Entering content frameFunction documentation Parallel Valuation Methods in Controlling Locate the document in its SAP Library structure

Use

In Controlling (CO), you normally store the valuation approach of the general ledger or an alternative cost-accounting valuation approach. Displaying multiple valuation approaches according to various accounting principles is a classic requirement of Controlling. However, as values can flow from Controlling to Financial Accounting, you can also carry out valuations according to various accounting principles in Controlling.

Features

To depict parallel valuation methods in Controlling, you have the following options:

Solution Scenario

Possible in Controlling?

Reason

Additional accounts

Yes

 

Additional ledger

No

Controlling is only integrated with the general ledger

Additional company code

No

Controlling is not integrated with additional company codes

Reconciliation ledger

Yes

 

Results analysis

Yes

 

Material valuation

Yes

 

Depiction Using Additional Accounts

If you depict parallel valuation methods using additional account, you have to decide which accounting principle is relevant for Controlling. You also have to create cost elements and revenue elements for the accounts that are relevant in Controlling.

Note

If you transfer values from parallel accounting principles to various accounts in Controlling, this can lead to a considerable increase in data, particularly with regard to clearing within CO.

Actual price determination is not possible for accounts that have been posted to in this way.

Depiction using the reconciliation ledger

Clearing within Controlling often leads to shifts between business areas and functional areas. The details of these shifts flow to Financial Accounting via the reconciliation ledger. This flow of information is required in Financial Accounting to ensure reporting by segment or to depict cost-of-sales accounting. In addition to the general ledger, you can also transfer the clearing entries to an additional ledger.

Results analysis

For long-term orders or projects, the various accounting principles have different requirements with regard to the handling and posting of costs, revenues and provisions (for example the percentage of completion method versus the completed contract method). For this purpose, results analysis provides you with flexible valuation methods. These methods are depicted in various parallel results analysis versions.

You have to define a results analysis version for each accounting principle. You can assign one accounting principle to each results analysis version. You can post the results of the various results analysis versions to additional accounts or to an additional ledger.

If you want to post the results to an additional ledger, you have to assign the additional ledger to the accounting principle for the results analysis version. See Setting Up Depiction Using an Additional Ledger.

Material valuation

Material valuation takes place in the SAP system during the period of the price control of the material in question. For the valuation of the material on the balance sheet, revaluations are normally carried out on specified dates. Here, the requirements of the various accounting principles must be taken into account.

The individual valuation methods take effect on the basis of a price defined as the upper limit in the material master. The system compares the material price determined using the valuation method with the current material price. The minimum is depicted and posted to the material master as a new result. The additional fields in the material master are use for this purpose (prices based on tax or on commercial law).

The results posted in the material master are then available for further valuation methods.

The system calculates the difference between the current stock value and the stock value that results using valuation with one of the price fields in the material master. You can post this revaluation difference manually to additional accounts or to an additional ledger.

For valuation on the balance sheet, you can use various valuation methods. You can also combine the valuation methods with one another.

The system determines the lowest price for a material Here, for example, prices are evaluated from purchase orders or delivery schedules. The lowest value determination is used for purchased parts or raw materials.

It might be necessary to devalue materials that your company sells if the material price is unlikely to be achieved when the material is sold. A customer enhancement is provided for this purpose. Here, you can define how the sales prices are to be determined.

The purpose of the LIFO (last in, first out) valuation is to valuate stocks with the oldest values possible. Assuming that the most recently acquired material will be the first to be used, the LIFO valuation leads to a devaluation of the stock if prices are rising.

The FIFO (first in, first out) valuation is based on the assumption that the materials used first will be those that were acquired first. The calculation of the stock value is based on the least recent acquisitions.

With lowest value determination according to days’ range, the price of a material is devaluated due to a lengthy range coverage. The range of coverage of the material is calculated from the relationship between the stock and consumption.

The movement rate of a material is determined using the acquisition or consumption of a material and the average material stock. Materials with a lower movement rate are devalued.

Inventory costing is used for balance sheet valuation of products created by your company in standard cost accounting. The material movement during the period generally occurs according to cost-accounting aspects with the results of plan costing. Key-date specific inventory costing is created for the balance sheet valuation.

This inventory costing is based on the plan quantity amounts that can be revaluated. For incoming materials, you can use the various price fields in the material master again. Inventory costing is created separately for the various accounting principles. The results of the inventory costing are posted in the material master. You can use this as the basis for a stock revaluation.

If you use actual pricing, you have the option of using the alternative valuation run as a further valuation method for balance sheet valuation of products that your company produces.

In actual costing, the material valuation takes place during the period using a periodic clearing price in the Material Ledger. For the balance sheet valuation, key-date-specific alternative valuation runs are created. This alternative valuation runs are based on the actual quantity flows that can be revaluated. The alternative valuation run calculates the difference between the current valuation of the materials and the valuation of the alternative valuation run. The difference is posted as a delta to an adjustment account and reversed when the closing entry is made in the Material Ledger in the next period. You can transfer the results of alternative valuation runs to Financial Accounting.

You can carry out a number of alternative valuation runs for a parallel valuation method. You can post the results of the alternative valuation runs to additional accounts or to an additional ledger.

 

 

 

 

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