How to Change the Type of Price Control in SAP?

Price Control in SAP System, there are two types of price control

• Standard price
• Moving average price

You determine the price control that should be used for a material when you create the material and enter the accounting data for it. You enter one of the following indicators in the Price control field to determine how the price is controlled:

• S for standard price control
• V for moving average price control

Standard Price

• All inventory postings are carried out at the standard price
• Variances are posted to price difference accounts
• Variances are updated
• Price changes can be monitored

If a material is assigned a standard price (S), the value of the material is always calculated at this price. If goods movements or invoice receipts contain a price that differs from the standard price, the differences are posted to a price difference account. The variance is not taken into account in valuation.

Moving Average Price

• Goods receipts are posted at the goods receipt value.
• The price in the material master is adjusted to the delivered price.
• Price differences occur only in exceptional circumstances.
• Manual price changes are usually unnecessary. However, they are possible.

If a material is assigned a moving average price (MAP), the price is automatically adjusted in the material master record when price variances occur. If goods movements or invoice receipts are posted using a price that differs from the moving average price, the differences are posted to the stock account; as a result, the moving average price and the value of the stock change.

The moving average price displayed in the material master record is rounded off. For valuation calculations, the system always uses the exact price (stock value / stock quantity).

Also See : How to do Pricing release procedure in SD

Changing the Type of Price Control

Under certain conditions, you can change the type of price control

From standard price to moving average price

You can make this change at any time. The moving average price (which until now has been updated for informational purposes only) replaces the standard price and is used for valuation from now on.

From moving average price to standard price

You cannot make this change in the following two cases

• If the material master record is set up as a valuation header record for a material subject to split valuation.
• If the standard price comes from costing and is not equal to the moving average price

If the change is possible, the moving average price becomes the standard price, which is then used for valuation.

You change the type of price control by overwriting the price control indicator in the material master record with the new indicator.

Changing the type of price control for a material does not change the value of the material stock, since in both cases the current price becomes the new price.

Also See : How to Create Pricing Conditions based on Order Type