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Function documentationAssigning Controlling Areas and Company Codes


The company code assignment to the controlling area must be made according to the processes your company has in logistics and accounting. The organizational environment is also very important. It is difficult or at best, time-consuming to change the 1:1 or 1:n relationsip between the controlling area and company code after the decision and the assignment have already been made.

The company code and controlling area organizational units can be combined in a number of ways. Using these combinations you can represent organizations with different structures.

  • One Controlling Area is Assigned to One Company Code

    In this example, the financial accounting and cost accounting views of the organization are identical.

  • Multiple Company Codes Assigned to One Controlling Area

    This example is Cross-Company Code Cost Accounting. Cost accounting is carried out in multiple company codes in one controlling area. All cost-accounting relevant data is collected in one controlling area and can be used for allocations and evaluations. In this case, the external and internal accounting perspectives differ from each other.

    For example, this method can be used if the organization contains a number of independent subsidiaries using global managerial accounting. Cross-company code cost accounting gives you the advantage of using internal allocations across company code boundaries.

Note Note

If you assign more than one company code to one controlling area, then you need to note the following:

  • You need to use a consistent chart of accounts

    You need to treat each cost element (in all company codes) in the same way (for example, as a primary cost element, or as an accrual cost element).

    In Financial Accounting, you can also use country-specific charts of accounts.

  • The operative fiscal year variants in the company codes must match the fiscal year variants in the controlling area.

  • You should execute period-end closing in Controlling for all company codes at the same time. Separate period-end closing for each company code would be too time-consuming.

    You can only execute period-end closing for a shared controlling area once closing is complete in Financial Accounting.

  • If you wish to calculate plan prices automatically, you need to wait until planning is complete.

  • The system only posts reconciliation postings across company codes without tax, which means that it cannot automatically create invoices.

    For tax reasons, cost flows (that are cross-company code) in Controlling can only be passed onto Financial Accounting if the company codes form an integrated company with sales tax.

  • If you wish to prevent cross-company code postings in Controlling, then you need to create a detailed authorization concept.

  • Retrospectively excluding a company code in another SAP system or client, requires more time and effort than in cost accounting by company code.

  • If you only use one controlling area, you can only use one operating concern.

  • You can only display profit center allocations in a controlling area.

  • You can only use transfer prices within a controlling area.

End of the note.

You need to take the following into consideration when deciding on the controlling area – company code assignment:

  • It is currently not possible to make CO allocations across controlling areas.

    However, if you then create a controlling area with more than one assigned company code so that you can use all the functions in Controlling, you may be causing a significant amount of extra work. Therefore, check to see if you really need a 1:n relationship and whether the extra work it would create is acceptable.

Recommendation Recommendation

SAP recommends a 1:n relationship between controlling area and company code for the following situations:

  • Cross-company code transactions that MUST be processed in a controlling area, for example, production in an associate plant, special cases of intercompany processing.

  • Cross-company code CO postings that can be displayed in the reconciliation ledger, such as assessments, capitalization of internal activity in Asset Accounting, activity allocation.

  • Representation of group costing

  • Use of Profit Center Accounting and transfer prices

  • Multilevel Product Cost Management across company codes

End of the recommendation.

Recommendation Recommendation

SAP recommends a 1:1 relationship between controlling area and company code for the following situations:

  • Consolidated analysis of settled transactions across company codes in Profitability Analysis (CO-PA) In this situation, you assign more than one controlling area to an operating concern

  • Representation of intercompany processes, whereby producing and delivering plant are the same.

End of the recommendation.


  1. To assign one or more company codes to a controlling area, go to the Implementation Guide (IMG) and choose Start of the navigation path Controlling Next navigation step Organization Next navigation step Maintain Controlling Area End of the navigation path.

  2. To assign company codes to an existing controlling area, select a controlling area.

  3. Choose Assign company code(s).

  4. Choose New entries.

  5. Enter the company code(s) that you want to assign to the selected controlling area.

Note Note

The company code(s) must be fully maintained before you can assign them to a controlling area.

End of the note.