Execution of Elimination of IU Profit/Loss in Inventory (SAP Library

Execution of Elimination of IU Profit/Loss in Inventory

Purpose

You use this process to run automatic elimination of interunit profit/loss in transferred inventory (IPI) in the Consolidation system.

Prerequisites

If you are going to use currency translation, you have defined the customizing settings for currency translation.

You have defined the customizing settings for deferred taxes.

The additional financial data with regards to interunit trade of goods and services is available and can be collected by means of one of the methods for data collection.

Process Flow

A. Customizing

Define Document Type

Define a document type with posting level 20 (two-sided elimination entries).

Define Task

Define a task for the elimination of interunit profit/loss in transferred inventory.

Assign a document type to the task.
Select the location of the values: totals data or additional financial data.
Select the exchange rate indicator for the currency translation of balance sheet and income statement items.
Decide whether the system is to take valuation allowances into account – that is, whether the calculation of the group cost of goods manufactured uses the gross book value or the net book value (which discounts the valuation allowances).
Decide whether offsetting entries are posted to the inventory-managing consolidation unit (buyer) or the supplying consolidation unit (seller).
Indicate whether interunit losses may be posted.

Assign the task to a task group (in the workbench, process view, you choose Consolidation Monitor ® Task).

Define Product Groups

Define the product groups, which will be the basis for eliminating interunit profit/loss.

Note

You will only be able to use the product groups in the additional financial data.

Define Inventory Items

Define the inventory items and their subassignments. When doing this, specify the subassignments for all relevant additional financial data.

Define Posting Items

Define the combinations of inventory items and product groups.

You can use either single values or ranges of values for specifying inventory items and product groups.

The combinations may not overlap.

Do the following for each individual combination:

Specify the offsetting item for the posting of the interunit profit/loss. (In general, these are income statement items.)
If applicable, specify the posting items for the posting of currency translation differences.
If applicable, specify the posting items for the transfer of distribution costs. When doing this, specify:

The item from which the distribution costs are cleared
The item to which the distribution costs are posted

B. Entry of Additional Financial Data

To record the additional financial data (inventory and suppler data), go to the consolidation monitor and run the task for data collection.

C. Execution of the Elimination of Interunit Profit/Loss

Execute the elimination of IU profit/loss by running the corresponding task in the consolidation monitor.

Result

The system calculates and posts the IU profit/loss, and logs the results in an audit trail.