What is Valuation Area and Valuation Class

By: Tulsi

What is Valuation Area? How is it linked with Valuation Class? What is the significance of Valuation Area?

Valuation areas are nothing but the level at which you want to valuate your materials. SAP provides two levels of valuation Plant level and company code level.

For example:

Valuation at plant level: Suppose you have two plants one in Hissar and one in Andhra Pradesh, Then of course you would like to valuate the rawmaterials at plant level as because you have got transportation cost and taxes etc to account for.

Valuation at company code level:Here you valuate all your material in same way.

In One client valuation areas can either be set to plant level or company code level. Once you have made this setting this cant be changed

Valuation classes are linked to valuation class in Tcode OBYC

If your valuation area is at plant level then in OBYC you will find a coloumn for Valuation modifier you can provide your plant there.

For example:

Valuation Mod   Valuation class    Account
plant 1                       3000           200130                                                 

What is valuation class?

Valuation class it is used in FI and MM integration. It determines the g/l accounts to be posted automatically (Ex Raw materail or Finised goods).

In material master we specify valuation class:
- for valuation class, we assign g/l accounts based on nature of transaction,
- at the time of goods receipt/ issue, stores person enters movement type, 
- our a/c's will be updated automatically based on account assignment to valuation class which is specified in material master.

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