Transcript
Page 1: 4103 SAP Transfer Pricing Solution Overview at CMC

Orange County Convention Center

Orlando, Florida | June 3-5, 2014

SAP Transfer Pricing Solution Overview at CMCKumar Kalidindi

Page 2: 4103 SAP Transfer Pricing Solution Overview at CMC

Utilize SAP standard solution to fulfill your companies transfer pricing requirements

Transfer Price Structures and their maintenance

Parallel valuation approach and its use for Transfer Pricing

Standard solution to support intra-company transfers

Master Data requirements and their maintenance

LEARNING POINTS

Page 3: 4103 SAP Transfer Pricing Solution Overview at CMC

Americas Operating Locations

Page 4: 4103 SAP Transfer Pricing Solution Overview at CMC

4

SAP Parallel Valuation Approach

Parallel Valuation Views

Legal View - Represents the transfer of goods and services between independent companies according to legal reporting requirements

Group View - Valuate the exchange of goods and services within the group using Cost Of Goods Manufactured eliminating internal profits between member companies

Profit Center View - Valuate the exchange of goods and services between Profit Centers using internal prices to determinate profitability of each Profit Center for Management Reporting

Each Valuation view is assigned to a single currency type

Valuation View + Currency Type = Valuation Approach

Page 5: 4103 SAP Transfer Pricing Solution Overview at CMC

5

Parallel Valuation Approach

CMC decided to use the following two valuation approaches

Company Code Currency, Legal Valuation (10) Group Currency, Profit Center Valuation (32)

Valuation Approaches

10= Legal Valuation (0) + Currency Type (10) 32= Profit Center Valuation (2) + Currency Type (30)

Currency

types

Valuation

view 0

210 30

X

X

10

Leg.

32

PrCtr.

Page 6: 4103 SAP Transfer Pricing Solution Overview at CMC

Transfer of Material For Intra-Company

L 100

G N/A

P 100

L 100

G N/A

P 120

Profit Center

Sender

Profit Center

Receiver

Company Code XXXX

Stock Transport Order

(STO)

Transfer Price

$120/TON

Page 7: 4103 SAP Transfer Pricing Solution Overview at CMC

Legal Valuation - T-Account Entries

Plant xxxx

PC Sender

Plant xxxx

PC Receiver

Inventory

$100 $100

Intra-Company

Offset

$100 $100

Inventory

Intra-Company

Offset

Page 8: 4103 SAP Transfer Pricing Solution Overview at CMC

Profit Center Valuation - T-Account Entries

$100$120

Intra-Company

Sales

$120

Intra-Company

COGS

$100

$120

$120

Plant xxxx

PC Sender

Plant xxxx

PC Receiver

Intra-Company

Offset InventoryInventory

Intra-Company

Offset

Page 9: 4103 SAP Transfer Pricing Solution Overview at CMC

Conditions for SD Billing Documents

SD Conditions for Inter-Company Billing Documents (affiliated companies)

PC00 refers to IV01 condition and carries the same value

Type Valuation Condition Cond Cat COPA

Revenue

Legal IV01 Sales

Profit Center PC00 c Sales

COGS

Legal VPRS G COGS

Profit Center PCVP h COGS

Type Valuation Condition Cond Cat COPA

Revenue

Legal PR00 Sales

Profit Center PC00 c Sales

COGS

Legal VPRS G COGS

Profit Center PCVP h COGS

SD Conditions for External Billing Documents

PC00 refers to PR00 condition and carries the same value

Page 10: 4103 SAP Transfer Pricing Solution Overview at CMC

Master Data

An Access sequence is assigned to each condition type which determines the priority of the condition record and its maintenance levels

The condition record

determines the amount or

percentage to be applied

for each set of values in the

condition table

Page 11: 4103 SAP Transfer Pricing Solution Overview at CMC

Master Data – Upload Tool

Custom Program to upload transfer prices from excel spreadsheet

Excel Template for

loading transfer prices

Page 12: 4103 SAP Transfer Pricing Solution Overview at CMC

Intra-Company STO

Stock Transport Orders are used as a vehicle to transfer stocks from plant to plant within the company

The goods Receipt can be planned in the receiving plant

The entire process can be monitored via the Purchase Order History

Page 13: 4103 SAP Transfer Pricing Solution Overview at CMC

Post Goods Issue

Post Goods Issue transaction generates a material transfer document to track logistical movement of goods from sender to receiver plant

The material document also generates an accounting document to transfer the stock across valuation areas

Page 14: 4103 SAP Transfer Pricing Solution Overview at CMC

Price Determination

The sending and receiving plants belong to different profit centers

Transfer across profit center invokes pricing procedure

The pricing procedure with different conditions determine the markup of the stock transfer

Page 15: 4103 SAP Transfer Pricing Solution Overview at CMC

Accounting Document- Legal Valuation

Legal Valuation with currency type 10 transfers inventory from sender to receiver profit center

No Revenue and COGS postings in legal valuation

If the material is valuated in receiver plant with price control “S”, the difference between the sender and receiver valuation will post to a Variance account

Page 16: 4103 SAP Transfer Pricing Solution Overview at CMC

Accounting Document- PC Valuation

Profit Center Valuation with currency type 32 transfers inventory from sender to receiver profit center and records markup

Revenue and COGS are posted in this valuation

If the material is valuated in receiver plant with price control “S”, the difference between the sender and receiver valuation will post to a Variance account

Page 17: 4103 SAP Transfer Pricing Solution Overview at CMC

Reporting: Financial Reports

Standard Financial Reports: Use currency type “32” to report in Group Currency, Profit Center Valuation

Custom Report Painter/Writer

reports: Use basic key figure

KSL (Second Currency) in

FAGLFLEXT to report in

Group Currency, Profit Center

Valuation

Page 18: 4103 SAP Transfer Pricing Solution Overview at CMC

Controlling Reports

Cost Center Accounting: Use Actual Valuation “2” to report on Profit Center Valuation for all cost center reporting

Product Cost Controlling:

Use Actual Valuation “2” to

report on Profit Center

Valuation for Product

Costing Reports

Page 19: 4103 SAP Transfer Pricing Solution Overview at CMC

Controlling Reports

Profitability Analysis: Use Currency Types “B2” or “12” for Profitability Analysis reporting

Material Ledger: Use

Currency Type “32” to

report on Profit Center

Valuation for Material

Ledger Reports

Page 20: 4103 SAP Transfer Pricing Solution Overview at CMC

Transfer Pricing in SAP is a valuation approach that will allow CMC to transfer inventory between Profit Centers within the Company Code (Intra-Company) using Stock Transport Orders

Maintenance and timing of transfer price conditions is critical; master data must be in place prior to post goods issue transactions

Adequate training and education for Accounting end users to fully understand concepts and approach prior to go live

Reporting and consolidation teams have to use the appropriate currency valuations based on the managerial objectives

Extensive testing and validation required prior to rolling out the solution

KEY LEARNINGS

Page 21: 4103 SAP Transfer Pricing Solution Overview at CMC

FOLLOW US

Page 22: 4103 SAP Transfer Pricing Solution Overview at CMC

THANK YOU FOR PARTICIPATING

Please provide feedback on this session by completing a short survey via the event mobile application.

SESSION CODE: 4103

For ongoing education on this area of focus,visit www.ASUG.com

THANK YOU


Top Related