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Material Ledger Configuration

The document discusses the configuration required for the material ledger in SAP to comply with Brazilian legislation regarding total absorption costing. It outlines 9 key steps needed to configure the material ledger, including activating valuation areas and actual costing, defining movement type groups, and configuring account determinations for transactions like price differences, stock postings, and revaluations. Proper configuration of the material ledger is important to ensure accurate absorption of production costs into inventory and cost of goods sold.

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Marcelo Del Canto Rodriguez
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78 views

Material Ledger Configuration

The document discusses the configuration required for the material ledger in SAP to comply with Brazilian legislation regarding total absorption costing. It outlines 9 key steps needed to configure the material ledger, including activating valuation areas and actual costing, defining movement type groups, and configuring account determinations for transactions like price differences, stock postings, and revaluations. Proper configuration of the material ledger is important to ensure accurate absorption of production costs into inventory and cost of goods sold.

Uploaded by

Marcelo Del Canto Rodriguez
Copyright
© © All Rights Reserved
Available Formats
Download as DOCX, PDF, TXT or read online on Scribd
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Material Ledger Configuration

01541,309

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. 1. Activate Valuation Areas for Material Ledger

Spro: Controlling |  Product Cost Controlling | Actual Costing/Material


Ledger | Activate Valuation Areas for Material Ledger

1. 2. Assign Currency Types to Material Ledger Type

Spro: Controlling | Product Cost Controlling | Actual Costing | Material


Ledger | Assign Currency Types to Material Leddger Type

1. 3. Assign Material Ledger Types to Valuation Area

Spro: Controlling | Product Cost Controlling | Actual Costing / Material


Ledger | Assign material Ledger Types to Valuation Area

1. 4. Configure Dynamic Price Changes

Spro: Controlling | Product Cost Controlling | Actual Costing / Material


Ledger | Configure Dynamic Price Changes

1. 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

1. 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

1. 7. Activate Actual Costing

Spro: Controlling | Product Cost Controlling | Actual Costing / Material


Ledger | Actual costing | Activate Actual Costing

1. 8. Activate Actual Cost Component Split

Spro: Controlling | Product Cost Controlling | Actual Costing / Material


Ledger | Actual costing | Activate Actual Cost Component Split
1. 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.

Example

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.

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