0 Replies Latest reply on Oct 20, 2015 11:07 AM by Kendall Schwoyer

    SAP - Variance and WIP Revaluation

    Kendall Schwoyer
    Visibility: Open to anyone

      Looking for some alternatives to design in inventory accounting  - any thoughts or help would be greatly appreciated.



      1. Work In Process Inventory in a Standard Costing environment:  (Alternatives desired for Re-costing WIP inventory on an annual basis!)
        1. Annual standard re-costing process for In-Process (WIP) inventory.

          1. For companies with long lead times (in excess of two weeks): concerned about the Re-pricing/costing of in-process inventory at Fiscal year standards change

          2. SAP (out of the box) does not reprice/re-cost Work in Process inventory.
        2. For companies with significant WIP balances - what processes were considered to allow the re-costing of these inventories?


      2. Work In Progress Variance Recognition Concerns
        1. SAP (out of the box) does not recognize variances until orders are TECO/DLVD

        2. For companies with long lead times (4 – 26 weeks or more); what alternatives have been deployed to recognize “in—process” production variances before the TECO/DLVD occurs.
          1. RICEF –considerations taken?   Magnitude/limitations?
          2. Alternative process - -i.e. creation of reports to “measure’ variances not otherwise recognized with a TECO/DLVD.   Was this also a RICEF or could you utilize any delivered S_ALR reports to fulfill in-process variance measurements?

      Note: Our legacy systems recognize “in-process” manufacturing variances at the completion of each routing step –hence a variance occurring at an operation in September is recognized financially in September, even though the order may not be completed till January.


      Appreciate any suggestions or guidance you may offer.


      Kendall Schwoyer