The valuation of a material is done at the Valuation Area, which can either be at the Company Code level or the Plant level. The level at which the valuation needs to happen is defined in the customizing. Note that once it is defined, you will not be able to change it later!

When the valuation is at the Company Code level, then the valuation of a material is uniform across the plants attached to that Company Code. On the other hand, if the valuation is at the plant level, then the value of the material is plant specific and will vary from one plant to another. If you are using PP (Production Planning)/MRP in your company, then the valuation has to be at the plant level.

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