Valuation: Revaluation for Promotions
Use
When you run a promotion, you can work with or without revaluation at retail, depending on the revaluation at retail profile. The differences are explained as follows:
You only have to revaluate if you do not work with split valuation. If you do work with split valuation for promotional merchandise, all goods movements are automatically valuated at the promotion pricing conditions.
Features
Running a Promotion with Revaluation at retail
If you revaluate stock at the start of a promotion, all goods movements are valuated with the promotional price for the duration of the promotion. At the end of the promotion the stock is revaluated on the basis of the standard retail price.
Example of valuation of a goods issue for a promotion for which stock is revaluated
Situation |
Promotion price condition (per piece) |
Standard retail price condition (per piece) |
Total stock (pieces) |
Stock value |
Before promotion |
2 |
100 |
200 | |
Promotion start |
1 |
2 |
100 |
100 |
10 pieces sold |
1 |
2 |
90 |
90 |
Promotion ends |
2 |
90 |
180 |
Running a Promotion Without Revaluation at retail
If you do not revaluate, the goods movements in the central R/3 system are valuated at the standard retail price as per the conditions even for the duration of the promotion. The difference between the promotion price and the standard retail price is transferred from the point of sale to the Retail Information System (RIS), where it is then available for analysis. The RIS can calculate the sales volume generated by the promotion from the promotion number, which is part of an information structure.
Example of valuation of a goods issue for a promotion for which stock is not revaluated
Situation |
Promotion price condition (per piece) |
Standard retail price condition (per piece) |
Total stock (pieces) |
Stock value |
Before promotion |
2 |
100 |
200 | |
Promotion start |
1 |
2 |
100 |
200 |
10 pieces sold |
1 |
2 |
90 |
180 |
Promotion ends |
2 |
90 |
180 |
To be able to apply this method, you have to ensure that articles are entered in the cash register individually (and not on a merchandise category basis). Otherwise the price cannot be found from the conditions
If you use Inventory Management on a value-only basis, you can revaluate promotional stock as local markdowns. In this case you do not revaluate the stock at the start of a promotion. Instead you transfer the relevant data for revaluation to R/3, where the stock is automatically revaluated in the course of POS inbound processing. The quantity of the promotional merchandise sold in the store must also be transferred. You should always make sure that you enter the reason for the price change as "promotion". This enables you to track and analyze promotional sales volume.
For example:
Situation |
Promotion price condition (per piece) |
Standard retail price condition (per piece) |
Total stock (pieces) |
Stock value |
Before promotion |
2 |
100 |
200 | |
Promotion start |
1 |
2 |
100 |
200 |
10 pieces sold |
1 |
2 |
90 |
190 |
10 pieces revaluated |
1 |
2 |
90 |
180 |
Promotion ends |
2 |
90 |
180 |
To be able to apply this method, you must have selected the "local markdowns" indicator in the revaluation profile.
See also:
Promotion: Split Valuation for Promotion Merchandise