories, is only supported by the operational version. You should take this into account if you are using the application component Profitability Analysis and want to transfer these variance categories into Profitability Analysis. The variances for the additional CO versions, too, can be transferred into Profitability Analysis through automatic account assignment, but these variances can only be transferred as a total and not broken down into variance categories. Variances from the group view are not transferred into CO-PA.
Implementation Guide (IMG)
- General Controlling
- Product Cost by Order
- Actual Costing/Material Ledger
For detailed information on transfer prices, refer to the following:
and in the section Transfer Prices in the following sections.
For information on valuated sales order stocks, refer to the following section:Valuated Sales Order Stock
For information on preliminary costing for manufacturing orders, refer to the following section:Preliminary Cost Estimates for Manufacturing Orders Preliminary Cost Estimates for CO Production Orders
For information on the distribution of actual costs for cost object hierarchies, refer to the following section:Actual Cost Distribution
For information on distribution for co-products, refer to the following section:Distribution for Co-Products
For information on work in process at actual costs, refer to the following section:Work in Process in Product Cost by Order
For information on collective orders with automatic goods movements, refer to the following section:Collective Orders with Automatic Goods Movements
For information on sales order cost estimates, refer to the following section:Sales Order Costing
For information on results analysis, refer to the following section:Results Analysis
For information on settlement, refer to the following sections:Settlement in Product Cost by Order or Period Settlement of Sales Order Items
For general information on updating the inventory values of finished products in multiple valuation, refer to the documentActual Costing/Material Ledger.
For special information on displaying material ledger data in multiple valuation, refer to the following section:Displaying Material Ledger Data