What is valuation strategy in SAP CO-PA - Profitability Analysis?

SAP Term: valuation strategy

• Component: CO-PA

• Component Name: Profitability Analysis

• Description: A method of costing-based valuation of value fields. The valuation strategy describes the valuation methods that are used to valuate value fields, and in which order the SAP System applies them. The following methods are available: Valuation using conditions Valuation using material cost estimates Valuation using user-defined valuation routines

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• Key Concepts: 
  Valuation strategy in SAP CO-PA Profitability Analysis is a set of rules that determine how the system calculates the value of a cost element or revenue element. It is used to determine the value of a cost or revenue element in a given period. The valuation strategy can be set up to use different methods such as fixed value, average value, or standard cost. 
  
  How to use it: 
  The valuation strategy is set up in the SAP system by defining the valuation type and the valuation method. The valuation type defines the type of cost or revenue element that will be used in the calculation. The valuation method defines how the system will calculate the value of the cost or revenue element. The system can use different methods such as fixed value, average value, or standard cost. 
  
  Tips & Tricks: 
  When setting up a valuation strategy, it is important to consider how it will affect the profitability analysis results. Different methods may produce different results and it is important to choose the method that best fits your business needs. 
  
  Related Information: 
  For more information on setting up a valuation strategy in SAP CO-PA Profitability Analysis, please refer to SAP Help documentation.