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split valuation

hi friends,

could some plz write why split valuation is used for a material instead of maintaining 2 material master records to maintain 2 different prices

points assured

santosh

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9 Answers

  • Best Answer
    Aug 31, 2008 at 05:18 PM

    Hi,

    The SAP R/3 System allows you to valuate stocks of a material either together or separately, that is, according to different valuation criteria. Split valuation is necessary if, for example:

    1. Stock from in-house production has a different valuation price than externally procured stock.

    2. Stock obtained from one manufacturer is valuated at a different price than stock obtained from another manufacturer.

    3. Different batch stocks of a material have different valuation prices.

    4. Value damaged and repair part differently from a new part.

    To used split valuation, you have to activate it using 'OMW0'.

    To change split material valuation once it has been set, you must

    1. first post out all stocks (for example, to a cost center or with movement type 562)

    2. then change the control parameters

    3. if necessary, change the automatic account determination

    4. finally post the stocks back in again

    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.

    With the function "Setting" you can determine:

    which valuation categories exist in your company (global categories)

    which valuation types exist in your company (global types)

    which valuation types belong to which valuation category

    which valuation categories exist in a valuation area (local categories)

    Your entries are only relevant if you set split valuation as active in the function "Global settings".

    In the standard SAP R/3 System, the following valuation categories are default settings :

    B procurement type

    with the valuation types:

    "EIGEN" for in-house production

    "FREMD" for external procurement

    H Origin

    X automatic valuation (only for batch)

    To select split valuation ('OMWC'), proceed as follows:

    1. Determine the valuation categories and valuation types that are allowed for all valuation areas:

    global valuation categories via menu "Goto --> Global Categories"

    global valuation types via menu "Goto --> Global Types"

    2. Allocate the valuation types to the valuation categories.

    a) Select "Goto --> Global Categories".

    b) Position the cursor on a valuation category and select

    "Goto --> Global Categories --> Assignments --> 'Types->Category'".

    c) Activate the valuation types you want.

    3. Determine the local valuation categories for each valuation area.

    a) Select "Goto --> Local definitions".

    b) Position the cursor on a valuation area and select

    "Goto --> Local Definitions --> Allocate Categoires->Org.units (button Cats->(OU)".

    You obtain a list of the global valuation categories.

    c) Activate the categories to be used in this valuation area.

    The system creates the local valuation types based on the allocations under point 2.

    Only now can you create a master record with split valuation.

    Regards,

    Kiran

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    Former Member
    Aug 31, 2008 at 11:49 AM

    Dear,

    Hope this will give you an idea.

    One of the biggest problems is that users will rarely ask for it by name and so when they need the functionality, they normally get alternative options that don't really suit.

    Most companies would benefit from the use of split valuation. To explain this, it would be clearer to use an example.

    Company X make their own Widgets at a cost of £1, but sometimes their production line is so busy that it cannot make enough. When this happens they buy some Widgets from their supplier at £2 each. They are exactly the same apart from the cost. Company X wants to monitor costs closely and so they want to keep track of the materials they use.

    The problem is that they want to store the two values and cost the issues according to which material was used, the manufactured one, or the bought one.

    There are two common solutions used for this problem, both of which are far from ideal.

    The first and most common, is to create another material, one for the manufactured material and one for the bought material. This means that you now have the ability to value one at £1 and the other at £2, using the A/C view of each material. The biggest problem here is that you now have two material numbers for the sam material. This causes many problems, especially with MRP, Purchase Orders and stock reports and enquiries.

    The second solution is to create a dummy Plant, this also now allows the use of different prices, one on each accounting view of each Plant. This does not require two material numbers, but there are similar problems with MRP, Purchase Orders and stock reports and enquiries, as you have to consider BOTH Plants.

    So in basic terms, the real problem here is that there is only one accounting view for each material / plant combination. If this rule could be broken, then the above problem could be solved quite easily.

    This is EXACTLY what Split Valuation does!

    You have one Material, one Plant and as many accounting views as you need.

    The above example is just one of many. Other examples include the following situations;

    You have a material that is sometimes imported and sometimes bought from within your own country, it is the same material, but when imported you incur customs costs etc.

    You buy the material from several countries, each charging different costs, or the same costs but you want to keep the values in separate stock accounts.

    You have a Batch controlled material and each Batch has a different value (due to gold content, or strength, for example)

    You have a material that has different grades, each with a different value.

    In each of the above situations, the problem is the same, one material master with multiple accounting views.

    To use split valuation, you need to configure the system correctly, you have to activate it and then build the structure you require.

    There are two new terms to understand here, Valuation Category and Valuation Type.

    The Valuation category is a single character, entered on the accounting view to indicate that this material is subject to split valuation. The character used, indicates the kind of split valuation being used (Internal / External, Country of Origin, Batch, Duty paid? etc., etc.). The Valuation Category is used to control which Valuation Types can be used.

    Valuation types are used as the "Key" to the additional accounting views so that you can indicate which accounting view is relevant to this movement. (Typical Valuation types would be "Europe", "USA", "Japan" etc. if the Valuation Category was Country of Origin. "Duty paid" or "Duty not paid" to control imports, etc. etc.)

    The "overhead" involved in split valuation, is that on every transaction that has a potential affect on stock value, you will have to indicate which Valuation Type is to be used. (In some cases this can be automated). This includes transactions such as Stock Counting, Receipts, issues, transfers, etc. This overhead is not normally a problem as to gain the benefits, you would expect to have to identify the type of stock.

    Stock of a split valuated material is clearly identified. In fact you get two levels. The qty of the material for MRP, or availability purposes is the total stock of all Valuation types in the Plant, but the stock overviews will list the individual valuation types separately, under the storage location level.

    To use the functionality when configured, you have to firstly create the accounting view of the Material as normal (although at this level it MUST be a Moving Average Price controlled material) entering a Valuation category on the accounting view. When this has been created, you create another accounting view for the same material in exactly the same manner, EXCEPT, you enter a valid Valuation Type on the Organization Levels screen. This gives you the ability to have different Price Controls (Std or MAP), Different Prices and use different accounts (by using different Valuation Classes) on each Valuation type.

    In all, good functionality with few drawbacks. It is worth experimenting with.

    Regards,

    Syed Hussain.

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    Former Member
    Sep 01, 2008 at 04:12 AM

    Hi

    Split Valuation

    Split valuation enables you to valuate substocks of a material in different ways (for example, according to external procurement or in-house production or by batches).

    Under the menu option "Split valuation", you can determine whether and how you want to use split valuation at your company.

    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.

    With the function "Setting" you can determine:

    which valuation categories exist in your company (global categories)

    which valuation types exist in your company (global types)

    which valuation types belong to which valuation category

    which valuation categories exist in a valuation area (local categories)

    Requirements

    Your entries are only relevant if you set split valuation as active in the function "Global settings".

    Default settings

    In the standard SAP system, the following valuation categories are defined:

    B procurement type

    with the valuation types:

    "EIGEN" for in-house production

    "FREMD" for external procurement

    H Origin

    X automatic valuation (only for batch)

    Actions

    To select split valuation, proceed as follows:

    1. Determine the valuation categories and valuation types that are allowed for all valuation areas:

    global valuation categories via menu "Goto --> Global Categories"

    global valuation types via menu "Goto --> Global Types"

    2. Allocate the valuation types to the valuation categories.

    a) Select "Goto --> Global Categories".

    b) Position the cursor on a valuation category and select "Goto --> Global Categories --> Allocations --> Types->Category".

    c) Activate the valuation types you want.

    3. Determine the local valuation categories for each valuation area.

    a) Select "Goto --> Local definitions".

    b) Position the cursor on a valuation area and select "Goto --> Local Definitions --> Allocate Categoires->Org.units". You obtain a list of the global valuation categories.

    c) Activate the categories to be used in this valuation area.

    The system creates the local valuation types based on the allocations under point 2.

    Only now can you create a master record with split valuation.

    Regards

    Ram

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    Former Member
    Sep 01, 2008 at 05:30 AM

    Hi,

    Split valuation is used to maintaion the two different price for the same material.

    The confi. steps are:

    1.SPRO > MM >VALN AND ACC ASSIGNMENT > SPLIT VALUATION > Acitvate Split Valuation

    2.SPRO > MM >VALN AND ACC ASSIGNMENT > SPLIT VALUATION > Configure Split Valuation

    Click on Golbal type: create your own valuation types as Type 1, Type 2 etc

    Click on Global categories:create your own Valuation Category as Type(T) and

    Activate all valuation types(Type1, Type2 ) for your category(T)

    Goto MM01, enter materialu2026u2026u2026u20261st enter valuation category and save & again enter MM01 enter the Valuation type as Type 1 and maintain price for it and repeat the same for all the Types.

    When you create a PO for split valuated material it will ask for valuation type and you can enter your required valuation type and save.

    For more check this Links

    http://www.sap123.com/showthread.php?t=29

    http://help.sap.com/erp2005_ehp_03/helpdata/EN/ff/515fb849d811d182b80000e829fbfe/content.htm

    http://help.sap.com/erp2005_ehp_03/helpdata/EN/12/084fde470311d1894a0000e8323352/content.htm

    http://help.sap.com/erp2005_ehp_03/helpdata/EN/47/61017149f011d1894c0000e829fbbd/content.htm

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    Former Member
    Sep 01, 2008 at 06:00 AM

    Dear santosh,

    pl note that with use of split valuation at accounting data in material master. you can split the valuation for different batches of material.

    e.g:

    if a company keep stock of one item and want to have two valuation for the same like same material is used for o&m and same for project. then this split valuation can be helpful

    regards

    points if helpful

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    Former Member
    Sep 01, 2008 at 12:30 PM

    Dear Santosh,

    Valuation category is used if you want to have a split valuation i.e. you have an option of differentiating partial stocks of material according to particular criteria & handling them differently regarding valuation within a plant.

    Why Required? : 1)Your valuation of in-house & external procurement may be different

    2) Distinguish based on Quality so value

    3)Different batches have different value

    Valuation category could be In House/External , Indian / Imported

    Following configuration reqd.

    1)In global setting we have to define Valuation category( Say P-Procurement) & Valuation type( Int. / Ext)

    2) Active split valuation in MM

    3) Assign valuation type to category in customizing

    5) In Material Master enter valuation category in accounting view & choose price control V

    6) Extend Material Master view for both valuation type

    7) valuation category to be active /assign for plant

    8) In local definition Define Valuation category to Valuation area.

    Then for every transaction (Valuation relevant) may be GR, GI, and Phy. Inventory you must mention valuation type during transaction to get your material valuated separately.

    This is all about valuation category & valuation type,

    Vivek

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  • Sep 01, 2008 at 02:03 PM

    Hi,

    Some very good detailed answers.

    On previous projects I have used split valuation to hold the same item in stock at two different values. The most obvious situation being valuation type 'Good' for clean usable stock and 'Defect' for returned/damaged stock. In this way you can see that you have say quantity 10 of an item in stock but 3 are Good and 7 are defective probbaly waiting repair. Shows up well on stock overview transaction MMBE.

    Regards

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  • Sep 01, 2008 at 05:21 PM

    Hi,

    I will explain this with an example, For e.g. valuation criteria is ORIGIN

    Go to OMWC - Configure Split Valuation

    Here Create Valuation Category as for e.g. "ORIGIN" and Valuation Types as "DOMESTIC" and "IMPORTED"

    Here in Valuation types, you can assign the Account Category Reference

    And in OMSK - You can define 2 Valuation classes and assign these to 2 Account Category References

    Now in OBYC - Maintain Account Determination for Account Key BSX as per the valuation class

    Refer following link for detailed configuration of Split Valuation

    [Split Valuation Process|http://www.sap123.com/showthread.php?t=29]

    [Split Valuation Help|http://help.sap.com/saphelp_erp60_sp/helpdata/en/8f/d1de34e4cb2300e10000009b38f83b/frameset.htm]

    Process Flow: -

    1. Create Material Master for Asset in MM01, maintain valuation category ORIGIN in "Accounting 1" view and extend the material master for all the above 2 valuation types and input the value.

    Here in your case Valuation Types will be "DOMESTIC" and "IMPORTED" and also assign the respective valuation classes.

    When you want to Purchase materials then,

    1. ME21N - Create for Material with valuation type "DOMESTIC" or "IMPORTED" as per requirement, maintain it in "Delivery" Tab

    2. MIGO - GR w.r.t. PO (GR of material will be done in valuation type as per maintained in PO "DOMESTIC" and "IMPORTED"

    3. MMBE - Stock Overview (Here you can see the stock as per valuation type "DOMESTIC" and "IMPORTED"

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    Former Member
    Aug 31, 2008 at 12:25 PM

    Hi,

    The business process may be different .So ,you are going for split valuation. Split Valuation is used to maintain to two different prices for same material.

    Lets Example: You are procuring raw material u201CMu201D of price Rs.45/- per Kg and manufacturing final products u201CPu201D. In any situation your company may got order of double quantity of final products u201CPu201D and u need to order more raw material u201CMu201D to cater the requirement. So you need to order raw material u201CMu201D from different vendor( same vendor may not able to supply) and you may not get same price as earlier of raw material u201CMu201D, so the price is now of price Rs.50/- per Kg( As it is immediate requirement). In this situation , you may go for split valuation not with material maintaining 2 material master records to maintain 2 different prices.

    Note:

    The Split Valuation settings are as follow:

    1.SPRO > MM >VALN AND ACC ASSIGNMENT > SPLIT VALUATION > Acitvate Split Valuation

    2.SPRO > MM >VALN AND ACC ASSIGNMENT > SPLIT VALUATION > Configure Split Valuation

    Click on Golbal type: create your own valuation types as Type 1, Type 2 etc

    Click on Global categories:create your own Valuation Category as Type(T) and

    Activate all valuation types(Type1, Type2 ) for your category(T)

    Goto MM01, enter materialu2026u2026u2026u20261st enter valuation category and save & again enter MM01 enter the Valuation type as Type 1 and maintain price for it and repeat the same for all the Types.

    When you create a PO for split valuated material it will ask for valuation type and you can enter your required valuation type and save.

    For more check this Link

    http://www.sap123.com/showthread.php?t=29

    Regards,

    Biju K

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