Definition: cost element accounting

Controlling (CO)
A component of Controlling (CO) that collects and summarizes postings that arise
within CO in a reconciliation ledger.
Cross-company and across business area postings are passed on to Financial Accou
nting. You can also create cost analyses in the CO applications.
Cost Center Accounting
This section describes the user-specific default settings to be made in Cost Cen
ter Accounting (CCA). The structure gives you an idea of the configuration seque
nce.
Further notes
For more information on the IMG for "Cost Center Accounting", see the SAP Librar
y under Financials -> CO Controlling -> Cost Center Accounting under the topics:
Cost Center Accounting Master Data
Cost Center Planning
Actual Cost Calculation and Transaction-Based Allocations
Funds Commitment
Period-End Closing
Cost Center Accounting Information System
Cost Elements
In the SAP system, you must manually activate automatic creation of cost element
s for G/L accounts.
Cost Element Accounting, Cost Center Accounting, and Order Controlling are close
ly linked together in the SAP System. Every posting to a cost element account is
assigned to an object in cost accounting.
Note the following differentiation when you create a cost element:
Primary cost element
You can create a primary cost element, only after you indicate it as a G/L accou
nt in the chart of accounts, and create it as a G/L account in Financial Account
ing.
A primary cost element must have a corresponding account in Financial Accounting
. When you create a cost element, the SAP System checks if a corresponding accou
nt was created in Financial Accounting.
Secondary cost element
A secondary cost element is used only in cost accounting, and may not be created
in Financial Accounting.
The cost element category has a technical control function, which determines whe
ther a cost element can be posted to directly or indirectly.
Direct posting
You post an amount to each account, specifying the account number.
You can make direct postings to all primary cost elements.
Indirect posting
The SAP System always determines the account during the posting transaction. You
cannot enter the account number during the posting transaction.
You can only make indirect postings to secondary cost elements.