What is multiple valuation approaches/transfer prices in SAP EC-PCA - Profit Center Accounting?

SAP Term: multiple valuation approaches/transfer prices

• Component: EC-PCA

• Component Name: Profit Center Accounting

• Description: A concept for the valuation of the internal exchange of goods within a group of companies, using various valuation approaches - known as transfer prices. These various valuation approaches are used because of the various levels in a group of companies, which require different views of the value flow. These are the group level, the level of the companies as legal entities and the profit center level. In the SAP system, the concept of multiple valuation approaches/transfer prices is implemented by the consistent posting and transfer of the various valuation approaches upon each valuation-relevant activity.

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• Key Concepts: 
  Multiple valuation approaches/transfer prices in SAP EC-PCA Profit Center Accounting are used to determine the cost of goods and services that are transferred between different profit centers. This approach allows for the calculation of a transfer price that is based on the actual cost of the goods or services being transferred. The transfer price is then used to calculate the profit or loss for each profit center involved in the transaction. 
  
  How to use it: 
  In order to use multiple valuation approaches/transfer prices in SAP EC-PCA Profit Center Accounting, you must first set up a transfer price calculation rule. This rule will define how the transfer price is calculated and will be used to determine the cost of goods and services that are transferred between different profit centers. Once the rule is set up, you can then enter the details of each transaction into the system and the transfer price will be automatically calculated based on the rule. 
  
  Tips & Tricks: 
  When setting up a transfer price calculation rule, it is important to consider all of the factors that could affect the cost of goods and services being transferred. This includes factors such as market conditions, production costs, and other external factors. Additionally, it is important to ensure that all transactions are accurately recorded in order to ensure accurate transfer pricing calculations. 
  
  Related Information: 
  For more information on multiple valuation approaches/transfer prices in SAP EC-PCA Profit Center Accounting, please refer to SAP's official documentation on this topic. Additionally, there are many online resources available that provide detailed information on how to set up and use transfer pricing rules in SAP EC-PCA Profit Center Accounting.