Material Ledger Configuration
Material ledger must be configured to attend the Brazilian legislation, that establishes the total absorption for production costs to inventory and COGS.
The actual tariff must be applied to activity types used on production cost centers previously with standard price allocating the manufacturing expense price differences.
Below the necessary steps to be reviewed and if necessary configured relative to Material Ledger:
- 1. Activate Valuation Areas for Material Ledger
Spro: Controlling | Product Cost Controlling | Actual Costing/Material Ledger | Activate Valuation Areas for Material Ledger
- 2. Assign Currency Types to Material Ledger Type
Spro: Controlling | Product Cost Controlling | Actual Costing | Material Ledger | Assign Currency Types to Material Leddger Type
- 3. Assign Material Ledger Types to Valuation Area
Spro: Controlling | Product Cost Controlling | Actual Costing / Material Ledger | Assign material Ledger Types to Valuation Area
- 4. Configure Dynamic Price Changes
Spro: Controlling | Product Cost Controlling | Actual Costing / Material Ledger | Configure Dynamic Price Changes
- 5. Define Movement Type Groups of Material Ledger
Spro: Controlling | Product Cost Controlling | Actual Costing / Material Ledger | Material Update | Define Movement Type Groups of material Ledger
- 6. Assign Movement Type Groups of Material Ledger.
Spro: Controlling | Product Cost Controlling | Actual Costing / Material Ledger | Material Update | Assign Movement Type Groups of material Ledger
- 7. Activate Actual Costing
Spro: Controlling | Product Cost Controlling | Actual Costing / Material Ledger | Actual costing | Activate Actual Costing
- 8. Activate Actual Cost Component Split
Spro: Controlling | Product Cost Controlling | Actual Costing / Material Ledger | Actual costing | Activate Actual Cost Component Split
- 9. Define productive start
SAP Menu: Accounting / Controlling / Product Cost Controlling / Actual Costing / Material Ledger / Environment / Production Startup / CKMSTART – Set Valuation Areas as Productive.
Account Determination in Material Ledger
The account determination for Material Ledger postings is made using Materials Management (MM) account determination (OBYC)
It’s important understand that are a link between Material Ledger and cost component structure (OKTZ) in product costing planning configuration – that is used to update standard cost.
Revenue/Expense from Revaluation (UMB)
The Material Ledger closing entries (CKMLCP) will use transaction key UMB, and is used when a material price is changed and/or revaluate.
Price Differences for Material Ledger (PRY)
The system uses transaction key PRY during the Material Ledger closing entry, as well as during the roll-up of single-level price differences. Material Ledger does not use the PRD transaction key configuration to transfer the price variance from an input material to an output material.
Instead, the system uses the PRY assigned account.
Price Differences from Lower Levels (PRV)
The transaction key PRV is used by Material Ledger closing entries for the multilevel price variances.
If the Material Ledger posts a roll-up of a price difference that was received from a lower level (multilevel price differences), it uses the PRV account determination to find the account to which the difference should be posted. In this case, the PRV account is used to credit/debit the input material and debit/credit the output material.
Exchange Rate Differences from Lower Level (KDV)
The KDV transaction key works for the exchange rate differences in the same way the PRV transaction key works for the price differences. In this manner, the Material Ledger is capable of keeping the roll-up of price differences and the roll-up of exchange rate differences in different accounts.
Stock Posting (BSX)
The BSX transaction key is used for all postings to inventory accounts. If the choose will to revaluate the inventory based on actual cost, then the account that is configured in this transaction key will receive all of the variances that come from the single differences and multilevel differences. Therefore, this transaction key has the offset account for PRY, PRV, KDM, and KDV transaction keys for inventory revaluation in the Material Ledger.
Accruals and Deferrals Accounts in the Material Ledger (LKW)
If the choice is not revaluate the inventory accounts to actual costs, then the Material Ledger allows you to post all the variances to a separate account. In this case, the price and exchange rate differences that should actually be applied to the inventory value are contra-posted to accounts with the transaction key LKW. If choose is do not revaluate inventory, the LKW account is the offset for the PRY, PRV,KDM, and KDV transaction keys.
This transaction cannot be used for Brazil, because the revaluation will occurs on inventory, but its accounts will be defined for default practice. Using FIN_CO_COGM we have the postings separated by ledgers, it means no impact on US GAAP.
Cost Center Crediting from Activities (GBB-AUI)
The GBB-AUI transaction key is used during the Material Ledger closing entries to credit the cost centers with the delta value between the plan activity type price and the actual activity type price. This transaction key is used to offset transaction key PRV, which receives the variances as a lower-level price variance.
In other words, for activity type variance absorption, the PRV transaction key dictates the account in which the Material Ledger will receive the variance, and the GBB-AUI transaction key dictates the account used to credit the variance in the cost centers that performed the activity type.
GBB-AUI is also used by the WIP revaluation function. For WIP revaluation, the delta between plan and actual activity type price is also credited to the cost centers that performed the activities using the account assigned to GBB/AUI and offset by the transaction key WPA.
Revaluation of Other Consumption (COC)
The COC transaction key is required for the revaluation of consumption in actual costing/Material Ledger. Revaluation of consumption valuates single-level consumption (cost center, sales, scrap, etc.) using the actual prices determined in the actual costing/Material Ledger.
This transaction is not necessary for Brazil, because the revaluation will occurs on inventory, but its accounts will be defined for default practice.
[DPA1]Please add general requirement for ML !!!