How To Fix CNV_20200_CHECK017 - LIFO valuation is active and valuation level is not company code

SAP Error Message - Details

• Message type: E = Error

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

• Message number: 017

• Message text: LIFO valuation is active and valuation level is not company code

Self-Explanatory Message

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Smart SAP Assistant

• What is the cause and solution for SAP error message CNV_20200_CHECK017 - LIFO valuation is active and valuation level is not company code ?

  The SAP error message CNV_20200_CHECK017 indicates that there is an issue related to the LIFO (Last In, First Out) valuation method in the context of the valuation level settings in your SAP system. Specifically, this error arises when the LIFO valuation is active, but the valuation level is not set to "Company Code."
  Cause:
  
  LIFO Valuation Active: The system is configured to use LIFO as the inventory valuation method.
  Valuation Level Setting: The valuation level is set to a different level (e.g., Plant level) instead of the required Company Code level. In SAP, the valuation level determines how inventory values are managed and reported.
  
  Solution:
  To resolve this error, you need to ensure that the valuation level is set correctly. Here are the steps you can take:
  
  
  Check Valuation Level Settings:
  
  Go to the transaction code OBY6 (or navigate through the menu: SPRO > Financial Accounting > General Ledger > Master Data > G/L Accounts > Preparation for Creating G/L Accounts > Define Valuation Level).
  Verify the valuation level settings for your company code. Ensure that it is set to "Company Code" if you are using LIFO valuation.
  
  
  
  Adjust LIFO Valuation Settings:
  
  If you need to keep the valuation level at the Plant level, consider changing the inventory valuation method from LIFO to another method that is compatible with the current valuation level (e.g., FIFO or moving average).
  This can be done in the transaction code OMN1 (or through the menu: SPRO > Logistics > Materials Management > Valuation and Account Assignment > Material Valuation > Define Valuation Methods).
  
  
  
  Consult Documentation:
  
  Review SAP documentation or consult with your SAP functional consultant to understand the implications of changing valuation methods or levels, as this can affect financial reporting and inventory management.
  
  
  
  Testing:
  
  After making the necessary changes, perform testing to ensure that the error is resolved and that the system behaves as expected.
  
  
  
  Related Information:
  
  LIFO Valuation: This method assumes that the most recently purchased items are sold first. It can have tax implications and affect financial reporting.
  Valuation Level: This setting determines whether inventory is valued at the company code level or at the plant level. The choice of valuation level can impact how inventory is managed and reported in financial statements.
  SAP Notes: Check for any relevant SAP Notes that may provide additional guidance or updates related to this error message.
  
  If you continue to experience issues after following these steps, it may be beneficial to engage with your SAP support team or a consultant who specializes in SAP MM (Materials Management) and FI (Financial Accounting) modules.