Setup Step 5 — Set Valuation Level
MANDATORY
Layer 3 · MM↔FI bridge
⏱️ ~5 min
OX14
🎯 Why this setting exists
SAP needs to know where stock value is tracked — at what level the same material carries a price. There are two options:
- Plant level (recommended) — each plant keeps its own moving-average / standard price for the same material, so the same iron can be valued differently at Karachi than at Lahore.
- Company-code level — all plants of a company code share one price for a material.
💡 Easy example
This step is choosing whether each PakSteel factory prices its own iron, or all factories share one company-wide price.
Plant level = the Karachi factory (PK01) can value its iron at PKR 250/kg while Lahore (PK02) values the very same iron at PKR 255/kg — because they bought it at different times and prices. Company-code level = every PakSteel plant must show iron at one shared price.
For Pakistan and the S/4HANA standard, the answer is plant level — each plant prices its own stock.
Plant level = the Karachi factory (PK01) can value its iron at PKR 250/kg while Lahore (PK02) values the very same iron at PKR 255/kg — because they bought it at different times and prices. Company-code level = every PakSteel plant must show iron at one shared price.
For Pakistan and the S/4HANA standard, the answer is plant level — each plant prices its own stock.
🔗 How this connects to everything else
Valuation level is a quiet switch with loud consequences — it shapes how every material is priced and how account determination is structured downstream.
⬆️ Depends on (must exist first)
- Step 4 — Assign Plants → Company Codes: plants must already be assigned so the valuation areas (the plants) actually roll up to a set of books.
⬇️ Enables (what this unlocks)
- The material master accounting view (price + valuation class per valuation area)
- Step 15 — OBYC account determination (keyed by valuation area)
- Split valuation — e.g. domestic vs imported stock (Scenario 17)
🧩 Who owns it & why MM cares
MM Enterprise-structure config. It decides whether stock is valued per plant or per company code — i.e. whether the same material can carry different prices at different plants. MM owns the consequence: every accounting view and every OBYC row keys off this choice.
🔮 Links to other modules (now & later)
- FI Sets the granularity at which inventory value is reported and posted.
- CO Product costing requires plant-level valuation — CO cannot cost a material that is only valued at company-code level.
🔧 Configuration — fields & steps
OX14 · SPRO → Enterprise Structure → Definition → Logistics — General → Define valuation level
Action
- Run OX14
- Select "Valuation area is a plant"
- Save
📊 Plant level vs Company-code level — what each means
| Option | Same material, two plants | Used by |
|---|---|---|
| Valuation area is a plant (pick this) | Can have different prices per plant (PK01 ≠ PK02) | S/4HANA standard, required for PP / CO product costing |
| Valuation area is the company code | One shared price across all plants of the CC | Rare — legacy migration only |
🚨 Issues & fixes
⚠️ This is an irreversible, system-wide decision once material exists
The plant-vs-company-code valuation choice is a one-time, system-wide setting and is effectively immutable once stock has been posted for any material. Changing it afterward is a full SAP conversion project — not a config tweak.
Pick "Valuation area is a plant" — it's the standard. The only reason to choose company-code level is a rare legacy migration, and even then most projects convert to plant level.
✅ Verification
- Run SE16N → table
T001K→ should have entries per plant (one row per plant) - Or run OX14 → confirm "Valuation area is a plant" is selected