on 09-17-2010 12:09 AM
Hi,
We are going to implement material ledger in one of our Company and its assigned plants.
When we run CKMLCP, we have an opportunity to revaluate the materials in the closed period with periodic unit price. This gives a journal entry viz., Inventory A/c Dr. and ML Revaluation A/c. Cr. and if decided not to revaluate then the journal entry is Accrual - ML a/c. Dr. and ML Revaluation A/c. Cr.
If Semi-finished goods and Finished Goods are revaluated by periodic unit price, I presume that SFG or FG A/c. will be debited and ML Revaluation A/c. Cr.
My question is how COGS is revaluated, when CKMLCP Costing run carried out with a check mark in Revaluate COGS? What is COGS revaluation in Material Ledger?
Is this only relavant for COPA valuation and mapping? Is there any Financial GL entry occurs?
I couldn't see anywhere in the SAP documentation showing a journal entry in Financial books for COGS?
Am I missing something.. kindly clarify...
Cheers,
Ashok
Hi,
I don't know which release of SAP ERP you use, however, we can use the revaluation of consumption (RoC) for COGS or any consumption since SAP R/3 Enterprise (470). It'd not only relates to CO such as Cost Center Accounting or Internal Order etc, but also to affect GL account. Please check the following help documents first;
http://help.sap.com/saphelp_erp60_sp/helpdata/en/48/f7c82da0f411d48ba70000e83234f3/content.htm
http://help.sap.com/saphelp_erp60_sp/helpdata/en/26/2a30a8aa6311d48bad0000e83234f3/content.htm
You'd already found the COGS revaluation flag in Actual Costing Cockpit CKMLCP. This flag allows to post Revaluation entry for RoC, however, you have to process 'Revaluation of Cunsumption' step in CKMLCP. If you don't see this step in CKMLCP, you first have to activate EA-FIN: Enterprise Extentions for Financials by transaction SFW5.
Hope this will help,
Takashi
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Nicolas stated "the entries created upon revaluation of COGS depend on your customizing of ML. In our case, we have set the system to revaluate any consumption on the same account and - where applicable - CO object where the original consumption to be revaluated had been posted."
Could you tell me where in Customizing do we set this up to revalue on the same account? Thanks in advance for your help.
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As Nicholas and Takashi rightfully indicate, Material Ledger configuration and system version can impact this area dramatically. You are also on the right track looking at movement types and the CF and CG indicators in configuration. Let me restate what I believe has already been said, but with accounting terms. The behavior of consumption revaluation is to calculate the Closing Entry postings necessary to revalue inventory consumption from inventory. Assume you have a part in inventory (raw or semi or finished goods should be irrelevant if they all are set up to behave the same way in this respect. Our design has tehm work the same for revaluation of consumption). Let us assume the part standard cost is $100 and there is a PPV or production order variance (or combination of the two) equal to an additional $10. Finally, let us assume you consumed this out of inventory. If sold, the CKMLCP Closing Entry entry looks like this:
Dr COGS $10
Cr Variances acct $10
However, the consumption may not have gone to COGS. What if it were consumed to another production (PP) order, service order, cost center object? Each of these consumptions will have a different entry. Most of them end up charging the variance to the object, but a PP order is charged to a separate account rather than to the PP order object itself.
On a separate note, I wonder if you are looking for the entry to appear in FI as a direct result of the Revaluation of Consumption step within CKMLCP? Consider this step and all before it as calculators that provide information to the CKMLCP Closing Entry step, which posts the entries.
I apologize if I have stepped on anyone's post here, as I only wish to clarify a couple things from my own experience in 4.7.
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revaluation of COGS in COPA has to be executed seperately in TC KE27.
In CKMLCP revaluation is done for FI.
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Ashok,
the entries created upon revaluation of COGS depend on your customizing of ML. In our case, we have set the system to revaluate any consumption on the same account and - where applicable - CO object where the original consumption to be revaluated had been posted.
Where such a setting has not been made, in MM account determination (TC OBYC) it's the entries for transaction 'COC' that determine the account to which the revaluation is posted, if I'm not mistaken.
You might find the entries in the accounts under 'COC'. Filter for the document type material ledger uses (in our system it's 'ML', but that may be a question of customization)
Hi,
From your explanation the following is my understanding:
Configure the system using a movement type group say CF with 2 as valuation that is FI and CO. Assign this group to movement types 601 and 602. (I don't know why Material update structure in standard configuration will not do this)
When Actual costing run occurs, system revaluates 1) Invenotory Balance Sheet Accounts and 2) Inventory Consumption accounts.
Now the GL entry is as follows:
Inventory A/c (Raw Material) Dr xxx (If Raw Material still available and variance is positive in stock)
PRY closing account Cr. xxx
Inventory Consumption A/c (Raw Material) Dr. xxx
PRY closing account Cr. xxx (Wherever Raw Material has been consumed but not in stock any more)
(This will happen, if above movement type 601 and 602, configuration done, if this configuraton NOT done, then system will use COC GL account whatever we configure in OBYC)
Kindly correct my understanding.
How closing stock entries of Finished goods revaluated. Closing stock Inventory part I understand as follows:
Finished or Semi Finished Invenotory Dr. xxx (If FG or SFG still available and variance is positive in stock)
PRV closing Account Cr. xxx
Still I couldn't see any GL entry for COGS account in FI. Could you please clarify?
Regards,
Ashok
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