COGS at Actual Costs E

SAP AG 2000 filename (author) / 1
Revaluation of
Cost of Goods Sold
at Actual Costs
Frank Bigdon
SAP Development Cost Management
Introduction
1) Introduction
Example: Consumption of a Finished Product
Ending Inventory
500kg
Sales
400kg
Cafeteria
100kg
1000 kg
Price Determination
Ending Inventory
500kg
Sales
400kg
Cafeteria
100kg
1000 kg
ML Price Determination:
Roll Up of Variances
Revaluation of Ending Inventory
1000 kg
Ending Inventory
500kg
Sales
400kg
Cafeteria
100kg
ML Period Closing:
Revaluation of Ending
Inventory
Revaluation of Cost of Goods Sold (COGS)
1000 kg
Ending Inventory
500kg
Cafeteria
100kg
Revaluation of
COGS
Sales
400kg
Postings in FI
Preliminary Valuation: 10 USD / kg
Variances calculated by price determination: 1 USD / kg
Material stock Price difference Consumpt. Sales
10000
USD
1000
USD
500
USD
500
USD
4000
USD
4000
USD
400
USD
400
USD
Production
1000 kg
Sales
400 kg
Price
determination
Revaluation
Inventory
Revaluation
COGS
Modification of the Material Ledger Update
2) Modification of the
Material Ledger Update of
Goods Movements for
Revaluation of COGSCOGS
SAPRCKML_COGS ZSAPRCKML_COGS
Types of Consumption Relevant to Revaluation
Sales
Cafeteria Quality Inspection
? ? ?
Types of Consumption Relevant to Revaluation
It is specified in Customizing which
movement types are relevant to revaluation
(by assigning special movement type groups
CF and CC).
Movement type Movement type group
251 - Sales CF (Revaluation FI)
201 - Cost Center (Cafeteria)
331 - Quality Inspection
Tracing of Movements Relevant to Revaluation
Material: chocolate
Beginning Inventory 0 Kg
Receipts 1000 Kg
Production 1000 Kg
Cumulative Inventory 1000 Kg
Consumption 500 Kg
Sales 400 Kg
Account 890000 250 Kg
Cost Center 100 Kg
Cafeteria 100 Kg
Ending inventory 500 Kg
Consumption Alternatives relevant to revaluation:
FI Account is a key of of the Consumption Alternative
Revaluation in CO
Sales Cost Center: Cafeteria
Quality Inspection
Revaluation in CO
To revaluate also the CO-Object (besides the
FI-account) in customizing you assign the
movement type group CC (instead CF)
251 - Sales CF (Revaluation FI)
201 - Cost Center (Cafeteria) CC (Revaluation FI and CO)
331 - Quality Inspection
Consumption to Cost Center:
Iteration Problem
1) Cost Center Closing
Cost Center Cost Center
Cost Center
2) Order Settlement
3) Multi-Level
Actual Costing
Tracing of Movements Relevant to Revaluation
Material: chocolate
Beginning Inventory 0 Kg
Receipts 1000 Kg
Production 1000 Kg
Cumulative Inventory 1000 Kg
Consumption 500 Kg
Sales 400 Kg
Cost Center 100 Kg
Acc.850000, CC. Cafeteria 100 Kg
Ending inventory 500 Kg
The CO Object - besides the FI Account - is a key of a
Consumption Alternative relevant to Revaluation in CO
Revaluation of Other Consumption (COC)
Sales
Cafeteria
Quality Inspection
COC Account
Example
Material: chocolate
Beginning Inventory 0 Kg 0 USD 0 USD
Receipts 1000 Kg 10000 USD 1000 USD 11 USD
Production 1000 Kg 10000 USD 1000 USD 11 USD
Cumulative Inventory 1000 Kg 10000 USD 1000 USD 11 USD
Consumption 500 Kg 5000 USD 500 USD 11 USD
Sales 400 Kg 4000 USD 400 USD 11 USD
Account 890000 250 Kg 2500 USD 250 USD 11 USD
Account 895000 150 Kg 1500 USD 150 USD 11 USD
Cost Center 100 Kg 1000 USD 100 USD 11 USD
Cafeteria 100 Kg 1000 USD 100 USD 11 USD
Ending inventory 500 Kg 5000 USD 500 USD 11 USD
Revaluation COGS Revaluation COC
How the old program worked
3) How the old program
worked
PRCKML_COGS SAPRCKML_COGS
ZSAPRCKML_COGS
Problems of standard Material Ledger update
In standard Material Ledger update of goods movements
consumption to sales does not always appear in the correct
process type (Example: If goods are sold via a cost center the
consumption appears as Consumption to Cost Center)
Reversal movements sometimes appear as procurement
(above the cumulative line) and thus cannot be revaluated
Reading of material and accounting documents is needed to
determine the COGS accounts that have to be revaluated
The Old Program SAPRCKMN_COS
The old program ....
makes no use of the material ledger update to identify the
quantities consumes for sales (Reason: goods issues to sales
are not always updated under the correct process type in ML)
identifies goods issues to sales by existence of a billing
document in the Sales & Distribution Module
obtains all information needed to revaluate the movements
(consumed quantities, accounts etc.) by reading the
document flow of the Sales & Distribution Module
Document Flow
Material
Delivery
Material
document
Invoice
Quantities, Accounts
Accounting
document
Problems of the Old Program
Use of Sales & Distribution Module required!
High Complexity of Processes in SD. Reading of the document flow
can be very complicated. This difficulty has caused many errors in
the old program.
Performance: Reading of the document takes very long time in
systems where much transaction data exists!
Time dependency: Sales movements are only recognized if the
billing has already been posted and if it has been posted in the same
period!
The old program had poor performance and
often determined wrong consumption
quantities for the sales movement
Posting Logic
Old Program:
Cumulated Posting per
Account.
New Program:
Separate Posting for
each Material.
Material specific data is
provided to Acc. Interface
Material B
COGS Account: 850000
Revaluation Amount: 300,-
Material B
Business Area: 6100
Profit Center: PC 2
Material A
Accounting
Interface
Material A
Business Area: 6000
Profit Center: PC 1
Material specific data
Conclusion
!
Conclusion:
SAP recommends not to use
the old program anymore!!
How to Implement and Use the New Program
4) How to implement and
use the new program
ZSAPRCKML_COGS
Implementation of the New Program
Step 1: Modification of the Material Ledger Update.
For this step follow the instructions of OSS-NOTE 305056.
It has to be done BEFORE the start of the period, for which the
new program shall be used
This step includes the settings in customizing for all movement
types that shall be revaluated at periods end
Step 2: Installation of the new report
For this step follow the instructions of OSS-NOTE 320152.
In customizing you have to assign accounts for transaction key
COC, if you want to revaluate Cost of Other Consumption
Settings in Customizing
601 - delivery CF
602 - GI to delivery (Reversal) CF
201 - Cost Center CC
202 - Cost Center (Reversal) CC
261 - Production Order
301 - Stock Transfer
Never forget to
assign the reversal
movement !!
Never assign multi-
level movements!!
Test each movement type, you assigned to CF or CC!
!
General Understanding:
Single- and Multi-Level Consumption
Materials Materials
Cost Center
Customers
Multi-Level Consumption
Single-Level Consumption
The new Program: Advantages/Disadvantages
Advantages
Higher performance, because
all relevant data is collected
during the period. No reading of
documents needed.
S & D Module is not required
Higher reliability because
reading of the document flow is
avoided
Revaluation of other single
level consumption types
possible
Revaluation of original CO-
Objects possible
All reversal movements can be
recognized correctly
Material Ledger update of
goods movements needs to be
modified before period starts.
Otherwise program can not be
used at periods end.
Disadvantges

COGS at Actual Costs E

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