Purpose of valuation class

[jbrotto]

I come from the SAP Business One space and part of a S/4 project and in the material master there is a concept I am trying to wrap my head around. It is the Valuation class.

[sanilbhandari · Accepted solution]

Hi @jbrotto 

A valuation class serves as the bedrock for your material stock accounting. The magic of valuation class lies in its ability to determine which GL Accounts should be used for financial postings, when a valuation relevant financial transaction happens.

Valuation class along with the combination of different transaction keys are linked to GL Accounts, which would be used for financial postings when a specific material movement or related logistics transaction with financial impact takes place, using a specific movement type. 

In the movement type configuration, the transaction keys are assigned. That is how the link between GL and material postings is established. The below blog also explains the set up of the same including the link to Material type and Automatic GL Determination.

Automatic Account Determination Overview - SAP Community

Thanks & Regards

Sanil Bhandari

[Former Member]

A valuation class is an attribute that can be assigned to a material in a specific plant. This makes it possible to group together materials from a financial point of view. That attribute code is the link to the FI accounting. Every time there is a material movement, the accounting entries of that movement are derived from the accounting engine based on the valuation class of the material.