Skip to Content
0

ML Closing : WIP creation and revaluation

Nov 13, 2017 at 08:21 AM

134

avatar image

Dears

We have ML closing through CKMLCP every month end.

We revaluate WIP also during the closing.

I found the following OBYC settings against PRA,PRM & WPA, WPM for creating and revaluating the WIP.

I found postings also in the GL account configured for this under following categories:

1. ZUWIP: Create WIP Material

2. VNPRD: Offset against single-level price diff.

3. VNPRV: Offset against multi-level price diff.

4. ABWIP: Reduce WIP Material

If my understanding is correct these postings are used for:

(a) Creating WIP in the system for the materials lying still in the process

(b) When WIP is finished and the price differwnce on consumption revaluation are posted into the target material.

Please correct me if I am wrong.

The point I do not understand is, if the above postings are relating to WIP, then during the revaluation the system needs to post both actual entries in the period end and reversal entry in the next period opening. In that case the GL balance for the WIP should be zero.

But our case the GL is still having balance.

Please guide me to understand this.

Best regards

10 |10000 characters needed characters left characters exceeded
* Please Login or Register to Answer, Follow or Comment.

4 Answers

Best Answer
MALAY VAKIL Nov 14, 2017 at 12:34 PM
0

Hi Nikki,

Your understanding is correct. But it is not right that WIP entry will have revaluation entry at the time of closing and same time reversal entry of opening in next month.

If next month, order will be completed and will not have any wip then wip reversal entry will be passed. So below your understanding is totally correct

WIP Revaluation entry for 100 USD:

price difference GL XXXX 100 USD Dr. (PRV /PRY)

Off setting of the dvaluation GL YYYY 100 USD Cr. (WPM)

When the WIP is reduced fully, will the above entry reversed as follows ?

price difference GL XXXX 100 USD Cr. (PRV /PRY)

Off setting of the revaluation GL YYYY 100 USD Dr. (WPM)

Regards,
Malay

Share
10 |10000 characters needed characters left characters exceeded
avatar image
Former Member Nov 13, 2017 at 08:50 AM
0

Hi Nikki,

Yes, you are right. Those OBYC are for WIP posting in ML.

Assuming you are using product cost by order and you are plan to produce FG qty = 10 in production order. At month end, you GR FG qty = 7. At this time the production order status without TECO or DLV. So only WIP during Settlement KO88, your WIP = Actual production order (without PPV) - GR Std cost (Without PPV). When you run CKMLCP, system will allocate the 30% of total PPV to WIP and 70% of PPV to Inventory (If inventory still in warehouse).

System won't reverse the WIP next month. System will only reverse the WIP if the production order status is TECO or DLV. Let say next month you GR the remaining qty = 3. Then at the month end, system will reverse the WIP and settle to production variance.

Thanks.

Share
10 |10000 characters needed characters left characters exceeded
nikki saju Nov 13, 2017 at 09:03 AM
0

Dear Mr.Lam

Thank you for the prompt response.

Based on your reply, let me put the issue as follows:

WIP Revaluation entry for 100 USD:

WIP price difference GL XXXX 100 USD Dr.

Off setting of the dvaluation GL YYYY 100 USD Cr.

When the WIP is reduced fully, will the above entry reversed as follows ?

WIP price difference GL XXXX 100 USD Cr.

Off setting of the dvaluation GL YYYY 100 USD Dr.

So that the WIP price difference will be Zero ?

thanks.

Show 1 Share
10 |10000 characters needed characters left characters exceeded
Former Member

Hi Nikki,

You can refer to this link.

https://archive.sap.com/discussions/thread/1662471

Thanks

0
nikki saju Nov 15, 2017 at 10:50 AM
0

Thanks to all for the valuable inputs.

Best Regards

Share
10 |10000 characters needed characters left characters exceeded