LIFO Lowest Value Comparison: Pools (SAP Library - Balance Sheet Valuation (MM-IM-VP))

LIFO Lowest Value Comparison: Pools

Use

When comparing the lowest values, the system calculates the net value for each existing layer.

Features

In the R/3 System, there are two ways to compare the lowest values in pool LIFO valuation:

Material devaluation
Pool devaluation

Material Devaluation

When comparing the lowest values, the system determines an average price from various different prices. The system can use the following price fields for this:

The tax prices
The commercial prices
The layer prices
The material prices

The average can be formed in two ways:

Single-item prices

The system first determines the lowest price for each material in the pool. The weighted average of these lowest values is the lowest price in the pool.

Material prices on a pool basis

For each price field used in the lowest value comparison, the system finds the average of the weighted prices of all materials in the layer. The lowest of these average prices is the lowest price.

Pool Devaluation

In the annual data for a pool layer you can enter three deductions. When comparing the lowest values, the system adds these deductions together. The difference between the gross value and total deduction is then the net value.

Comparing the lowest values with pool deductions does not affect data in layers from previous years.

Devaluation Rule

You can compare the lowest values either layer by layer or for all layers together:

If you compare the lowest values layer by layer, the system compares the layer value for each layer with the lowest value determined. The lower of these gives the net value of the relevant layer (see example).

If you compare the lowest values for all layers together, the system compares the lowest value determined with the average value of all layers. The system calculates this average layer value from the gross value of the current layer and the net values of the old layers. If the lowest value is smaller than the average value, the existing layers are dissolved. At the same time, the system creates a current layer, which is valuated gross using the average value of all layers and net using the lowest value determined.