SAP ERP Financials and FICO Handbook

36 CHAPTER 1 INTERVIEW QUESTIONS AND ANSWERS
71. How does FI-MM integration take place? Please explain in detail.
FI-MM integration is how the G/L account will be updated when you are carrying
an inventory-related transaction. For convenience, you may divide the process into
three areas: (1) Organization structure dependent, (2) material master dependent,
and (3) transaction dependent. Account determination will be carried out depending
upon these three factors.
Organization structure dependent:
■ Valuation level — It is an organization structure, which determines at which level
valuation will be done for material. Valuation can be done at plant level or
company code level. Valuation must be at plant level if you want to use the
application component PP or Costing, or if the system is an SAP Retail system.
The decision you make is valid for the entire client. It is recommended that you
set material valuation at plant level.
■ Valuation area — The valuation area is a component of valuation level. Suppose
you have created the valuation level at the plant level and there are several
plants at the company code level; each plant is a valuation area for the purpose
of inventory.
■ Valuation grouping code — The valuation grouping code is a set of valuation areas
that are grouped together for the purposes of accounting. Through the account
determination process, it will be related to the COA. The valuation grouping
code makes it easier to set automatic account determination. Within the COA,
you assign the same valuation grouping code to the valuation areas you want
to assign to the same account. Valuation grouping codes either reflect a fine
distinction within a COA or correspond to a COA. Within a COA, you can use
the valuation grouping code.
Material master dependent:
■ Valuation class —This is the assignment of a material to a group of G/L accounts.
Along with other factors, the valuation class determines the G/L accounts that
are updated as a result of valuation-relevant transactions or events, such as a
goods movement. The valuation class makes it possible to:
■ Post stock values of materials of the same material type to different G/L
accounts
■ Post stock values of materials of different material types to the same G/L
account