Internal Profit (Between two/more Profit Centers)

[Former Member]

Dear friends,

My client has nearly 30 profit Centers (Each product/line) and final product of one profit center sya X is an in put of production process of another profit center say Y.

Here problem is that Profit Center X wanted to claim some internal profit margine on Profit Center Y because it supplying materials and Profit Center X want to treat Y as an External customer.

Friends, this profit is shown in internal reports only (Profit center wise P & L Account) and it cannot appeared in Financial Statement. How this can be configured in the system? Please help me

Thank you

[Former Member · Accepted solution]

Hello Dasu,

This situation is not unique to your client, but universal to enterprise operating with two or more company codes / business lines / products.

Recording inter-profit centre transactions at sales price is not that easy; however with the standard functionalities this can be achieved. SAP system has provided various functionalities with the combination of currency and valuation which is more commonly known as u201CTransfer Pricing or Multiple Valuation Approachesu201D.

You define your currency and valuation profiles in Customizing under Controlling  Controlling General  Multiple Valuation Methods/Transfer Prices  Basic Settings  Maintain currency and valuation profile.

You assign the currency and valuation profile in Customizing under Controlling  Controlling General  Multiple Valuation Methods/Transfer Prices  Basic Settings  Assign profile to controlling area.

You activate the profile under Controlling  Controlling General  Multiple Valuation Methods/Transfer Prices  Activation  Activate multiple valuation approaches

For more information, you may refer to

http://help.sap.com/saphelp_erp60_sp/helpdata/en/eb/13811243c411d1896f0000e8322d00/frameset.htm

This functionality is very powerful and interesting.

I hope you can enjoy with this.

Enjoy SAP!

Ambadas

[Former Member]

Hi Dasu,

It is quite correct that the information only appears in the profit center reporting, because that is what it is, profit centre mark-up.