7/23/2019 Tfin22 2 en Col62 Fv Inst a4 http://slidepdf.com/reader/full/tfin22-2-en-col62-fv-inst-a4 1/257 TFIN22_2 Management Accounting II mySAP ERP Financials Date Training Center Instructors Education Website Instructor Handbook Course Version: 2006 Q2 Course Duration: 2 Day(s) Material Number: 50080907 Owner: Michael Janning (D034089) An SAP Compass course - use it to learn, reference it for work
This document is posted to help you gain knowledge. Please leave a comment to let me know what you think about it! Share it to your friends and learn new things together.
To conduct this course successfully, it is a good idea to attend the above
recommended courses and work through the course flow and exercises. Attend the
course when another instructor holds it, and make sure to co-teach the course at
least once before you teach it alone. CO-PA covers a lot of functions in and around
the CO application, with which you will not immediately be familiar. For further
practice, there are excellent demo scripts in the IDES system.
Training System
Required Data
Refer to Example Data for the Instructor section.
User IDs and Password for Course Participants
User IDs: Create your own
Password: INIT
To create participant user IDs, use transaction ZUSR and copy user AC605-99 (!).
This user has been set up with a special authorization profile that prevents users
from maintaining the operating concern tables. If you copy another user, youwill encounter major problems during class. This is because only one operating
concern is available for each course and it should be maintained only by you.
System Preparation
A CATT has been created to post a goods receipt of 10,000 items to the stock
of material P-100 in storage location 0002. This CATT should be executed
automatically before the class, but you should check the balance manually. If no
The transaction data for the Actual Data unit is generated using the above
information.
Predefined planning layouts, report forms, and reports for the Planning and
Information System units are available in the IDES system. It is a good idea to
define your own planning layouts, report forms, and reports during the course sothat the participants get a better idea of how this is done. Course-specific reports
and layouts have been created as samples.
This course teaches participants how to set up and use Profitability Analysis and
how to adjust the system to company-specific requirements in the planning and
information system areas. It also introduces the interfaces for the flow of actual
values.
Course Structure and Flow
Units 1 through 3 introduce the Profitability Analysis application and Profitability
Analysis customizing. The Actual Data, Planning, and Information System units
provide further information. Finally, unit 7 takes a closer look at additionalProfitability Analysis functions.
The following paragraphs provide a brief introduction to the important topics
within each unit:
The Profitability Management unit introduces participants to profitability
accounting in the SAP system and highlights the differences between the CO-PA
module and the EC-PCA module. This is done by comparing the two modules
Explain to the participants how to create characteristics and value fields from
different field sources and define the operating concern attributes. Demonstratehow to copy characteristics and value fields into Data Structure Definition and
generate the operating concern environment. In addition, help them to identify and
set nonsegment level characteristics.
Unit Overview
This unit introduces you to the organizational structures from a Profitability
Analysis perspective. It helps you to know the data structures used within
Profitability Analysis. It explains the CO-PA characteristics and value fields and
the possibilities that the system offers to define these data structures.
Unit Objectives
After completing this unit, you will be able to:
• Describe the various organizational units
• Understand the basic concepts, characteristics and value fields, of an
operating concern
• Define an operating concern and its attributes
• Define data structures
• Identify transaction data structures
• Describe the CO-PA database structures and the operating concern templates
Make the participants aware of the fact that only one user at a time can change
the data structures of an operating concern. Because the operating concern has
to be regenerated each time a change is made, no changes should be made to
the operating concern, IDEA. Instruct the participants that they can display the
configuration but must not make any changes. The user master records created
for the course prevent the participants from having the authorization to change
the operating concern.
This topic is designed to give the participants an overview of the organizational
units and the significance of the operating concern. The business scenario
emphasizes that the company is an international company divided into various
legal entities. For this reason, several different currencies are used. The variouscharacteristics and value fields needed are indicated by the different analytics
requirements.
First, explain the relationship between the various organizational units. In
contrast with other CO modules, the sales organization and the corresponding
master data play an important role in CO-PA. Explain that several Controlling
areas can be grouped in one operating concern, however all Controlling areas
The operating concern is the key organizational unit within CO-PA. It defines the
extent of the marketing and sales information that can be reported in combination
by this component. One or more controlling areas are assigned to an operatingconcern when organizational structures are defined. In most cases, corporations
have only a single operating concern, which is recommended for the sake of
simplicity and convenience if all controlling areas and company codes share the
same fiscal calendar.
The controlling area is an organizational unit delimiting the independent cost
accounting operations of the organization, such as cost center accounting,
profit center accounting, and order accounting. Company codes are assigned
to controlling areas when organizational structures are defined. Mostly, a 1:1
relationship exists between the company code and the controlling area. Notice
that a controlling area can also incorporate several company codes to take
cross-company cost allocations into account.
The company code is an independent accounting unit within a client. The legal
requirements of a balance sheet or a profit and loss statement are fulfilled on the
company code level. Plants are assigned to company codes when organizational
structures are defined.
The plant represents a production center. It is the primary organizational unit in
operations and manufacturing.
Demonstration: Organizational Structures
Purpose
To demonstrate how to display the operating concern and assign the company
code and the controlling area
System Data
System:
Client:
User ID:
Password:
Set up instructions:
1. In structure maintenance, display the operating concern, IDEA.
Explain that certain characteristics that are known as the fixed characteristics, are
automatically included in all operating concerns. There are also certain technical
fields, such as posting period, which are also automatically contained in the datastructures. Notice that in account-based profitability analysis, the cost element is a
fixed characteristic. The job of the user is to define any characteristics required
but not already available as fixed characteristics.
Value fields are created based on information requirements. They differ from one
company to the next and only play a role in costing-based Profitability Analysis.
Explain that value fields normally represent a group of cost or revenue elements.
The various accounts for discounts can be grouped into one value field. Value
fields are defined as either a quantity field or an amount field. Mention that the
data structures are valid across all the clients of a system.
Characteristics are the analytic dimensions of the Profitability Analysis. They
define what items or objects the user can evaluate. Several characteristics, such as
sales organization, customer, and product, are predefined automatically for every
operating concern. These are known as fixed characteristics.
In addition to the fixed characteristics, up to 50 non-fixed non fixed characteristics
can be added to an operating concern.
Characteristic maintenance in the field catalog: These non-fixed characteristicsmust be added to the field catalog before they can be used to define a new operating
concern. The characteristics in the field catalog can be accessed in any client.
The field catalog originally contains some suggested characteristics which might
be used in a new operating concern definition. There are two ways to add other
characteristics to the field catalog:
• Choose an existing field from certain SAP tables, which must be five
characters long or less.
• Create a characteristic independently, which should begin with WW and be
four to five characters total.Behind every characteristic, there is potentially a check table with the valid
characteristic values for CO-PA. In this way, the data that flows into CO-PA are
checked. When manually creating a new characteristic in the field catalog, you
can decide whether the system should generate a check table for this.
After completing this exercise, you will be able to:
• Describe the organizational structures relevant for Profitability Analysis
• Summarize the types of Profitability Analysis in the SAP system
Business Example
The group has legal entities in Germany, Italy, and the United States. For this
reason, it must be able to report sales and profitability both across the corporationin a group currency and in each of the legal entity’s local currency. The sales
managers require summarized sales performance figures, such as revenue,
discounts, and surcharges both along and across the lines of the sales structure,
product lines, and customers. They also need to view sales and marketing costs
along these lines. Describe the options available for the organizational structures
for CO-PA.
Task 1:
1. Check the basic settings and organizational assignments for the IDEAoperating concern using the Customizing Monitor.
Is the controlling area 1000 assigned to the IDEA operating concern?
Does the IDEA operating concern have the same fiscal year variants as
the controlling area 1000?
Does the assigned Company Code 1000 also have the same fiscal year
variant?
What chart of accounts do the controlling area and the Company Code have?
Task 2:Call the profitability report AC605-ORDER (order analysis) in the costing-based
Profitability Analysis. Select the reporting date for the previous year.
1. Obtain an overview of the order situation with regard to sales characteristics.
Costing-based CO-PA stores its transaction data in its own data tables, which are
created when activating and generating the operating concern. This means that its
data will never affect the execution speed of a report in another CO application.
Account-based CO-PA stores its transaction data in the transaction data tables for
Overhead Cost Management. This means that its data will affect the execution
speed of reports for other CO applications that share the same transaction data
tables.
The definitions of profitability segments for both CO-PA sub modules are stored
in the same table, CE4XXXX, where XXXX = operating concern. The system
always accesses this segment definition table when posting the transaction data for
costing-based or account-based CO-PA.
Profitability segments, which represent the account assignment objects for
profitability analysis, are unique combinations of characteristic values that thesystem creates and numbers automatically from the information in the originating
transactions.
Figure 11: CO-PA Transaction Data Structures (2)
The CE3... and CE4... tables work effectively together to store the summarized
transaction information, both actual and plan, for costing-based ProfitabilityAnalysis.
The CO-PA drill-down reporting tool accesses the data in the CE3... and CE4...
tables. Line item data and the information from the CE1... and CE2... tables can
The data of CO-PA is divided into characteristics and value fields. The
characteristics are stored in the data division of the table, CE4xxxx. The key of
the CE4xxxx basically consists of the profitability segment number that is used as
a join field for the table, CE3xxxx. The key of the table, CE3xxxx, consists of the profitability segment number and the posting-period and some other technical
fields that are not listed. The value fields are specified in the data division.
The table, CE4xxxx, represents the profitability segments, created based on the
business considerations that are defined when an operating concern is created. The
table, CE3xxxx, contains the values posted to the profitability segments that are
additionally available broken down into the posting period. Typical record lengths:
CE4xxxx = 250 bytes, CE3xxxx = 2000 bytes.
Segment Level and Non-Segment Level Characteristics
You first have to name an operating concern and then define its attributes.
Explain the various currency options and the period type, “Weeks”. This period
type stores data in weeks and posting periods, which increases data volumes
drastically. The setting is only possible in costing-based Profitability Analysis.
After the attributes are defined, you can define the data structures for the operating
concern. To do this, select the required value fields and characteristics for the
profitability segment. Then, you must save these, activate them and generate
the data structures. During the generation process, the system creates the tables,
CE1XXXX, through CE8XXXX and check tables. The tables from CE1 through
CE4 are of particular significance for the market segments. It is important to
mention that the data in costing-based profitability analysis is stored in separatetables, and the data for account-based profitability analysis is stored in the same
tables as the other CO modules.
CE4 contains only the characteristic values and profit segment numbers.
CE3 is the table access by drill-down analytics. It contains the profit segment
number, certain technical characteristics, and the values for value fields. CE1
contains all characteristics and value fields as well as technical characteristics.
Figure 13: Segment-Level Characteristics
For reasons of performance, we recommend that the number of profitability
segments be kept as low as possible so that the quantity of the totals records
required in the profitability segment also remains low. You can achieve this by
restricting the selection of characteristics for the profitability segment.
You can to configure the system so that certain characteristics are not used in
defining profitability segments. The impact of this is that the values for these
non-segment-level characteristics will appear on CO-PA line items but will not be
available for reporting with the CO-PA drill-down reporting tool.For example, you must have access to the number of the order that has occurred in
SD in every CO-PA line item (CE1). However, it is not necessary to save a new
totals record in the object level (CE3) for every line item that is created during the
transfer from the SD. This would create as many summary records as line items.
You can individually adjust the characteristics that have been used or not used at
object level and make different settings for the costing-based and account-based
profitability analysis. Certain fixed characteristics are generally not used at object
This is where you can gain an initial overview of Profitability Analysis without
the need to have any specialist knowledge and without the need to have made
any settings previously. Further, operating concerns that have already been
preset are available, allowing Profitability Analysis to be quickly integrated into
your productive system. To do this, you can customize these operating concerntemplates. At any time, you can reset the templates to their original settings.
Start the transaction for operating concern templates. The template for the
consumer industry is loaded automatically.
The details view provides you with an overview of the delivered settings and of
the modifications that you can make. By choosing Application examples, you can
view reports and planning layouts. The system fills them with example data to
demonstrate more clearly how the application works. You can delete the example
data later.
If you want to use an operating concern template for your profitability analysis,
you first have to copy it. You can find this function under “Tools”. This is alsowhere you can choose to reset an operating concern template back to its initial
state.
Demonstration: Operating Concern Templates
Purpose
To demonstrate the use of operating concern templates
7. To define data structures, you need to copy the required characteristics and
value fields to the operating concern.
Answer: True
To define data structures, copy the required characteristics and value fields to
the operating concern and save them.
8. Costing-based CO-PA stores its transaction data in its own data tables, which
are created when activating and generating the operating concern.
Answer: Costing
9. If you want to implement an operating concern template as a template for your Profitability Analysis, you first need to copy it using the copy function
under Tools.
Answer: Tools
10. What must be done after you generate the operating concern, and before you
activate Profitability Analysis for data entry?
Answer: After you generate the operating concern and before you activate
Profitability Analysis for data entry, you need to add the valid characteristic
values to the check tables generated for the new characteristics.
11. Costing-based CO-PA stores its transaction data in the transaction data tables
for Overhead Cost Management.
Answer: False
Account-based CO-PA stores its transaction data in the transaction data
tables for Overhead Cost Management.
12. State the advantages of operating concern templates.
Answer: The advantages of operating concern templates are:
1. They enable you to gain an insight into Profitability Analysis without
the need to perform extensive Customizing.
2. The operating concern templates simplify the Customizing in the
profitability analysis. If necessary, you can adjust your Customizing
settings for an operating concern template as required, copy these and
then use the copied and adjusted operating concern productively.
TFIN22_2 Lesson: Introduction to Characteristic Derivation and Valuation
Lesson:
44
Introduction to Characteristic Derivation and Valuation
Lesson Duration: 30 Minutes
Lesson Overview
This lesson helps you to understand the concept of characteristic derivation. It
also describes the concept of valuation.
Lesson Objectives
After completing this lesson, you will be able to:
• Explain the derivation concepts
• Explain the valuation concepts
Characteristic derivation is used to determine the value of one characteristic
based on the value of another, provided there is a logical dependency between
the two. It is important for the participant to realize that most derivation steps
are created automatically by the system during generation. Explain extensively
the cases in which the users must define their own derivation steps and the
possibilities that the system offers for doing this.
Valuation can only be used in the costing-based approach and it can be used for
both planning and actual values. Explain that for actual data in particular, valuation
is only used if the user wants to calculate or estimate the values to supplement the
existing actual values. Valuation is also used to read cost estimates for materialsand, as a result, retain the cost component split for the cost of goods manufactured.
This cost component split for the cost of goods manufactured is the only way in
which fixed and variable manufacturing costs can be displayed separately, and
contribution margin accounting according to full and partial costs can be realized.
Business Example
The management of your company wants to implement a profitability accounting
application in the SAP system. As a member of the project team, you are supposed
to advise on the question of whether to implement CO-PA or EC-PCA in the SAP
system. You then will be responsible to implement the selected applications.
Mr. Udo, Mrs. Veloce, and Mrs. Schnell require profitability reports for
many characteristics, some of which are available on the selling and invoicing
transactions (the sales organization, sold-to, product, etc.), and some of which are
available only on master records (the product group, state, etc.). Mr. Udo requests
that, for sales reports, the state and country should first of all be determined from
the goods recipient (if there is one for the CO-PA relevant transaction). If not, they
should be derived from the sold-to party. Mrs. Veloce is familiar with the customer
hierarchy that is defined in the Sales Order Management and insists on being able
to report along the lines of that hierarchy even in the Profitability Analysis. In
addition, she requires profitability reports on the special characteristic Strategic
Business Unit, which is only determined via the product group. This specialcategorization of product groups is only used within CO-PA. The true freight costs
are not known at the time of invoicing but are known only at the period-end when
the invoices have been received from the freight vendors. These costs are not
applied in a costing-based way in FI, but are calculated in the profitability analysis.
This is why Mrs Schnell was able to estimate the expected final result for her plant
already before the end of the month. Mr Cash, who is responsible for company
planning, requests that sales quantities be planned with regard to the material
requirements in the profitability analysis. Here, price and cost information should
be read by the system and automatically applied to the planned quantities, so that
the respective revenues and cost of sales - and thus the profit - can be determined
with sufficient accuracy. The Product Costing module is being used. The detail
results are to be imported into CO-PA so that true cost-of-sales can be analyzed
extensively and different types of margins can be calculated and analyzed, such as
the margin after fixed costs and the margin after all costs.
For this purpose, an understanding about the characteristic derivation and
valuation concepts is required.
Characteristic Derivation: Central Points
• Some keys point about derivation:
– Derivation supplements or overwrites certain automatically mappedcharacteristic values.
– A derivation strategy is a sequence of steps, where each step uses one
derivation technique to calculate one or more values for one or more
characteristics, respectively.
– Control attributes can be assigned to each step, such as conditions for
execution, reactions when unsuccessful, and overwrite authority.
– Some derivation steps are created by the system at generation time, of
which some are modifiable. Others are created by the configurator
For each sales order management transaction, the system automatically imports
the sales organization, distribution channel, division, customer, product, profit
center, business area, and any sales order management partners for each salesorder or invoice item. Notice that the values for all of these, except customer and
product, can be overwritten with derivation.
In addition to those values determined through the automatic mappings, derivation
can access additional information, such as characteristic values, both on and off
the originating transaction. For example, it could supply the sales district from the
invoice and the product group from the material master.
In addition to the values imported through the manual mappings, valuation can
import information that is off of the originating transaction as well. For example, it
could supply in-depth product cost breakdown information from Product Costing,
which is not available on the sales document.
All CO-PA-relevant transactions are affected by derivation configuration, and
some of these are affected potentially by valuation configuration, which is optional.
This lesson helps you to understand the derivation strategy. In addition, it explains
how to evaluate derivation techniques.
Lesson Objectives
After completing this lesson, you will be able to:
• Explain the derivation strategy
• Evaluate derivation techniques
In this lesson, establish that the system automatically generates a derivation
strategy when you generate your operating concern. Describe the standard
derivation steps. Next, show the options available for users to add derivation steps.
Underline that this is normally only required for the user-defined characteristics
that were not transferred from an SAP table.
Business Example
The management of your company wants to implement a profitability accounting
application in the SAP system. As a member of the project team of your company,you are supposed to provide advise on the question of whether to implement
CO-PA or EC-PCA in the SAP system. You then will be responsible to implement
the selected applications.
Mr. Udo, Mrs. Veloce, and Mrs. Schnell require profitability reports for
many characteristics, some of which are available on the selling and invoicing
transactions (the sales organization, sold-to, product, etc.), and some of which are
available only on master records (the product group, state, etc.). Mr. Udo requests
that, for sales reports, the state and country should first of all be determined from
the goods recipient (if there is one for the CO-PA relevant transaction). If not,
they should be derived from the sold-to party. Mrs. Veloce is familiar with the
customer hierarchy that is defined in the Sales Order Management and insistson being able to report along the lines of that hierarchy even in the Profitability
Analysis. In addition, she requires profitability reports on the special characteristic
“Strategic Business Unit”, which is only determined via the product group. This
special categorization of product groups has meaning only within CO-PA.
As a result, for reporting, sales organization, distribution channel, division,
sold-to, ship-to, and product, the information is required from each order/invoice
item. The product group and product hierarchy information is required from the
material master record. The country and state are required from either the ship-to
record or the sold-to record. The customer hierarchy information is required for
each business transaction (or simply „transaction") involving a customer. Product
groups are to be categorized into special categories called ‘strategic businessunits’ for reporting.
For this purpose, the characteristic derivation strategy and techniques need to
be used.
Characteristic Derivation Concept
Characteristic Derivation Concept
At this point, question the course participants about the following points: What
characteristics can the system read from one simple sales order? Possible answersare: Item, customer and sales organization. The next question is – where could
the system find values such as the customer group and the product group? In
addition, explain the concept of check tables extensively at this point. Highlight
the fact that most check tables are maintained in other applications but the check
tables for user-defined characteristics need to be maintained by someone with
access to CO-PA configuration. Further, point out that the system “attempts” to
For each CO-PA-relevant transaction, if the derivation strategy is complete,
the system tries to derive a characteristic value for each characteristic in the
operating concern. Notice that derivation is not always successful. If the systemcannot determine a characteristic value for a characteristic, then a blank, null, or
unassigned characteristic value is posted.
The total combination of (segment-level) characteristic values for a given
transaction consists of the definition of the relevant profitability segment.
The profitability segment is the account assignment object for the Profitability
Analysis.
Demonstration: Check Tables
PurposeTo demonstrate the steps to check tables
System Data
System:
Client:
User ID:
Password:
Set up instructions:
1. Show the check table for “Sales District”“.
Application menu ! CO-PA ! Master Data ! Display CharacteristicValues: All Characteristics On/Off ! Referenced Characteristics ! Sales
District ! Define Sales Districts: Execute
Maintain the check table for the characteristic, WWMGR, which you created
in the previous chapter:
001 = Miller
002= Jones
003= Smith
Emphasize that so far we have not instructed the system under which
circumstances Miller, Jones, or Smith will be the Regional Manager.
Demonstration: Characteristic Derivation
Purpose
To demonstrate the characteristic derivation concept
Accounting ! Controlling ! Profitability Analysis ! Actual Postings
! Create Line Items
Posting date: Today’s date
Record type: F
Customer:
Sales organization:
Distribution channel:
Company code:
Product: P-100
Plant:
Execute the derivation function. Talk about the derivation analysis function.
Extras ! Derivation Analysis.
Point out that certain fields were derived while others, such as the sales
order reason, were not derived.
Invoiced quantity in sales units: 100 units
Revenue:
Post the document.
Display the line item and call up the characteristics.
Accounting ! Controlling ! Profitability Analysis ! Information System
! Display Line Items ! Actual/Plan.
In a second session, use these characteristic values to explain the derivationtechniques table look-up and the derivation rule. To do this, display the
characteristic derivation function in Customizing and demonstrate three
different views of characteristic derivation.
IMG ! Controlling ! Profitability Analysis ! Master Data !
The system automatically creates a standard derivation strategy for each operating
concern. This strategy contains the derivation steps for all the dependencies that
are already known between characteristics. You can then change this strategy tomeet the requirements of your organization. If you define your own characteristics
that need to be derived from other characteristics, you need to add your own
derivation steps to the standard strategy to define this derivation.
Figure 19: Options for Derivation Steps
The system goes through a sequence of steps in attempting to locate a characteristic
value for each characteristic for a COPA-relevant transaction. This step sequence
is known as the derivation strategy.
The steps are performed in a customizable sequence to maximize the possibilities
to locate or determine valid characteristic values. The following items can be
configured for each step:
• Conditions under which the step should be executed
• Whether or not initial values are allowed for source fields in a step
• Whether or not the step should overwrite an existing characteristic value
• Whether or not an error message should generate if the step is unsuccessful
Each step normally represents one of the customizable derivation techniques,
such as table lookups, derivation rules, region, product and customer hierarchies,
moves, clears, and enhancements. The values for one or more characteristics can
Derivation occurs for every CO-PA-relevant transaction, including direct entry
into CO-PA and external data uploads into CO-PA. Note: For more information on
customer exit functions, see the Appendix.
Figure 20: Standard Derivation of Organizational Units
Certain characteristics, such as division and profit center, have fixed derivation
steps. This means that the system automatically generates nonmodifiable stepsthat may be used to determine their values. These may take the form of one of the
six standard derivation techniques or may be function calls.
You can use other derivation steps to overwrite the values determined through the
fixed derivation steps. This can be normally achieved with all characteristics,
except for controlling area, company code, product, and customer. These have
fixed, nonmodifiable derivation.
The system incorporates fixed derivation to force, at high levels, or at least
enhance the possibility of reconciliation with data in other modules in the SAP
A table lookup is a derivation method used by CO-PA to access the characteristic
values from SAP master data tables when this information is not available on the
originating transaction. For example, an invoice may not contain the purchasing
group for a material that is being sold. Notice that CO-PA can capture this
information for the invoice item using a table lookup.
Table lookups can be performed when the key of the table to be accessed can be filled with the characteristic values that are already known to CO-PA for the
transaction. For example, a country value can be determined when a customer
is known. This is because the customer is the only key to the KNA1 table that
contains general customer information, such as addresses.
The ability to customize table lookup derivation allows the configurator to control
exactly which types of characteristic values are used to access other characteristic
values. For example, you can configure the table lookup for the characteristic
country to find the country value for the ship-to instead of the country value for
the sold-to.
Using table lookups, you can access entire field values or parts of field values for the fields in the tables in which keys can be filled with the known characteristic
values for transactions. For example, the derivation lookup for product hierarchy
could be configured to import the entire product hierarchy value or only the first
Some table lookups are generated automatically on the basis of a characteristic‘s
definition. These are generated when the operating concern environment is
generated. Notice that the nonfixed lookups can be modified. Other tableslookups, such as the ones for user-defined characteristics must be created from
the beginning.
Figure 22: Derivation Rule
Derivation rules are used to determine characteristic values through user-defined
logic. They are frequently used with user-defined characteristics although they are
not limited to this application.
With derivation rules, characteristic values, known as target values, are determined
directly based on the values of other characteristic values, known as source values.
Similar to other derivation steps, derivation rules can be configured either to apply
for all situations or to only apply when certain conditions are met (for example,
only for sales organization 1000). Accordingly, you can also configure the
derivation rules to produce an error message when a characteristic value cannot bedetermined through the rule entries. You can also ignore the error and proceed.
In contrast to other derivation steps, derivation rule entries can be configured to
be either related to a specific interval or time, which is being time-dependent, or
applicable for all times, which is being time-independent. Derivation rules can be
set up in sequence with other derivation steps and methods to produce complex
a) In the Customizing settings for Profitability Analysis, under Master
Data ! Define Characteristic Derivation:
Display the MOVE step for the Ship-to Party characteristic. What
are the source and target fields?
To display, click ALL derivation steps: View ! Display All Steps
Select the “move” step for Ship-to Party, and select “Choose”.
Source field: ! CO-PA ! KNDNR ! Choose Customer.
Target field: ! CO-PA ! KUNWE ! Ship-to party
An attribute has been maintained for this characteristic, to apply the
derivation rule only under certain conditions. What is the attributefor this derivation step?
Select the Condition tab. This derivation step is only carried out if
the Ship-to field is blank.
What is the purpose of this particular step?
In this case, the Ship-to field is filled with the value in the Customer
field.
Task 4:
To test the derivation strategy, enter a line item for your sample customer andthe product P-100 using the transaction Simulate Evaluation. Select Derivation
to execute. As you can see, some of the fields have remained blank. Use the
derivation analysis to view the various derivation steps.
This lesson helps you to understand valuation using the product cost information.
It also outlines the valuation using a CO-PA costing sheet.
Lesson Objectives
After completing this lesson, you will be able to:
• Understand valuation using the product cost information
• Outline valuation using a CO-PA costing sheet
• Use the Customizing Monitor to perform valuation analysis
Explain that with the valuation function, you can supplement the information
provided directly by a transaction. Valuation can be performed both when
updating actual values and within planning. It is used in costing-based profitability
analysis only because account-based profitability analysis is reconciled with the
Financial Accounting and does not use estimated values.
There are various valuation techniques within CO-PA, such as valuation with
conditions and costing sheets, valuation using material cost estimates, and
valuation using user-defined valuation routines or user exits.
The condition technique can be used to estimate the values that are needed
for analysis in Profitability Analysis but which are not known at the time the
document is posted. As a result, to evaluate a sales transaction, any commissions,
cash discounts, discounts, or freight costs, which are not known at the time of
invoicing, can be estimated.
The product cost estimate technique is used to determine the manufacturing
costs when data is updated to Profitability Analysis. This technique can be used
to supplement the revenues and sales deductions transferred from the invoice in
the case of a sales transaction with the fixed and variable manufacturing cost
components belonging to the product.
User-defined valuation routines are supported to allow you to determine thevalues that cannot be determined using the other two techniques. This allows for
the implementation of user-defined valuation logic, should this be required.
Valuation Using Material Cost Estimates
Valuation using material cost estimates is primarily used to determine the
manufacturing costs when billing documents are transferred to Profitability
Analysis. By valuating transactions using cost estimates from Product Cost
Planning, you can supplement the revenues and sales deductions transferred from
the billing document with the fixed and variable manufacturing cost components
belonging to the product. Transactions can be valuated with up to six different cost
estimates in parallel. This option is available only for the costing key assigned to
“other” characteristics.
The cost component split can be transferred in either the company code currency
or the Management Accounting area currency. The manufacturing costs can be
transferred to Profitability Analysis both according to the cost component split
and the primary cost component split. Based on the customizing settings made for
Product Cost Planning, the cost component split and the primary cost component
split are stored either in the main cost component split or in the auxiliary cost
component split of a cost estimate.
The relevant cost estimates are assigned either on the basis of the material or
material type or on the basis of any other characteristics in an operating concern.
Either using the plant of the CO-PA line item or a special valuation plant stored in
customizing can access the costing data. To set up valuation using material cost
estimates, work through the steps described in Customizing. There, you will also
find further information on this subject.
Valuation Using a Costing Sheet
The condition technique in the case of CO-PA is used to determine estimated
values. Some technical terms need to be explained to familiarize participants with
this technique. Explain that the condition technique is widely used throughout
SAP system. Although participants do not need to become experts on conditions,
they need to have at minimum a basic understanding.
The background for the condition technique is explained extensively in the unit,
Actual Data, and in the online documentation.
Business Example
The management of your company would like to implement a profitability
accounting application in the SAP system. As a member of your the project team,
you are supposed to advise on the question of whether to implement CO-PA or
EC-PCA in the SAP system. You then will be responsible for implementing the
selected applications.
Mrs. Schnell has requirements for profitability reports along the lines of
many characteristics, some of which are available on the selling and invoicingtransactions, such as the sales organization, sold-to, and product, and some of
which are available only on master records, such as the product group and state.
True freight costs are not known at the time of invoicing but are known only at the
month-end when the invoices are received from the freight vendors. These costs
are not applied in a cost-based way in FI, but are calculated in the profitability
analysis. This is why Mrs. Schnell was able to estimate the expected final result
for her plant already before the end of the month. Mr. Cash, who is responsible
for company planning, requests that sales quantities be planned with regard to
the material requirements in the profitability analysis. Here, price and cost
information should be read by the system and automatically applied to the planned
quantities, so that the respective revenues and cost of sales - and thus the profit -can be determined with sufficient accuracy. The Product Costing module is being
used, and the detail results are to be imported into CO-PA. This is to analyze true
cost-of-sales extensively, and to analyze and calculate the types of margins, such
as the margin after fixed costs and the margin after all costs.
As a result, freight and packaging costs are to be estimated for each line item
on each order/invoice (transaction-based billing). Revenue and COGS are to be
projected automatically for the materials with planned quantities in aggregate. The
Detail Product Costing information is to be brought in for each line item on each
order/invoice (transaction-based billing).
For this purpose, the valuation strategy and techniques need to be used.
Valuation Concept
Valuation: Overview
Emphasize that valuation is relevant only for costing-based CO-PA. In addition,
explain that many value fields will be populated through the Sales Order
Management and Management Accounting interfaces. As a result, valuation will
populate value fields if the data was not transferred from any other source.
In costing-based Profitability Analysis, you can configure a function known
as valuation to supplement the performance information provided directly by
a transaction. The additional information may be estimated, calculated, or retrieved from a different source. For example, you can set your system so that
it automatically calculates the internal commissions and freight costs that are to
be expected in the respective business transaction, when you transfer billing data
into CO-PA. In this way, you can evaluate the expected profit from the business
transactions without all actual data having been posted. Similarly, you can access
the detailed product costing information.
Figure 26: Valuation: Overview
Valuation can be used with either actual or planning data. It is often used in
Controlling Profitability Analysis (CO-PA) planning to access the pricing and
product cost information for the products that have planned quantities. This
enables the automatic calculation of projected revenue and cost-of-sales figures.
Valuation can be configured to function either in real-time, which means at the
time data is first posted to CO-PA, or periodically, which means at some later point
when manually triggered. The periodic evaluation provides advantages when
many postings are executed, thereby causing a higher system load for real-time
evaluation. By putting off the evaluation to a later date, you ease the system.
Similarly, it gives the option of re-evaluating the posted data.
Begin by explaining the terms: Condition type, condition records, access
sequence, and base versus calculated values.
Use the example of the condition type, Outgoing Freight (OUTF). The condition
definition is a surcharge or reduction, meaning the value to be calculated will
either be positive or negative so in the case of freight, it is a freight cost or a
freight charge. The Detail button reveals the plus/minus sign logic, which controls
whether the condition results in an amount that is negative or positive. A negativeamount is a discount and a positive amount is a surcharge. This logic also controls
whenever both positive and negative amounts are possible.
The surcharge or reduction overhead type determines whether a percentage of a
certain value should be calculated or an absolute value multiplied by a quantity
field should be calculated. The issue to be decided is whether the freight should be
10% of COGS or $10 for each pound shipped.
Scales are basically look-up tables for the percentage or quantity-based values.
Examples are weight = 10 pounds, freight rate = 5 USD, weight = 100 pounds and
freight = 8 USD. Scales are not necessary, even when you can only take into
account a flat rate or a percentage.
The Access Sequence is directly related to the condition record. It defines at
which organizational level a particular value is calculated. For example, if the
freight rate in plant 1000, access sequence “Plant” is 10 USD and in Plant 2000
12 $. The condition record itself contains the value.
The costing sheet combines calculated conditions and so called Base Conditions.
Base Conditions are used in calculations. If you therefore want to calculate the
freight based on the COGS, you have to create these as base conditions. The value
for the base condition originates in an application other than CO-PA.
Figure 30: Valuation using Product Costing: Customizing (2)
When you define a costing key, you can enter either a costing date or a period or
a value for the period indicator. Using the plan period indicator, you specify the
date for which the system should look for a valid material cost estimate in the
database, for Product Cost Controlling.
The following options are available for the plan period indicator:
0 for the future standard cost estimate.
1 for the current standard cost estimate.
2 for the past standard cost estimate.
3 for the standard cost estimate valid on the posting date.
4 for the standard cost estimate valid on the date of goods issue.
If you enter 0, 1, or 2 for the plan period indicator, the system reads the standard
cost estimate valid on the first day of the period. This refers to the future, current,
or past period for which the standard cost estimate is valid according to theentries in the valuation segment of the relevant material master record. If
you enter 3 or 4 for the plan period indicator, the system reads the standard cost
estimate valid on the given posting date or date of goods issue, regardless of
Figure 31: Valuation using Product Costing: Customizing (3)
In addition to assigning the costing keys to products or material types, you can
assign the costing keys to any combination of characteristics. This allows greater
flexibility and control in using costing keys.
You can use up to three characteristics as source fields”, such as plant, product,
and group. In this way, you do not need to assign costing keys to one specificmaterial or material type. You can also assign costing keys to a combination
of different characteristics. This makes it possible to access the cost of goods
manufactured from different plants, which is useful if you want to use the costs
from the production plant when the product is sold by different sales plants.
Costing sheets are a vehicle through which special values can be accessed or
calculated. They are the central piece to the condition technique, a method used
throughout SAP for performing calculations.
Costing sheets consist of a sequence of user-defined condition types, each of
which accesses a value or performs specific calculations, as dictated by thedefinitions of the condition types. Each condition type is mapped to a value field
1. Begin your demonstration by entering another line item. This time focus onthe value fields and point out that certain value fields, such as Material Input,
were populated although there was no billing document.
Accounting ! Controlling ! Profitability Analysis ! Actual Postings
! Create Line Item
Posting date: Today’s date
Record type: F
Customer: 1000 1000
Sales organization: 1000 1000
Distribution channel: 10 10
Company code:1000 1000
Product: P-100
Plant:
Posting date: Today’s date
Record type: F
Execute the valuation function and take a look at the value field, Material
Input.
As of release 4.6, you can analyze how the system populated a value field.
Select:
Extras ! Analyze valuation
2. Open up another session and display the material cost estimate for the
material, P-100:
Costing Variant: PPC1
Plant: 1000 1000
Costing version: 1 1
Valid on: Today
3. Call up the cost Component view for the currently released material cost
The value field analysis function enables you to analyze all the flows of actual
data to Profitability Analysis. You can find inconsistencies by looking at the
individual value fields. The report shows you what value flows the value field isinvolved in and what condition types or cost elements it gets its values from. In
all, you can analyze the following actual value flows:
• Transfer of billing documents and incoming sales orders from Sales Order
Management.
• Direct postings from Financial Accounting and operations.
• Order and project settlement from Overhead Cost Orders (CO-OPA), and
the Project System Cost center assessment from Cost Center Accounting
(CO-OM-CCA).
• External data transfer.
Figure 36: Analysis of Valuation
Valuation analysis is available to you when entering of plan or actual data. Notice
that you have the possibility of checking valuation by simulating the entry of single line items. You can specify different valuation points in time and in this
way check different valuation strategies.
To analyze the valuation errors during billing document transfer, you can execute
a simulation of previously transferred billing documents and then analyze the
results of your valuation strategies. For further options for the simulation of
billing document transfers, refer to the section, Tools.
How was the Material Overhead Costs field populated?
Select the “Result of Valuation” tab.
Sort according to the text. Step 10 for Valuation View I10.
Select the “Display Value Field Assignments” tab.
With the costing key I10 that is connected to the costing variant PPC1,
Value field VV250 was connected to cost component 080 in cost component
structure 01.
Save the line item and write down the document number.
Task 3:
The true costs for packaging and accessories are not known at the time of invoicing
but are known at the month-end when the packaging materials are posted and
allocated to the various cost centers. These costs are not accrued during the month
in FI, but you want to estimate them in CO-PA so that your plant manager can
already estimate the profitability of all plants before the month-end. You can use
valuation to configure the system to calculate the estimated values for packaging
supplies at the time an invoice is billed.
1. Display the costing sheet under Valuation in Customizing. What basis is
used to calculate estimated packaging (OUPA)?2. Display the definition for the condition type OUPA. Which condition type
is used?
3. Which overhead type is used for OUPA?
4. Which rate does the system use to valuate packaging for one piece of the
material P-100 in plant 1000?
Task 4:
1. To verify that the costing sheet has been configured correctly, enter another
line item in the costing-based profitability analysis. Enter your customer andall other relevant information. Enter product P-100. Enter 10 for Invoiced
Quantity, 10,000 for Revenue, and 8,000 in the Cost of Goods Sold field.
Carry out the valuation. What is the value for Dispatch Packaging ?
Task 5:
1. Create a pricing report for the existing condition records.
This unit covers the flow of actual values. Participants should be made aware
of the modules from which Profitability Analysis can be supplied with data.
For costing-based Profitability Analysis in particular, it is important that the participants learn how to maintain the respective interfaces to obtain the
corresponding data. Further, explain the differences between the value flows
from the point of view of costing-based Profitability Analysis and account-based
Profitability Analysis. The selected example processes and the exercises help to
deepen the understanding of the participants.
Unit Overview
This unit explains the flow of actual data. It explains condition types and the
transfer and allocation of costs. In addition, it provides an overview of settlement
orders and discusses direct and automatic posting, variance calculation, andschedule manager.
Unit Objectives
After completing this unit, you will be able to:
• Explain the flow of actual data in CO-PA
• List the sources of value fields
• Understand the data flow from sales order management to CO-PA
• Outline the concept of a condition type
• Explain the transfer and allocation of costs
• Explain the settlement of orders
Unit Contents
Lesson: Flow of Actual Data...................................................129Demonstration: Steps to set up number assignment .. .. .. .. .. .. .. .. .. 132
Lesson: Integration with Sales Order Management .. .. .. .. .. .. .. .. .. .. .. .. 136
Demonstration: Transferring Data from the SD Module . . . .. .. . . . . .. .142Exercise 6: Sales Order Processing .. .. ... .. .. ... .. ... ... .. .. ... ... .. ... 151
This lesson should provide you with an understanding of the value flows in the
Profitability Analysis. Furthermore, you will become familiar with the steps
required to prepare the Profitability Analysis for actual value flows.
Lesson Objectives
After completing this lesson, you will be able to:
• Explain the flow of actual data in CO-PA
• List the sources of value fields
Value flow: This lesson gives the participants an initial impression of the
actual value flows in Profitability Analysis. Based on the example report for
costing-based or account-based Profitability Analysis, first explain the modules
from which the individual values in a profitability report are derived.
Business Example
The management of your company wants to implement a profitability accounting
application in the SAP system. As a member of the project team, you are supposedto advise on the question of whether to implement CO-PA or EC-PCA in the SAP
system. You then will be responsible to implement the selected applications.
Your corporate controller asks you to explain the differences in the actual value
flows in the costing-based and account-based profitability analysis. Your Japanese
sales manager is very familiar with the sales order process. He asks you to explain
at what point data is posted to CO-PA. Furthermore, he wants to know what order
data are specified in CO-PA.
In order to be able to allocate completely the spending levels for research and
development that are currently collected at the production group level via internal
orders, Mr. Cash tries to find out whether the internal orders can be calculated inCO-PA. The logistics department in your company would like to allocate costs
across the two manufacturing plants and the distribution centers in Canada, the
US, and Japan. They can track the services they provided at the division level and
want to ensure that Logistics costs are included in the contribution margin reports.
Your Marketing department has spent an extensive amount of time training the
world wide sales force and product management on the advantages of the new
’Blue Bicycle’ product line. They have tracked training hours and want to allocate
costs to all the products within the “Blue Bicycle” product group. The product
manager for Taiwan has been informed of price increases for bicycle seats which
are purchased externally, and wonders how that will affect contribution margins.
He also wants to analyze the cost of production variances due to the scrap and use
of reflectors for the three models within the ‘Blue Bicycle’ product group.
Value Flows in Actual: Overview and Results
Flow of Actual Values – Overview
Flow of Actual Values – Results
Sources of Value Fields
Explain the steps required to prepare Profitability Analysis for actual value flows.
Demonstrate briefly the number assignment and the function for activating
CO-PA. In addition, explain the concept of the record types and show where (if required) other record types can be configured. A reason may be that data is
manually transferred for planning.
Figure 37: Flows of Actual Values - Overview
Revenues and discounts are transferred to profitability segments in Profitability
Analysis at the point of billing in Sales Order management. Quantities sold are
valuated at the same time with the standard cost of goods manufactured according
to the cost component split from Product Cost Controlling (CO-PC).
In Overhead Cost Controlling, primary postings are posted to the objects
in Overhead Cost Controlling and allocated to the cost object by the most
source-related means available. The actual cost of goods manufactured is
also allocated to the cost object, and the cost centers that perform the activity
are credited. From the viewpoint of Profitability Analysis, this leads to under
absorption or over absorption for the cost centers performing the activity and production variances for the corresponding cost objects, such as production orders.
Production variances: The difference between the actual costs of goods
manufactured and the standard costs determined for cost objects, in this case
production orders, are divided into variance categories and settled to profitability
segments.
Overhead costs remaining on the Overhead Cost Controlling objects are allocated
to the originating profitability segments.
Figure 38: Flow of Actual Values – Results
The method of determining period operating results in Profitability Analysis is
based on the assumption that the success of a company can be measured primarily
on the basis of its transactions with other companies. The aim is to supply the
sales, marketing, product management, controlling, and corporate planning teams
with decision-support information.
This sales-oriented approach in Controlling Profitability Analysis means that no
contribution to the success of the organization is made until a sales transaction is
completed. As a result, the products sold are transferred to CO-PA in accordance
with the cost of sales accounting method and provide the information about the
sales revenue and sales deductions.
This net revenue is compared with the cost of sales. The costs consist of the cost
of goods manufactured, products sold, or services rendered in addition to any
The value fields in the costing-based CO-PA contain the amounts and quantitiesthat you want to report on. They represent the finest level of detail at which costs
and revenues are broken down. One of the most important tasks in Customizing
for the costing-based CO-PA is to assign your costs and revenues to the required
value fields. This enables you to calculate the contribution margins that your
In this lesson you will become familiar with the data flow from sales order
management into CO-PA. In addition, the condition type will be explained.
Lesson Objectives
After completing this lesson, you will be able to:
• Understand the data flow from sales order management to CO-PA
• Outline the concept of a condition type
Transferring Data from the Sales Order Management Module
First, explain the classical process flow of a sales order in some detail, including
creating the sales order in the system, the goods issue posting, and billing. Work
on establishing the differences between the two approaches and explain the
possibilities that the costing-based approach offers on account of the valuation
function.
Business Example
The management of your company would like to implement a profitability
accounting application in the SAP system. As a member of your the project team,
you are supposed to advise on the question of whether to implement CO-PA or
EC-PCA in the SAP system. You then will be responsible for implementing the
selected applications.
Your corporate controller asks you to explain the differences in the actual value
flows in the costing-based and account-based Profitability Analysis. Your
Japanese sales manager is very familiar with the sales order process. He asks you
to explain at what point data is posted to CO-PA. He also would like to know
which sales order data is posted in CO-PA.
To fully allocate Research and Development costs which are currently collectedat the product group level using CO internal orders, Mr. Cash inquires whether
internal orders can be settled to CO-PA. To do this, you must explain the flow
of actual values into CO-PA and demonstrate the value flow differences in
costing-based and account-based CO-PA. Furthermore, you must explain the
Account-based CO-PA enables you to reconcile cost and Financial Accounting
at any time at the account level. In contrast to costing-based CO-PA, the system
stores values in cost and revenue elements, which form the common accountstructure for all the Financials applications. All the costs and revenues are posted
to account-based CO-PA simultaneously and using the same valuation approach
as Financial Accounting. The main difference here is that the cost of sales is
transferred at the point of goods issue and not together with the revenues.
Figure 41: Sales from Stock: Business Background
The sales order management application component consists of the functions for
handling quotations, orders, deliveries, and billing. Each of these areas has its own
sales documents, which contain the relevant data for that activity.
The central document in sales order management is the sales order. This order
may be based on the existing inquiries and customer quotations. When you create
an order, the information about the customer and the products or services sold is
stored in the document.
The following information is passed on to all the subsequent documents createdfor this business transaction:
• The delivery is created when the product is shipped to the customer, which
means the goods issue.
• A billing document is created to bill the customer for the goods or services
provided.
This is a central process in the SAP system and the starting point for the data
transfer to Financial Analytics. In some cases, data is transferred to costing-based
and account-based CO-PA at different times using different valuation approaches.
TFIN22_2 Lesson: Integration with Sales Order Management
Figure 44: Sales from Stock: Billing
A business transaction is normally concluded in Sales Order Management with
the billing document. The billing data is automatically transferred to Financial
Accounting (FI), where the revenue and receivable postings are made at the same
time.
When a billing document is created, Sales Order Management calculates all salesrevenues, sales deductions, and other values, such as the standard cost using
pricing procedures, and stores these values in condition types. By assigning these
condition types to the value fields in Profitability Analysis, you can have the
system automatically transfer their values to CO-PA.
By valuating this billing data from Sales Order Management using a material
or sales order cost estimate, you can assign further anticipated costs and sales
deductions to this transaction. The billing data is transferred to Profitability
Analysis with the record type, F.
In addition, you can transfer the quantities from the Sales Order Management
quantity fields, such as the sales quantity or gross weight, by assigning them to thecorresponding quantity fields in CO-PA.
IMG ! Controlling ! Profitability Analysis ! Flows of Actual Values !
Transfer of Billing Documents ! Assign Value Fields.
IMG ! Controlling ! Profitability Analysis ! Flows of Actual Values !
Transfer of Billing Documents ! Assign Quantity Fields.
Note: Draw attention to the fact that a condition type from sales
order management with a value that leads to a posting in the Financial
Accounting module is transferred to costing-based CO-PA only if the
G/L account is defined as a cost element of the categories, 11 or 12.
Condition Types
Sales Order Flow:
Transaction Costing-
based
Account-
based
FI
Create Sales
Order Revenue
Discounts
COS
Record Type
A
Post GoodsIssue
DR COS DR COS
CR Inventory
BillingRevenue
Discounts
COS
Record Type
F CR Revenue
DR Discounts
CR Revenue
DR Discount
DR Customer
AR
Explain again the condition technique, which works similar to the condition
technique explained under the lesson, “Valuation”. Notice that the set-up is alittle bit more elaborate here because you are not posting estimated values but the
values that affect Financial Accounting and Management Accounting. A generic
overview of all the pieces in sales order management Pricing configuration will
have to suffice at this point.
Sales Order Type, i.e. OR! Pricing Procedure, i.e. RV001A! Condition Type(s),
A condition type is a representation in the system of some aspect of your daily
pricing activities. For example, you can define a different condition type for each
type of price, discount, or surcharge that occurs in your business transactions.
A condition table defines the combination of fields that identifies an individual
condition record. A condition record is how the system stores the specific
condition data that you enter in the system as condition records. For example,when you enter the price for a product or a special discount for a good customer,
you create individual condition records.
An access sequence is a search strategy that the system uses to find valid data for a
particular condition type. It determines the sequence in which the system searches
for data. The access sequence consists of one or more accesses. The sequence of
the accesses establishes which condition records have priority over others. The
accesses instructs the system where to look first, second, and continue in this way
until it finds a valid condition record. You specify an access sequence for each
condition type for which you create condition records.
Figure 49: Simulation of the Transfer of Billing Document Data to CO-PA
In the activity, Simulating the Transfer of Documents from Billing, you have
the option of simulating the transfer of billing document data into Profitability
Analysis. Simulation occurs on the basis of the Customizing settings valid at the
time it is carried out. You can view the characteristics and value fields of the line
item to be written to CO-PA.
The function, Valuation analysis, allows you to perform an analysis of the
valuation strategy valid for valuating the billing document data.
You can also restart the simulation of document transfers for the billing documentsthat have already been transferred. Performing this simulation causes no data to be
This lesson helps you understand the transfer and allocation of costs. It also
explains settlement of orders.
Lesson Objectives
After completing this lesson, you will be able to:
• Explain the transfer and allocation of costs
• Explain the settlement of orders
Transfer of Overhead
Explain the business concept behind assessing the cost center and process costs
in Profitability Analysis. To allow full analysis of the costs that have arisen
in Overhead Cost Controlling, you can periodically transfer the overhead costs
that are not directly attributable to the cost centers or business processes to
Profitability Analysis. These are sometimes referred to as below the line expenses
or SG expenses.
These costs can be allocated to any market segment or profitability segment
and, as a result, to any level of the contribution margin hierarchies. This function
allows you to transfer the sales, marketing, and administration costs, as well as
the variances in service cost centers or production cost centers to Profitability
Analysis. Underline the fact that CO-PA uses the same assessment tool as
Overhead Cost Controlling.
Remind the participants that the product cost information can be retrieved when
transferring sales order management documents. Highlight the differences
between condition type VPRS and other COGS or COGM fields that are populated
through valuation. VPRS can be reconciled to Financial Accounting. It is the legal
Cost of Sales, and COGM or COGS may indicate a future or current standard
cost estimate.
To familiarize yourself with the concept of customer agreements, there is anexcellent IDES demo script on this topic, which you can execute in the training
To show in Profitability Analysis all the costs incurred in Overhead Costs
Controlling, you can transfer to Controlling Profitability Analysis (CO-PA) the
particular overhead costs for the cost centers and the business processes that are
not allocated to the inventory. This can be done using periodic assessment.
In addition, you can execute a direct or indirect allocation of internal activities
into CO-PA for Cost Centers and business processes. Along wíth the sender (cost center or process) and the receiver (profitability segment), you enter the
quantity of the activity performed and valuate it with the planned price of the
activity type. The amount that is arrived at is credited to the sender and debited
to the profitability segment receiving the quantity. The amount that is arrived at
is credited to the sender and debited to the profitability segment receiving the
quantity. This means that a transport activity can be directly posted to particular
customers without the need to be posted to a cost center or an order.
If you use the cost component split in Cost Center Accounting or Activity-Based
Costing for price calculation, you can update the prices divided into cost
components during allocations to Profitability Analysis.
Credit object Which time basis
Cost Center Assessment CostCenter Periodical costs
Direct activity allocation Cost center Quantity Price ad-hoc
In the SAP system, you allocate the process costs incurred for individual
profitability segments, such as a sales organization, to Profitability Analysis.
Notice that here you transfer the valuated process quantities and not the activity
type quantities as with cost centers.
When you create the process allocation, you can specify a profitability segment as
the receiver by selecting the Profit segment field. Then, when you press ENTER,the system displays a dialog box in which you can specify the characteristic values
to which you want to allocate the process.
The process quantity is then valuated using the planned price for that process and
credited to the cost center as actual data with the allocation cost element that was
assigned to the relevant business process.
In account-based CO-PA, the costs are debited with the same allocation cost
element. For costing-based CO-PA, you need to assign this allocation cost element
to the required value field in the PA transfer structure CO.
In dynamic process allocation, you can determine to a great extent, which
profitability segment used the process and, as a result, should receive the processcosts. In this case, you can use a process template to define the formulae and
functions that select the cost drivers from Profitability Analysis or other sources to
assign the costs most accurately to their cause.
In Customizing, you assign this process template to characteristics, which are used
to select the cost drivers. Then, you need to assign update characteristics, which
ultimately determine the profitability segments to which the business process
Demonstration: Assessing Cost Center and ProcessCosts
Purpose
To demonstrate the steps to assess the cost center and process costs
System Data
System:
Client:
User ID:
Password:
Set up instructions:
1. In Financial Accounting, post expenses (account, 417000) to the cost center
for sales and distribution of pumps (3200).
Document date: Today’s date
Company Code: 1000 (should appear as standard value)
G/L Account:
Amount:
Sign: Debit
Tax code: 0l
Cost center:
Account:
Sign: Credit
Amount:
Choose Post
Accounting ! Financial Accounting !General Ledger ! Posting ! Enter
G/L Account Document
2. Define an assessment cycle, which assigns the cost center, 3200, to Division,01, 02, and 06, in Profitability Analysis, according to the rule, fixed
percentage rates. Explain the effects of the tracing factor field. Explain
the following central points: The assessment of costs is not done via the
Cost Center accounting (“Push”), but via CO-PA (“Pull”). Allocations
cannot cross controlling areas. Assessment is the only value allocation
method available. Distribution and Periodic Reposting do not work in
conjunction with PA. During the allocation run, postings are made to both
account-based and costing-based PA. The record type for the postings made
to costing-based PA is ‘D’. Derivation takes place during the allocation
The PA transfer structure contains the assignment of costs and revenues to
the value fields in costing-based CO-PA. PA transfer structures are used in
order settlement, direct postings from FI, and internal activity allocations in
Management Accounting.
A PA transfer structure consists of any number of “assignment lines”. Each
assignment line contains the assignment of one interval or a group of cost or
revenue elements to the required value field.
A PA transfer structure must meet the following criteria:
• It must be complete: All the cost and revenue elements that can receive costs
or revenues must be assigned to a value field in the PA transfer structure.
• The assignments must be unique: Each cost or revenue element can only
occur one time within a PA transfer structure.
Settlement structure: During settlement, the costs incurred under the primary and
secondary cost elements by a sender are allocated to one or more receivers. When
you settle by cost element, you settle using the appropriate original cost element.
An allocation structure consists of one or several settlement assignments. Anassignment defines which costs (Origin: Cost element groups from debit cost
elements) are to be settled to which receiver type (for example, cost center or
order). You have two alternatives in settlement assignment:
• You can assign the debit cost element groups to a settlement cost element.
• You can settle by cost element, which means the debit cost element is the
After completing this exercise, you will be able to:
• Allocate costs using Cost Center Assessment
Business Example
The costs of a marketing survey conducted by an outside service provider are to be
allocated from the marketing cost center to the products, P-101 and P-102.
Note: The primary source of the data for CO-PA is normally sales order
management billing. The primary source of period costs, such as sales
and administration costs, for CO-PA is normally Cost Center Accounting.
With cost center assessments, you can allocate responsibility-oriented
costs across profitability segments for P&L reporting.
Task:
Post an invoice from the marketing company CEB Berlin against this cost center
to pay for a market survey it conducted. AC605-##
The credit entry in this case will be posted to the vendor account number, andthe debit entry will be posted against the cost center using the external services
account number. The posting is made in the company code, 1000.
Vendor : 1000 C.E.B Berlin
Invoice Number: 1234##
Invoice Amount: 10,000.00
Account Number: 417000 External Services
Account Assignment: Marketing Cost Center
AC605-##
1. In the costing-based profitability analysis, apportion a cost assessment for
the Cost Center to products P-101 and P-102. The costs should be divided
equally between the two products.
2. Create an allocation cycle, CYC-##, starting January 01, XXXX, to allocate
the marketing costs to the Marketing Costs value field. Use the assessment
After completing this exercise, you will be able to:
• Allocate the costs from Overhead Cost Accounting to CO-PA using activity
types
Business Example
Your R&D cost center manager wants to allocate R&D costs to products whenever
possible. The Product Engineering group spent 10 hours last month in improving product P-101. Controlling has set a rate of $100.00 per development hour.
Note: In addition to cost center assessments, you can use activities to
allocate the costs from cost centers to Profitability Analysis. The activities
in the SAP system are normally defined as the productive output of a cost
center and can be measured in time increments or units. Activity prices
can be planned manually or calculated by the system based on planned
or actual costs. Activities can be allocated using a process called Direct
Activity Allocation, which credits the sending cost center and debits one
or more receivers.
Task 1:
1. Create the activity type EH## for the development time in hours. Validity
period from 1 January of the current year to 31 December 9999.
All the cost center categories should be able to use this activity. The
activity type category is 1 because the costs are allocated manually. The
secondary cost element, 621000, will debit the activity receiver and credit
the cost center.
Save the activity type.
Task 2:1. Plan the activity price for this activity type for the current fiscal year in
the plan version, 0.
The development department plans to spend 1200 hours R&D time on blue
bicycles.
In Cost Center Accounting, choose Planning ! Activities/Prices to plan a
rate of 100 for the activity type, EH##, and the cost center, 4500.
Figure 62: Working with a Standard Unit of Measure
Working with standard units of measure (UoM) allows you to convert different
UoMs into a single UoM of universal application. This conversion can occur
in two different ways.
First, you can define the standard UoM in such a way that the UoM transferred
from the source quantity field’s previous applications can be converted into
the standard CO-PA UoM for all materials. When you do this, ensure that theUoM that is selected as standard is also maintained in the material master for all
materials, either as a base UoM or as an alternative UoM.
If you cannot define a uniform standard UoM due to the heterogeneity of the
materials affected, you can define a comparable standard UoM using the methods
for deriving characteristics. To do this, use a characteristic value (such as a
product group) as your basis.
This straightforward feature enables you to compare the different UoMs in CO-PA.
The product hierarchy entered in the material master is contained in an 18-character
field that is logically divided into different levels. If you simply choose this field
from the reference table, the tables MARA or MVKE, as you would for other characteristics, the Information System cannot recognize its encrypted hierarchical
structure. This means that you can drill down only on one level of the hierarchy.
Figure 68: Transfer "Product Hierarchy" before Rel. 4.5
If you want to drill down through all the levels of the product hierarchy, you
need to represent each of the individual levels as a separate characteristic in
CO-PA. Example: The product hierarchy contains three parts, the first two with
the length 5 and the third with the length 8. This means that the first level of the
product hierarchy is of the length 5, the second one of the length 10 (because
it is composed of the first two parts) and the third level is of the length 18. In
CO-PA, you need to define the following three characteristics for these three
representative functions and partner functions, which signify the customer master
data table and the KNA1 or LFA1 vendor master data tables. Partner functions,
which refer to the customer master data table or the vendor master data tables,are assigned to the corresponding master data tables (KNA1 or LFA1) as value
tables. Personnel representative functions do not have any value tables. The sales
employee is an example of a personnel representative function, which is available
in the standard system.
For an in-depth explanation of how to transfer partner functions from SD to
CO-PA, see SAP Note 36557.
Figure 74: Value Flows
Figure 75: SD/CO-PA interface (transfer of sales revenue/revenue
deductions)
The system accesses only those condition types in SD that have been assigned
to a CO-PA value field in CO-PA Customizing. Even so, note that only certaincondition types in SD can be transferred to CO-PA. These are:
• Revenues and sales deductions, the G/L account for which was created in
CO with the cost element types 11 = “Revenue” or 12 = “Sales deduction”
• Conditions that are defined as statistical in SD, such as the VPRS condition
type, which contains the costs of goods sold. Statistical conditions do not lead
to a posting to a G/L account. In addition, note that only active conditions
are transferred to CO-PA. Inactive conditions are not transferred. If all the
conditions in an item are inactive, the order item is not transferred to CO-PA.
All values are transferred to CO-PA as positive. For credit memos (billing
type G2), all signs are reversed. Only in CO-PA reporting are sales deductions
subtracted from the gross revenues. The reason for this procedure is that the
revenues in the different SAP applications have different plus and minus (+/-)signs. The revenues in the SD component are managed as positive amounts, but in
the FI component they are negative amounts. Since revenues can be transferred to
CO-PA from both systems, the plus and minus signs (+/-) have to be processed.
Note that this solution requires condition types that are managed as negative
amounts in SD, such as discounts, to be assigned to other CO-PA value fields as
positive condition types, such as special revenues.
Figure 80: Top Down Distribution of Single Valuation Views
Previously, in top down distribution for actual data, the data used to be distributed
for all the valuation views from legal valuation and profit center valuation.
Currently, individual valuation views can be processed separately within a top
down valuation run.
In cases where you use both valuation views but require details for only one, it is
a good idea to perform top down distribution just for this view. This allows youto reduce runtimes in top down distribution and avoid generating unnecessarily
Each independent installation of R/3 is known as an R/3 instance. Normally, there
is a 1:1 ratio between R/3 instances and database servers. In addition, there are at
least three instances for each SAP project: for development, integration testing,
and production activities.
Each operating entity within an instance is called a “client”. There are normally
several clients in any instance, which are used for different tasks, such as“playgrounds”, development, unit testing, and backups. The way in which the
clients and instances are used in a project is known as a client strategy.
The technical operating level of an instance is known as the data dictionary
(DDIC). The DDIC contains objects, such as tables, programs, and data elements,
which are client-independent. This means they pertain to all the clients in an
instance.
Certain objects contain data that is client-dependent. Data can be classified as
master data, configuration data, and transaction data. Master data should be
maintained on the user side of system. Configuration data represents the settings
that define transactions for R/3 Enterprise.
Transaction data is produced by the transactions in R/3 Enterprise. Transporting
indicates the SAP process of moving items between clients within an instance
and among instances.
With transporting, items (such as objects and data) are collected into transportable
bundles, which are then processed at the operating system level by a systems
administrator. Normally, configuration data can be transported between clients
within or among instances. Master data and transaction data, on the other hand,
cannot be transported in this way. However, they do not have to be transported
between clients since they are client-independent.
The transport function for CO-PA is flexible and sophisticated, allowing for a
number of ways to accomplish the required goals.
Option 1: Most CO-PA Customizing changes are automatically included in change
requests when the change management system is active for a client. The change
requests can be transported with standard functions. This approach is encouraged
for small configuration changes, especially deletions. Note: Not all Customizing settings can be transported using this option, as not all
Customizing settings create change requests automatically. However, deletions of
mappings must be transported with this option.
Option 2: Most configuration which takes the form of entries in a table (technically
speaking, that configuration which is modified through view maintenance) can be
selectively added to manually triggered transports. Manually created transports
are triggered by an option in the Table View menu.
Note: This option is for transporting selected entries in a table, such as mappings of
condition types. Again, only some configuration can be transported in this manner.
Option #3: This tool facilitates the transport and ensures consistency in thedevelopment of CO-PA. This transport tool can transport all or some parts of
an operating concern.
Notes: Other such objects are listed below.
Option 4: Copying of certain items, such as reports, forms, line item layouts,
report line structures, and planning layouts, from client to client within an instance
and within an operating concern is possible with an import tool, without going
Figure 93: CO-PA Transport Tool – Operating Concern
The method used to process transports generated by the three CTS-relevant
transport options (remember that this excludes the import tool) depends on the
location of the receiver.
• If the receiver is a client in a different SAP instance, then the standard
system-to-system transport method is required to process the transport(s).
• If the receiver is a client in the same instance, then a client has to be copiedin accordance with the transport request. This ignores any client-independent
objects.
It is recommended that you regenerate the operating concern and summarization
levels in the target after transporting any configuration changes. This ensures that
all the necessary items in the DDIC are updated for the change.
The special transport tool can transport Customizing data separately or together.
You can transport the following objects:
• Client-independent structures for data structures and summarization levels
• Client-dependent configuration for actual postings and planning
• Derivation and valuation configuration pieces
• Table entries for check tables and derivation rules
• Miscellaneous, such as number range groups and plan structures
Note that number range groups and their assignments to record types are
transported with the transport tool. However, the number intervals themselves
have to be transported separately. It is a good idea to use the same number range
intervals in all instances to avoid possible conflicts as a result of transports.
Profitability Analysis uses the standard R/3 functions for authorizations. A
number of predefined authorization objects are shipped with the standard system.
You can use these to create authorizations and profiles and protect the Customizing
and application functions in the CO-PA components.
For example, most CO-PA users will be authorized only to enter planning data
and execute reports. Cost accountants may be allowed to perform cost center assessments and other allocations to CO-PA. Other support employees may also
be authorized to create line items directly, update derivation rule entries, or make
assignment changes.
To restrict data in CO-PA, you need to create custom authorization objects for
certain characteristics, value fields, and key figures. The default settings for an
operation concern state that all data is unprotected (freely accessible) at data level
until a custom authorization object is created for a field or combination of fields.
For example, you can create an authorization object to protect information about
individual sales employees (such as sales commission) or about certain product
costing information. Different authorization objects are used for planning data andactual data. If you want to protect both data types, you have to create two objects.
R/3 Enterprise delivers the standard profile, K_RKE_ALL, which contains full
authorizations for all the delivered CO-PA authorization objects. This means that
a user with this profile can perform any function in CO-PA, provided that no
custom authorization objects have been created. If objects have been created,
then authorizations for them have to be created and added to this or another
Data can be uploaded directly into costing-based CO-PA through the external data
upload feature. You may need to do this if a company is not implementing the
SD module but wants sales details in CO-PA to take advantage of the module’s
multidimensional reporting capabilities. It might also be used to load historic
data in CO-PA or to load the data for company divisions that do not use the ERP
system productively.
With this feature, data is uploaded directly from text files on the operating system
level into the costing-based CO-PA transaction data tables. The feature does notsimulate the manual line item create feature. The records in the text file must be of
a consistent format, where each field is allocated a fixed number of characters, and
where records are not separated by characters or carriage returns.
If you upload data through the external data interface, you need to define the
structure of the file to be uploaded and assign the fields of that structure to the
fields of the operating concern. The fields are mapped to each other through the
aid of assignment groups. This allows different mappings for data to be uploaded
to the same structure.
The configuration described above is set in Customizing, but the transfer itself is
conducted in the application menu. The function is available for both actual dataand planning data. However, you have to transfer these separately. Derivation,
valuation, and validation occur during the upload, just as they would for any other
transaction that transfers data to CO-PA.
Any records that do not pass the validation checks are written to an error file, which
can be corrected. These files can then be uploaded to the CO-PA component. This
procedure can occur only once for each file, since the system monitors the files
to avoid data being duplicated. Each file can be uploaded to CO-PA only once
because the system logs the files to ensure that the data is not duplicated. Multiple
files can be uploaded into CO-PA at the same time for maximum performance.
Profitability Analysis uses the standard ERP system functions to archive and delete
movement data. In the ERP system, archiving means copying data from ERP
datatables to archive files. Deletion means removing data from ERP datatables.
As a result, you can archive with or without deletion. If you archive with deletion,
you can configure the two processes to occur simultaneously or sequentially.
In Profitability Analysis, you can archive or delete line items for selected periods
(although not for the current period). Summary records, on the other hand,can only be deleted once a year. Actual and planning data, as well as data in
costing-based and account-based Profitability Analysis, is archived and deleted
separately. Data records can also be archived and deleted by record type.
Incidentally, there are standard functions in the Implementation Guide to
reorganize or delete the other types of data and other items in CO-PA, such as
frozen data, report definitions, form definitions, planning layouts, and line item
layouts. Note that deleting security data does not delete movement data from the
standard tables but only deletes the “frozen” data for the reports.
With the COPA0001 enhancement, you can program steps to determine
characteristic values during derivation. These steps can be given step IDs and
sorted in your derivation strategy as required. For example, this enhancementmight be used to determine the value for a special user-defined characteristic,
which is determined by complex logic not achievable through derivation rules.
With the COPA0002 enhancement, you can program the steps to calculate or
retrieve the special values during valuation. Separate calculations can be defined
for the planned and actual data. Calculations are assigned user exit numbers,
which must be placed in active CO-PA valuation strategies for the calculations to
occur during the posting of data. For example, this enhancement might be used
to delete certain values for updating Profitability Analysis, provided that these
are not required (for example, “dummy” products for freight, documentation,
and services).
With the COPA0003 enhancement, you can use characteristic groups in
conjunction with additional conditions (instead of just one report) whenever
manual assignment to a profitability segment is required. This means the same
transaction could require the specification of values for different characteristics
when different situations arise.
For example, you can use this enhancement to determine a characteristic group
according to the account that is posted, so that product-related accounts have the
product number and customer-related accounts have the customer as a required
field in the profit segment.
Figure 100: CO-PA Enhancement Overview (2)
With the COPA0004 enhancement, you can reprogram the exchange rate type
that should be used for currency transaction when actual data is processed in