Valuation type &1 does not exist for material &2 in plant &3

What causes this issue?

Material <LS>&V2&</> is subject to split valuation in plant <LS>&V3&
</>. You therefore have to assign an existing valuation type to every
batch of this material in plant <LS>&V3&</>. However, the valuation
type you entered <LS>&V1&</> does not exist for material <LS>&V2&</> in
plant <LS>&V3&</>.

The system issues an error message and will not allow you to continue with this transaction until the error is resolved.

How to fix this error?

Create the valuation type <LS>&V1&</> for material <LS>&V2&</> in plant
<LS>&V3&</> before you create batches for this material.

Error message extract from SAP system. Copyright SAP SE.