SAP CO - Material Ledger - Transfer Pricing

Karanam Sreedhar
SAP CO-Product Costing &

Material Ledger Consultant
Material Ledger / Actual Costing
Presented
by
KARANAM SREEDHAR
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Material Ledger Scenarios:

1). Multiple Currencies: Company Code Currency, Group Currency and Hard Currency
2). Multiple Valuations: Legal Valuation, Group Valuation and Profit Center Valuation
Transfer pricing: Material (RM) to Material (SFG or FG)
Transfer pricing: Plant to Plant
3). Combination of Multiple currencies and Multiple valuations
4). Work in process Functionalities
5).Revaluation of Consumption Functionalities
6). Distribution Usage Variances
Material: Physical Inventory Count Process
Activity: Actual Activities Distribution Process
7). Material Ledger with CO-PA
8). Alternative Valuation Run (AVR)-CKMLCPAVR
Cumulative Material Ledger Run
Material Ledger run with IFRS and Local GAAP
9). Debiting or Crediting Materials and Changing Actual Cost Component Split Values
10). Value Flow Monitor-Calculation/Analysis of Not Distributed and Not Allocated
Concept.
11). Accounting Entries
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Transfer Pricing Methods:
In transfer pricing, normally two types

A). Material to material i.e. From Raw material to SFG and or Semi-finished to Finished Goods.
B). Plant to Plant i.e., Material will be transfer from one plant to another.
We will discuss one by one
A). Material to material i.e. From Raw material to SFG and or Semi-finished to Finished Goods.
In this scenario, Raw material Cost plus markup price to SFG/FG material by doing standard cost
estimation.
For Raw Material (2996) price is 100 for all valuation levels and Profit center is 1000 was maintained.
MM02-Raw material
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In Raw Material –Profit Center 1000 assigned
And In Finished Good Material –Profit Center 2000 assigned
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For FG material price didn’t maintained because this price should come from through Standard Cost
estimation.
Bill of Material-CS01
Transfer Pricing Procedure- Configuration

Maintain Condition Types-8KEZ
Here two condition types required 1). Base Condition type and 2). Percentage Overhead
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1).Base Condition type:
Here Definition of Condition type is Base condition type from Material Ledger-DX1
2). Percentage Overhead: Here Definition of Condition type is Percentage Over Head –DX2
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Pricing Procedure: In the same step,
In step 10, maintained Condition type DX1 and step 20, maintained Condition type DX2 with From to
option is 10.
Here two Transfer Price Variant (000 & PC0) need to be maintained.
000 for Standard Cost estimation and PC0 for preliminary cost estimation purpose either by
production/process order /Product cost collector. And assign Earlier created Pricing Procedure.
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Creation Records-AKE5
Maintain Percentage to receiving Profit center (Partner Profit center) from sending material
Here This process is Multiple valuation i.e., Legal, Group and Profit Center Valuation. So for each
valuation its need to be maintained Separate Costing Variants.
Legal Valuation – PPC1, Group Valuation –IKO1 and Profit Center Valuation – IPCA
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CK11N-Standard Cost Estimation for Legal Valution-PPC1 Costing Variant
CK11N-Standard Cost Estimation for Group Valution-IKO1 Costing Variant

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CK11N-Standard Cost Estimation for Profit Center Valuation-IPCA-Costing Variant
While doing Profit center valuation cost estimation system will calculate transfer pricing based on the
condition types.
Once Standard Cost estimation, marked and released for all valuations, In material master display-
MM03
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Production Order Creation-CO01
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Once click on the Calculation Button-Transfer pricing will be calculate for Raw material
Cost Trend-CO03
For Legal Valuation Goods Issue Plan cost is 2,000 also Legal Valuation.
For Profit Valuation Goods Issue Plan cost is 2,000 also Legal Valuation.
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Production Order Confirmation-CO15
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Here Transfer Pricing hitting from Raw material to FG
Now Check Legal, Group and Profit Center Valuation accounting entries
Legal and Group valuation level, no additional GL accounts hit.
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For Profit center valuation additional accounting entries are coming.
Profit Center Valuation
CKM3- Material Price Analysis - Legal & Group valuation
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CKM3- Material Price Analysis - Profit Center valuation
Transfer Pricing Methods: (From Plant to Plant)

B). Plant to Plant i.e., Material will be transfer from one plant to another by doing STO Process
Plant to Plant i.e. From SFG/FG with one plant TO SFG/FG with other plant.
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Here 2997 Finished material is transferring from DX1 plant to DX2 plant.
By setting Special Procurement for DX2 plant’s material also need to be standard cost
estimation. This also standard cost estimation for all three valuations legal, group and Profit
center valuation.
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Maintain Condition Types-AKE5

In this scenario, DX1 Sender Plant - markup Percentage 12 % to DX2 Receiver Plant’s Profit Center
which is 3000.
Transfer Posting-MB1B
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Karanam Sreedhar

SAP CO-Product Costing &

Material Ledger / Actual Costing

Material Ledger Scenarios:

In transfer pricing, normally two types

In Raw Material –Profit Center 1000 assigned

And In Finished Good Material –Profit Center 2000 assigned

Transfer Pricing Procedure- Configuration

1).Base Condition type:

CK11N-Standard Cost Estimation for Group Valution-IKO1 Costing Variant

Production Order Creation-CO01

Production Order Confirmation-CO15

Here Transfer Pricing hitting from Raw material to FG

Profit Center Valuation

CKM3- Material Price Analysis - Legal & Group valuation

CKM3- Material Price Analysis - Profit Center valuation

Transfer Pricing Methods: (From Plant to Plant)

Maintain Condition Types-AKE5

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