How To Fix CNV_20200_CHECK016 - LIFO valuation is active and valuation level is company code

SAP Error Message - Details

• Message type: E = Error

• Message class: CNV_20200_CHECK - Messages for check functions (company code merge)

• Message number: 016

• Message text: LIFO valuation is active and valuation level is company code

What causes this issue?

LIFO valuation is active and valuation level is company code.

System Response

Error

How to fix this error?

You cannot run the transformation solution Company Code Merge because
certain prerequisites have not been met. We recommend that you contact
SAP for support by creating a ticket using component CA-LT-CNV.

Procedure for System Administrators

The system issues an error message and will not allow you to continue with this transaction until the error is resolved.

Error message extract from SAP system. Copyright SAP SE.

Smart SAP Assistant

• What is the cause and solution for SAP error message CNV_20200_CHECK016 - LIFO valuation is active and valuation level is company code ?

  The SAP error message CNV_20200_CHECK016 indicates that there is an issue related to the LIFO (Last In, First Out) valuation method being active in your system while the valuation level is set to the company code. This error typically arises during data migration or conversion processes, particularly when using the SAP S/4HANA Migration Cockpit or similar tools.
  Cause:
  
  LIFO Valuation Active: The LIFO valuation method is enabled in the system. This method is used for inventory valuation and can affect how stock is valued and reported.
  Valuation Level: The valuation level is set to the company code, which means that inventory valuation is done at the company code level rather than at the plant level. This can lead to inconsistencies when LIFO is active, as LIFO is generally more complex and is often used in specific scenarios.
  
  Solution:
  To resolve this error, you can consider the following steps:
  
  
  Check LIFO Settings:
  
  Go to the configuration settings in SAP and check if LIFO valuation is indeed active. You can do this by navigating to the following path:
  
  SPRO > Financial Accounting > Asset Accounting > Valuation > Valuation Methods > Define Valuation Methods.
  
  
  If LIFO is not required for your business processes, consider switching to a different valuation method (e.g., FIFO or moving average).
  
  
  
  Change Valuation Level:
  
  If LIFO is necessary for your operations, you may need to change the valuation level to plant level instead of company code level. This can be done in the configuration settings:
  
  SPRO > Materials Management > Valuation and Account Assignment > Account Determination > Configure Automatic Postings.
  
  
  Ensure that the valuation level aligns with your business requirements.
  
  
  
  Consult Documentation:
  
  Review SAP documentation or notes related to LIFO valuation and valuation levels to understand the implications of changing these settings.
  
  
  
  Testing:
  
  After making changes, perform thorough testing to ensure that the new settings do not adversely affect other areas of your financial or inventory management processes.
  
  
  
  Consult SAP Support:
  
  If you are unsure about making these changes or if the issue persists, consider reaching out to SAP support or consulting with an SAP expert who can provide guidance based on your specific system configuration and business needs.
  
  
  
  Related Information:
  
  LIFO Valuation: This method assumes that the most recently purchased items are sold first, which can have tax implications and affect financial reporting.
  Valuation Levels: Understanding the difference between company code and plant-level valuation is crucial for inventory management and financial reporting.
  Migration Projects: If this error occurs during a migration project, ensure that all relevant settings are reviewed and aligned with the target system's requirements.
  
  By addressing the cause of the error and implementing the appropriate solution, you should be able to resolve the CNV_20200_CHECK016 error and proceed with your SAP processes.