Valuation Structures

Valuation takes place within the following structures:

• The Valuation Area specifies the organizational level at which valuation is carried out.
• The Valuation Class contains materials with similar properties that have been grouped together for accounting purposes.
• The Valuation Category specifies the criterion according to which split valuation is to be carried out.
• The Valuation Type specifies the characteristic used for split valuation.

Valuation Area 
The valuation area specifies the level at which materials are valuated. You can define a valuation area in the following ways:

• Valuation area = company code

All stocks of a particular material in this company code are valuated together.

• Valuation area = one plant

The stocks of a particular material in this individual plant are valuated together. Stocks in other plants are not included in this valuation area.

Valuation Class 
So that you do not have to manage a separate stock account for every material, you can group together different materials with similar properties into valuation classes.
This table contains examples of possible valuation classes:

Valuation class	Description
3001	Colors
3002	Paints
3011	Oils
3021	Foam materials
3030	Operating supplies
3040	Spare parts
3100	Trading goods

The valuation class that a material can be assigned to depends on the material type. You can define the following assignments in Customizing:

Ø  All materials with the same material type are assigned to just one valuation class.

Ø  Different materials with the same material type are assigned to different valuation classes.

Ø  Materials with different material types are assigned to a single valuation class.

A material is assigned to a valuation class in the material master record. The system checks whether the material type allows the material to be assigned to the valuation class specified.
The system refers to the valuation class of a material to determine which stock account to post to when a posting is made for this material.
Valuation Category 
You can use split valuation to manage stocks of a material according to different criteria. Examples of such criteria include:
Procurement
You can valuate a material differently depending on whether it is manufactured in-house or procured externally
Origin
You can valuate a material differently depending on where it comes from (such as home or abroad)
Status
You can valuate a material differently depending on its status (such as new, used, repaired)
You define the valuation categories in Customizing. A material is assigned a valuation category in the material master record.
The individual characteristics that make up a valuation category (such as "internal" or "external" in the case of Procurement) are called valuation types.
Valuation Type 
The valuation type is an individual characteristic of a valuation category. For example, within the valuation category "origin" the valuation types would be the different countries. You define valuation types in Customizing. You first determine all the valid valuation types for a valuation category.
Then you enter the individual valuation types allowed for a material in the material master record. For every material with split valuation, you must enter all the valuation types allowed in the material master record.