Changes in Material Valuation

Major Editors: Vinay Kumar Malik

Introduction

Most of the goods movements transactions in Inventory Management and every invoice receipt in Logistic Invoice Verification lead to changes in stock value. In case of goods receipts, the stock value is increased and in the case of goods issues, the stock value is reduced. Following are some the important transaction in the Standard SAP R/3 which always leads to changes in Material Valuation:

• Delivery Free of Charge
• Transfer Posting
• Goods Receipt
• Initial Entry of Inventory Data
• Goods Issue
• Goods Receipt Reversal
• Logistic Invoice Verification
• Subsequent Debits/Credits
• Credit Memos
• GR/IR Clearing Account Maintenance
• Unplanned Delivery Cost
• Cash discount
• Material Price Changes
• Posting of physical inventory differences
• Revaluation/Devaluation of a material

Categorization

In the Standard SAP these changes are categorized as follows:

• Automatic changes
• Manual changes

Automatic Changes

Based on the configuration setting and type of price control assigned to material, changes in Material Valuation due to goods receipts and invoice receipts are carried out automatically when the relevant transaction is posted. Before carrying out these changes system always checks for availability of quantity. Increase/Decrease in Valuation depends on the availability of quantity. For all these adjustment quantity remains unchanged and system adjusts the valuation automatically.

Manual Changes

These changes are carried out manually by the end users during the following business transactions on as and when required basis:

• Price change in material price
• Material debit or credit
• Physical inventory differences

Source - Sap Ittoolbox