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Price difference and variance accounts as a cost elements

Former Member
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Dear Experts,

     I have confusion about the differences accounts:

1. about variance account generated from production order settlement I now that it is recommended not to create it as a cost element and the variance categories will be settled to COPA but my question which variance category value equal the value in variance account.

2. about price difference account generated from good receipt from PO and differences form stock transfer like from unrestricted to sales order stock should be created as a cost element or not and if i create it as a cost element which best co object i have to assign to this cost element.

3. about the revaluation account generated from MR21 and from releasing cost estimate have I create it as a cost element or not and if yes which best co object I have to assign to this cost element.

thanks for replies in advance but really these points are very important.

Thanks

Nassar

Accepted Solutions (1)

Accepted Solutions (1)

kamalkumar_biswas2
Active Contributor
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Hi Ahmed

  Simple logic is that when you want to post any exp/loss which hits your PL a/c requires primary CE ...

  Now..

1. about variance account generated from production order settlement I now that it is recommended not to create it as a cost element and the variance categories will be settled to COPA but my question which variance category value equal the value in variance account.

....... Here CE is not required because variance will flow to profitability segment in copa through variance cat value field as defined in PA structure

 

   

2. about price difference account generated from good receipt from PO and differences form stock transfer like from unrestricted to sales order stock should be created as a cost element or not and if i create it as a cost element which best co object i have to assign to this cost element.

...... When you received goods under any PO generally PO price is the Inventory price if Material is defined as price control as V. so no PRD is generated but if your Material is under price control "S" then Inventory will be at std price. When you do the invoice then PRD will be generated in both the case if there is any diff in PO/Inventory value and Invoice then will generate PRD value. So it will effect your consumption and inventory both ,,so requires CE cat 1  and you need not to assign any CO object because it will adjust at material level during CKMLCP run

   3. about the revaluation account generated from MR21 and from releasing cost estimate have I create it as a cost element or not and if yes which best co object I have to assign to this cost element.

........ Here you are changing the price of a material...so the diff of old and new price will generate a PRD value for your stock qty of that material and similarly it may affect your consumption and inventory both..so required CE

  Kamal 

Former Member
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Thanks Kamal For your Reply, but I have question for every point:

1. about variance which variance category is equal the variance value posted to variance account.

2. we don't have material ledger and sorry the raw materials are average not standard but when we transfer from sales order stock to another sales order stock or to unrestricted and vice versa, we have price difference generated in this step so how can i deal with it and which cost object is better for it (PSG or cost center).

3. about revaluation when we release cost estimate because of changing in price there is value generated in revaluation account in UMB key in OBYC so which best cost object for this account.

thanks again kamal for your professionl reply but please I need more clarification for these steps

kamalkumar_biswas2
Active Contributor
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Ahmed

1. about variance which variance category is equal the variance value posted to variance account.

....... Still not very clear..can you give some example with data ?

2. we don't have material ledger and sorry the raw materials are average not standard but when we transfer from sales order stock to another sales order stock or to unrestricted and vice versa, we have price difference generated in this step so how can i deal with it and which cost object is better for it (PSG or cost center).

....... This price diff is due to different stock/Inventory value between sender and receiver..for this type don't  create any CE...only post in GL a/c..so question of cost object

3. about revaluation when we release cost estimate because of changing in price there is value generated in revaluation account in UMB key in OBYC so which best cost object for this account.

....... Here also you need not to create any CE..only post in GL a/c..so no question of cost object

Kamal

Former Member
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thanks kamal,

about variance as you know we have many categories like input price variance , quantity variance and so on, we have value for every category I need to know which value of them posted to variance account

and thanks again for your help.

kamalkumar_biswas2
Active Contributor
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Hi Ahmed

  Only Total variance in version 0 is posted in FI GL a/c.

  Kamal

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