Posting Logic and Account Determination

Use

Additional Posting Lines

When goods movements between profit centers occur, the sale on the part of the sender profit center and the goods receipt on the part of the receiver profit center both need to be depicted in order for the profit centers to be treated as independent companies. As with internal goods movements without transfer prices, this view requires additional posting lines.

You need to define the following additional profit and loss accounts in General Ledger Accounting to represent internal revenues and costs.

  • Account for internal revenues

  • Accounts for internal stock changes

  • Account for deliveries from other profit centers

You create these accounts in account determination for internal goods movements in Customizing for General Ledger Accounting (New) under Start of the navigation path Business Transactions Next navigation step Parallel Valuation Approaches/Transfer Prices Next navigation step Settings for Internal Goods Movements End of the navigation path.

In the case of internal goods movements with valuated stock in transit, you can differentiate the stock change account between sending and receiving profit centers. In this case, you need to create an additional account for internal stock changes for the receiving profit center and store it in account determination for internal goods movements.

Note Note

You can use stock in transit to override account determination selectively for internal goods movements (such as for individual materials). For this, you can use the BAdI Modification of Account Determination for Transfer Prices (BADI_TP_ACCOUNT_MODIFICATION).

End of the note.
Valuation Approach Clearing Account

If you store profit-center valuation approaches in General Ledger Accounting, you additionally need to define a “valuation approach transfer account” to post the valuation differences that arise for business transactions between affiliated companies. When you use transfer prices, payables and receivables in General Ledger Accounting are only posted using the legal valuation method, since the corresponding payments are made in this amount. However, if other valuation methods are stored for the offsetting account, you need to post the difference to a valuation approach clearing account so that it appears in the group report and that the post will have balance zero in all valuation views.

Production Variances in Exchanges Between Profit Centers

If you use more than one plant in the production process and the actual cost of goods manufactured differs from the planned cost of goods manufactured, you need to create an additional account for the production variances. This account is necessary so that you can settle the difference to the sender profit center. Without this account, the production variances would be settled to the receiver profit center. Since a transfer price is posted for the transfer, this would cause the receiver profit center to be debited twice.

Example Example

Profit center 1 produces material A in plant 1. A transfer price of USD150 has been negotiated for material A when it is sold to profit center 2 in plant 2. The planned cost of goods manufactured is USD100, but the actual cost of goods manufactured turns out to be USD110. The difference ‑‑ USD10 ‑‑ is posted to the account “Production Variances” and settled to profit center 1.

End of the example.
Example of Posting Logic

The following example shows the posting logic for two goods movements using transfer prices in Profit Center Accounting:

Example for a Withdrawal of a Semifinished Product

In this example, the business transaction is shown in the lowest bar. The 'Value Flow' area shows how the document lines appear in General Ledger Accounting (FI-GL), Controlling (CO), and in Profit Center Accounting.

Use the following legend to understand the postings:

L = Legal valuation view

G = Group valuation view

P = Profit center valuation view

Integration

The additionally generated line items are updated in General Ledger Accounting as follows:

  • If you use the profit center valuation approach in the relevant controlling area and have defined a parallel currency in the profit center valuation for the leading ledger and other relevant ledgers, the system automatically updates the additional posting items.

  • If you do not use the profit center valuation approach in the relevant controlling area, the standard system does not update the additional lines created in the legal valuation view. You can use the Business Add-In (BAdI) Update of Internal Revenues Between Profit Centers (FAGL_INTERNAL_ACCOUNTS) to activate updates (at the goods value) in the ledgers in new General Ledger Accounting.