The settlement process for product cost collectors is as follows:
Settlement is initiated to debit the price difference account and credits the inventory change account if the price control indicator is set to S.
Settlement is initiated to debit the inventory account and credit the inventory change account if the price control indicator is set to V. The value of the total variance is posted.
Settlement is initiated to transfer work in process (WIP) to Financial Accounting (FI).
The system updates the value of the total variance in the Material Ledger, which is mandatory in SAP S/4HANA.
The variance categories can be settled to costing-based CO-PA. The only variances that are relevant for settlement to CO-PA are those calculated on the basis of target cost version 0. The value fields are assigned in Customizing to the variances for each category and cost elements.
The price difference is settled to CO-PA, if it is active, in a similar way to FI if the price difference account has a corresponding cost element.
Note
In SAP S/4HANA it is possible, to assign the variance categories to different G/L accounts. Therefore, the variance categories like scrap variance could be analyzed in FI and CO-PA Margin Analysis. You use a Price Difference Splitting Profile in Customizing FI for that.
Customizing – Settlement Profile
The settlement profile for a product cost collector must allow settlement to a material.
If you want to settle variances to CO-PA, the variances indicator must be selected and settlement to a profitability segment must be allowed.
The settlement profile is defaulted through the order type of the product cost collector. The settlement profile defines the proposal for the allocation structure and the CO-PA transfer structure. An allocation structure is used for settling the price differences to FI and CO-PA, whereby the actual data for both modules are updated in the table ACDOCA. The G/L account for price difference (PRD) is selected from the account assignment, transaction OMWB. On the other hand, the variance categories could be assigned to different G/L accounts using the price difference splitting profile in customizing FI, navigation via: Customizing→Financial Accounting→General Leger Accounting→Periodic Processing→Integration→Material Management→Define Accounts for Splitting Price Differences.
The PA transfer structure controls the settlement of the variance categories to costing-based CO-PA.
Note
With the settlement of the variances to FI and CO-PA, the variances will be posted to CO-PA Margin Analysis based twice: once in total and once by category. The settlement to FI will be to a G/L account with the account type primary cost element.
Customizing – PA Transfer Structure
In the PA transfer structure, you specify the assignment of the cost elements plus variance category to the value fields in costing-based CO-PA. The assignment can be defined different according to:
Different cost elements of one variance category to different value fields, for example the material cost and the activity cost with variance category Input Quantity Variance are assigned to different value fields.
Different variance categories of the same cost element are assigned to different value fields, for example the Input Quantity Variance and the Input Price Variance of the material costs are assigned to different value fields.
Using the fixed/variable indicator, you can assign the fixed cost and the variable cost of one variance category to different value fields.
On the other hand, the detailed analysis of variances usually takes place in the information system of the cost object controlling and not in CO-PA.
Settlement of the variances to CO-PA Margin Analysis
The settlement of the variances to Margin Analysis relates to
the price difference account, selected based on the Account Assignment for Automatic Posting transaction OMWB and
the settlement of the different variance categories to FI and Margin Analysis using a Price Differences Splitting Profile.
The system selects the price difference account from the Automatic Posting according to transaction type = PRD, chart of accounts from the corresponding company code, the general modification (option) and the account class assigned in the material master. The cost element for price difference debit the cost object. In the Financial Accounting (FI) and in CO-PA account-based, the price difference is posted with debit and credit. The reason for debit and credit posting is the fact, that the loss for price differences (or probably positive variance) has already been realized in FI.
To settle the variance categories to FI and Margin Analysis, a Price Differences Splitting Profile must be created in customizing FI. The price differences splitting profile defines the assignment of Cost Element Group + Variance Category to Target Account. For one target account, the default indicator must be set. You can find the Price Differences Splitting Profile in Customizing Transaction SPRO→Financial Accounting→General Ledger Accounting→Periodic Processing→Integration→Materials Management→Define Accounts for Splitting Price Differences.
While it is possible to distinguish between fixed and variable costs in the variance categories in CO-PA costing-based, this is not possible in FI and Margin Analysis.