Controlling Object Cost
Controlling Product Cost by Period
Controlling Product Cost by Period for Period-End Closing
Controlling Product Cost by Orde
Controlling Product Cost by Order for Period-End Closing
Exploring Sales-Order-Related Production Scenarios in Cost Object Controlling
Controlling Product Cost by Sales Order with Production
Configuring Product Cost Controlling by Sales Order
Controlling Product Cost by Sales Order for Period-End Closing
Controlling Product Cost by Sales Order without Production (Service)
Understanding Information Systems for Product Cost Controlling

Performing Settlement of Work in Process (WIP)

Objective

After completing this lesson, you will be able to perform settlement of work in process (WIP)

Settlement of Work in Process

Process order form showing items' material, activity, and accounting details, with arrows indicating posting of goods receipt in actual column to inventory and reserve accounts in general ledger.

When you settle WIP, the system transfers it to Financial Accounting (FI).

The following actions are performed by the system to settle WIP:

  • If the debit of the order item is greater than the credit, the system debits Unfinished Goods Inventory and credits Unfinished Goods Inventory Change.
  • If the debit of the order item is less than the credit, the system debits Expense for Reserves for Unrealized Costs and credits Reserves for Unrealized Costs. This expense posting corresponds to a value adjustment for finished products that the system capitalizes in FI.

Perform Settlement of WIP for Process Orders

ExerciseStart Exercise

Perform Settlement of WIP for Production Orders

ExerciseStart Exercise

Summary

  • Settlement transfers work in process to Financial Accounting for inventory actualization.
  • Settlement debits or credits inventory accounts based on work in process balance.
  • Work in process accrual does not update the controlling object.
Learning

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