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Piyush Gupta
June 23, 2015 | 2 minute read

Settlement Options in Refurbishment

Order !
 16  13  5,919
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It is a common understanding that Settlement of a Refurbishment Order happens on

 Like Material. This is true, but not always.

It depends upon whether the price control indicator for the Batch material in
 RSS Feed material master is Standard (S) or Moving average price (V).

Batch material refers to the material with Valuation types C1/C2/C3. So if the price
control indicator of Batch material is:

1. V: Settlement happens on the Material Master.

2. S: Settlement doesn’t happen on Material Master, but on price difference
account.

Scenario 1: Consider material 795, with Batch material’s price indicator = V

Have 1 unit each of batch C1, C2, C3. Therefore the material valuation =
(200+80+10)/3 = 96.67

Created a Refurbishment Order for this material (for C3) using IW81. Done GI. Done
GR using IW8W.

After GR, we have 1 unit of C1 and 2 of C2.

Therefore, Material valuation = (1*200 + 2*80)/3 = 360/3 = 120

Cost incurred in WO: 10 for GI of 1 unit of C3 and -80 for GR of 1 unit of C2.

So the balance amount on WO is -70.

Settlement: Since batch material price indicator is V, therefore settlement of balance

amount happens on material.
So the settlement happens on GL Spare Parts, against material master.

Since the settlement happens on material, therefore material valuation also changes
as:

1*200 + 2*80 = 360

360-70 (for settlement on material) = 290 /3 = 96.67

Scenario 2: Consider material 796, with Batch material’s price indicator = S

Have 1 unit each of batch C1, C2, C3. Therefore the material valuation =
(200+80+10)/3 = 96.67

Followed same steps as above. Create Refurbishment Order, GI, GR. Skipped the
screenshots.

Valuation of material after GR, but before settlement.

Therefore, Material valuation = (1*200 + 2*80)/3 = 360/3 = 120

 Settlement: Since batch material price indicator is S, therefore settlement doesn’t
happen on material, rather on Price diff account.

So the settlement happens on GL Price Diff account and not on material master.

Since the settlement doesn’t happen on material, therefore no change in material

valuation:

1*200 + 2*80 = 360

360 – 0 (for settlement) = 360 /3 = 120

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Assigned Tags

PLM Enterprise Asset Management (EAM)/Plant Maintenance (PM)

eam

material

refurbishment order

settlement;
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16 Comments

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K Jogeswara Rao
June 24, 2015 at 8:16 am

Good information. Will be useful to Refurbishment users. Thank you for sharing.

Regards
KJogeswaraRao

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Piyush Gupta | Blog Post Author

June 24, 2015 at 10:46 am

Thanks Jogeswara Sir.

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Maria Terence
June 28, 2015 at 10:23 am

Hi Piyush,

Good document on refurbishment i have read so far.

Regards

Terence

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Piyush Gupta | Blog Post Author

June 28, 2015 at 5:48 pm

Thanks Terence for appreciating !!

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rakesh kushwaha
July 17, 2015 at 7:58 am

nice document..

Clear the costing in Refurbishment order.

thanks

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 Piyush Gupta | Blog Post Author
July 17, 2015 at 12:14 pm

Thank you Rakesh.

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Kiran Ambi
August 11, 2015 at 2:40 pm

Good document on Settlement of Refurbishment orders.

Thanks for Sharing.

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Piyush Gupta | Blog Post Author

August 12, 2015 at 10:00 am

Thanks for your kind words Kiran.

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Former Member
August 17, 2015 at 12:23 pm

Dear Piyush,

Good document very informative,

REgards

Anand

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Piyush Gupta | Blog Post Author

August 17, 2015 at 3:02 pm

Thank you Anand for your appreciation.

Regards,
 Piyush

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SS
September 7, 2015 at 10:39 am

Dear Piyush,

Thank you for the good information.

Could you please explain how actually the settlement rule gets defined here in this case?

Will it be defined in the allocation to Material alone?

Like 0 | Share

Piyush Gupta | Blog Post Author

September 8, 2015 at 6:45 am

Hello Vijaya,

Even I had the same doubt when I exploring this concept.

In both the cases, the S Rule is defined for the material only.

The system tries to settle the cost to material. But if the Batch material is at standard pricing, then the
settlement is automatically routed to the price diff account, in place of material valuation.

So invariably, the S Rule object is material in both the cases.

Thanks,

Piyush

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SS
September 8, 2015 at 8:37 am

Thanks Piyush...
Like 0 | Share

Former Member
September 20, 2016 at 8:15 pm

excellent doc

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Hakim M
April 17, 2021 at 6:38 pm

Hi Piyush,

Thanks this is excellent information.

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Chris Susatyo
May 26, 2022 at 3:41 pm

Thank you for this great doc. I have a question and hopefully this blog is still active. what will happen with the
settlement if material (with V price control) was moved before the settlement is done? if there is inventory and
if there is no inventory. thank you in advance for your input!

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