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Written by Suzanne Reid Published by Klee Associates, Inc.
Copyright Klee Associates, Inc., 2009
Unit 3: Cost Element Accounting
This unit covers the following: A further discussion of Primary and Secondary Cost Elements, including a more defined list of rules and a breakdown of the categories assigned to Primary and Secondary Cost Elements Configuration of Field Statuses Manual reposting of values in CO Cost Element Grouping Reporting Exercises that will reinforce the concepts explained.
The primary focus of this unit is the use of Primary and Secondary Cost elements. Use of these elements will be discussed further in later Units as they relate to Cost Center Accounting, Profit Center Accounting, and Internal Order Accounting.
SAP Controlling ECC 6.0
SAPtips Sample Controlling Cost Element Accounting
An example of this would be the allocation of electricity. the bills are received from the electric company that services the corporate offices of company 3000. the Primary Cost Elements carry the values from FI into different modules depending on the category or classification assigned to the G/L account. In this example. The AP department posts a financial transaction that debits Utility Expense for Cost center 2100. at the end of the month the value in cost center 2100 is allocated to the departmental cost centers based upon square footage using Secondary Cost Element 990000. Secondary Cost Elements move data around within CO and have NO impact on the General ledger. As shown below. One way of looking at this is how data flows into SAP and how it moves within CO.Unit 3: Cost Element Accounting Klee Associates. The result is that the costs posted to the budgets now reflect an overhead cost. Cost Elements in SAP are either Primary or Secondary. The key to differentiating the two is how and when they are used. Primary Cost Elements bring the data (financial postings) into SAP. Overview As noted in Unit #1. As shown below. 05/04/09 SAP Controlling ECC 6. 2 Rev. which is used as a holding place for HQ expenses. PCA receives the posting because of that relationship and not directly from the cost element.0 . Inc. It is important to note that cost elements with a category of “01” are considered an expense and post to a cost center. The value will also appear in PCA because each cost center is tied to a profit center.
SAP Controlling ECC 6. Inc. Enter the document number and click to see the document details. 05/04/09 3 . you can select your personal line layout. Click to the left of the CO document number to see the details.0 Rev. 1. Unit 3: Cost Element Accounting Demonstration Overview The objective of this Demo is to reveal the details of an Accounts Payable (AP) Travel Expense Reimbursement Invoice in Cost Element Controlling.Klee Associates. Display Actual Cost Documents Transaction: KSB5 Menu Path: Accounting Controlling Cost Element Accounting Information System Reports for Cost and Revenue Element Accounting Document Display Controlling Documents: Actual Costs Or Menu Path: Accounting Controlling Cost Element Accounting Information System Reports for Cost and Revenue Element Accounting (New) Document Display Controlling Documents: Actual Costs Data for Demo: Field Document Number Value 0200093541 Note: Prior to executing the document.
Inc.0 .Unit 3: Cost Element Accounting Klee Associates. Selet the text Val/COArea Crcy header and Click the document. to see the total amount of 4 Rev. 05/04/09 SAP Controlling ECC 6.
if necessary. If it does. then postings to the “Other Expenses” account are not relevant and it should not be created as a cost element. how it is used. Examples of this would be your Core COGS or WIP Offset account. Can be created automatically. NOT every P&L account will have a cost element association. Inc. it is important to understand when it is required. Unit 3: Cost Element Accounting Master Data Primary Cost Elements As shown below. expense. Must have a 1:1 relationship with a P&L account within the General Ledger. SAP Controlling ECC 6.0 Rev. Primary Cost Elements exist in both FI and CO. Another example relates to an “Other/Miscellaneous Expense account”. Represents revenue. or sales deductions. but it is not recommended for this use. depending on two things. If your company has implemented CO-PA and is using it for Gross Margin calculations. then it should not be created as a cost element. Once a category is assigned and you have posted to the cost element. Its purpose is to “move” data into CO. With the exception of revenue and expense accounts. Setup and Use To ensure that Primary Cost Elements perform in the manner you intend. it depends on whether or not the account in question fully describes its purpose. In FI they are called “General Ledger Accounts”. and the setup in detail. the category cannot be changed. 05/04/09 5 .Klee Associates. the G/L account and the category you assign to it. Primary cost elements can be used to move data within CO – under certain situations.
Inc. it will be necessary to set the cost element to begin on a prior date. Elements classified within this category will post to Profit Centers and/or a CO-PA segments. This master data object is NOT company code specific. but CANNOT post to a Cost Center. 12: Sales Deductions This category is assigned to Primary Cost Elements that are used to reflect adjustments on a billing document. There are three Primary Cost Elements categories that are always used. Used for postings from FI (Salaries or Travel expenses) or MM (purchased supplies). The end date is generally 12/31/9999. Cost-reducing revenues. Elements classified within this category will post to Profit Centers and/or a CO-PA segments. or a charge for a special order (such as a specific configuration of an item). Also included in this category are Sales “Deductions” such as freight (if it is listed separately on the invoice). The difference between categories 11 6 Rev. A company generally sets up Primary Cost Elements to begin on the first day of the fiscal year you go live. if you have implemented Costing Based CO-PA and want these postings to move into CO-PA. you have to use a secondary cost element. that change will apply to postings within each company code. unless you know you will only be using the cost element for a limited period of time. or a quantity surcharge when a customer orders less than the minimum. 05/04/09 SAP Controlling ECC 6. These postings generally post to a cost center or an internal order. Categories The category assigned to a cost center determines which other CO elements can receive the value of the posting. Specifically they relate to a discounted sale or rebates. and you then associate a cost element with an existing G/L account. Because these charges do not occur during the SD invoice process. When an organization operates multiple company codes that are assigned to one controlling area AND which share the same Chart of Accounts.Unit 3: Cost Element Accounting Klee Associates. They are as follows: 01: Primary costs/cost-reducing revenues Costs. An example of this would be a posting for exchange rate differences or a cash discount posting.0 . It is important to identify and mitigate any issues prior to making the change. If you are going live and loading history. It is time dependent. 11: Revenues This category is assigned to a Primary cost element relevant to revenue postings that are a result of SD (Sales & Distribution) billing documents.
1. Change Cost Element – Primary Transaction: KA02 Menu Path: Accounting Controlling Cost Element Accounting Master Data Cost Element Individual Processing Change Data for Demo: Field Cost Element Value 474212 Enter the Cost Element number and click . 05/04/09 7 .0 Rev. 04: Accrual Calculation Using the Target=Actual Method Only used with Primary Cost Element accruals. 22: Internal Cost Allocation Used for settling costs from an order to a G/L account. Inc. 90: Cost Elements for Balance Sheet Accounts in FI Only used in a statistical manner relative to Asset accounts. Most companies accrue within FI and allow the postings to flow thru into CO. SAP Controlling ECC 6. The following categories are available for Primary Cost Elements but are not generally assigned. Unit 3: Cost Element Accounting and 12 is that category 12 allows for statistical posting to cost centers. 03: Accrual Calculation Using the Percentage Method Only used with Primary Cost Element accruals.Klee Associates. Demonstration Overview The objective of this Demo is to refresh the Cost Element Accounting master data. Most companies accrue within FI and allow the postings to flow thru into CO.
Change the text in fields Name and Description to “Travel – Airfare”. The system will display a message at the bottom of the screen confirming the change. 8 Rev. Click . 05/04/09 SAP Controlling ECC 6. Inc.0 .Unit 3: Cost Element Accounting Klee Associates.
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