Split Valuation Configuration

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TABLE OF CONTENTS
INTRODUCTION.........................................................................................................4 1. Activate Split Valuation................................................................................5 2. Configure Split Valuation.............................................................................6 2.1 Define Valuation Category..........................................................................7 2.2 Create Valuation type ..................................................................................9 2.3 Allocate Valuation type to Valuation categories ................................... 18 2.4 Allocate Valuation categories to Valuation areas................................. 22 2.5 Default Valuation type per plant.............................................................. 26 3. Creating a split valuated Material Master.............................................. 32 3.1 Create the Valuation Header Record ......................................................... 32 3.2 Create the Material for the Valuation type (In -house manufactured) .... 40 4. Creating procurement alternatives ......................................................... 46 5. Creating Mixing Ratios ............................................................................. 50 6. Create Standard Cost estimate............................................................... 52 7. Mark and Release Cost estimate............................................................ 55 8. Scenario...................................................................................................... 60
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INTRODUCTION
What is Split Valuation? Split Valuation means managing a material as several partial stocks. Each partial stock is valuated separately. Why do you require Split Valuation? Split Valuation is required for certain materials in order to valuate them separately. Following can be the reasons for opting for split valuation:1) Different origin of the material 2) Different grades of the material 3) Different statutes of the material 4) Differentiation between in -house production and external procurement 5) Differentiation between deliveries Each transaction whether it a goods receipt, goods issue, invoice receipt or physical inventory, is carried out at the level of the partial stock. When you process one of these transactions, you must always specify which partial stock is involved. This means that only the partial stock in question is affected by a change in value, the other partial stocks remain unaffected. Alongside the partial stocks, the total stock is also updated. The calculation of the value of the total stock results from the total of the stock values and stock quantities of the partial stocks. You define whether the material is subject to split valuation on the accounting view of the material master record. There are two fields for this:
The valuation category specifies which criterion should be used as the basis for differentiating between the various partial stocks. The valuation type specifies an individual characteristic of a partial stock.
We will understand the split valuation configuration. We cover how to maintain a split valuated material master and how to create and release a standard cost estimate for a split valuated material. Lastly we see the split valuation results after goods receip t is done for a split valuated material.
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1. Activate Split Valuation

For configuration we use the following path on the SAP application screen:SAP Menu Tools Customizing IMG SPRO Edit Project
IMG Materials Management Valuation and Account Assignment Split Valuation Activate Split Valuation Here we configure whether split valuation is allowed for our company. Allowing split valuation does not mean that you must valuate each and every material on this basis. You decide whether to do so or not for a particular material when creating the material master record. In the standard SAP R/3 System, split valuation is set as active.
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2. Configure Split Valuation

IMG Materials Management Valuation and Account Assignment Split Valuation Activate Split Valuation Configure Split Valuation In split valuation, you can distinguish between partial stocks of a material according to certain criteria and valuate them separately. The material stock is divided according to valuation category and valuation type:
The valuation category determines how the partial stocks are divided, that is, according to which criteria. The valuation type describes the characteristics of the individual stocks.
Click
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2.1 Define Valuation Category

IMG Materials Management Valuation and Account Assignment Split Valuation Activate Split Valuation Configure Split Valuation
The valuation category specifies which criterion should be used as the basis for differentiating between the various partial stocks. The standard system contains several default valuation categories, for example:
B for procurement type The stock is divided up according to whether the material is manufactured in -house or procured externally.
H for origin The stock is divided up according to where it was delivered from.
X for Batch This is a special case: no valuation types are predefined for this category. At goods receipt, a batch is created for the material entered. This also serves as its valuation type. This makes it possible to valuate every goods receipt separately, for example, by using the order number as the valuation type.
Click
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2.2 Create Valuation type

IMG Materials Management Valuation and Account Assignment Split Valuation Activate Split Valuation Configure Split Valuation There are valuation types for each valuation category, which specify which individual characteristics exist for that valuation category. If you give the valuation types meaningful keys, each valuation type in some way represents the name of a sub-stock. Fixed valuation types are defined in the system for each valuation category except valuation category X.
Example 1:
You get a material both from in -house production and from external vendors. You want to valuate the stocks from each source separately. In this case, you select Procurement type as the valuation category (B) and Internal and External as valuation types.
Example 2:
You procure a material from several countries. You want to valuate the stocks from each country separately. In this case, you select Origin as the valuation category (H). As valuation types, you define the relevant countries, for example, USA and UK.
Example 3:
You procure a material in different grades. You want to valuate the stocks of each class separately. In this case, you select Quality as the valuation category (Q). As valuation types, you could define A, B and C.
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Split Valuation
B
(Procurement type)
H
(Origin Country)
Q
(Quality)
Valuation Category
Internal
External
USA
UK
al
Valuation type
Scenario : In our scenario A Ltd is manufacturing product Polyethylene in-house and also procuring it from an external vendor. The cost of manufacture of Polyethylene in-house (in plant 9100) is 265.78 INR per kg. The cost of procured Polyethylene (from vendor 1000010) is 240 INR per kg. Thus the same product Polyethylene has different valuations due to different source of procurement. Different valuation for the same material is only possible by using split valuation functionality. We will use the valuation category B (procurement type) and create 2 valuation types under B. 1) INTMFGD Internal Manufactured 2) PROCURED - Procured
Click
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Click
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Update the following:Take a drop down in the field Ext. purchase orders
Select 0 Take a drop down in the field Int. purchase orders
Select 2 www.sapficoconsultant.com Page 12 of 67
The account cat. Reference 0009 is Finished goods which is linked to the valuation class and the material type.
Click
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Click on
Click
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Click
Update the following:-
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Click on
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Click on
Click
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2.3 Allocate Valuation type to Valuation categories

IMG Materials Management Valuation and Account Assignment Split Valuation Activate Split Valuation Configure Split Valuation We need to allocate valuation type to valuation category. Click
Click Click
and then
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Position the cursor on Valuation type
Double click
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Click Click on Valuation type Double click
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Click on Let us deactivate all other valuation types in Valuation category B. Click on Double click
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Similarly deactivate all others Click on
2.4 Allocate Valuation categories to Valuation areas

IMG Materials Management Valuation and Account Assignment Split Valuation Activate Split Valuation Configure Split Valuation
Click
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Click on Double click
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The valuation categories B, H and X are active for Plant 9100. Since we only want one valuation category B to active for plant 9100, let us deactivate H and X. Proceed as follows:Click on Double click
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Click
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Click on
2.5 Default Valuation type per plant

IMG Materials Management Valuation and Account Assignment Split Valuation Activate Split Valuation Configure Split Valuation The default valuation type per plant can be set here in this step. This is only possible if there are 2 valuation types per valuation category. This default is useful so that whenever users raise purchase order, info records, goods receipt they do not have to manually enter the v aluation type applicable. In this case PROCURED. Further it is also useful for users creating production orders wherein they do not have to manually specify the valuation type (INTMFGD)
Click
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Click
Update the following;-
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Click on Update the following:-
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Click Update the following:-
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Click on Click
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We have change the default valuation type for external procurement to PROCURED and in house production to INTMFGD This is useful since the users while creating info records and purchase orders do not have to select manually the valuation type. But if more than one valuation type exists for a plant then these defaults should not be set. Click on
3. Creating a split valuated Material Master

Let us now create a split valuated Material Master. A split valuated material master has 2 step creation procedures. The first step is creating a Valuation header record. The second step is creating a material per valuation type.
3.1 Create the Valuation Header Record

This is where the individual stock of a material are managed cumulatively. The Valuation header record is always managed using the price control V (moving average price). The moving average price is built in the valuation header record from the values and quantities of the individual stocks. Update the following:-
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Click
Select
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Click Select
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Click
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Take a drop down in the field Valuation Cat.
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Click
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Click
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Click on
3.2 Create the Material for the Valuation type (In-house manufactured)
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Click Select
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Click
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Click on Now we create material for the valuation type PROCURED
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Click
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Since the item is procured from a vendor we keep the price control as V. Click on The split valuated material is ready.
We now need to calculate the standard cost estimate for the split valuated material. The procedure for creating a standard cost estimate for a split valuated material is slightly different. The reason being when you calculate standard cost estimate using transaction code CK11N or CK40N no valuation type selection is available. Therefore we need to create procurement alternatives for each of the procurement type using transaction code CK91N.
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After creating the procurement alternatives we need to maintain mixing ratios using transaction code CK94. This step is to give weight age to each of the procurement alternative. The standard cost thus derived for the header record is a mixed cost estimate. Let us proceed to create the standard cost estimate. 4. Creating procurement alternatives
SAP menu Accounting Controlling Product Cost Controlling Product Cost Planning Material Costing Master Data for Mixed Cost Estimate CK91N - Edit Procurement Alternatives Update the following:-
Click
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Select Update the following:-
Click
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Click on Update the following:-
Click
Select Update the following:-
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Click
Click on
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5. Creating Mixing Ratios

SAP menu Accounting Controlling Product Cost Controlling Product Cost Planning Material Costing Master Data for Mixed Cost Estimate Mixing Ratios CK94 - Create/Change Mixing ratios are nothing but the product mix of the procurement alternatives which will be followed for the year. We will buy 60% of the output from the vendor and 40% we will manufacture. Update the following:-
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Click
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Click on
6. Create Standard Cost estimate

SAP menu Accounting Controlling Product Cost Controlling Product Cost Planning Material Costing Cost Estimate with Quantity Structure CK11N Create
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Click
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Click
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Click on
7. Mark and Release Cost estimate

SAP menu Accounting Controlling Product Cost Controlling Product Cost Planning Material Costing CK24 - Price Update
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Click
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Click on Click
Remove the Test run Click
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Click
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Click
Click
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8. Scenario Let us now see the valuation of the split valuated material, when goods receipt is made for each of the valuation type and the effect on the header record.
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Goods Receipt of Valuation type PROCURED
Click on
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Goods receipt of valuation type INTMFGD
Click
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Click on
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Material Master display (MM03)
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You can see above that the procured stock is shown as 1000 and the stock value is 240,000 INR. Click Update the following:to go to another valuation type
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You can see above that in valuation type INTMFGD the stock shown is 1000 and the stock value is 265,7 80 INR.
Click
to go to header record
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The total stock shown for Polyethylene is 2000 KG and the stock value is 505,780 INR.
This is the way SAP handles different valuations for the same material with the split valuation functionality.
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Split Valuation Configuration

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Split Valuation Configuration

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2005 -2006 sapficoconsultant.com. All rights reserved.

1. Activate Split Valuation

2. Configure Split Valuation

2.1 Define Valuation Category

2.2 Create Valuation type

Select 0 Take a drop down in the field Int. purchase orders

Select 2 www.sapficoconsultant.com Page 12 of 67

Update the following:-

2.3 Allocate Valuation type to Valuation categories

Position the cursor on Valuation type

Click Click on Valuation type Double click

Similarly deactivate all others Click on

2.4 Allocate Valuation categories to Valuation areas

Click on Double click

Click on Double click

2.5 Default Valuation type per plant

Click on Double click

Update the following;-

Click on Update the following:-

Click Update the following:-

3. Creating a split valuated Material Master

3.1 Create the Valuation Header Record

Click Update the following:-

Click Update the following:-

Take a drop down in the field Valuation Cat.

Click Update the following:-

Click Update the following:-

Click on Now we create material for the valuation type PROCURED

Select Update the following:-

Click on Update the following:-

Select Update the following:-

5. Creating Mixing Ratios

Update the following:-

6. Create Standard Cost estimate

Update the following:-

7. Mark and Release Cost estimate

Update the following:-

Click Update the following:-

Remove the Test run Click

Goods Receipt of Valuation type PROCURED

Goods receipt of valuation type INTMFGD

Material Master display (MM03)

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