BOM calculations that use cost records within a single specified costing version employ a fallback principle of none. However, several situations can benefit from BOM calculations that employ a fallback principle of another costing version or of active cost records. The fallback principle indicates the alternative source of cost data when it does not exist within the specified costing version. The following situations illustrate two uses of the fallback principle:

• Two-version approach to standard cost updates - A costing version can contain the incremental changes to standard costs, such as pending cost records that represent new items or cost changes. In this situation, the fallback principle can identify the use of the active standard costs that are contained within other costing versions.

• Simulating the impact of cost changes with planned costs - A costing version for planned costs can contain incremental changes for simulation purposes, such as pending cost records that represent the simulated cost changes to items, cost categories, and indirect cost calculation formulas. In this situation, the fallback principle can identify the use of the active standard costs that are contained within other costing versions.