Cost Elements not to be created

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Hi All,
Can you please let us know, which type of P&L accounts should not be created as Cost Elements in Controlling . . .
We have list of such accounts which are not to be created as Cost Elements. Pl let us if the list is correct or not.
Cost Elements should not be created for the following.
1 Change in work in process WIP
2. Cost element for cost of goods sold transactions. (P&L Accounts maintained in OBYC > GBB > General Modification VAX)
3. Production order variances. (P&L Accounts maintained in OBYC > PRD > General Modification PRF)
4. Do not create any cost elements for financial and tax expenses if you want your CO-PA structure to stop at earnings before interest and taxes
5. Price Difference account should not be made as cost element.
Please explain for situation where COPA is implemented and where COPA is not implemented . . .
Any guidence in this regard will be of grate help . . .
Regards,
Ravi Kumar

Hi,
Your list is not viable.
See, cost element only can be made for P&L item.
U can't make cost element for  B/S item.
For P/L item also , u need to understand company's policy and requirement.
In your list
change in WIP is a B/s item so it is not a cost element item.
O ther Gl like cost of goods sold , generaly no company follow this GL as such head is a part of costing sheet reporting .
U need to asssigne GL which is related with that head in costing sheet.
Any way your gl like price difference, Prod  order diff etc must have cost element . other wise U will get fake report on Controling.
Regards,
Pari

Similar Messages

  • Product costing - cost elements not to be created

    Hi
    Can any one suggest on the list of G/L accounts for which cost elements not be created in CO in terms of product costing?
    thanks
    Moderator: Please, search before posting

    hi,
    Cost elements need to be created for those you want assign in your cost component structure.
    Secondary cost elements for over heads  material, Production with category - 41,
    Cost elements for WIP calculation (All costs, Material costs)- 31 category
    Cost elements for RA.
    Primary cost elements are some how need to be created for  the P/L  accounts.
    secondary cost elements are which are used inturn used for production process like over heads etc.
    Why you are worried about GLs & cost elements not to be created.
    Which are require you create them.
    Edited by: santosh kumar on Feb 6, 2012 4:47 AM

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    Hi Gurus,
    Which Cost Elements should not created againts the GL accounts apart from Assets & Laibilties' GL.
    Like WIP change A/c should not created as Cost Elements.
    regards
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    Hi,
    There are different kind of Cost Elements which depends upon the Cost Element Category...
    01: Primary costs / cost-reducing revenues
    This cost element category can be debited for all primary postings, for example, in Financial Accounting (FI) or in Materials Management (MM).
    Cost-reducing revenues are revenues that are to be handled in CO similarly to overhead costs, and which reduce the prices of an activity type or the costs to be assessed. This is the case, for example, with rent revenues, which reduce the room costs to be assessed. Cash discount amounts and exchange rate amounts are also cost-reducing revenues.
    03: Accrual Calculation Using the Percentage Method
    You can only use this cost element category during accrual calculation in Cost Center Accounting (component CO-OM-CCA) when you are using the percentage method. You can post directly from FI to take account of the actual costs incurred. The system also uses cost elements of this category to post the accrual amounts within Cost Center Accounting CO-OM-CCA.
    If you do take actual costs into account (say, for additional costs), create cost elements of this category in Controlling (CO) only. The account must be defined in the chart of accounts, but you do not need to create the general ledger account in FI.
    04: Accrual Calculation Using the Target=Actual Method
    Used in Cost Center Accounting (CO-OM-CCA) only for accrual calculation when you are using the target=actual method. You can post costs directly from FI to register actual costs incurred. At the same time, the system uses this category of cost element to post accrual cost amounts within Cost Center Accounting CO-OM-CCA.
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    11: Revenues
    Used to post revenues. These revenues are generally posted during make-to-stock-production directly into the operating profit, or with make-to-order-production to the sales order.
    In Controlling (CO) revenues are displayed with negative +/- sign. An exception to this is Profitability Accounting  (CO-PA, costing-based), in which all values, including revenues, are displayed with a positive +/- sign.
    12: Sales Deductions
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    FI does not require CO account assignments to cost elements of category 90. However, if you enter an account assignment, it is only recorded statistically for true objects.
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    In CO the order or WBS element is debited statistically. This statistical debiting is checked by the system using the budget during availability control.
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    Reward Points to Help You Better
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    Jigar

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