Tasks to be completed when documenting an operation (from creation to publication)

 1. Enter the Title of the operation / page

2. Add the following Labels : 

    • Scope of applicability: ww, country_accounting 

    • Country or group of countries (if applicable): belux, china, france, italy, lam, nam, uk_ie, bulgaria, dach, netherlands, iberia, poland, latvia, australia, india, japan, south_korea, thailand, singapore, new_zealand, emea_transversal, apac_transversal

    • Unit and Domain according to the List of labels to be used in the Finance Service Line space

      • E.g. 1: WW Operation in Financial Accounting under domain "Central Finance Processes & Compliance":
        • Labels to be used: ww, financial_accounting, central_fin_proc_compliance

      • E.g. 2: France Operation in Financial Accounting:
        • Labels to be used: country_accounting, france, financial_accounting
          (for country operations, the Domain is always country_accounting)


3. Fill in all fields as described above

4. Name the title of each section using OPD methodology naming convention - Infinitive verb without the “to”, mainly action verb...something) - " I do something..."

5. Once the description of the operation is completed, ensure it is approved and published by launching the SBS-Finance approval workflow 




Domain: Costing



Responsibility area: Perform product costing monthly closing-ML


Table of contents 

By default the table of contents displays Heading 1 & Heading 2 (other levels can be added)



Scope

3. Remove the icon when not applicable


ERP

4. Remove the icon(s) when not applicable


Frequency

5. Remove the icon(s) when not applicable

 

 

References

Z1F_CLOSURE_CORR


Forms

7. Insert the links accordingly and change the link text with the OP nam


Attachments

8. Add the link to attachments or external links



Previous OP << >> Next OP



1. Objective and Scope

1.1. Objective of this Operation

Within the same Solvay legal entity a single product may have different purposes and usages encouraging potential synergies between the Business Units (BUs):

  • The BU A manufactures and sells the product Y
  • The BU B uses the product Y(*) to manufacture the product Z

The involved BUs may negotiate a fixed price that is is reviewed with an agreed frequency. This is known as the transfer price.

As the the product Y manufacturing cost in BU A ≠ product Y transfer  price in BU, a margin is generated in BU A. This is the so called Internal Margin flow.

1.2. Scope

This procedure is applied to all companies WW, in case we have a situation where:
  • Product Y is manufactured in BU A. Then BU B uses this product to manufacture the product Z. In case the manufactured costs in BU A are different from the transfer price to BU B, we have a flow called Internal Margin.
  • In order to have this flow correctly posted in PL, the sender material needs to have price control = S (standard price), and the receiver material needs to have valuation class Z049 (Interplant raw materials).


2. Definitions

See Finance Glossary:

3. Tasks description

3.1. I understand the process of internal margin

During the month the product’s transfer between BUs is processed as-is.

The price difference between the product’s cost in BU A and BU B is posted to P&L in value field VVD61 (D61 Elim.Margin Inv), linked to BFC heading R15430.

During the closure, the transaction Z1K_INTERNAL_MARGIN is executed. This transaction performs the following actions:

    • It cancels the product’s transfer operation impact in the P&L

    • It posts a new document identifying the following elements from BU A.

      • Sales in value field VVINT (INT Internal Sales), linked to BFC heading R10000

      • COS split by Fix/Var/Dep costs:


3.2. I correct the internal margin side effect




3.3. Check and analysis in case of issues

As mentioned on point 3.1, after running the Internal Margin the impact on the PL should be cancelled. This means that VF D61 must be zero



In case we have amounts still on D61, there are some things that we need to check (as the program will only work if these points are verified):

  • The sender material has price control = S (standard price).
  • The receiver material is assigned to valuation class Z049 (Interplant raw materials) in the destination plant (BU B).

  • The P&L data origin is the specific G/L account customized for these operations: 6096331000.

    • This G/L account is posted whenever there are price differences between the sender and the receiver material during transfer operations between plants (*).

    • These transfers are linked to several MM movement types, for example: 301 (transfer plant to plant) and 309 (transfer material to material).

  • The batch needs to be correctly created with the respective plant (can be checked in transaction MSC3N):



End of document.