Actual Costing Material Ledger Overview PDF

Actual Costing / Material Ledger
Solution Management ERP Financials
SAP AG
Agenda
Part A
Part B
Part C
Part D
Part E
Inventory Accounting with Material Ledger

Alternative Valuation Run
Distribution of Usage Variances
Revaluation of Consumption at Actual Costs
Revaluation of Cost of Goods Sold at Actual Costs
SAP AG 2009. All rights reserved. / Page 2
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not intended to be binding upon SAP to
any particular course of business,
product strategy, and/or development.
Please note that this document is subject
to change and may be changed by SAP at
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Agenda
1.
2.
3.
4.
Divider headline
Divider headline
Divider headline
Divider headline
Agenda
1. Divider headline
1.1. Subdivider headline
2. Divider headline
3. Divider headline
4. Divider headline
Actual Costing
Multi-level Periodic Material Prices
Actual Costing
Transparency
Multi-level
MultiPeriodic Material Prices
of Value Chain
Material
Ledger
Inventory Valuation
Parallel Currencies
Parallel Valuation
Valuation with Historic

Exchange Rates
Transfer prices
Group
Legal Profit Center
Mutli-Level Actual Costing
Production
Multi-Level Actual Costing allows

MultiInventory valuation with
actual periodic material price
Roll--up of price differences
Roll
Production
External Procurement
from raw materials to

finished materials
Integration of Actual Costing
Integration of
Multi--Level
Multi
Actual Costing
Profitability
Analysis
Contribution
Margins
Product Cost
Planning
Cost Center
Accounting
Actual Prices of
Activities and
Business Processes
Standard Prices
&
Cost Component
Split
Actual Costing and Profitability Analysis
Actual values in Profitability Analysis

Contribution Margin Accounting
Cost of sales split into cost components
Plan/Actual Variance analysis
Sales Quantity:
Revenues::
Revenues
1,000 pc
10,000 US$
Plan
Actual
Var. %
Var. Abs.
Raw Materials
Labor variable
Machine variable
Logistic Processes
Material Overheads
50,000
4,000
4,000
10,000
5,000
45,000
5,000
4,500
7,000
5,500
5,000
-1,000
- 500
3,000
- 500
10 %
- 25 %
- 13 %
30%
- 10 %
Contribution Margin I
27,000
33,000
6,000
22 %
Labor fix
Machine fix
10,000
7,000
10,000
7,000
0
0
0%
0%
Contribution Margin II
10,000
16,000
6,000
60 %
Actual Costing and Cost Center Accounting

/ABC
Direct settlement to materials:
Actual activity prices
Business
Processes
Plan
Actual ./. Plan
Actual costs of business

processes
Production
Standard Price
Settlement
Cost Center
Activities
Actual ./. Plan
Material
Actual Costing and Product Cost Planning

Product Cost
Planning
PP Master Data
Routing
BOM
Actual Costing with

Cost Components
Same cost component
structure as in planning
No Cost Estimates
necessary for Actual
Costing
Multi-Level
MultiActual Costing
Material Movements
Actual Quantity Structure
Optional: Primary cost

component split
Cost Estimate
Price Determination
Standard Price
with
Periodic Unit Price

with
Mat Proc Lab OH
Mat Proc Lab OH

Cost Component Split
Variance Analysis
Cost Component Split
Actual Cost Component Split
The Actual Cost Component Split is a strategic tool for

Sourcing Decisions based on procurement alternatives
Analyzing the actual value added in each production level
Category
Beginning Inventory
Receipts
Purchase Order
Trading Inc
Best Price Ltd
Production
Prod. Version1
...
Cumulative Inventory
Consumption
Ending Inventory
Qty
Value
100
8,400
900
300
200
100
500
500
100
1,000
600
400
72,600
26,000
18,000
8,000
38,500
38,500
8,100
81,000
48,600
32,400
Material Labor Machine Process OH

4,500
1,500
1,150
700
50,000 8,500
26,000
18,000
8,000
20,000 7,000
20,000 7,000
4,000 1,500
54,500 10,000
32,700 6,000
21,800 4,000
6,200
4,800
5,000
5,000
1,200
7,350
4,410
2,940
4,000
4,000
800
5,500
3,300
2,200
Price
550
84,00
3,100
81,00
87,00
2,500
2,500
600
3,650
2,190
1,460
90,00
80,00
77,00
77,00
81,00
81,00
81,00
81,00
Material Price Analysis
Price Analysis for selected Materials

Huge number of monetary and quantity key-figures
Multiple sorting and summarization functions
Easy-to-customize to fit personal needs
Direct drill-down tools to detailed views and documents
Easy error finding
Material
PC 500 Pentium
PC 600 Pentium
PC 330 Pentium
Monitor 17
Digital Camera xms
Digital Camera xms
PC Pentium 200
...
Total
Plant
London
London
Frankfurt
London
Frankfurt
London
Frankfurt
...
...
Std.Price Act. Price Var.abs Var. %

2,500
2,900
400 16 %
3,500
3,920
420 12 %
1,500
1,635
135
9%
400
432
32
8%
750
805
55 7,5 %
950
1020
70 7,4 %
800
855
55
7%
...
...
...
...
...
...
...
...
Material Price Analysis (2)
Price analysis for single Materials

Price history
Procurement controlling
Plausibility checks, and more
Category
Quantity PrelValue PriceDif Price
Beginning Inventory
100
1,000
160 11,60
Receipts
900
9,000
2,340 12,60
Purchase Order
300
3,000
1,500 15,00
Trading Inc
200
2,000
1,200 16,00
Best Price Ltd
100
1,000
300 13,00
Production
500
5,000
500 11,00
Prod. Version1
500
5,000
500 11,00
...
100
1,000
340 13,40
1,000
10,000
2,500 12,50
Consumption
600
6,000
1,500 12,50
Ending Inventory
400
4,000
1,000 12,50
Actual Costing in the Workplace
Cost Accounting
Manager
Cost Accountant
Inventory
Accountant
Inventory
Cost Estimator
Accountant
Sales Business
Analyst
Business
Unit Analyst
Inventory Accountant: Areas of Responsability

Procurement
Planning
Stock
Actual
Costing
Balance
Sheet Valuation
Inventory
Counting
Actual Costing in the Workplace
Actual periodic
Material Price
Multi-Level Roll
MultiRoll--up
of Price Variances
Integration with
Profitability Analysis
Integration with ABC and
Cost Center Accounting
Integration with
Product Cost Planning
Represented in Workplace
Inventory Accountant
Agenda
Part A
Part B
Part C
Part D
Part E

New Development in R/3 Enterprise in Actual Costing
Alternative Valuation Run (AVR) Concept
Reuses data collected in Periodic Actual Costing

Influencing Factors:
Material prices based on longer time periods :
Cumulation
Parameters can be varied to calculate alternative results for actual material costs:
Alternative valuation
Multiple (alternative) runs are possible for each period and

material (999)
Advantages of using the AVR
Cumulation:
Smooth out seasonal or random changes
Full absorbance of cost center costs although output is zero in some months
Decrease influence of work in process, beginning, and ending inventory
Get an overview of how prices influence processes over a whole business year
Alternative Valuation:
Support alternative valuation rules for stocks from IAS, US-GAAP, HGB, and so on.
Use activity prices that differ from the operational activity prices
Sequential Cumulations
9 10 11 12
Periods
Cumulation:
Quarters
Fiscal Years
Year-To-Date Cumulation (YTD)
9 10 11 12
Periods
Cumulation Runs
Cumulation of Periods
Instead of actual costs only being based on a single period (month), all price relevant
transactions from a multitude of periods are calculated together.
This process uses the:
Cumulated actual quantity structure
Cumulated single level differences from production or procurement
Cumulated activity prices
Beginning inventory from the first period
Ending inventory from the last period
Cumulation
Example follows...
Average of Periods!
Example: Average from Periods

Product A
Product B
Product A
Product B
$20
$20
$11
$11
$900
$100
90KG
Period 01
Period 1 + 2
$10
10KG
$1000
$90
10KG
Product B
$19.10
$11.90
$910
100 KG
$100
Period 02
Product A
$190
100 KG
$1100
90KG
Example: Cumulation
Product A
Product B
Product A
Product B
$20
$20
$11
$11
$900
90KG
Period 01
Cumulated Calculation for
Period 1 + 2
$100
$10
10KG
$1000
$90
10KG
Product B
$15.50
$15.50
$550
100 KG
$100
Period 02
Product A
$550
100 KG
$ 1100
90KG
Alternative Valuation
Valuations can vary by run

For materials:
Different split between valuation of ending inventory and consumption
Change ending inventory valuation and CCS using a BADI (ENDING_INVENTORY)
Use an external price for ending inventory, for example, FIFO price determined in balance
sheet valuation (Table CKMLPR_EB)
Manual change of material price and cost component split
Manipulate cumulated data using a BADI (CKMLAVR_SIM)
For activities:
Different types of activity prices
Planned activity prices (CO version > 0)
Periodic actual activity prices (CO version = 0)
Cumulative actual activity prices
Run Definition
A run consists of
Definition:
A collection of parameters
Plants taking part
Beginning and ending period
Settings
A name and a long text
Steps to complete all of the actual costing processes

Results
Reporting and analysis
Postings: FI and cost centers
Use in CO-PA
Definition: Period Data
Definition: Plant Assignment
Definition: Settings
Run processing Steps
A run consists of
Definition:
Plants taking part
Settings

Results
Use in CO-PA
Processing Steps
Process Step: Determine Actual Prices
Without AVR:
The determination of actual activity prices in Cost Center Accounting (Transaction
KSII) allows you to either calculate and store periodic or cumulated activity
prices.
With Step Determine Actual Prices in the AVR:
Cumulated actual activity prices can be stored additionally in their own version.
Actual data is used from version 0, but the results are written to an additional
version.
Aim:
Periodic ML uses periodic activity prices, AVR uses cumulated activity prices
Process Step: Posting
The Determine Delta Postings and Post Closing steps are optional steps. They are
only displayed if the run is defined as a posting run
Postings can be previewed and controlled in the results part of the cockpit.
An explanation of the posting logic follows...
Preview Delta Postings
Posting entries can be previewed using the filter hierarchy
Run Results I
A run consists of
Definition:
Plants taking part
Settings

Results
Use in CO-PA
Results: Reporting
AVR runs are stored separately from periodic data. The following reporting and
analysis tools can be used for AVR in the same way as for Periodic ML:
Price analysis on material level (CKM3)
Valuated quantity structure
Data extraction to BW
Value flow monitor
CKMLAVRPERD allows you to compare data from multiple periods with the AVR data at
procurement alternative level
Reporting: Price Analysis at Material Level

(CKM3)
Reporting: Valuated Quantity Structure

(Multilevel)
Run Results II
A run consists of
Definition:
Plants taking part
Settings

Results
Use in CO-PA
Results: Postings
Postings from AVR may include:

Delta stock account adjustments
Cost center credits from actual activity prices
Cost of single level consumption
Posting from AVR is optional, not mandatory!

SAP recommends posting from periodic
actual costing!
With Account Modification,

alternative valuations can be posted
in parallel to different sets of
accounts
with Accounting Principle, alternative
valuations can be posted in parallel
to a Special Ledger
The posting run flag determines if the results can be used for
posting or not. This prevents double postings being made to same
account from different runs.
The flag can only be set once per ending period, plant, and account
modification.
Delta Stock Account Postings

AVR results are compared, by material, with the current material valuation.
The difference is posted to a delta stock account with posting key BSD.
The offsetting posting uses key UMD.
To keep the operative valuation separate, the BSD account must not equal the BSX
account.
The posting is automatically reversed in next period in order to allow Year-to-DateCumulations.
Per material in AVR:
Example:
BSD = ( stock value AVR)

(stock value material master)
AVR periods 1 12, ending stock: 100 pieces,

Price $ 1.20
UMD = - BSD
Periodic valuation period 12: 100 pieces, V-Price

1.00 (from periodic revaluation)
Posting:
BSD 20
UMD 20-
Cost Center Credits from Actual Activity

Prices
There are three alternatives for crediting cost centers:
No crediting of cost center
Crediting triggered by periodic material ledger with periodic actual activity prices, not by
AVR
Crediting triggered by AVR with cumulative actual activity prices
Makes sense if, for example, cost centers would not be cleared in some periods due to
seasonal fluctuations.
Posting date: Last day of ending period of AVR

PRV
Lower level price differences
GBB / AUI
Offsetting posting (crediting cost center activity type in

CO)
In case of previous run, for example when using YTD:

Previous cost center posting is reversed
Scenarios with Cost Center Postings

Customizing
Activity
update
Rate in AVR
Def.
Blank
Actual Rate
Actual Rate +
Flag 'credit CC'
Periodic ML
Uses periodic
actual rates
Crediting CC
Uses periodic
actual rates
Crediting CC
Activity differences
not used
AVR
Actual valuation of periods will be recognized
in cumulation
No credit of CC
Determination of cumulated actual activity
prices available
Pickup of cumulated actual rate differences
No credit of CC
Determination of cumulated actual activity
prices is available
Pickup of cumulated actual rate differences
CC Credited
Revaluation of Consumption
Single-level consumption can be revaluated periodically, and can also be adjusted

to the AVR price
Consumption value from AVR

Consumtion quantities are cumulated.
Quantity x AVR price = consumption value
Periodic consumption value

Posting documents from revaluation of
consumption are added together for the
range of AVR Periods
AVR delta postings:

Consumption value from AVR periodic consumption value posted in
previous periods by AVR
Posting is made in same way as posting in periodic valuation: posting made
to original consumption account (and CO object)
Example Posting
Closing entry AVR January to September 2000
Posting date 30.09.2000
Credit cost center NSC1
Price Diff. Lower levels
Finished Goods Inv. Delta
Revaluation Delta
Cost of sales
Price Diff. ML
Posting Date 01.10.2000
Revaluation Delta
100100
50
5050
50-
GBB AUI
PRV
BSD
UMD
COGS
PRY
In January to September, 1000 pieces of a semifinished good

FG1 were produced. 1000 hrs of activity ac1 in cost center
NSC1 were consumed. The preliminary (frozen) price of ac1
was 1 EUR/h. For periods 1 - 9 in 2000, the total costs for
NSC1 were 1100 EUR and the total output was 1000 hrs of ac1.
Therefore the actual activity price of ac1 is 1.1 EUR/hr
At 09.30.2000 the ending stock is 500, another 500 pieces were
sold in January to September.
No other price differences occurred for FG1.
50
50-
UMD
BSD
Closing entry cumulation January to December 2000

Posting date 31.12.2000
Revaluation Delta
Cost of sales
Price Diff. ML
100
100180180
90
9040
40-
Posting Date 01.01.2001

Revaluation Delta
90
90-
GBB AUI <-reversal of former closing

PRV
<-reversal of former closing
GBB AUI
PRV
BSD
UMD
COGS <-difference to former closing: 90 - 50*
PRY
UMD
BSD
In the last quarter of the year,

another 1000 pc were
produced, again consuming
1000 hrs of AC1. The
cumulated yearly costs for
cost center NSC1 were 2180
EUR, and the total output was
2000 hrs. The price for AC1 is
1.09 EUR/hr. The ending
stock is now 1000 Pc.
Run Results III
A run consists of
Definition:
Plants taking part
Settings

Results
Use in CO-PA
Using AVR prices in CO-PA
AVR values in Profitability Analysis

Customizable strategy to select AVR
Cost of sales split into cost components
Plan/Actual/AVR variance analysis
Sales Quantity:
Revenues:
Plan
1,000 pc
100,000 US$
Actual (AVR) Var. %
Var. Abs.
Raw Materials
Labor variable
Machine variable
Logistic Processes
Material Overheads
50,000
4,000
4,000
10,000
5,000
45,000
5,000
4,500
7,000
5,500
5,000
-1,000
- 500
3,000
- 500
10 %
- 25 %
- 13 %
30%
- 10 %
Contribution Margin I
27,000
33,000
6,000
22 %
Labor fixed
Machine fixed
10,000
7,000
10,000
7,000
0
0
0%
0%
Contribution Margin II
10,000
16,000
6,000
60 %
Setup CO-PA Revaluation
IMG:
- Controlling
- Profitability Analysis
- Master Data
- Valuation
- Set up valuation using material
cost estimate
- Define access to Actual
Costing/Material Ledger
IMG:
- Controlling
- Product Cost Controlling
- Actual Costing/Material Ledger
- Actual Costing
- Set-up transfer of cost component
split to CO-PA
Summary
Features
AVR works as an add-on to Periodic Actual Costing

AVR can determine actual costs for a range of periods (cumulation)
You can choose between different valuations of stocks and activities
Results
AVR provides material prices, cost component splits, and actual

quantity structures
Reporting in BW, CO-PC, and CO-PA
Valuation for stocks, consumption, and activity consumption can be
posted to G/L accounts and cost centers
Agenda
Part A
Part B
Part C
Part D
Part E

New Development in R/3 Enterprise in the Area of Actual Costing
The Idea
Adjust confirmations to orders to almost actual quantities without the inconvenience

of manually entering actual confirmation quantities individually by order.
1.
Confirmation is completed using target quantities.
2.
Stock is counted regularly.
3.
Inventory differences are distributed to the orders relating to previously posted

consumption quantities.
Entering Consumption Quantities
Efficiency
Accuracy
Backflushing is used. No
manual interaction. Quantities
according to planned data
from Bill of Material (BoM)
and routing.
Manual confirmations by order.

Users enter quantities as taken
from stock.
Compromise:
1. Backflushing.
2. Counting daily, weekly, monthly.
3. Difference distribution.
Goods Issues
1. Traditional goods issues to the order during order production
Yoghurt
Yoghurt
Prod.
Order 1
Milkshake
Prod.
Order 2
Prod.
Order 3
500 KG
50 KG
50 KG
200 KG
200 KG
100 KG
Period 1
Period 2
1000 KG
Physical Inventory: Strawberries, storage location 1
400 KG
1000 KG
DUV for Material Consumption

2.
Distribution of usage variances (DUV) after physical inventory
Yoghurt
Yoghurt
Prod.
Order 1
Usage variances posted

as additional goods issues
with special movement type
Milkshake
Prod.
Order 2
20 KG
Prod.
Order 3
40 KG
40 KG
500 KG
50 KG
50 KG
200 KG
200 KG
100 KG
Period 1
Period 2
1000 KG
Physical Inventory: Strawberries, storage location 1
400 KG
1000 KG
Confirmation of Activities
1. Traditional activity allocations and goods issues,
for example, using backflushing
Yoghurt
Yoghurt
Prod.
Order 1
2 Mvmts
Period 1
Prod.
Order 2
2 m3
4 m3
Period 2
Milkshake
Prod.
Order 3
3 Mvmts
DUV for Activity Allocation

2. DUV after entering actual activities (and physical inventory)
Yoghurt
Prod.
Order 1
2 Mvmts
Period 1
Yoghurt
Prod.
Order 2
2 m3
4 m3
Milkshake
Prod.
Order 3
3 Mvmts
Period 2
Actual activity quantities (for example, from time sheets or machine counters)
Entering Differences
Materials:
Uses existing physical inventory functions. Gets differences from posted physical
inventory documents.
Create PI
Document
Record
Counting
Post PI
Difference
Distribute
to Orders
Mark checkbox
Relevant for
DUV
Activities:
New Transaction (CKMDUVREC) for entering actual output of an
activity, determined from timesheet, machine hour counter, and so
on.
Enter Actual
Quantities
Distribute
Differences
Possible Receivers for Differences
Materials:
Activities / Processes:
Production Orders
Product Cost Collector
Produced Material
Consumed material
None (leave in physical inventory
difference account)
Sender Receiver
Production Orders
Product Cost Collector
Produced Material
None (leave on cost center)
What is distributed
Type of posting
Mat.
Order & Cost Collector
Quantities & Costs
MM, FI, ML, CO
Act.
Order & Cost Collector
Quantities & Costs
CO
Mat./
Act
Material
Costs
FI, ML, Price Change,

CO
Searching DUV Receiver Objects
Materials:
Receiving orders are searched by material documents (MSEG) by:
Posting date in the period beween current and last PI counting.
Relevant movement type (set up in Customizing).
Material, plant, storage location, batch, valuation type, stock type the same as the
material to be distributed.
BADI
Activities:
CO Documents of confirmations are searched by:
Posting date in the period beween current and last PI counting.
Cost center and activity type, the same as the activity to be distributed.
FI Postings for DUV Materials
1
Stock
Post physical inventory difference

3
MM
PI Differences
BSX
GBB/INV
x
x
2
Order
2a
Post distribution to order
2b
Post distribution to material

(standard price)
2c
Post distribution to material

(moving average price)
GBB
x
Price Difference
PRD
x
Stock
PI Differences
GBB/INV
x
PI Differences
GBB/INV
x
PI Differences
BSX
x
GBB/INV
x
Activation in Customizing
Activation is completed per plant/storage location. Checkbox only appears when

activation takes place during creation of PI documents.
PI documents (created in background by Warehouse Management and so on) can be
used for DUV, if DUV is activated in the plant concerned and the distribution indicator
1 is binding.
Movement Types
Receiver Search
Movement types recognized during receiver search:
Set up in Table TDUVN156 using transaction SM31, for example: 261, 262
Distribution
Movement types used for getting quantities back from PI account to stock
Set up by copying movement types in MM Customizing. See DUV online documentation
Movement types for posting PI differences to order
By default: 261, 262. Can be set to new ones for example: Z61, Z62
Screenshot: Selection of Mvmt. Types
Customizing Follow-on Mvmt. Types OMJJ
Reversal of PI-Posting
PI-Posting
Z11 DUV
Z12 DUV
Z62
Z61
Posting to Order
Creating Physical Inventory (PI) Documents
PI Document: Details
Checkbox as set up in
DUV Customizing
Entering Inventory Count
Entering Inventory Count: Details
Posting PI Differences
Distributing Inventory Differences

(CKMDUVMAT)
Create distribution
Viewing/Editing Distribution Receivers
post movements / debits
save edited distribution
Change Type of Receiver

Proposed Distribution
Entering Activity Differences
Entering Activity Differences
1.
2.
3.
Enter quantity.
Mark item as OK.
Save.
Distributing Activity Differences
Create Distribution
CKMDUVACT - Distributing Activity

Differences
Post Movements/Debits
Save Edited Distribution
Proposed Distribution
Displaying Distributions
CKMDUVSHOW - Displaying Distributions
Selection options from last slide were entered here.
DUV and Actual Costing
DUV can be used with or without Actual Costing

DUV was developed by the actual costing development team in
a joint project with a customer from process industry
DUV is assigned to the component CO-PC-ACT-DUV
Integration with Actual Costing
Price Determination Schema

No impact on procurement
quantity and valueAdjusted consumption
quantityActual Quantity Structure.
DUV: Getting stock back
Original PI posting
DUV: Difference to order
See Notes
510692, 510273
Setting up ML Update Structure

By default, positive PI quantities (701) are
treated as other Receipts, and negative PI
quantities are collected in (702) consumption.
Beginning Inventory
Receipts
Other Receipts/Consumption
Consumption
Ending Inventory
701
702
Recommendation: Assign all PI movement types

to a movement type group and assign this to
process category VP
See Note 510692 for the procedure
Beginning Inventory
Receipts
Other Receipts/Consumption
Consumption
Ending Inventory
701
702
Z11
Z12
711 etc
BADI for Receiver Determination
BADI CKMLDUVN_CHOOSE_RECV
The automatic search for receivers of material differences (orders that consumed the
material) can be influenced by:
Method SET_PARAMETERS_RELEVANT: Implementation can decide which of the material
parameters should be used for receiver determination:
Storage location
Type of stock
Batch
Valuation type
Example: A difference for material 4711 with batch xy shall

be distributed to all orders which used material 4711 from
the same storage location and stock type, without respect
to the batch number
Method SUBSTITUTE_PARAMETERS: Implementation can substitute parameters for the

receiver search:
Material number
Plant
batch
Valuation type
Storage location
Type of stock
Example: A difference for material 4711 in recorded at

storage location 0001 (warehouse) shall be distributed to
orders which consumed the material from storage location
0002 (production line)
Movement Types (Special Topics)
In order to find possible receiver objects, DUV relevant goods issue mvmnt types
(for example: 261) must be maintained in table TDUVN156 (Transaction SM31).
During a DUV posting based on a physical inventory, the following goods
movements occur:
The inventory goods movements (movement types 701/702) are reversed. There are no
reversal goods movements for these movements in the standard. Therefore new reversal
movement types for the reversal of positive and negative inventory postings must be created
as copies of 711 and 712 (Z11 and Z12). You must not set the flag inventory posting for
these movement types.
After the inventory goods movements have been reversed,material usage variances are
posted to the receiving orders. In order not to take these goods movements into account
during a second distribution, special goods movements types should be created for these
DUV goods issues , e.g. Z61 and Z62 (as copies of 261 and 262).
The reference movement types for the copied movement types should be set to 999 so that
Warehouse Management ignores them.
Z61 and Z62 can then be defined as follow-up movements for Z11 and Z12 respectively with
function code DUV.
The corresponding order should be entered as the follow on movement type for the function
code DUV for the inventory reversal movement types Z11 and Z12.
Release
DUV is included as part of the SAP R/3 Enterprise

Financials Extension 1.10 and will, therefore, be
released to all customers
A downgrade to 4.6c is technically possible but would results in chargeable extra
work
Distribution of Usage Variances (DUV) - Tables
DUV for Materials:

CKMLDUVN - Information from inventory documents.
CKMLDUVNCO- Line items from distribution.
TDUV156 DUV relevant movement types.
DUV for Activity Types
CKMLDUVACT- Total activity quantities to be distributed
per DUV interval.
CKMLDUVACTCO - Line items from distribution.
Agenda
Part A
Part B
Part C
Part D
Part E


New Developments in R/3 Enterprise
Multilevel Actual Costing
Production
Multi-Level Actual Costing allows:

MultiInventory valuation using
actual periodic material price
Roll--up of price differences
Roll
Production
from raw materials to

finished materials
The gap to close

In 4.6, price differences are distributed to multilevel consumption and the ending
inventory:
Production
Transfer plant to plant
Transfer material to material
Ending inventory
However, no revaluation of single level consumption takes place:

Sales
Cost center, internal order, project, PA segment etc.
Scrap, physical Inventory, quality inspection
Revaluation of Cost of Goods Sold (COGS)
Ending Inventory
500kg
Cafeteria
Sales
400kg
100kg
1000 kg
Revaluation of
Consumption
ML Price Determination:
Roll Up of Variances
Customizing
Setting up the Material

Ledger Update of Goods
Movements for
Revaluation
Different Types of Single-Level Consumption
Sales
Cafeteria
Quality Inspection
Revaluation Types
CF
Collection with reference to the consumption account

number. Revaluation is posted to same account (original
account).
Collection with reference to the consumption account

number plus CO-Object (cost center number etc.)
Revaluation is posted to original account and CO-Object.
CC
Collection on process category. Revaluation is

posted to COC collective account.
COC
Creating Movement Type Groups
Assigning Movement Type Groups
Tracing Movements Relevant to Revaluation

Material: chocolate
Beginning Inventory
Receipts
Production
0 Kg
1000 Kg
1000 Kg
1000 Kg
Consumption
500 Kg
Sales
400 Kg
Account 890000
250 Kg
Account 895000
150 Kg
Cost Center
100 Kg
Cafeteria
100 Kg
Ending inventory
500 Kg
Consumption alternatives relevant for revaluation:

FI Account is key for consumption alternative
Revaluation in CO
Sales
Cost Center: Cafeteria
Quality Inspection
Setup for Revaluation in CO
To revaluate both the CO-Object and the FIaccount, you need to assign the movement
type group CC (instead of CF).
Movement type
Movement type group
251 - Sales
CF (Revaluation FI)
201 - Cost Center (Cafeteria)
CC (Revaluation FI and CO)
331 - Quality Inspection
Tracing Movements with CO-Objects

Material: chocolate
Beginning Inventory
0 Kg
Receipts
1000 Kg
Production
1000 Kg
1000 Kg
Consumption
500 Kg
Sales
400 Kg
Account 890000
250 Kg
Account 895000
150 Kg
Cost Center
100 Kg
Acc.850000, CC. Cafeteria

Ending inventory
100 Kg
500 Kg
The CO Object - and the FI Account - are keys for the

consumption alternative, relevant for revaluation in CO
Revaluating Other Consumption (COC)
If the movement type is not assigned to CC

or CF, differences are posted to COC
account
Sales
Quality Inspection
COC Account
Cost of Other Consumption
Example
Material: chocolate
Beginning Inventory
0 Kg
0 USD
0 USD
1000 Kg
10000 USD
1000 USD
11 USD
1000 Kg
10000 USD
1000 USD
11 USD
1000 Kg
10000 USD
1000 USD
11 USD
Consumption
500 Kg
5000 USD
500 USD
11 USD
Sales
400 Kg
4000 USD
400 USD
11 USD
Account 890000
200 Kg
2000 USD
200 USD
11 USD
Account 895000
150 Kg
1500 USD
150 USD
11 USD
100 Kg
1000 USD
100 USD
11 USD
Acc.850000 CC. Cafet. 100 Kg
1000 USD
100 USD
11Reval.
USD
50 Kg
500 USD
50 USD
500 Kg
5000 USD
500 USD
Receipts
Production
Cost Center
Other Consumptions
Ending inventory
Reval. FI
FI + CO
11
USD Posting
COC
11 USD
Costing Cockpit
Example Screenshot after Revaluation
Output list from Revaluation Step
Posting the Closing Entries
New Parameters for Revaluation of

Consumption
Postings in FI
Preliminary Valuation:
10 USD / kg
Variances calculated by price determination:

Material stock
Production
1000 kg
4000
USD
Price
determination
Revaluation
COGS
Price difference
Consumpt. Sales
10000
USD
Sales
400 kg
Revaluation
Inventory
1 USD / kg
4000
USD
1000
USD
500
USD
500
USD
400
USD
400
USD
Consumption to Cost Center:

Iteration Problem
1) Cost Center Closing
Cost Center
Cost Center
Cost Center
2) Order Settlement
3) Multi-Level
Actual Costing
Procedure
Set up Customizing
Create movement type groups
Assign movement types to groups
Maintain COC acount determination
Record Movements during the period

Perform step revaluation of consumption in costing cockpit after single- and multilevel settlement
Post closing entries with revaluation
Agenda
Part A
Part B
Part C
Part D
Part E

Agenda
1. Introduction
2. Modification of the Material Ledger Update of Goods Movements for
Revaluation of COGS
3. How the old program worked
4. How to implement and use the new program
Example: Consumption of a Finished Product

Ending Inventory
Sales
400kg
500kg
1000 kg
Cafeteria
100kg
Price Determination
Ending Inventory
500kg
Sales
400kg
Cafeteria
100kg
1000 kg
ML Price Determination:
Roll Up of Variances
Revaluation of Ending Inventory

Ending Inventory
500kg
Sales
400kg
1000 kg
Cafeteria
100kg
ML Period Closing:
Revaluation of Ending
Inventory
Revaluation of Cost of Goods Sold (COGS)

Ending Inventory
500kg
Cafeteria
Sales
400kg
100kg
1000 kg
Revaluation of
COGS
Postings in FI
Preliminary Valuation:
10 USD / kg
Variances calculated by price determination:

Material stock
Production
1000 kg
4000
USD
Price
determination
Revaluation
COGS
Price difference
Consumpt. Sales
10000
USD
Sales
400 kg
Revaluation
Inventory
1 USD / kg
4000
USD
1000
USD
500
USD
500
USD
400
USD
400
USD
Agenda
1. Introduction
Revaluation of COGS (COGS SAPRCKML_COGS
ZSAPRCKML_COGS)
Types of Consumption Relevant to Revaluation
Sales
Cafeteria
Quality Inspection
Types of Consumption Relevant to Revaluation
It is specified in Customizing which movement types are relevant to

revaluation
(by assigning special movement type groups
CF and CC).
Movement type
251 - Sales
Movement type group
CF (Revaluation FI)
Tracing of Movements Relevant to Revaluation

Material: chocolate
Beginning Inventory
Receipts
Production
0 Kg
1000 Kg
1000 Kg
1000 Kg
Consumption
500 Kg
Sales
400 Kg
Account 890000
250 Kg
Account 895000
150 Kg
Cost Center
100 Kg
Cafeteria
100 Kg
Ending inventory
500 Kg
Consumption Alternatives relevant to revaluation:

FI Account is a key of of the Consumption Alternative
Revaluation in CO
Sales
Quality Inspection
Revaluation in CO
To revaluate also the CO-Object (besides the FI-account) in

customizing you assign the movement type group CC (instead CF)
Movement type
Movement type group
251 - Sales
CF (Revaluation FI)
CC (Revaluation FI and CO)
Consumption to Cost Center:

Iteration Problem
1) Cost Center Closing
Cost Center
3) Multi-Level
Actual Costing
Cost Center
Cost Center
2) Order Settlement
Tracing of Movements Relevant to Revaluation

Material: chocolate
Beginning Inventory
0 Kg
Receipts
1000 Kg
Production
1000 Kg
1000 Kg
Consumption
500 Kg
Sales
400 Kg
Account 890000
250 Kg
Account 895000
150 Kg
Cost Center
100 Kg
Acc.850000, CC. Cafeteria

Ending inventory
100 Kg
500 Kg
The CO Object - besides the FI Account - is a key of a

Consumption Alternative relevant to Revaluation in CO
Revaluation of Other Consumption (COC)
Sales
Cafeteria
Quality Inspection
COC Account
Example
Material: chocolate
Beginning Inventory
0 Kg
0 USD
0 USD
1000 Kg
10000 USD
1000 USD
11 USD
1000 Kg
10000 USD
1000 USD
11 USD
1000 Kg
10000 USD
1000 USD
11 USD
Consumption
500 Kg
5000 USD
500 USD
11 USD
Sales
400 Kg
4000 USD
400 USD
11 USD
Account 890000
250 Kg
2500 USD
250 USD
11 USD
Account 895000
150 Kg
1500 USD
150 USD
11 USD
Cost Center
100 Kg
1000 USD
100 USD
11 USD
Cafeteria
100 Kg
1000 USD
100 USD
11 USD
500 Kg
5000 USD
500 USD
11 USD
Receipts
Production
Ending inventory
Revaluation COGS
Revaluation COC
Agenda
1. Introduction
Revaluation of COGS
3. How the old program worked (PRCKML_COGS SAPRCKML_COGS
ZSAPRCKML_COGS)
Problems of standard Material Ledger update
In standard Material Ledger update of goods movements consumption to sales does

not always appear in the correct process type (Example: If goods are sold via a
cost center the consumption appears as Consumption to Cost Center)
Reversal movements sometimes appear as procurement (above the cumulative line)
and thus cannot be revaluated
Reading of material and accounting documents is needed to determine the COGS
accounts that have to be revaluated
The Old Program SAPRCKMN_COS
The old program

makes no use of the material ledger update to identify the quantities consumes for
sales (Reason: goods issues to sales are not always updated under the correct
process type in ML)
identifies goods issues to sales by existence of a billing document in the Sales &
Distribution Module
obtains all information needed to revaluate the movements (consumed quantities,
accounts etc.) by reading the document flow of the Sales & Distribution Module
Document Flow
Invoice
Delivery
Material
document
Accounting
document
Material
Quantities, Accounts
Problems of the Old Program
Use of Sales & Distribution Module required!

High Complexity of Processes in SD. Reading of the document flow can be
very complicated. This difficulty has caused many errors in the old
program.
Performance: Reading of the document takes very long time in systems where
much transaction data exists!
Time dependency: Sales movements are only recognized if the billing has
already been posted and if it has been posted in the same period!
The old program had poor performance and

often determined wrong consumption
quantities for the sales movement
Posting Logic
Old Program:
New Program:
Cumulated Posting per

Account.
Separate Posting for

each Material.
Material specific data is
provided to Acc. Interface
COGS Account: 850000

Revaluation Amount: 800,-
Accounting
Interface
Material A
Revaluation Amount: 500,Material B
Revaluation Amount: 300,-
Material B
Revaluation Amount: 300,Business Area: 6100
Profit Center: PC 2
Material A
Revaluation Amount: 500,Business Area: 6000
Profit Center: PC 1
Material specific data
Conclusion
Conclusion:
SAP recommends not to use
the old program anymore!!
Agenda
1. Introduction
Revaluation of COGS
4. How to implement and use the new program (ZSAPRCKML_COGS)
Implementation of the New Program
Step 1: Modification of the Material Ledger Update.

For this step follow the instructions of OSS-NOTE 305056.
It has to be done BEFORE the start of the period, for which the new program shall be used
This step includes the settings in customizing for all movement types that shall be revaluated
at periods end
Step 2: Installation of the new report

For this step follow the instructions of OSS-NOTE 320152.
In customizing you have to assign accounts for transaction key COC, if you want to revaluate
Cost of Other Consumption
Settings in Customizing
Movement type
Movement type group
601 - delivery
CF
602 - GI to delivery (Reversal)
CF
201 - Cost Center
CC
202 - Cost Center (Reversal)
CC
Never forget to
assign the reversal
movement !!
261 - Production Order

301 - Stock Transfer
Never assign multi-level

movements!!
Test each movement type, you assigned to CF or CC!
General Understanding:
Single- and Multi-Level Consumption
Multi-Level Consumption
Customers
Single-Level Consumption
Materials
Cost Center
The new Program: Advantages/Disadvantages

Advantages
Higher performance, because all

relevant data is collected during
the period. No reading of
documents needed.
S & D Module is not required
Higher reliability because reading of
the document flow is avoided
Revaluation of other single level
consumption types possible
Revaluation of original CO-Objects
possible
All reversal movements can be
recognized correctly
Disadvantges
Material Ledger update of goods

movements needs to be modified
before period starts. Otherwise
program can not be used at
periods end.
Thank you!
Copyright 2010 SAP AG

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Actual Costing / Material Ledger

Solution Management ERP Financials

Inventory Accounting with Material Ledger

SAP AG 2009. All rights reserved. / Page 2

Inventory Accounting with Material Ledger

This presentation is a preliminary version

SAP AG 2009. All rights reserved. / Page 5

SAP AG 2009. All rights reserved. / Page 6

Valuation with Historic

Legal Profit Center

Mutli-Level Actual Costing

Multi-Level Actual Costing allows

from raw materials to

Integration of Actual Costing

Actual Costing and Profitability Analysis

Actual values in Profitability Analysis

Actual Costing and Cost Center Accounting

Actual ./. Plan

Actual costs of business

Actual ./. Plan

Actual Costing and Product Cost Planning

Actual Costing with

Actual Quantity Structure

Optional: Primary cost

Periodic Unit Price

Mat Proc Lab OH

Cost Component Split

Actual Cost Component Split

The Actual Cost Component Split is a strategic tool for

Material Labor Machine Process OH

Material Price Analysis

Price Analysis for selected Materials

Std.Price Act. Price Var.abs Var. %

Material Price Analysis (2)

Price analysis for single Materials

Actual Costing in the Workplace

Inventory Accountant: Areas of Responsability

Actual Costing in the Workplace

Inventory Accounting with Material Ledger

SAP AG 2009. All rights reserved. / Page 19

Alternative Valuation Run

New Development in R/3 Enterprise in Actual Costing

Alternative Valuation Run (AVR) Concept

Reuses data collected in Periodic Actual Costing

Multiple (alternative) runs are possible for each period and

Advantages of using the AVR

Year-To-Date Cumulation (YTD)

Example: Average from Periods

Valuations can vary by run

Steps to complete all of the actual costing processes

Definition: Period Data

Definition: Plant Assignment

Run processing Steps

Steps to complete all of the actual costing processes

Process Step: Determine Actual Prices

Process Step: Posting

Preview Delta Postings

Posting entries can be previewed using the filter hierarchy

Steps to complete all of the actual costing processes

Reporting: Price Analysis at Material Level

Reporting: Valuated Quantity Structure

Steps to complete all of the actual costing processes

Postings from AVR may include: