Standard Cost vs Moving Average Cost in SAP BYD

Small matrix to help understand the difference between the standard and moving average cost in BYD:

 
Standard Cost
Moving Average
Inventory Cost
Predetermined value that remains constant until changed manually
Average of current inventory value and all receipts of material into inventory
Goods Receipts
No effect on inventory cost
Recalculate inventory cost
Accounting for Differences
Differences resulting from business transactions and clearing runs are posted to difference accounts
Differences resulting from business transactions and clearing runs are allocated to inventory

Accounting for Differences means that when You for example post Goods Receipt for 100 and invoice comes for 120 then if You have Standard Cost as valuation method you will get the 120-100=20 difference to Difference account in accounting and if you have Moving Average then the difference of 20 will be allocated to inventory(material).

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