92241650 split-valuation-configuration

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TABLE OF CONTENTS
INTRODUCTION.........................................................................................................4
1. Activate Split Valuation................................................................................5
2. Configure Split Valuation.............................................................................6
2.1 Define Valuation Category..........................................................................7
2.2 Create Valuation type ..................................................................................9
2.3 Allocate Valuation type to Valuation categories ................................... 18
2.4 Allocate Valuation categories to Valuation areas................................. 22
2.5 Default Valuation type per plant.............................................................. 26
3. Creating a split valuated Material Master.............................................. 32
3.1 Create the Valuation Header Record......................................................... 32
3.2 Create the Material for the Valuation type (In-house manufactured).... 40
4. Creating procurement alternatives ......................................................... 46
5. Creating Mixing Ratios ............................................................................. 50
6. Create Standard Cost estimate............................................................... 52
7. Mark and Release Cost estimate............................................................ 55
8. Scenario...................................................................................................... 60

INTRODUCTION
What is Split Valuation?
Split Valuation means managing a material as several partial stocks. Each
partial stock is valuated separately.
Why do you require Split Valuation?
Split Valuation is required for certain materials in order to valuate them
separately.
Following can be the reasons for opting for split valuation:-
1) Different origin of the material
2) Different grades of the material
3) Different statutes of the material
4) Differentiation between in-house production and external procurement
5) Differentiation between deliveries
Each transaction whether it a goods receipt, goods issue, invoice receipt or
physical inventory, is carried out at the level of the partial stock. When you
process one of these transactions, you must always specify which partial
stock is involved. This means that only the partial stock in question is affected
by a change in value, the other partial stocks remain unaffected.
Alongside the partial stocks, the total stock is also updated. The calculation of
the value of the total stock results from the total of the stock values and stock
quantities of the partial stocks.
You define whether the material is subject to split valuation on the accounting
view of the material master record. There are two fields for this:
ü The valuation category specifies which criterion should be used as
the basis for differentiating between the various partial stocks.
ü The valuation type specifies an individual characteristic of a partial
stock.
We will understand the split valuation configuration. We cover how to maintain
a split valuated material master and how to create and release a standard
cost estimate for a split valuated material.
Lastly we see the split valuation results after goods receipt is done for a split
valuated material.

1. Activate Split Valuation
For configuration we use the following path on the SAP application screen:-
SAP Menu à Tools à Customizing à IMG à SPRO – Edit Project à
IMG à Materials Managementà Valuation and Account Assignmentà Split
Valuationà Activate Split Valuation
Here we configure whether split valuation is allowed for our company.
Allowing split valuation does not mean that you must valuate each and every
material on this basis. You decide whether to do so or not for a particular
material when creating the material master record.
In the standard SAP R/3 System, split valuation is set as active.

2. Configure Split Valuation
Valuationà Activate Split Valuation à Configure Split Valuation
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 categorydetermines how the partial stocks are divided,
that is, according to which criteria.
• The valuation type describes the characteristics of the individual
stocks.
Click

2.1Define Valuation Category
The valuation category specifies which criterion should be used as the basis
for differentiating between the various partial stocks.
The standard system contains several default valuation categories, for
example:
• B for procurement type
The stock is divided up according to whether the material is
manufactured in-house or procured externally.
• H for origin
The stock is divided up according to where it was delivered from.
• X for Batch
This is a special case: no valuation types are predefined for this
category. At goods receipt, a batch is created for the material entered.
This also serves as its valuation type. This makes it possible to valuate
every goods receipt separately, for example, by using the order
number as the valuation type.
Click

2.2Create Valuation type
There are valuation types for each valuation category, which specify which
individual characteristics exist for that valuation category. If you give the
valuation types meaningful keys, each valuation type in some way represents
the name of a sub-stock.
Fixed valuation types are defined in the system for each valuation category
except valuation category X.
Example 1:
You get a material both from in-house production and from external vendors.
You want to valuate the stocks from each source separately. In this case, you
select Procurement type as the valuation category (B) and Internal and
External as valuation types.
Example 2:
You procure a material from several countries. You want to valuate the stocks
from each country separately. In this case, you select Origin as the valuation
category (H). As valuation types, you define the relevant countries, for
example, USA and UK.
Example 3:
You procure a material in different grades. You want to valuate the stocks of
each class separately. In this case, you select Quality as the valuation
category (Q). As valuation types, you could define A, B and C.

Scenario :
In our scenario A Ltd is manufacturing product Polyethylene in-house and
also procuring it from an external vendor.
The cost of manufacture of Polyethylene in-house (in plant 9100) is 265.78
INR per kg.
The cost of procured Polyethylene (from vendor 1000010) is 240 INR per kg.
Thus the same product Polyethylene has different valuations due to different
source of procurement.
Different valuation for the same material is only possible by using split
valuation functionality.
We will use the valuation category B (procurement type) and create 2
valuation types under B.
1) INTMFGD – Internal Manufactured
2) PROCURED - Procured
Click
Split Valuation
B
(Procurement type)
H
(Origin Country)
Q
(Quality)
Valuation
Category
Internal
al
External USA UK A B C
Valuation
type

Click

Update the following:-
Take a drop down in the field Ext. purchase orders
Select 0
Take a drop down in the field Int. purchase orders
Select 2

The account cat. Reference 0009 is Finished goods which is linked to
the valuation class and the material type.
Click

Click on
Click

Click

Click on

Click on
Click

2.3Allocate Valuation type to Valuation categories
We need to allocate valuation type to valuation category.
Click
Click and then
Click

Position the cursor on Valuation type
Double click

Click
Click on Valuation type
Double click

Click on
Let us deactivate all other valuation types in Valuation category B.
Click on
Double click

Similarly deactivate all others
Click on
2.4Allocate Valuation categories to Valuation areas
Click

Click on
Double click

The valuation categories B, H and X are active for Plant 9100.
Since we only want one valuation category B to active for plant 9100, let us
deactivate H and X.
Proceed as follows:-
Click on
Double click
Click on
Double click

Click

Click on
2.5Default Valuation type per plant
The default valuation type per plant can be set here in this step. This is only
possible if there are 2 valuation types per valuation category.
This default is useful so that whenever users raise purchase order, info
records, goods receipt they do not have to manually enter the valuation type
applicable. In this case PROCURED.
Further it is also useful for users creating production orders wherein they do
not have to manually specify the valuation type (INTMFGD)
Click

Click on
Double click

Click
Update the following;-

Click on

Click

Click on
Click

We have change the default valuation type for external procurement to
PROCURED and in house production to INTMFGD
This is useful since the users while creating info records and purchase orders
do not have to select manually the valuation type.
But if more than one valuation type exists for a plant then these defaults
should not be set.
Click on
3. Creating a split valuated Material Master
Let us now create a split valuated Material Master. A split valuated material
master has 2 step creation procedures. The first step is creating a Valuation
header record. The second step is creating a material per valuation type.
3.1 Create the Valuation Header Record
This is where the individual stock of a material are managed cumulatively.
The Valuation header record is always managed using the price control V
(moving average price). The moving average price is built in the valuation
header record from the values and quantities of the individual stocks.

Click
Select

Click
Click

Click

Take a drop down in the field Valuation Cat.

Click
Click

Click

Click on
3.2 Create the Material for the Valuation type (In-house
manufactured)

Click
Select

Click
Click

Click on
Now we create material for the valuation type PROCURED

Click

Since the item is procured from a vendor we keep the price control as V.
Click on
The split valuated material is ready.
We now need to calculate the standard cost estimate for the split
valuated material.
The procedure for creating a standard cost estimate for a split
valuated material is slightly different. The reason being when you
calculate standard cost estimate using transaction code CK11N or
CK40N no valuation type selection is available.
Therefore we need to create procurement alternatives for each of
the procurement type using transaction code CK91N.

After creating the procurement alternatives we need to maintain
mixing ratios using transaction code CK94. This step is to give
weight age to each of the procurement alternative.
The standard cost thus derived for the header record is a mixed
cost estimate.
Let us proceed to create the standard cost estimate.
4. Creating procurement alternatives
SAP menu àAccounting à Controlling à Product Cost Controlling à
Product Cost Planning à Material Costing à Master Data for Mixed Cost
Estimate à CK91N - Edit Procurement Alternatives
Click

Select
Click

Click on
Click
Select

Click
Click on

5. Creating Mixing Ratios
Product Cost Planning à Material Costing à Master Data for Mixed Cost
Estimate à Mixing Ratios à CK94 - Create/Change
Mixing ratios are nothing but the product mix of the procurement alternatives
which will be followed for the year.
We will buy 60% of the output from the vendor and 40% we will manufacture.

Click

Click on
6. Create Standard Cost estimate
Product Cost Planning à Material Costing à Cost Estimate with Quantity
Structure à CK11N – Create

Click

Click on
7. Mark and Release Cost estimate
Product Cost Planning à Material Costing à CK24 - Price Update

Click

Click
Click on
Click
Remove the Test run
Click

Click

Click
Click

8. Scenario
Let us now see the valuation of the split valuated material, when
goods receipt is made for each of the valuation type and the effect
on the header record.

Goods Receipt of Valuation type PROCURED
Click on

Goods receipt of valuation type INTMFGD
Click

Click on

Material Master display(MM03)

You can see above that the procured stock is shown as 1000 and the stock
value is 240,000 INR.
Click to go to another valuation type

You can see above that in valuation type INTMFGD the stock shown is 1000
and the stock value is 265,780 INR.
Click to go to header record

The total stock shown for Polyethylene is 2000 KG and the stock value is
505,780 INR.
This is the way SAP handles different valuations for the same material with
the split valuation functionality.

92241650 split-valuation-configuration

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