Periodic Material Valuation

Purpose

 

You must carry out single-level material price determination for all materials each posting period, regardless of whether or not material movements have occurred for the relevant materials.

For more information, see Periodic Material Valuation: Single-Level Material Price Determination

Prerequisites

  1. The Material Ledger is active
  2. You have set the price determination 3 indicator in the material master record
  3. You have set the price control indicator S in the material master record.

Process Flow

  1. The system collects valuation-relevant transaction data in the material ledger data for the current period, for example Period 1. For more information, see: Collecting Actual Data for the Material Ledger

    2. For the duration of the period, the transactions are valuated preliminarily with the valuation price recorded in the material master record (in this case, the standard price). The periodic unit price is not updated; it is calculated upon price determination.

    The system posts differences from this preliminary valuation price to price and exchange rate difference accounts and updates these differences in specific categories in the material ledger data.

  2. You execute the program for period closing.
  3. You release the possible planned prices for valuation in period 2; otherwise, the valuation price for preliminary valuation will remain unchanged
  4. In period 2 you make postings to the previous period 1, if necessary. You can enter postings related to the current period 2: these postings have no effect on the price determination for period 1.

    5.  Postings to a previous period are not possible after closing entries are made for period 1.

  5. You perform single-level price determination for period 1. The system calculates the periodic unit price based on the sum of the price differences and exchange rate differences in relation to the cumulative inventory quantity and value. This period price can be used to valuate the ending inventory of period 1. The system uses the method of the weighted average price to calculate the periodic unit price. The periodic unit price is updated in the material master record as the statistical valuation price for the period to be closed (period 1).

    6.  Price determination does not generate postings in Financial Accounting. The postings are first generated in the step Closing Entries.

    Transactions that were collected in the categories Receipts and Other inward/outward movements of the Material Ledger data display can have an effect on the periodic unit price for the period to be closed. Transactions in the category Consumption have no effect on this price.

  6. You check the results and post them as a closing entry, specifying whether the material stock for period 1 should be revaluated.

Result

If you specify that the material stock should be revaluated, the system valuates the ending inventory and consumption for period 1 with the new periodic unit price and makes postings in Financial Accounting. Because the preliminary valuation price (standard price) should not be changed by this revaluation for period 1, the price control of the material for period 1 will be changed retroactively from S to V and the periodic unit price will be stored as the valuation price for period 1.

For more information, see Example: Single-Level Price Determination.

If you specify that the material stock should not be revaluated, the differences assigned to the ending inventory through price determination are not posted to the material stock account (transaction key BSX), but rather to a seperate account (transaction key LKW). In this case, the price control remains S for period 1.

No more material-related postings are possible in the closed period 1.