How To Fix CNVA_20290_CHECK027 - LIFO valuation is active; the valuation level is not company code

SAP Error Message - Details

• Message type: E = Error

• Message class: CNVA_20290_CHECK - Message class for company code merge preanalysis

• Message number: 027

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

Self-Explanatory Message

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• What is the cause and solution for SAP error message CNVA_20290_CHECK027 - LIFO valuation is active; the valuation level is not company code ?

  The SAP error message CNVA_20290_CHECK027 indicates that there is a conflict between the LIFO (Last In, First Out) valuation method being active and the valuation level set in the system. Specifically, the error suggests that the valuation level is not set to the company code level, which is required for LIFO valuation.
  Cause:
  
  LIFO Valuation Active: The system is configured to use LIFO valuation, which is a method of valuing inventory based on the assumption that the most recently acquired items are the first to be used or sold.
  Valuation Level Misconfiguration: The valuation level in the system is set to a level other than the company code (e.g., plant level), which is incompatible with LIFO valuation.
  
  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:
  
  Go to the configuration settings in SAP.
  Navigate to Financial Accounting (FI) > Asset Accounting > Valuation > Define Valuation Areas.
  Check the valuation level settings. Ensure that the valuation level is set to Company Code if you intend to use LIFO valuation.
  
  
  
  Adjust LIFO Settings:
  
  If the valuation level cannot be changed to company code due to business requirements, consider whether LIFO valuation is necessary for your organization. If not, you may need to deactivate LIFO valuation.
  To deactivate LIFO, go to the configuration settings and navigate to the relevant area where LIFO is defined and change the settings accordingly.
  
  
  
  Consult Documentation:
  
  Review SAP documentation or consult with your SAP support team for specific instructions related to your version of SAP and the configuration settings.
  
  
  
  Testing:
  
  After making the necessary changes, perform tests to ensure that the error no longer occurs and that the valuation method works as expected.
  
  
  
  Related Information:
  
  LIFO Valuation: This method is often used in industries where inventory costs are rising, as it can lead to lower taxable income.
  Valuation Levels: In SAP, valuation levels can be set at different levels such as company code, plant, or storage location. The choice of valuation level can impact financial reporting and inventory management.
  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 configuration.