Controlling (CO)Organization in Controlling

Operating ConcernCompany CodeControlling AreaPlantBusiness AreaProfit CenterCurrenciesNumber RangeBusiness Transactions in ControllingChart of AccountsFiscal Year Variant

Controlling Methods

Organization in Controlling Use

Using the SAP system, you can define each of the organizational units in your organization from the perspective of an SAP application component.

In the Financial Accounting (FI) component, you can define the organizational units for accounting in the Controlling (CO) component under controlling aspects.

The SAP system has direct links between internal and external accounting. This means that FI and CO organizational units are related.

Integration

You assign organizational units from the Financial Accounting component to the units in the Controlling component. This enables you to transfer postings relevant to cost accounting on to Controlling.

The following sections describe the organizational units in other components, which have cross-component relationships to units in Controlling. You cannot define these organizational units separately from one another.

Operating Concern Definition

An operating concern represents an organizational unit in your company for which the sales market has a uniform structure. It is the valuation level for Profitability Analysis (CO-PA).

Structure

You structure an operating concern by selecting

Characteristics

You should ask yourself at what level your analyses should be performed, such as the sales organization, region, product, or customer level.

and value fields (only in costing-based Profitability Analysis)

You should ask yourself which values and key figures should be analyzed, such as revenues, sales deductions, costs, or quantities.

as well as G/L accounts (only in account-based Profitability Analysis)

This structure may vary greatly from one company to the next. For example, the structure of total production costs in a manufacturing company differs from that in a wholesale or retail company. Consequently, you need to "model" CO-PA in Customizing by defining the characteristics and value fields that you want to analyze.

The system then generates the necessary

database tables for CO-PA transaction data and access programs based on how you defined your operating concern.

See also:

For information on the procedure for defining an operating concern, choose Structures Define Operating Concern in Customizing.

Characteristics for Profitability Segments

All the characteristics in the operating concern are used in the line item. However, you can restrict the characteristics for a

profitability segment that forms the basis for valuation. This is because it is unnecessary and impractical for a profitability segment to use characteristics that are almost always populated and each has a different value. You should deactivate such characteristics when creating a profitability segment. Otherwise the data volume of the profitability segments is too large and hampers system performance.

One characteristic that should not be used in profitability segments is the sales order in repetitive manufacturing.

You specify in Customizing which characteristics are to belong in which profitability segments. For more information about this function, see

Define Profitability Segments Characteristics (Segment-Level Characteristics).

Company Code Definition

The smallest organizational unit for which a complete self-contained set of accounts can be drawn up for external reporting. This involves recording all relevant transactions and generating all supporting documents for financial statements, such as balance sheets and profit and loss statements.

Use: You can set up more than one company code for each

client. This enables you to manage the accounts for more than one independent company at the same time. However, you need to set up at least one company code.

A legally independent company is normally only represented by one company code in the SAP system. You can, however, also use a company code to represent an operation that is not independent according to trade law. This is required, for example, if this operation is in another country and must use the corresponding country currency and must meet the local tax requirements.

In financial accounting, business transactions are always entered on the company code level and processed further. The costs are also managed on the company code level. By using internal organizational structures, it is possible to divide this up even further. All company-specific specifications are made on the company code level.

Controlling Area Definition

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.

Use

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.

Processing Controlling Areas Use

You make the settings for the controlling area to show the structure of your organization from the Controlling aspect.

Prerequisites

Before creating a controlling area, you need to create the company codes and business areas (in FI) that are to be assigned.

For more information, see: Organizational Structure of Financial Accounting.

Process Flow

Define the controlling area and enter the basic data relevant to cost accounting.

1. In Customizing, choose Controlling  General Controlling Organization  Maintain Controlling Area. Activate each component in the controlling area (cost centers, order management, profitability analysis, and so on). Store additional control information, such as, which currency the system should use to update the values, and whether it should display variances. Assign one or more company codes to the controlling area.

See also:

Assigning Controlling Areas and Company Codes

You can also activate individual components in the controlling area, using the IMG for each Controlling component.

Selecting and Displaying the Current Controlling Area PrerequisitesWhen you call up the first business transaction in Controlling, you need to select a controlling area.

You cannot execute a transaction for more than one controlling area at the same time.If you are working with multiple sessions, note that changing the controlling area setting in one session affects all other sessions. It is not possible to work with different controlling areas in different sessions.Procedure  1.  Enter the controlling area in the dialog box. The system saves your entry as a user parameter so that you do not need to enter the controlling area again.

If you mainly work in the same controlling area, you can store a default value as a user parameter:·  Choose System ® User Profile ® User Parameters.·  Enter CAC as the parameter ID (for controlling area).·  Enter the required controlling area as a parameter value in the dialog box.·  Save your entries.At the next system logon, the system automatically sets the specified controlling area.  2.  You can display or change the current controlling area in any transaction in Controlling. Choose Extras ® Set CO Area.A dialog box appears displaying the current controlling area. You can overwrite it if you want.

Assigning Controlling Areas and Company Codes 

Use: 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 relationship 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 AreaThis 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.

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.

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.

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

 

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.

 

ActivitiesTo assign one or more company codes to a controlling area, go to the Implementation Guide (IMG) and choose Controlling  Organization Maintain Controlling Area.To assign company codes to an existing controlling area, select a controlling area.Choose: Assign company code(s).Choose: New entries.Enter the company code(s) that you want to assign to the selected controlling area.

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

Example: Assigning Controlling Area and Company CodeAn organization consists of two areas, production and retail. The organization manufactures automobiles and utility vehicles.

This organizational structure can be represented in the SAP system in different ways, where the company code and controlling area can be combined as follows:

One Controlling Area is Assigned to One Company Code

The automobile and utility vehicle areas are not independent accounting entities. In Financial Accounting, they are only portrayed as business areas to create internal balance sheets. This enables evaluations for both organizational areas in Financial Accounting. Joint accounting is performed for both areas. The company code (independent accounting unit) is assigned to a controlling area. Analyses can be made at any time for the automobile and utility vehicle areas, because the business area was specified in all account assignment objects in CO.

Multiple Company Codes Assigned to One Controlling Area

The automobile and utility vehicle areas are independent accounting units. Therefore, they appear in Financial Accounting (FI) as company codes. You should still carry out joint accounting for both areas. For this reason, the system represents both areas in one controlling area.If you want to analyze the Car and Utility Vehicle areas in cost accounting, then you need to include this when defining cost centers (for example, by creating separate cost center groups for the Car and Utility Vehicle areas).

Assignment of Controlling Areas and Plants Use: Each plant is assigned uniquely to a company code. As a company code is always assigned

uniquely to a controlling area, you can also easily derive the relationship from the controlling area and

plant.

Plant Definition

An organizational unit serving to subdivide an enterprise according to production, procurement, maintenance, and materials planning aspects. It is a place where either materials are produced or goods and services provided.

Use

The preferred shipping point for a plant is defined as the default shipping point, which depends on the shipping condition and the loading condition.

For the placement of materials in storage (stock put-away), a storage location is assigned to a plant. The storage location depends on the storage condition and the placement situation.

The business area that is responsible for a plant is determined as a function of the division. As a rule, a valuation area corresponds to a plant.

Structure

A plant can assume a variety of roles:

As a maintenance plant, it includes the maintenance objects that are spatially located within this plant. The maintenance tasks that are to be performed are specified within a maintenance planning plant.

As a retail or wholesale site, it makes merchandise available for distribution and sale.

A plant can be subdivided into storage locations, allowing stocks of materials to be broken down according to predefined criteria (for example, location and materials planning aspects).

A plant can be subdivided into locations and operational areas. Subdivision into locations takes geographical criteria into account, whereas subdivision into operational areas reflects responsibilities for maintenance.

Integration

All data that is valid for a particular plant, as well as for the storage locations belonging to it, is stored at plant level. This includes, for example, MRP data and forecast data.

Business Area Definition

An organizational unit in external accounting, which corresponds to a separate operational or responsibility area in the organization, and value flows recorded in Financial Accounting can be assigned to it.

UseThe business area should be treated as a separate economic unit, for which you can create an internal balance sheet and a profit and loss statement. The business area is, however, only an internal organizational unit and does not have any external impact.

You define business areas if you wish to create a balance sheet and a profit and loss statement for internal areas, in addition to company codes.

If you want to create business area balance sheets for internal reporting purposes, you must maintain the business area within Controlling as well. This means that when you create cost center master records you need to specify the business area. CO objects (such as, cost centers and internal orders) aid account assignment, as the business area can be derived from the master data records. When you post primary costs to a cost center, the system determines the business area automatically from the cost center master data. This enables the costs to be assigned to the correct business area. Therefore, you do not need to manually set the business area in the posting document, as the system does this, and thus reduces the number of incorrect assignments to a minimum.

Profit Center DefinitionA profit center is an organizational unit in accounting that reflects a management-oriented structure of the organization for the purpose of internal control.

You can analyze operating results for profit centers using either the cost-of-sales or the period accounting approach.

By calculating the fixed capital as well, you can use your profit centers as investment centers.

UseProfit Center Accounting at the profit center level is based on costs and revenues. These are assigned statistically by multiple parallel updating to all logistical activities and other allocations of relevance for a profit center.

The exchange of goods and services between profit centers can be valuated using the same valuation approach as in financial accounting or another approach (see Multiple Valuation Approaches/Transfer Prices).

StructureThe master data of a profit center includes the name of the profit center, the controlling area it is assigned to, and the profit center’s period of validity, as well as information about the person responsible for the profit center, the profit center’s assignment to a node of the standard hierarchy, and data required for communication (address, telephone number and so on).

Every profit center is assigned to the controlling area organizational unit. This assignment is necessary because Profit Center Accounting displays values in G/L accounts.

The system transfers all the data to Profit Center Accounting together with the G/L account to which the data was originally posted. You can only aggregate data that shares the following:

●  Same chart of accounts●  Same fiscal year variant●  Same currency

Time-Based Master DataLike cost centers, profit centers are valid for a specific time period. This has the following advantages:

●  No complicated activities are necessary when a new fiscal year begins.●  You can enter future changes to the master data in advance.

Profit centers are time-dependent in two ways:

●  First, you can enter a period during which actual or plan data can be posted to the profit center.●  Second, you can define time-based fields when you customize Profit Center Accounting.

Time-based fields let you change information in the profit center master record, such as the person responsible for the profit center, at a specific point in time without having to create a new profit center and without losing any information about the previous person responsible.

IntegrationEnterprise OrganizationIf you are using the enterprise organization, both profit centers and cost centers form part of it. For more information, see Enterprise Organization.

You can only use the enterprise organization to portray relatively small hierarchies. Trying to portray a larger hierarchy in the enterprise organization can lead to performance issues.The Standard HierarchyTo ensure that your data in Profit center Accounting is consistent with that in other areas, you must assign each profit center to the Standard Hierarchy.

The standard hierarchy is used in the information system, allocations, and various planning functions. You can also assign your profit centers to alternative hierarchical structures, called Profit Center Groups.

Copying Cost CentersIf the profit centers in your organization are closely linked to your cost centers, you can simply copy your cost center master data to create your profit centers. For more information on this function, see the Implementation Guide (IMG) for Profit Center Accounting, under Master Data.

Currencies DefinitionLegal means of payment in a country.

UseIn external accounting, you assign a company code currency to each company code. You can also specify one or two parallel currencies for a company code, which are recorded in the external accounting documents. Examples of parallel currencies are currencies from other organizational units (group currency, hard currency, global company currency or index-based currency).When you create a controlling area, you specify whether the controlling area currency may differ from the company code currency, and which particular currency is to be the controlling area currency.You can use the company code currency or the currency of a different organizational unit recorded as a parallel currency in the company code. You can also use a separate controlling area currency not dependent on the company code currency.Cross-company code cost accounting can therefore be performed for company codes that use values recorded in different currencies. SAP recommends that you specify a consistent parallel currency for the company codes, and use this as the controlling area currency. In this case, postings in Controlling are made that are relevant for Accounting.

Defining Currencies Purpose

In the SAP system you can post in different currencies.

PrerequisitesYou define the currencies allowed in the system and the exchange rates in Customizing under General Settings Currencies.

You must define a company code currency for each company code in FI. In addition, you can agree on one or two parallel currencies for each company code. These settings also affect Controlling.

You must define a

controlling area currency for each controlling area. You make these settings in Customizing for Controlling underGeneral Controlling  Organization  Maintain Controlling Area. The system can derive the controlling area currency from the company code currency or from the currencies of other organizational units. Or you can specify the controlling area currency yourself.

Process Flow

The system requires these definitions to check whether an entered currency is allowed and to translate the currencies during posting.

Define a currency key with long text and short text for each currency.In Customizing, choose General Settings  Currencies

 Check Currency Codes.For more information, see the SAP Library, under FI - Financial Accounting Accounts Payable or Accounts Receivable  Posting  Posting a Document in a Foreign Currency Define the number of decimal placesfor each currency, if you do not want the currency displayed in the standard format.In Customizing, choose General Settings  Currencies  Setting Decimal Places for Currencies.For more information, see the SAP Library, under FI - Financial Accounting Accounts Payable or Accounts Receivable  Posting  Posting a Document in a Foreign Currency Store the required exchange rate types.

Exchange rate types enable you to record different exchange rates valid on the same date for different purposes. The system uses exchange rate type M (= average exchange rate) for postings. You can define other exchange rate types for different planning scenarios using different exchange rates, for example.

To define exchange rate types for currency translation, see Customizing, under General Settings Currencies  Check Exchange Rate Types.

For each exchange rate type, enter a basic currency to be used for the currency translation.For more information, see the SAP Library, under FI - Financial Accounting Accounts Payable orAccounts Receivable  FI General Topics  Organizational Units and Basic Settings -> Currencies Exchange Rates  Exchange Rate Type

Enter translation ratios (for currency translation) in pairs for the required currencies, and for each exchange rate type.

In Customizing, choose General Settings  Currencies  Defining Translation Ratios for Currency Translation.

The translation ratios (such as 1:1 or 1000:1) form the basis of the exchange rates and simplify their display if there is a large difference in the currency units.

For more information, see the SAP Library, under FI - Financial Accounting Accounts Payable orAccounts Receivable  FI General Topics  Foreign Currencies  Exchange Rates  Exchange Rates  Definition of Exchange Rates

Specify exchange rates in pairs for the required currencies, and for each exchange rate type.In Customizing, choose General Settings  Currencies  Enter Exchange Rates.

Exchange rates are period-dependent and valid from the date entered. You can maintain the exchange rates at regular intervals according to your own requirements.

If you have established a basic currency for the exchange rate type, you only need to specify the translation ratios in relation to the basic currency.

For more information, see the SAP Library, under FI - Financial Accounting Accounts Payable orAccounts Receivable  FI General Topics  Foreign Currencies  Exchange Rates  Definition of Exchange Rates

Currencies in Controlling Use: You can use different currencies in the Controlling component (CO):

Features: The following currencies are valid in Controlling:Controlling area currency

The system uses this currency for cost accounting. This currency is set up when you create the controlling area. It is based on the assignment control indicator and the currency type.

Object currency

Each object in Controlling, such as cost center or internal order, may use a separate currency specified in its master data. When you create an object in CO, the SAP system defaults the currency of the company code to which the object is assigned as the object currency. You can specify a different object currency only if the controlling area currency is the same as the company code currency. There is an object currency for the sender as well as one for the receiver.

Transaction currency

Documents in Controlling are posted in the transaction currency. The transaction currency can differ from the controlling area currency and the object currency. The system automatically converts the values to the controlling area currency at the exchange rate specified.

The system always translates actual data with the average rate (exchange rate type M).

You store the exchange rate type for each currency. You can specify a different exchange rate type for planning data in the version.

All three currencies are saved in the totals records and the line items. This enables you to use the different currencies for evaluations in the information system. This is only possible if you specified that all currencies should be updated for the given controlling area (see: Maintain Controlling Area).

The transaction currency is USD, the controlling area currency is EUR, and the object currency is SFR (Swiss francs). The system converts the amounts as follows:

1.) From transaction currency to controlling area currency (USD  EUR)2.) From controlling area currency to object currency (EUR  SFR)

The following additional currencies may also appear as controlling area currencies in Controlling if you use cross-company code cost controlling:

Local Currency:

Company code currency (country currency) used for local ledgers in external accounting.

For each company code you can specify one or two parallel currencies (= second and third local currencies) which are stored in the documents and updated parallel to the local currency in the general ledger.

Group Currency:

Currency in which the group balance sheet is displayed.

You can specify it as a parallel currency (additional local currency) for a company code.

Hard Currency:

Secondary currency for countries with high inflation. You can specify it as a parallel currency (additional local currency) for a company code. You need to specify the hard currency in the detail screen for the corresponding country.

Index-Based Currency:

Country-specific, fictitious currency stipulated in certain countries with high inflation for tax returns. You can specify it as a parallel currency (additional local currency) for a company code. You need to specify the index-based currency in the detail screen for the corresponding country.

Global Company Currency:

Currency used in a corporate group. In the CO application component you can create companies to represent divisions, regions, or product groups.

You can specify it as a parallel currency (additional local currency) for a company code. You need to store the global company currency in the detail screen for the corresponding company.

For more information on defining parallel currencies, see Customizing under Financial Accounting FI Global Settings  Company Code  Parallel Currencies  Defining additional local currencies.

Example: Currencies in ControllingThe controlling area currency is EUR (euros), while the cost center currency is SFR (Swiss francs). You post two documents to the cost center: one in USD (US dollars) and one in MXN (Mexican pesos). The following line items and totals records are generated:

Specifying the Controlling Area Currency Use

You use the

controlling area currency for cost accounting. You specify the controlling area currency when defining the controlling area in Customizing for Controlling.

You can assign more than one

company code with varying currencies to a controlling area. The system can derive the controlling area currency automatically from the company code currencies or currencies of other organizational units. Or you can specify the controlling area currency yourself.

A German corporation has subsidiaries in Switzerland and the USA. The Swiss subsidiary uses the SFr (Swiss francs) currency for cost accounting purposes in its own company code. The American subsidiary uses USD. The corporation executes its cost controlling on a global basis in EUR.

Prerequisites

The controlling area currency depends on:

The assignment of company code and controlling area The currency type in the controlling area.

You can specify the assignment control indicator, and the currency type in Customizing, under: Defining the Controlling Area.

If you choose the assignment of the controlling area at the same time as the company code, then you assign one company code to a controlling area. In this case, the controlling area currency corresponds to the company code currency.

If you choose the assignment of Cross Company Code Accounting, then you can:

Assign more than one company code to the controlling area, or Specify a controlling area currency different from the company code currency.

The currency type then determines the controlling area currency.

If you use a controlling area currency, which differs from the company code currency, the system automatically records the company code currency as the object currency for the CO objects. For example, when creating a cost center, the currency of the company code to which the cost center is assigned is automatically defaulted as the object currency.

Features

Controlling Area Currency Control

Company Code-CO AreaAssignment

Currency type Controlling Area Currency

Controlling area / company code 10 Use company code currency

Cross-company code cost accounting 10 Use company code currency

Cross-company code cost accounting 20 Independent controlling area currency

Cross-company code cost accounting 30 Group currency transfer.

Cross-company code cost accounting 40 Hard currency transfer.

Cross-company code cost accounting 50 Index-based currency transfer.

Cross-company code cost accounting 60 Global company currency transfer.

 

Use Company Code Currency (Currency Type 10)

You can transfer the company code currency to the controlling area. If you assign more than one company code to the controlling area, all company codes must use the same currency. In this case any object currency can be used.

A German company owns a subsidiary in Mexico. The company code currency is MXP (Mexican pesos). The controlling area should be managed in the same way as the company code. This means that the controlling area currency is also Mexican pesos and you can define the object currency for CO objects as you wish.

Different subsidiaries of a German corporation produce balance sheets for two company codes in EUR. Joint cost controlling is executed for both subsidiaries. Use currency type 10 to specify that the company code currency is the same as the controlling area currency.

Use Group Currency (Currency Type 30)

You can use the company code currency for the controlling area if:

The assigned company code uses the group currency as a parallel currency, and The group currency is stored in the corresponding clients.

If more than one company code is assigned to the controlling area, all these company codes must use the same group currency as a parallel currency.

A German company owns a subsidiary in Mexico. The company code currency is MXP. The group currency EUR was defined and stored in the corresponding client, for external accounting. You can specify the group currency as the controlling area currency. In this case the company code currency MXP is the object currency.

A German corporation owns subsidiaries in Mexico and USA. The company code currencies are MXP and USD. The group currency EURO is the parallel currency for both company codes. You can therefore use the group currency EURO as the controlling area currency. The Controlling objects in the Mexican subsidiary must use MXP and the objects in the American subsidiary USD.

Using Hard Currency (Currency Type 40)

You can use the hard currency for the controlling area if:

The assigned company code uses the hard currency as a parallel currency, and The hard currency is stored for the country that it is to be used for.

If more than one company code is assigned to the controlling area, all company codes must use the same hard currency as a parallel currency. The company codes must be in the same country, or the countries where the subsidiaries are located must all use the same hard currency.

A German company owns a subsidiary in Mexico. The company code currency is MXP. USD is specified as the hard currency for external accounting and is stored for Mexico. The hard currency can be used as the controlling area currency. In this case the company code currency MXP is the object currency.

Using Index-Based Currency (Currency Type 50)

You can use the index-based currency for the controlling area if:

The assigned company code uses the index-based currency as a parallel currency, and The index-based currency is stored for the land that it is to be used for.

If more than one company code is assigned to the controlling area, these company codes must use the same index-based currency as a parallel currency. The company codes must all be in the same country, or the countries where their subsidiaries are located must all use the same index-based currency.

Using Global Company Currency (Currency Type 60)

You can use the global company currency for the controlling area if:

The assigned company code uses the global company currency as a parallel currency, and

The global company currency is stored for the land that it is to be used for.

If more than one company code is assigned to the controlling area, these company codes must use the same global company currency as a parallel currency. The company codes must all belong to the same company, or the companies must be managed in the same hard currency.

Other Controlling Area Currency (Currency Type 20)

You can choose any of the currencies for the controlling area, from the currencies that you defined in Customizing.

A German corporation owns subsidiaries in Mexico and USA. The company code currencies are MXP and USD. The hard currency USD is specified as a parallel currency for the company code in Mexico. USD can be chosen as the controlling area currency. The CO objects in the Mexican subsidiary must be recorded in the object currency MXP, and the CO objects in the American subsidiary must be recorded in the object currency USD.

By using the controlling area currency from the currencies of other organizational entities, you ensure that postings within Controlling appear in currencies relevant to external accounting. This is not the case if you specify any controlling area currency.

You can specify the assignment control and currency type indicators if

You redefine the controlling area, or You have not yet assigned any productive company codes to it.

Once an assigned company code is productive, the currency type cannot be changed.

Number Range DefinitionArea in which numbers are assigned that refer to business objects of the same type. Examples of objects:

  Business partners   G/L accounts   Orders   Posting documents   Materials

One or more number range intervals are specified for each number range, as well as the type of number assignment.

There are two types of number assignment:

  Internal: When saving a data record, the SAP system assigns a sequential number that lies within the corresponding number range interval.

  External: When saving a data record, either the user or an external system assigns a number. The number must lie within the corresponding number range interval.

You maintain number ranges in Customizing for Controlling under General Controlling ® Organization ® Maintain Number Ranges for Controlling Documents.UseThe system generates a document number for each business transaction. Business transactions are classified according to CO transactions.

The business transaction Direct Internal Activity Allocation belongs to the Controlling transaction Actual Activity Allocation.This means that you must assign each transaction to a number range interval. It is also possible to define multiple business transactions in one number range interval.

The Controlling component provides a large number of transactions for each controlling area.

Defining Number Ranges Purpose

The SAP system creates a numbered document for each posting in Controlling. The document numbers are unique in every controlling area as each number is only used once.

PrerequisitesYou define number ranges in Customizing under Controlling: GeneralOrganization Maintain Number Ranges for CO Documents.

You can:

Create business transaction groups Assign business transactions to business transaction groups Maintain number range intervals for individual business transaction groups Maintain number range intervals and number range statuses in the controlling area

Process Flow

You define: number ranges in two steps:

1. You create individual business transaction groups for each controlling area.

You can, for example, group all planning transactions into a business transaction group and then assign it to a number range interval.

You can also create a business transaction group for each business transaction if you require a greater level of detail for the number assignment. If this is the case, you make assignments to the number range on the business transaction level.

2. Assign the business transaction groups to number range intervals.

This enables you to combine similar or related business transactions into one number range.

If all planning transactions are grouped together, the system processes all the business transactions connected with planning in one number range.

The SAP system includes standard default assignments of business transactions to number ranges for controlling area 0001. You can copy these assignments to other controlling areas if you wish. You then only need to maintain the number ranges if you require other assignments or other number range groups.

The following graphic illustrates the steps required for defining number ranges.

Business Transactions in Controlling Use: Each component in Controlling uses specific business transactions. When activating a CO

component (you can do this successively), you must make sure that all business transactions used by the

component have been assigned to number ranges. Otherwise you will not be able to call up the business

transactions in the System.

The OKC1 transaction enables you to display all CO business transactions.

You define number ranges for each controlling area. The sample client 000 contains defaults for number ranges.

You combine transactions into transaction groups.

Create the plan and actual transactions in separate transaction groups (see also: Defining Number Ranges).

Features

Business transactions, planning

The business transactions for planning are split up as follows:

Period-Based

Business transaction Name

CPPP ABC Process Assessment: Plan

FIPA Automatic Payment Schedule

JVPL JV Planning Data Document

KAZP Plan Cost Center Accrual

KOAP Plan Settlement

KPPB Standard Cost Estimate

KSP0 Plan Splitting

KSPB Plan assessment to PA

KZPP Plan: Periodic overhead

KZRP Plan Interest Calculation

PAPL Plan Sales/Profit

RKPB Plan Periodic Reposting

RKPL Plan Indirect Activity Allocation

RKPP Primary Planning with Template

RKPQ Manual Cost Planning

RKPS Secondary Planning with Template

RKPU Plan Overhead Cost Assessment

RKPV Plan Overhead Cost Distribution

 Business Transaction-Based

RKP1 Planning Primary Costs

RKP2 Planning Activities

RKP3 Plan Secondary Costs

RKP4 Planning Statistical Key Figures

RKP5 Planning Revenue Elements

RKP6 Planning Activity-Dependent Primary Costs

RKP7 Planning Activity-Dependent Secondary Costs

RKP8 Planning Settlement Costs

RKP9 Planning Activity-Dependent Settlement Costs

RKPW

Secondary order cost planning

RKPX Activity-dependent secondary order cost planning

RKPZ Planning overhead credits

Business transactions, actual postings

The business transactions for actual postings can be classified as follows:

Period-Based Transactions

Business transaction Name

COIN CO through-posting from Financial Accounting

CPPA ABC Actual Process Assessment

JVIU JV Actual assessment

JVIV JV Actual Distribution

JVU1 JV Reposting Costs

KAMV Manual Cost Allocation

KAZI Actual Cost Center Accrual

KAZO Down payments

KGPD Distribution according to peg

KOAO Actual Settlement

KPIV Actual Distribution to Cost Objects

KSI0 Actual Split Costs

KSII Actual Price Calculation

KSOP Primary Target Cost Calculation

KSPA Assessment to CO-PA

KVAR Variance Calculation

KZPI Actual Periodic Overhead

KZRI Actual Interest Calculation

RKIB Actual Periodic Reposting

RKIL Actual Indirect Activity Allocation

RKIU Actual Overhead Assessment

RKIV Actual Overhead Distribution

RRIB Segment Adjustment: Actual Periodic Reposting

RRIU Segment Adjustment: Actual Assessment

RRIV Segment Adjustment: Actual Distribution

 

Business Transaction-Based

RKU1

Repost Costs

RKU2

Repost Revenues

RKU3

Repost CO Line Items

RKL Actual Activity Allocation

RKN Actual Non-Allocable Activities

RKLT Actual Process Allocation

RKLX Predistribution of Fixed Costs

RKS Enter Statistical Key Figures

Other Business Transactions

The remaining business transactions cannot be classified as plan or actual transactions:

Other Business Transactions

Business transaction Name

KABG Automatic Accrual Calculation

KABM Manual Accrual Calculation

KAFM Payment Data

KAUS Calculate Scrap

KEKB Unit Costing

KEKZ Unit Costing (Overhead)

KFPI Fixed Price Allocation

KFPP Fixed Price Agreement

KPPZ Standard Costing (Overhead)

KSOS Secondary Target Cost Calculation

KSWP Primary Target Cost Calculation (WIP)

KSWS Secondary Target Cost Calculation (WIP)

Chart of Accounts Definition

An organizational structure, defined using accounting principles, that records values and value flows for orderly account management.

Use

The operational chart of accounts is used by financial accounting and cost accounting. The items in a chart of accounts can be expense or revenue accounts in FI and cost or revenue elements in cost accounting.

Integration

You need to assign each Company code to a chart of accounts.

In addition, you may assign each company code to a country-specific chart of accounts. The chart of accounts and country-specific chart of accounts are linked using alternating account numbers.

The accounts from internal and external accounting are managed in an integrated accounting system. Therefore, when creating a controlling area, the charts of accounts used by the corresponding company code must be respected.

The controlling area adopts the chart of accounts belonging to the company code assigned. In cross-company code cost accounting the controlling area and all company codes assigned to it must use the same chart of accounts.

Nevertheless, you can also use a country-specific chart of accounts to apply the country-specific accounting requirements while using consistent cost accounting.

You assign a company code to the controlling area. The company code uses the INT chart of accounts (International Chart of Accounts). The controlling area also uses the INT chart of accounts.

Your organization has subsidiaries in France and Italy which produce balance sheets in different company codes. Uniform managerial accounting is to be performed for the entire enterprise.

In order to comply with the accounting regulations of each country, the company codes are assigned to different country charts of accounts.

In addition, you also define a uniform worldwide chart of accounts for internal accounting to which you assign the company codes and the controlling area.

Fiscal Year Variant DefinitionThe fiscal year variant contains the number of posting periods in the fiscal year and the number of special periods.You can define a maximum of 16 posting periods for each fiscal year in the Controlling component (CO). To define the fiscal year variant, go into Customizing for Financial Accounting (FI) under Financial Accounting Global Settings® Fiscal Year ® Maintain Fiscal Year Variant.

IntegrationYou need to specify the fiscal year variant for each company code.When you create a controlling area, you also need to specify the fiscal year variant. The fiscal year variants of the company code and controlling area may only differ in the number of special periods used. You need to ensure that the fiscal year variants match, in other words, they may not have a time conflict.You can assign a company code using a fiscal year variant with 12 posting periods and four special periods to a controlling area that has a fiscal year variant with 12 posting periods and one special period. The time frame, for example, from April 1 to March 31 in the following year, must be identical in each fiscal year variant.However, it cannot be assigned to a controlling area with 52 posting periods for example.