Example for a Withdrawal of a Semifinished Product 

This section shows the posting logic for a withdrawal of a semifinished product on the basis of a production order within one company code.

Assumptions

In Financial Accounting (FI), only the legal and group valuation views are used. In Controlling (CO), all three views are used for the purpose of reconciliation. In Profit center Accounting, transfer prices are shown using the profit center valuation view.

The inventory value in the material ledger is:

·        EUR 100 in the legal valuation view

·        EUR 80 in the group valuation view

·        EUR 120 in the profit center valuation view

Semifinished good 1 is assigned to profit center 1. Production order 2 is assigned to profit center 2. The transfer price for “sales” of the semifinished good between profit centers is EUR 150.

 

Postings in the Material Ledger (Not Shown)

The following lines are posted in the material subledger:

 

Change in stock	(L) 100 (G) 80 (P) 120	to
Stock	(L) 100 (G) 80 (P) 120

Postings in Financial Accounting and Controlling

The following lines are posted in Financial Accounting:

 

Change in stock	(L) 100 (G) (80)	to
Material stock	(L) 100 (G) (80)

 

Of this posting in FI, only the CO-relevant part Change in stock is posted to the production order.

 

Change in stock

(L) 100 (G) 80 (P) 150

 

Posting in Profit Center Accounting

The semifinished good and the production order are assigned to different profit centers. Thus from a profit center viewpoint, this transaction is regarded as a “sale” by profit center 1 to profit center 2. This sale is represented by a series of posting lines, each of which is shown separately.

Posting from the Viewpoint of Profit Center 1

First, the selling profit center 1 receives the transfer price of EUR 150 as Internal revenue. No posting for internal payables is made in Profit Center Accounting, since no payment will be received. Thus no clearing entry can be made, nor is this necessary, since the profit center is not an independent legal unit that requires a complete balance sheet.

 

Internal revenues

(P) 150

 

The delivery of the semifinished good is represented for profit center 1 by the following record:

 

Internal change in stock	(P) 120	to
Stock	(P) 120

 

In total, profit center 1 shows the following results according to the period accounting method:

External sales	0
Internal sales	150
Change in stock	-120
Result	30

 

The account Internal change in stock is shown in the report together with the account Change in stock so that the overall change in stock that appears is the correct amount when seen from the profit center viewpoint.

Posting from the Viewpoint of Profit Center 2

For the receiver profit center 2, the posting line Change in stock is taken and valuated using the transfer price:

 

Change in stock

(P) 150

Profit center 2

 

As with payables, no posting for internal receivables is created.

However, because no change in stock has occurred from a profit center viewpoint, a reposting has to be made to the item Delivery from profit centers so that the change in stock is correct from the profit center viewpoint.

 

Delivery from other profit centers	(P) 150	to
Internal change in stock	(P) 150

 

This additional posting is not necessary if you only represent profits using the cost‑of‑sales method, since in that case no report items Change in stock appear. It is also not necessary when raw materials are used.

The result for profit center 2 looks like this:

External sales	0
Internal sales	0
Change in stock	0
Delivery from other profit centers	-150
Result	-150

 

As stated above, the accounts Change in stock and Internal change in stock appear in the same report item.