SAP CO Material Ledger: CKMLCP and CKMLCPAVR in "S/4 HANA"

In S/4 HANA, SAP has made significant enhancements in the area of Material Ledger and Actual Costing, enabling businesses to meet the complexities of parallel accounting principles, such as IFRS and Local GAAP. Let’s elaborate on the integration and functioning of CKMLCP and CKMLCPAVR in S/4 HANA, especially in the context of parallel COGM calculation for different accounting principles.

CKMLCP and CKMLCPAVR in S/4 HANA:

1. CKMLCP (Periodic Actual Costing Run): This is the traditional transaction used for executing the Material Ledger’s period-end closing activities for actual costing. It typically refers to the standard or leading ledger, often linked to the IFRS accounting principle.

2. CKMLCPAVR (Actual Costing Run for Additional Valuations): Introduced to cater to the need for parallel valuations. CKMLCPAVR allows companies to calculate actual costs based on non-leading ledgers which might correspond to local GAAP or other accounting principles.

Parallel Financial Reporting in Controlling:

1. Depreciation Considerations:

   • Depreciation calculations are a key component of the total cost of manufactured goods. Since IFRS and Local GAAP often have different rules and timelines for asset depreciation, the cost of goods manufactured (COGM) will vary between the two accounting principles.

   • In S/4 HANA, different depreciation areas can be maintained in the asset accounting module. Each depreciation area can have its own set of rules (for example, one for IFRS and another for Local GAAP). This facilitates parallel depreciation calculations.

2. Parallel Valuation in Material Ledger:

   • The Material Ledger can maintain inventory values in parallel for different accounting principles, with each valuation view being tied to a specific ledger.

   • Inventory can be carried at different values in the same system, facilitating compliance with both international and local accounting standards.

3. Executing Actual Costing Runs:

   • For IFRS: Execute CKMLCP, which uses the leading ledger.

   • For Local GAAP: Execute CKMLCPAVR, specifying the non-leading ledger associated with the local GAAP accounting principle.

4. Linking Accounting Principles to Ledgers:

   • Accounting principles are directly linked to specific ledgers. The leading ledger typically represents IFRS, while non-leading ledgers can be linked to local GAAP or other accounting standards.

   • By linking depreciation areas to these ledgers, the system ensures the correct depreciation calculation gets included in the cost component structure and COGM calculations.

Advantages of Parallel Reporting in S/4 HANA:

1. Compliance & Flexibility: Catering to both international and local reporting standards in a single integrated system reduces reconciliation efforts and ensures compliance.

2. Transparency: Clear visibility of how costs (especially depreciation) impact product costing under different accounting principles.

3. Efficiency: Streamlined period-end closing activities with consistent and automated calculations.

In summary, S/4 HANA’s capabilities in the realm of Material Ledger and Actual Costing offer businesses a robust platform to manage parallel financial reporting in controlling seamlessly. By leveraging CKMLCP and CKMLCPAVR, organizations can ensure they meet both global and local financial reporting requirements efficiently.

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