valuation area

Materials Management (MM)

Organizational unit in Logistics dividing up a company for the purpose of valuating stocks in a standardized and consistent manner.

Classification

Business object

Application:

Inventory must be valuated at plant level for product costing and order costing.

Integration

Inventory is valuated either at plant or at company code level. At plant level, a plant represents a valuation area. At company code level, a company code represents a valuation area.

To valuate inventory in a plant, you must assign each plant to a valuation area. each valuation area is assigned to a company code for balance sheet purposes.