The Purpose of Price in MMR is for valuation of stock in inventory management but not for

PO/SA/Contract. For an e.g. if you create PR, then in valuation tab the price for material will
come automatically. Price from MMR will only fetch in PR, but whenever you are creating any
purchasing documents like SA or PO , price has to fetch from Info record conditions. or any
changes in the purchase prices, you should update the same by using Update push button in the
conditions tab in the PO item level, which will update the prices in the Info record. The GRN
price will be updated in the Material Master if its V… Material Master Price will be copied in PR
for reference, not in PO. PO should carry price agreed with Supplier. in the standard SAP the
material Master Price is used in the GI time only,

(((MMR—Valuation of stock in IM;

---PR valuation tab ,price automatically come; MMR Price fetch in PR for refrence
---GRN mmr auto. Updated if price control indic. “V”
---GI MMR price used only

For Purchasing DOC. Like PO/SA/CONTRACT---price fetch from PIR Conditions

---Update any change in purchase price by using push button in cond.tab--- it will auto.
Update PIR price
--- PO should carry price agreed with Supplier.)))

((((((S------As you have maintained the Price Control as S, system will always post the value that
maintained in the material master only i.e. for the standard price the remaining amt will be
posted to Price Diff account. Sytem will always take the PO price for GR.if there exists a price
differrance between PO price and material master price, the differance will be posted to the price
diff account .

M----- If you want to capture the actual value ie the PO value on stock, you have to change the
Price Control to V. If the material is valuated with the MAP the diff will be posted to stock
account to calculate the new MAP to the material.))))

If Material master has price control 'V'

1. GR : BSX Stock acc get debited as per PO Price.

WRX GR/IR Clearing account credited.

2. IR : If there is no difference in PO Price & IR Price,

Vendor account get credited

WRX GR/IR account get debited.

3. IR : If there is difference in PO Price & Ir price,

Vendor account as per IR price get credited

WRX GR/IR account get debited as PO price

BSX Stock acc get debited for the remaining diff amount (If full stock is available)

PRD Price difference account get debited for the remaining diff amount (If no stock is available)

(OR) Both BSX & PRD will get debited if half stock is available)

If Material master has price control 'S'

1. GR : BSX Stock acc get debited as per Material master price.

WRX GR/IR Clearing account credited.

PRD Price difference account get debited if there is difference in Material master price & PO
price.

2. IR : If there is no difference in PO Price & IR Price,

Vendor account get credited

WRX GR/IR account get debited.

3. IR : If there is difference in PO Price & Ir price,

Vendor account as per IR price get credited

WRX GR/IR account get debited as PO price

PRD Price difference account get debited for the remaining diff amount irrespective of stock
availablility, i.e, no BSX

If material is maintained in MAP price if so then it will be loaded to stock account....if it is STD
price then it will hit PRD account.....

Price Determination

When you create a purchase order or scheduling agreement with time-independent conditions,
the system searches for valid conditions and inserts them into the new document (this is the
process of price determination).OR Price determination involves the process of determining
already existing conditions only.

(((time independent condition - which doesn’t have validity of condition-pbxx

dependent condition – which have validity of condition or condition depend on time and a scale
are defined—pb00 For different validity period different conditions may apply making them time
dependent .:: PB00 - this condition is determined via access sequence from PIR or contract or
SA or RFQ etc. ::PBXX - if you have not defined any info or contract etc then system will
suggest PBXX in PO so you can manually enter the price for PO.::Conditions in info records
and contracts are always time-dependent. In the case of quotations and scheduling agreements,
we can Customize the document type which determines whether the conditions will be time-
dependent or time-independent .SAP recommends working with time-dependent conditions for
quotations and scheduling agreements, since these provide a wider range of processing options because
The system determines the effective price based on the time- dependent conditions... The conditions in
purchase orders are time-independent. Like in PO once the condition is identified and is applied
in PO it remains applicable even if the condition is expired in source .. For example I created a
PO 123 which takes its pricing condition from Info records 100 which is valid for 10 days ....
After 10 days this condition in Info record will be
expired >> (Showing condition in Info rec is time dependent ) However even after 10 days this
condition for PO will be valid ... )))

Some Standard Conditions:

PB00 Gross Price (info record, contract, scheduled Agreement) dependent

PBXX Gross Price (PO) independent,,,access sequences
FRA1 Freight
RA00 Discount on net
RA01 Discount on Gross
ZA00 Surcharge on net
SKT0 Surcharge / discount
ZPB0 Rebates
MWVS Input Tax
MWAS Output Tax
BASB Base Amount
RM0000 Calculation Schema or Pricing Procedure (PB00 & PBXX)
RM0002 Calculation Schema or Pricing Procedure (PB00)

In the case of purchase orders, the system searches for conditions in info records and contracts
(for contract release orders), and for general conditions.

In the case of scheduling agreements with time-independent conditions, the system searches

for conditions in info records and for general conditions.

If no conditions are found, but the last PO is noted in the info record, the system can adopt the

conditions from this PO. You can specify how the system treats the conditions from the last PO
in

Customizing for Purchasing (default values for buyers).

The system can proceed in similar fashion in the event that a scheduling agreement with
timeindependent

conditions is noted in the info record.

Price determination involves the process of determining already existing conditions

only. Thus, if the buyer enters further conditions in the purchase order - over and

above those inserted by the system - and a new effective price results, the latter is

not calculated via the price determination process.(as I create new condition types and assign in
calculation procedures ))

If the conditions were adopted from the last document and the buyer performs the

New price determination function, these conditions will not be inserted again.

the price are taken automatically for the material in the po

1. Inforecord

2.previous PO

Q…..>>>>i have made a PO taking a material with std. price say 1 rs. but before doing GRN i
changed the price to 4 rs. Now, when iam

doing GRN , system post the document taking the old price (1rs.) of the material.

I want that system should calculate the cost with the new price defined for the material ( 4rs.)

In Accounting 1 tab of the material display MM03 :

sSoln______MR21 is used for a price change for any material moving average price or
standard price with refer to the material master settings. Once the material is created and
some MM movements have been done on that then you won’t be in the position to change the
price going to MM02. In such case we need to do if via MR21. Here you need to enter company
code and plant. Once you get in, there you may enter the list of materials, whose prices to be
changed. It would show you the current valuation. In the next column you need to put the new
price. Once you save the new document would be generated showing the old and new prices for
the materials you changed. The following accounting entries occur. Changed price would be
debited or credited to the stock account depending on the increase or decrease in the price
respectively. The same amount would be posted to loss or profit account depending on the
increase or decrease in the price respectively
In MR21--> You have to enter the new price and it will direct change the moving
average price or standard price with refer to the material master settings.

E.g. Material No: ZZZZZZZ

Material Price: 20.00

If you use MR21 you can change the price directly in to 23 or 25 whatever you need.

In MR22--> I have to enter the amount needs to be adjusted and it will hit the moving
average price or the standard price with refer to the quantity you are having in stock.

E.g Material No: ZZZZZZ

Material Price: 0.17
Quantity: 191 Nos
Total Value : 31.57 ( 31.57/191=>0.17)

If you enter debit or credit to this material.

Assume if you want to add 100.00 to this material.

After the change ==>

Material No: ZZZZZZ
Material Price: 0.69
Quantity: 191 Nos
Total Value : 131.57 ( 131.57/191=>0.69)

Instead of increase the value you can decerease also. (by enter negative value)

This is the difference between this two transactions.

Q>>>>>>>>In the info record we maintained netprice 5.80 EURO ,while put a PO manually we
changed net value as 6 EURO .but while doing GR system

took 5.8 euro-info record price instead of p.o price, price control indicator is 1-purchase orde

Soln>>>>>> Just Cross verify your material master price control.

If it is Standard Price (S) with 5.8 then there is no problem with the system. Please check your
PO, may still price is same for material as per info record also check price control for material if
price control is S then system will pick price from material master for accounting purpose in
GRN. Please maintain in info record price control as 5

There are two types of Price control in the SAP R/3 system:

(((- V Moving average price/ periodic unit price: price that changes periodically as a result of goods
movement and invoice entries. It is calculated by dividing the value of the material by the quantity of
the material in inventory. It references the base unit of measure and price unit in the material master
records
- S Standard price: constant price at which a material is valuated without taking goods movement and
invoices into account ))))

For each material, you must specify the price control indicator in the material master record in
Accounting1 view according to which the material is to be valuated.

Standard Setting in the Material Master

Price control is preset as follows in the standard SAP R/3 system:

- Moving average for materials procured externally

- Standard for in-house produced materials

Configuration:
IMG Menu :- SPRO - SAP Ref. IMG - Materials Management - Valuation and Account Assignment - Define
Price Control for Material Types
Transcation Code :- OMW1

price control for the Material Types:

Material Material Type Desc. Price Control Price control

Type Mandatory

FERT Finished Material S –for

in house
produced
material
DIEN Service Product S X
HALB Semi finished S
Product
ABF Waste S X
ERSA Spare parts V- for
external
produced
material
FGTR Beverages V X
ROH Raw materials V
VERP Packaging material
FRIP Perishable V
If the material is assigned a moving average price (V), the price is automatically adjusted in the material
master record when price variance occur. If goods movement or invoice receipts are posted using a
price that differs from the moving average price, the difference are posted in the stock account; as a
result, the value of the moving average price and the value of the stock change. The moving average
price displayed in the material master record is rounded off. For valuation calculation, the system always
uses the exact price (stock value/ stock quantity)
Standard Price:
- All inventory postings are carried out at the standard price
- variance are posted at the price difference account
- variances are updated
- price change can be monitored

(((((If a material is assigned to standard price (S), the value of the material is always calculated at this
price. If goods movement or invoice receipts contain a price that differs from the standard price., the
differences are posted to a price difference account. The variance is not taken into account in
valuation))))).

Changing the type of price control for a material does not change the value of the material stock, since
in both cases the current price becomes the new price.

Material Ledger combines the advantages of both MVA and Std price
One of the Advantages of the Material Ledger is , it combines the advantages of both types of
price controls

1. S ( Standard price)
2. V (Moving Average price)

In this blogpost you will learn how Material Ledger combines the advantages of both MVA and
Std price

Let us first see the advantages and disadvantages of Price control V and S

S ( Standard price) V (Moving Average price)

Adv : Std price can be used as a
bench mark price to analyse the
variances
Disadv : Std price don’t reflect
the actual price
Disadv : As the MVA changes with every goods receipt and
invoice receipt . it can not be used as a bench mark price . So
variance analysis is not possible ,
Adv : MVA reflects the actual price as it updates with every
goods receipt and invoice receipt .

When Material ledger is not active MVA is recommended for RM and Std price is recommended for FG
and SFGs. It is interesting to see that when Material ledger is active it is recommended to set Std price
even for RMs. More interestingly system do not use Std Price for all periods even though we set std
price in the material master. In fact system uses Std price in the current period and MVA price in the
closed periods. price control changes from Std to MVA at month end and back to Std price at the
beginning of the next month

Finally we can conclude that during the single level and multi level price determination actual
cost (PUP) is calculated . During ‘Post Closing’ the system changes the price control to ‘V’
and uses PUP as the new MVA price. Price differences are posted to inventory accounts(posting
date will be the last day of the period ).

And creates one more document which is a reversal of the inventory posting (Posting date will be
1st day of the next period) and sets the price control back to ‘S’ . This is how Material ledger
uses both Std price and MVA price but for different periods and combine the advantages .

Further advantage of Material ledger is that uniform average prices(of the period) are used to
valuate all the consumptions in a period . This is possible with the functionality ‘ Revaluation of
consumption ‘ .((( In case of FG and SFG , PUP is nothing but the average cost of all production
orders in a month . And in case of RM , PUP is nothing but the average price of all purchase
orders (each purchase order has GR and Invoice) in a month . That is why I used the word
‘average price’ . If ML is not active the MVA price that is used to valuate RM is not uniform .
ie Each RM consumption can be valuated with a different MVA price which exist at the time of
consumption . If ML is active , PUP (Average price) is used to valuate all the consumptions of
a material in a month (Initial valuation with std price + Revaluation with variance) . That is why
I used the word ‘Uniform’)))