Purpose

The objective of balance sheet valuation is the calculation of material prices for subsequent use in external or internal balance sheets, typically for valuation of the stocks of current assets. Generally, the conditions include meeting legal requirements, complying with corporate group guidelines, and implementing internal company objectives regarding accounting policy. In this context, the company code is regarded as an independent accounting unit

The SAP System provides the following techniques for balance sheet valuation:

The procedure used depends first on country-specific tax and commercial laws. Use of procedures that are legally permitted but not stipulated can be varied according to internal company experiences and preferences. Objectives concerning company policy can lead to different decisions on the use of individual procedures depending on the industry sector, national inflation rate, or other criteria.

Generally, the Results of Balance Sheet Valuation are calculated in compliance with the Lowest Value Principle . Alongside the prices from lowest value determination, LIFO procedures, and FIFO procedures, the following prices are, in principle, possible as the maximum value for the balance sheet price.

See also:

Material Price Change (MM-IV-MP)