Valuation
Use
In retailing it is common practice to record the retail price of inventory (retail method). Since it is extremely time-consuming to determine all the costs associated with the procurement of an article without the use of modern IT systems, it is all the more difficult to determine the delivered cost of merchandise. In view of this, the delivered cost of an article is usually taken as an average price calculated on the basis of the retail value.
You can only apply this method if you can ensure that all changes involving an article can be accurately recorded. What is known in the trade as the "cost inventory method" or the "cost method" involves valuating stocks at delivered prices and assigning costs to individual articles.
What is known in the trade as the "retail inventory method" or the "retail method" involves valuating stocks at retail, often aggregated at merchandise category or departmental level. Stock is updated at retail for every merchandise category and department. For balance sheet valuation purposes on the balance sheet key date, the delivered cost of the stock is worked out based on a gross margin between cost and retail.
Both the cost method and the retail method can be used in SAP Retail.
The following describes how you can valuate stocks at retail using the retail method. For more information about the cost method, see
MM - Material Valuation.
Prerequisites
Integration
In the site master you assign a valuation area to every site. You can activate valuation at retail here if required. When valuation at retail is active, you must enter a control profile for revaluation at retail. This defines, for example, whether reevaluations are to affect margins.
If you re-calculate retail prices in Pricing, you usually have to revaluate the inventory at retail. For inventory managed on a quantity and value basis, you can automate the revaluation process by scheduling a background job.
If, on the other hand, you mange your inventory on a value-only basis, the quantities on-hand of the individual articles are not known to the system. You therefore have to count the, stock before revaluating. To support you in counting the stock, you can generate count lists especially designed for this purpose. For more information, see
The retail value for every article is managed at valuation area. In SAP Retail, every site has its own valuation area level. This is also the case when inventory is managed on a value-only basis. In this case, a value-only article is used to represent the individual articles.
If valuation at retail is active, the system automatically valuates all goods movements at retail. It also posts physical inventory differences at retail. When inventory is managed on a quantity and value basis, you can valuate the stock of promotional merchandise separately from the standard merchandise. For more information, see