In the SAP System, there are two types of price control:

• Standard price
• Moving average price

These two types of price control differ in how they handle price variances resulting from goods receipts or invoice receipts.

You determine the price control that should be used for a material when you create the material and enter the accounting data for it. You enter one of the following indicators in the Price control field to determine how the price is controlled:

• S for standard price control
• V for moving average price control

Valuation using a standard price has the following features:

• All inventory postings are carried out at the standard price
• Variances are posted to price difference accounts
• Variances are updated
• Price changes can be monitored

If a material is assigned a standard price (S), the value of the material is always calculated at this price. If goods movements or invoice receipts contain a price that differs from the standard price, the differences are posted to a price difference account. The variance is not taken into account in valuation.

Valuation using a moving average price results in the following:

• Goods receipts are posted at the goods receipt value.
• The price in the material master is adjusted to the delivered price.
• Price differences occur only in exceptional circumstances.
• Manual price changes are usually unnecessary. However, they are possible.

If a material is assigned a moving average price (MAP), the price is automatically adjusted in the material master record when price variances occur. If goods movements or invoice receipts are posted using a price that differs from the moving average price, the differences are posted to the stock account; as a result, the moving average price and the value of the stock change.