An aggregation of individual products. The criterion for the aggregation is the similarity in the type or use of the individual products.

The product group is only used in the elimination of interunit profit/loss in transferred inventory.

The product group classifies the inventory items into logistical units and is used to structure the calculation of the interunit profit or loss from the transfer of goods and services between consolidation units.

The system automatically performs the elimination of interunit profit/loss and the associated valuation allowance for the product groups defined in customizing at the level of either inventory items or product groups.

• The interunit profit/loss is calculated at the product group level.
• But the document is posted at the inventory item level.

You create product groups in accordance with the accounting requirements of your corporate group.

The product groups are read from the additional financial data.

When customizing the posting items, you determine the combinations of items and product groups. For these combinations you then determine the posting items for the interunit profit/loss (offsetting item, translation differential items, and items for transferring distribution costs).

In the automobile industry, you might create product groups for the various versions of individual vehicle models.