Price Variance: Account Movements
When price variances occur, the type of price control defined in the material master determines how the difference is posted. (See also
Material Valuation in Materials Management).There are two types of price control in the SAP system:
If a material is invoiced on the basis of a standard price, the value of the material is always calculated using a fixed price stored in the material master record. When material is received, the value of the receipt is calculated from the price in the material master. Variances are posted to a price difference account at the time of goods or invoice receipt.
The price of a material changes with moving average price control. It is calculated by dividing the current total value by the current total quantity of the material. It changes if the material price differs from the delivered price at goods or invoice receipt. Variances are posted to the stock account, with one exception: if the stock of material is less than the amount stated in the invoice because of a withdrawal that took place between goods receipt and invoice receipt, then the price variance for the missing quantity is posted to a price difference account.