ML Configuration

Material Ledger Configuration
Material ledger must be configured to attend the Brazilian legislation, that establishes the total
absorption for production costs to inventory and COGS.
The actual tariff must be applied to activity types used on production cost centers previously with
standard price allocating the manufacturing expense price differences.
Below the necessary steps to be reviewed and if necessary configured relative to Material Ledger:
1. 1. Activate Valuation Areas for Material Ledger
Spro: Controlling | Product Cost Controlling | Actual Costing/Material Ledger | Activate

Valuation Areas for Material Ledger
1. 2. Assign Currency Types to Material Ledger Type
Spro: Controlling | Product Cost Controlling | Actual Costing | Material Ledger | Assign
Currency Types to Material Leddger Type
1. 3. Assign Material Ledger Types to Valuation Area
Spro: Controlling | Product Cost Controlling | Actual Costing / Material Ledger | Assign
material Ledger Types to Valuation Area
1. 4. Configure Dynamic Price Changes
Spro: Controlling | Product Cost Controlling | Actual Costing / Material Ledger | Configure
Dynamic Price Changes
1. 5. Define Movement Type Groups of Material Ledger
Spro: Controlling | Product Cost Controlling | Actual Costing / Material Ledger | Material
Update | Define Movement Type Groups of material Ledger
1. 6. Assign Movement Type Groups of Material Ledger.
Spro: Controlling | Product Cost Controlling | Actual Costing / Material Ledger | Material
Update | Assign Movement Type Groups of material Ledger
1. 7. Activate Actual Costing
Spro: Controlling | Product Cost Controlling | Actual Costing / Material Ledger | Actual
costing | Activate Actual Costing
1. 8. Activate Actual Cost Component Split
Spro: Controlling | Product Cost Controlling | Actual Costing / Material Ledger | Actual
costing | Activate Actual Cost Component Split
1. 9. Define productive start
SAP Menu: Accounting / Controlling / Product Cost Controlling / Actual Costing / Material
Ledger / Environment / Production Startup / CKMSTART – Set Valuation Areas as Productive.
Account Determination in Material Ledger
The account determination for Material Ledger postings is made using Materials Management (MM)
account determination (OBYC)
It’s important understand that are a link between Material Ledger and cost component structure (OKTZ)
in product costing planning configuration – that is used to update standard cost.
Revenue/Expense from Revaluation (UMB)
The Material Ledger closing entries (CKMLCP) will use transaction key UMB, and is used when a material
price is changed and/or revaluate.
Price Differences for Material Ledger (PRY)
The system uses transaction key PRY during the Material Ledger closing entry, as well as during the roll-
up of single-level price differences. Material Ledger does not use the PRD transaction key configuration
to transfer the price variance from an input material to an output material.
Instead, the system uses the PRY assigned account.
Price Differences from Lower Levels (PRV)
The transaction key PRV is used by Material Ledger closing entries for the multilevel price variances.
Example
If the Material Ledger posts a roll-up of a price difference that was received from a lower level
(multilevel price differences), it uses the PRV account determination to find the account to which the
difference should be posted. In this case, the PRV account is used to credit/debit the input material and
debit/credit the output material.
Exchange Rate Differences from Lower Level (KDV)
The KDV transaction key works for the exchange rate differences in the same way the PRV transaction
key works for the price differences. In this manner, the Material Ledger is capable of keeping the roll-up
of price differences and the roll-up of exchange rate differences in different accounts.
Stock Posting (BSX)
The BSX transaction key is used for all postings to inventory accounts. If the choose will to revaluate the
inventory based on actual cost, then the account that is configured in this transaction key will receive all
of the variances that come from the single differences and multilevel differences. Therefore, this
transaction key has the offset account for PRY, PRV, KDM, and KDV transaction keys for inventory
revaluation in the Material Ledger.
Accruals and Deferrals Accounts in the Material Ledger (LKW)
If the choice is not revaluate the inventory accounts to actual costs, then the Material Ledger allows you
to post all the variances to a separate account. In this case, the price and exchange rate differences that
should actually be applied to the inventory value are contra-posted to accounts with the transaction key
LKW. If choose is do not revaluate inventory, the LKW account is the offset for the PRY, PRV,KDM, and
KDV transaction keys.
This transaction cannot be used for Brazil, because the revaluation will occurs on inventory, but its
accounts will be defined for default practice. Using FIN_CO_COGM we have the postings separated by
ledgers, it means no impact on US GAAP.
Cost Center Crediting from Activities (GBB-AUI)
The GBB-AUI transaction key is used during the Material Ledger closing entries to credit the cost centers
with the delta value between the plan activity type price and the actual activity type price. This
transaction key is used to offset transaction key PRV, which receives the variances as a lower-level price
variance.
In other words, for activity type variance absorption, the PRV transaction key dictates the account in
which the Material Ledger will receive the variance, and the GBB-AUI transaction key dictates the
account used to credit the variance in the cost centers that performed the activity type.
GBB-AUI is also used by the WIP revaluation function. For WIP revaluation, the delta between plan and
actual activity type price is also credited to the cost centers that performed the activities using the
account assigned to GBB/AUI and offset by the transaction key WPA.
Revaluation of Other Consumption (COC)
The COC transaction key is required for the revaluation of consumption in actual costing/Material
Ledger. Revaluation of consumption valuates single-level consumption (cost center, sales, scrap, etc.)
using the actual prices determined in the actual costing/Material Ledger.
This transaction is not necessary for Brazil, because the revaluation will occurs on inventory, but its
accounts will be defined for default practice.

ML Configuration

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ML Configuration

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What are the main steps to configure the Material Ledger?

How does the Material Ledger determine the accounts for postings?

Material Ledger Configuration

1. 1. Activate Valuation Areas for Material Ledger

Spro: Controlling | Product Cost Controlling | Actual Costing/Material Ledger | Activate

1. 2. Assign Currency Types to Material Ledger Type

1. 3. Assign Material Ledger Types to Valuation Area

1. 4. Configure Dynamic Price Changes

1. 5. Define Movement Type Groups of Material Ledger

1. 6. Assign Movement Type Groups of Material Ledger.

1. 7. Activate Actual Costing

1. 8. Activate Actual Cost Component Split

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