Material valuation IFRS

[Former Member]

Hello experts,

We are working on an ECC 6.0 implementation for IAS/IFRS. Therefore, it is necessary to have two accounting ledgers (IFRS ledger and Legal ledger for the country - Chile) in order to support two different kind of material valuation (one of the ledger must have a special valuation procedure for material).

Is it possible to manage a parallel valuation of material without material ledger?

Thanks in advance for your help

Regards,

Ricardo

[Former Member · Accepted solution]

Hi,

The purpose of material ledger is to valuate goods at actual cost.

You can use T/code:MR 21 and valuate goods at actual cost.This way you can avoid material ledger.

Hope you will find this useful.

Regards

Ramesh

[Former Member]

Can anyone give suggestion on my question?

Thanks

Saurav!!

[Former Member]

Hi All

About your question, having another valuation without the material ledger.

So I believe you are talking about a standard price (S) or average price (2)

1) About standard price, you can define a different Costing Variant (OKKN), run a Costing Calculation (CK40N) and updated a different price in the material master (eg fiscal or commercial price, view accounting 2)

2) About average price I dont how to handle it.

Could you pls inform the scenario you have implemented.

Send a message to fredc.ramos gmeio com

Regards

[Former Member]

Hi everybody,

I am recently coming to this important forum, at first to learn and after to help as it coul be necessary.

It is a fact what Ramesh confirmed like the customer pain point ... I totally agree with him and related to the Material Ledger implementation to give a solution about this issue ... in my understanding there is no other option until now.

That approach is not typical in our countries in South America, but that is possible occurs with the growing number of countries adopting IFRS, that could be that we have a really issue soon fron the point of view of ERP

Regards for all of you IFRS´ers

[Former Member]

Hi

In order to have a different valuation without material ledger,you could do the following

1) The major IFRS impact is that it does not allow LIFO

2) Carry out valuation in IFRS ledger as per whatever price control the material master has

3) Use the Balance Sheet valuation approaches in MM,by which during month end you could use FIFO or LIFO for valuation.It also supports flexible upload of prices

[Former Member]

Hi Swaninathan , I to do the material revluation using the inflation accounting, The legal requirement is as below, can you please have a look at it and tell me if it is possible to achieve with the standard program. I am Using J1AX and J1AZ and it doens seem to be working according to the requirement. 

We have to inventory revaluation using this standard functionality, we don't need to change any values in the Material master , just have to post it into tax ledger for the reporting purpose.No material Ledger.

I have three business scenarios

1. Domestic inventory from second half of calendar Year

Calculation: need to find the Highest value from invoice, contract or agreement document and do the following calculation

          so for example

Product         PO date                  PO Price

Material A     04-22-2012            $ 500

Material A     04-22-2012            $ 480

Material A     04-22-2012            $ 495

Data in the MM

Product         Units   Standard Price (CLP)          Inventory Total

Material A     100    485                       48.500

Adjust                                                1.500

Total            100    500                       50.000

just calculate the inflation using the inflation index . so just 1500 will go into tax ledger

2. Domestic inventory from first half of calendar Year

Product         PO date                  PO Price

Material A     04-22-2012       $ 500

Material A     04-22-2012       $ 480

Material A     04-22-2012       $ 495

Product                        Units Standard      Price (CLP)          Inventory Total

Material A                    100                   485                       48.500

Adjust                                                                              1.500

Total                           100                   500                       50.000

Infl.Adjust (1,8%-2011)                          509                            50.900

1500(difference from total value)+900(inflation) will go into tax ledger

SO Adjust the inventory according to the Total value of that material and take the difference and post into tax ledger. Is it Possible with the standard functionality of inventory revaluation using J1AX and J1AZ? ? Please let me know if this is possible

3. Domestic inventory from previous year  calendar Year

- calculation based on last years inflation.

Please let me know if this is possible.

Thanks & Regards

Saurav.

[Former Member]

Hi,

Thanks for your answer, but to be more specific: We need to manage two different material prices: Standard price (V) and Legal price for the same material (different material valuation), without using material legder.

Regards,

Ricardo

[Former Member]

Hi,

Just to clarify,Even if you maintain the Material ledger,the valuation at Actual cost is done only as on the date of valuation,say,month end,year end or any other period end.So even with the Material ledger you dont maintain inventory with two different valuations at the Transactional level.Material ledger just helps valuating the stock at Actuals by eliminating the variances from the Standard price - you dont maintain transactions at actual cost.The Inventory transactional entries are still made at Standard price in the Material ledger.Hope am not wrong here.

You may use T/code:CON1-or CO1n?- and valuate at actual cost.My earlier mention of the T/code is wrong.This way you can bypass the Material ledger.

From the IFRS perspective there is no compulsion in posting the Inventory transactions at the actual cost.In other words you can post at the planned values.IAS 2 mentions that for the B/sheet purposes the inventory should be valued at cost or market value which ever is lower.Only for this purpose you need valuation at Actual cost.

As much as this there is no need to maintain 2 different inventory ledgers - one at cost and other at plan.

I think this is your pain point.

Hope this helps.

Regards

Ramesh

[udo_werner]

Hi Ramesh,

Having very profound knowledge of material ledger I don't agree with your statements. It is right that material ledger calculates the actual costs only after period end. But the postings of material ledger will revalue inventories, consumptions, CO-PA and cost of sales of the whole period to actual costs. So you can say that the transactions are valued at actual costs from this time on.

I doubt that anyone would need a realtime IFRS ledger at actual costs. So a posting at month-end should satisfy the requirements.

Picking up material ledger postings in a ledger or not might very well create different valuation approaches in the different ledgers.

In a parallel thread [https://www.sdn.sap.com/irj/scn/profile?editmode=true&userid=815144] a colleague describes that SAP is currently extending ML to make the parallel values better accessible for newGL.

best regards,

Udo