Controlling Area 


Organizational unit in an organization that represents a closed system used for cost accounting purposes. A controlling area may contain one or more company codes, which can operate in different currencies, if required. The company codes within a controlling area must all use the same operational chart of accounts.

All internal allocation transactions refer only to objects from the same controlling area.


Internal business transactions are portrayed in the controlling area. Primary costs are transferred from external accounting and classified according to managerial accounting perspectives. If the primary costs are direct costs, then they are assigned to cost objects. If they are overhead costs, then they are assigned to cost centers or overhead cost orders. The system then allocates them using internal allocation techniques, according to their source.

When you create master data, the system always assigns the Controlling objects to a controlling area and a company code.

The level of detail provided by the Controlling component enables you to track specific information for cost monitoring, business decisions and sales control. For example, the Controlling component contains subdivisions such as cost centers and internal orders in addition to accounts.

See also:

Assigning Controlling Areas and Company Codes

Assigning Controlling Areas and Plants.