MM: Material Valuation

•
• Material can be valuated (valuation area) either at plant level or company code level. 
• Material type controls if material is valuated or not.
• Material can be valuated either at Standard Price or Moving Average Price (MAP). 

Standard Price:
• All goods movements are valuated with the same (standard) price. Variances from this standard price are posted to price difference accounts.
• GR/IR account is updated at PO price.

MAP:
• System valuates goods receipts with the purchase order price and goods issues with the current moving average price. If there is any difference in price during IR, difference is posted to stock account and system calculates new MAP (total value / total stock).
• If material stock is less than invoice quantity, stock account is debited or credited for actual stock and remaining amount is posted to price difference account.
• GR/IR account is updated at PO price.