Material Ledger - Revaluation of Consumption (CKMLCP)

[former_member197292]

Hi,

At month-end before execution of CKMLCP we need to complete all CO activities like actual allocations and WIP & Variance calculation and settlement. So, once the settlement is done, the actual balance at Production order is ZERO i.e. Debit and Credit is equal. Normally, once the month-end closing is over there should not be any balance at the cost object level (production order).

My 2 Questions:

If the revaluation of Consumption is executed in CKMLCP:

1. Does it revaluate all consumptions (Material MovType 261 & Activity Types) OR it only revaluate Activity Types?

2. The Production Order balance is already ZERO after Settlement (KO88). So, if we now execute revaluation function, the system will post additional delta amount entries {(plan price-actual price)*actual qty} in Production Order. This will again create new balance at the Production Order level and Debit and Credit will not be equal. How & when this new balance/ variance will be nullified/ settled? What are the entries that gets posted.

Please try to clarify my doubts.

Regards,

Bijay

[kamalkumar_biswas2]

Hi Bijay

1. Whether During CKMLCP (Revaluation of Consumption) there will be any fresh posting on the production orders (which were already closed during CO month end) because of plan and actual price difference? OR this plan and actual price difference will be recorded/ collected only in Material Ledger? If there is no posting on order, this means no CO document is created, only FI & ML document is created. Is that true?

....  1. There will be no fresh posting in prd order

....  2. Yes, it will be only collected in ML and FI & ML doc will be created

2. Variance: If nothing is posted on Order during CKMLCP revaluation, how Variance will be analysed? Because during order settlement (KO88/ CO88) the variance is posted to Variance GL. However, during CKMLCP (Post Closing) the same variance (through ML) is also loaded on inventory. How this is possible? The Variance is still in PL A/C and also loaded in Inventory (BS A/C)?

....1. Here the diff coming from single/multilevel prod process will come not order lev which already taken care during order settlement..So variance is calculated at order lev (diff of actual debit and GR value). Here the diff is coming from mat consumed from one lev to other lev to make the diff available for posting at consumption and inventory propotionate and getting PUP (actual cost). So basically CKMLCP is a matrix calculation tool and not generating any addl PRD against order already settled and closed.

Kamal

[former_member197292]

Variance related query is still not clearly answered.

[kamalkumar_biswas2]

Bijay

Whether it is WIP or Variance it depends upon status of order but this is the value which is settled at the time of settlement. so diff is posted to PRD a/c during settlement (variance amt) already calculated in variance calculation and posted to FI GL a/c

So when you run ckmlcp PRD inclusive of variance is allocated/distributed to various multilevel and proportionately going to inventory and consumption to calculate PUP of material

Kamal

[former_member197292]

Hi Ajay & Pavan,

Thank you very much for replying to my queries:

I know that Revaluation at Actual Prices (MFN1/ CON2) and Revaluation of Consumption in CKMLCP are mutually exclusive. If we run both then there will be double posting, this should not be done. I am clear on that.

Assume: Price Determination is set as 3.

My questions are:

1. Whether During CKMLCP (Revaluation of Consumption) there will be any fresh posting on the production orders (which were already closed during CO month end) because of plan and actual price difference? OR this plan and actual price difference will be recorded/ collected only in Material Ledger? If there is no posting on order, this means no CO document is created, only FI & ML document is created. Is that true?

2. Variance: If nothing is posted on Order during CKMLCP revaluation, how Variance will be analysed? Because during order settlement (KO88/ CO88) the variance is posted to Variance GL. However, during CKMLCP (Post Closing) the same variance (through ML) is also loaded on inventory. How this is possible? The Variance is still in PL A/C and also loaded in Inventory (BS A/C)?

Regards,

Bijay

[pavan_kumar18]

Hi

Adding points to my earlier reply

As explained earlier, there will be no effect to the production/process orders which were already closed during co month settlements.

CKMLCP effect is to the materials with the price determination "3".

Price differences/ exchange rate differences will get adjusted to these materials.

After adjusting we will get the new price, i.e Periodic unit price, it will be updated in the material master.

There will be no pup for the materials with price determination "2" - Transaction Based.

Regards,

Pavan Kumar Arvapally

[ajaycwa1981]

Hello Bijay

My answer would slightly differ from Pavan

1. If you use ML, you must not do actual activity price revaluation of orders. It is covered during Ckmlcp

Whether all materials are revalued or not depends on what price determination you assign in material master (should be 3 and not 2)

2. Nothing is posted in the order upon ckmlcp. It is collected in the material ledger. Imagine a separate ledger for each material like asset accounting

All revaluations happen there in ledger and order won't receive anything

Ajay M

[pavan_kumar18]

Hi,

Answers to your queries:

1. Does it revaluate all consumptions (Material MovType 261 & Activity Types) OR it only revaluate Activity Types?

Ans: Revaluation of the activity types covered during the CO Month end process itself.

ML Run considers  all the material movements and it will post the price differences/exchange rate differences to the materials.

2. The Production Order balance is already ZERO after Settlement (KO88). So, if we now execute revaluation function, the system will post additional delta amount entries {(plan price-actual price)*actual qty} in Production Order. This will again create new balance at the Production Order level and Debit and Credit will not be equal. How & when this new balance/ variance will be nullified/ settled? What are the entries that gets posted.

Ans: There will be no effect to the production orders which were already closed during co month end.

ML run updates the Periodic Unit Price considering all the price differences.

PUP will be updated in the material master not in the production/process order.

There are two options, we can use the PUP as a standard price for the next month or we can continue with the old standard price.

Regards,

Pavan Kumar Arvapally