Data on a material is valuated using the following structure:

• Valuation area
• Valuation class
• Valuation category
• Valuation type
• Material type
• Movement type

Organizational level at which material valuation is carried out. You can define a valuation area as follows:

• Valuation area = company code

• Valuation area = one plant

You define in Customizing the level at which valuation should take place.

You group together different materials with similar properties into valuation classes so that you do not have to manage a separate stock account for every material.

Which valuation class a material can be assigned to depends on the material type. You can define the following assignments in Customizing:

• All materials with the same material type are assigned to just one valuation class.
• Different materials with the same material type are assigned to different valuation classes.
• Materials with different material types are assigned to a single valuation class.

A material is assigned to a valuation class in the material master record. The system checks whether the material type allows the material to be assigned to the valuation class specified.

The system refers to the valuation class of a material to determine which stock account to post to when a posting is made for this material.

Criterion according to which split valuation is carried out:

• Procurement

• Origin

• Status

You define the valuation categories in Customizing. A material is assigned a valuation category in the material master record.

The valuation type specifies the individual characteristic of the valuation category, such as internal or external, in the case of Procurement. Within the valuation category Origin, you can define the different countries as the valuation types. You define valuation types in Customizing. You first determine all the valid valuation types for a valuation category.

You define in the material master record which valuation types are allowed for a particular material. For every material subject to split valuation, you must enter all the valuation types allowed in the material master record.

You assign every material to a material type when you create it. Examples of material types in the standard system include raw materials, operating supplies and finished products.

The material type controls the properties of a material and which data must be maintained for the material. The following control features are important for valuation:

• Is the material managed by quantity?
• Is the material managed by value?
• Which price control type may be used for the material?
• Which valuation class can the material be assigned to?

The system administrator can create or change material types in Customizing.

For every material movement, there is a movement type in the SAP System. The movement type controls the properties of the movement, for example, which entries you must make when entering a material movement, and which updates are carried out when the movement is posted. The following control features are important for valuation:

• Does the material movement cause the quantity to be updated?
• Does the material movement cause the value to be updated?
• Does the material movement lead to postings in Accounting?
• Is the material movement relevant for LIFO/FIFO valuation?

The system administrator can create or change movement types in Customizing.