Settlement Rules for Cost Object Hierarchies (SAP Library - Cost Object Controlling (CO-PC-OBJ))

Settlement Rules for Cost Object Hierarchies

A cost object hierarchy consists of the following elements:

Cost object nodes

Single objects assigned to the lowest nodes of the hierarchy, such as a material/plant combination and product cost collectors and manufacturing orders assigned through this combination.

The costs for the cost object nodes and the assigned orders are settled when you perform periodic settlement.

Note

Both the settlement rules for the cost object nodes in the hierarchy and the settlement rules for the orders assigned to the hierarchy must specify periodic settlement (see also: Settlement in Product Cost by Order or Period).

Settlement Receivers

At the end of the period, the costs that were assigned directly to the cost object nodes are either:

First distributed to the assigned single objects and then settled to Financial Accounting (FI) (price difference account with S price control, material stock account with V price control) and possibly a profitability segment in Profitability Analysis (CO-PA) (see also: Period-End Closing for Cost Object Hierarchies with Distribution) or

Dynamically summarized to the highest cost object node under which a cost element was posted, together with the assigned single objects, and

First settled to the highest cost object node and then to a price difference account in FI

This type of settlement uses material account determination.

SAP recommends this type of settlement if you do not want to perform distribution.

From each cost object node, price differences are settled to FI.

This type of settlement uses manual account assignment.

Procedures for Creating Settlement Rules

The settlement rules for cost object hierarchies without distribution can be created using two different procedures. You control which procedure is active in Customizing for Product Cost by Period under Cost Object Hierarchies ® Define Cost Object Categories for Cost Object Hierarchies.

Settlement through material account determination

Settlement with manual account assignment

Note that if you are using cost object hierarchies, the order balance will usually show a shortage because some costs for the materials being produced were entered at the level of the hierarchy, while the balance of individual cost object nodes will show a surplus.

Note

For materials with price control indicator S, the moving average price updated for statistical purposes during settlement.

This function is not active for materials that are assigned to a cost object hierarchy.

See also:

For detailed information on settling cost object hierarchies, refer to the IMG for Product Cost Controlling in Cost Object Controlling under Product Cost by Period ® Cost Object Hierarchies ® Define Cost Object Categories for Cost Object Hierarchies.

For information on processing cost object hierarchies in the period-end closing process, refer to the following sections:

Period-End Closing for Cost Object Hierarchies Without Distribution

Period-End Closing for Cost Object Hierarchies with Distribution