Cost element category

 Use

The cost element category determines which cost elements can be used for which business transactions. The R/3 System distinguishes between:

• Primary cost element categories

• Secondary cost element categories

Primary Cost Element Categories

You can use the following cost element categories for primary cost elements:

• 01: Primary costs / cost-reducing revenues

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

Cost-reducing revenues are revenues that are to be handled in CO similarly to overhead costs, and which reduce the prices of an activity type or the costs to be assessed. This is the case, for example, with rent revenues, which reduce the room costs to be assessed. Cash dis_countamounts and exchange rate amounts are also cost-reducing revenues.

Note:

In contrast to revenues of cost element category 11, cost-reducing revenues in the CO module are typically assigned to cost centers. Note that when you use Profitability Analysis (CO-PA, costing-based) these cost-reducing revenues can only be transferred to Profitability Analysis during secondary allocations and not during invoicing.

• 03: Accrual Calculation Using the Percentage Method

You can only use this cost element category duringaccrual calculation in Cost Center Accounting (component CO-OM-CCA) when you are using the percentage method. You can post directly from FI to take ac_countof the actual costs incurred. The system also uses cost elements of this category to post the accrual amounts within Cost Center Accounting CO-OM-CCA.

If you do take actual costs into ac_count(say, for additional costs), create cost elements of this category in Controlling (CO) only. The ac_countmust be defined in the_chart of accounts, but you do not need to create the general ledger ac_countin FI.

• 04: Accrual Calculation Using the Target=Actual Method

Used in Cost Center Accounting (CO-OM-CCA) only foraccrual calculation when you are using the target=actual method. You can post costs directly from FI to register actual costs incurred. At the same time, the system uses this category of cost element to post accrual cost amounts within Cost Center Accounting CO-OM-CCA.

If you do take actual costs into ac_count(say, for additional costs), create cost elements of this category in Controlling (CO) only. The ac_countmust be defined in the_chart of accounts, but you do not need to create the general ledger ac_countin FI.

• 11: Revenues

Used to post revenues. These revenues are generally posted during make-to-stock-production directly into the operating profit, or with make-to-order-production to the sales order.

In Controlling (CO) revenues are displayed with negative +/- sign. An exception to this is Profitability Accounting  (CO-PA, costing-based), in which all values, including revenues, are displayed with a positive +/- sign.

Caution:

If you post revenues to cost centers, the values are displayed as statistics only (for information purposes). This means:

• • You can repost revenues to other cost centers to correct postings, but other allocation is not possible.

• • Revenues are not taken into ac_countduring activity price iteration and are therefore not included in activity allocation prices.

Note:

Revenues are generally defined as cost element category 11. This enables the integrated transfer of billing documents to CO-PA. An exception to this rule is cost-effecting revenue. See the section "Primary Costs / Cost-Reducing Revenues".

Example

• 12: Sales Deductions

Used to post deductible items (sales adjustments, sales corrections) such as discounts and rebates. Certain deductible items (freight_charged separately in the invoice, surcharges for small quantities, special orders) are not classified as sales deductions, but as revenue elements.

You can use this category in the same manner as revenue elements (category 11). Values on cost centers are displayed as statistical only.

• 22: External Settlement

Used to settle order costs, project costs, or cost object costs to objects outside of CO. These objects could be assets (Asset Management), materials (Materials Management), or general ledger accounts (Financial Accounting). The R/3 System creates an accounting document when the costs are settled.

Cost elements of this category cannot be used for settlement within CO (cost centers, orders, projects, and so on). Use secondary cost element category 21 for this purpose. The system does not create an accounting document when costs are settled within CO.

• 90: Cost Elements for Balance Sheet Accounts in FI

Automatically assigned when you create cost elements in CO whose general ledger accounts in FI are asset reconciliation accounts (special balance sheet accounts), not income statement accounts. You cannot change this category in CO_master data maintenance.

FI does not require CO ac_countassignments to cost elements of category

90. However, if you enter an ac_countassignment, it is only recorded statistically for true objects.

Category 90 cost elements enable you to check the budget of an order or project when you acquire fixed assets that can be directly capitalized. To do this, enter the capital investment order or the WBS element in the corresponding field of the asset_master data. Asset Management (AM) ensures that the specified order or WBS element is automatically entered in the document during the asset acquisition.

In CO the order or WBS element is debited statistically. This statistical debiting is checked by the system using the budget during availability control.

Secondary Cost Element Categories

The following categories exist for secondary cost elements:

• 21: Internal Settlement

Used to settle order costs or project costs to objects in Controlling (CO), such as orders, profitability segments, cost centers, and projects.

Cost elements of this category cannot be used for settlement to objects outside of CO (assets, materials, general ledger accounts, and so on). Use primary cost element category 22 for this purpose.

• 31: Order/Project Results Analysis

Used to store results analysis data from order/project results analysis on the order/project.

• 41: Overhead

Used to allocate overhead costs from cost centers to orders. Thisoverhead rate can be material, sales, or administrative costs .

• 42: Assessment

Used to allocate costs duringassessment.

• 43: Internal Activity Allocation

Used to allocate costs duringinternal activity allocation and for allocating process costs.

• 50: Incoming Orders: Sales Revenue

Used for sales revenues fromsales orders with incoming orders in the current period of the project-related incoming orders.

• 51: Incoming Orders: Other Revenues

Used for other revenues, such as imputed interest fromsales orders with incoming orders in the current period of the project-related incoming orders.

• 52: Incoming Orders: Costs

Used for the costs arising fromsales orders with incoming orders in the current period of the project-related incoming orders.

• 61: Earned Value

Used for earned values fromearned value analysis in the project system.