Cost Element Categories 

Definition

The

cost element category has a technical control function. It determines whether you can post to a cost element directly or indirectly.

Direct posting means: You post a fixed amount to an account by specifying the account number. You can post directly to all

primary cost elements.

Indirect posting means: The R/3 System determines the account automatically at the time of posting You can not enter the account number with the posting transaction. You can only post indirectly to

secondary cost elements.

Use

The following cost element categories can be used for primary cost elements:

  • 01: Primary cost element

This category of cost element can be debited with all primary postings, for example, in Financial Accounting (FI) or Materials Management (MM).

  • 03: Accrual cost element / percentage method

This cost element category may only be used in Cost Center Accounting (CO-OM-CCA) with the percentage method of

accrual calculation. You can post directly in Financial Accounting to register when actual costs are incurred. The R/3 System uses this cost element category to post accrued costs in Cost Center Accounting.

If you do not want to consider actual costs (for example, additional costs), you can create this category of cost elements exclusively in Controlling. You define the account in the chart of accounts, but you do not need to create the account as a G/L account in Financial Accounting.

  • 04: Accrual cost element / target=actual method

This cost element category may be used only in the target=actual method of accrual calculation with Cost Center Accounting. You can post the cost directly from Financial Accounting to register when actual costs are incurred. The R/3 System uses this cost element category to post accrued costs in Cost Center Accounting.

If you do not want to consider actual costs (for example, additional costs), you can create this category of cost elements exclusively in Controlling. You define the account in the chart of accounts, but you do not need to create the account as a G/L account in Financial Accounting.

  • 11: Revenue elements

The cost element category is used to post revenues.

Revenues are displayed in Controlling with a negative sign (-). An exception to this is Profitability Analysis (CO-PA). In CO-PA revenues are displayed with a positive sign (+).

If you post revenues to cost centers, the values appear as statistical information only. This means that you can repost revenues for posting adjustments to other cost centers, but another allocation is not possible. Revenues are ignored in iterative activity price calculation and are therefore not included in the allocation price of an activity type.

Before you define a revenue element, check whether the posting is in the form of a credit memo whose costs you want to take into account. If this is the case, use cost element category 01 (primary cost elements), not category 11 (revenue elements). These credit memos appear as negative costs and are processed in the same way as all other cost elements of category 01.

Example: Cost centers

Cost center with revenue posting

Cost center with credit entry

Costs

10,000

Costs

10,000

Revenues

-5,000

Credit memo

-5,000

Cost effective

10,000

Cost effective

5,000

 

  • 12: Sales deduction

Cost elements of this category are used to post sales deductions. Sales deductions (reductions, adjustments, corrections) are adjustment or deduction postings of revenues, such as discounts and rebates. Certain revenues, such as freight charged separately in the invoice, surcharges for small quantities or special orders, are not classified as sales deductions. Such value items are defined as revenue elements.

The account assignment options for cost elements of this category are the same as for cost element category 11 (revenue elements). Values on cost centers are displayed statistically only (as for revenues).

  • 22: External settlement

Cost elements of this category are used to

settle order, project, or cost object costs to objects outside of Controlling. CO external objects can be, for example, assets (AM), materials (MM) or G/L accounts (FI). The R/3 System always creates an accounting document when you settle to external objects.

You cannot use this cost element category for settlement to objects within Controlling (such as cost centers, orders, or projects). Use secondary cost element category 21 for internal settlement. In contrast to settlement to CO-external objects, no accounting documents are generated by the R/3 System for settlement to CO internal objects as the value flow occurs exclusively within CO.

  • 90: Cost element for balance sheet accounts in Financial Accounting

Cost elements of this category are generated automatically when you create cost elements in Controlling that have asset reconciliation accounts, that is, special balance sheet accounts, as corresponding general ledger accounts in Financial Accounting.

You cannot change this cost element category in CO master data maintenance.

FI does not require CO account assignments of category 90. However, if you do enter a CO account assignment, this is only updated statistically even for true CO objects.

Cost elements of category 90 enable you to control the costs of an order or project budget during the acquisition of fixed assets that can be directly capitalized. To achieve this you enter a capital investment order or work breakdown structure (WBS) element in the appropriate field in the asset master data. The Asset Management (AM) component ensures that when the asset is acquired, the order or WBS element is automatically entered in the document.

In Controlling, orders and WBS elements are debited statistically. This statistical debit is checked with the budget during availability control.

The R/3 System does not support other uses of category 90 cost elements at present. You cannot plan using these cost elements.

 

The following cost element categories can be used for secondary cost elements:

  • 21: Internal settlement

This cost element category is used to settle (further allocate) order or project costs to Controlling (CO) internal objects. CO-internal objects are, for example, orders, profitability segments, cost centers and projects.

You cannot use this cost element category for settlement to CO-external objects (such as fixed assets, materials, or G/L accounts). Use primary cost element category 22 for external settlement.

  • 31: Order/project results analysis

This cost element category is used to save the order/project results analysis data on the relevant order/project.

  • 41: Overhead rates

This cost element category is used to further allocate

overhead costs using overhead rates from cost centers to orders.
  • 42: Assessment

This cost element category is used to allocate costs using the assessment method.

  • 43: Allocation of activities/processes

This cost element category is used during

internal activity allocation and in Activity-Based Costing.
  • 50: Incoming orders: sales revenues

This cost element category is used for sales revenues from sales orders with incoming orders in the current period of the project-related incoming order.

  • 51: Incoming orders: other revenues

This cost element category is used for other revenues, such as imputed interest, from sales orders with incoming orders in the current period of the project-related incoming order.

  • 52: Incoming orders: costs

This cost element category is used for costs from sales orders with incoming orders in the current period of the project-related incoming order.

  • 61: Earned values

This cost element category is used for the earned values from the earned value analysis in Project System.