Reconciliation of COPA and Financials - SAP

Hi,

After having activated Material Ledger/Actual Costing, first thing we need to verify is 'whether results in financials and COPA are reconcilable or not.
As in standard Costing there is no way to reconcile FI & COPA as COGS is built on Standard Cost in COPA, while in FI, we have Raw/Packing movements on moving average.
Secondly, in Standard Costing, variances are not segregated for 'Inventory' and 'Consumption', rather complete variance is shown against 'Consumption Only', i.e. Sale.
Thirdly, Price of Finished Goods does not carry effect of across period changes, rather than, COGS of all sales is transferred from current active standard cost estimate, that makes it technically impossible to reconcile both FI & COPA.
But after activation of Material Ledger; this is possible, however we need to make sure of couple of things:
First, we should know the reconciling items:

Rule of thumb is, any thing (cost/expense) that is part of 'Production Process' or made subsequently (via allocation or assessment) part of 'Production Process' is taken care of while preparation of Actual Cost Component. 

Any cost/expense other than that is to be taken as 'reconciling item' or difference item(s), like:

• Revaluation of Finished/Semi Finished Goods: Since this cost is charged directly to cost centers (usually), never becomes part of actual cost component.
• Other examples may be 'Price Differences captured during stock transfers or LIV (invoices)', 
• or there may be amount not made part of allocation/assessment cycle, eventually will not become part of 'Actual Overhead Price', so will not flow to production process.
• or amount allocated to a production cost center, where no production activity was performed, such cost will never become part of production process

Since above reconciling items are actually expenses of current period, so we should take these to COPA via allocation cycles. (just a suggestion only)