TFIN22_2 Management Accounting II

7/30/2019 TFIN22_2 Management Accounting II

http://slidepdf.com/reader/full/tfin222-management-accounting-ii 1/191

TFIN22_2Management Accounting II

mySAP ERP Financials

Date

Training Center

Instructors

Education Website

Participant HandbookCourse Version: 2006/Q2Course Duration: 2 Days

Material Number: 50080906

An SAP course - use it to learn, reference it for work



Copyright

Copyright © 2006 SAP AG. All rights reserved.

No part of this publication may be reproduced or transmitted in any form or for any purpose

without the express permission of SAP AG. The information contained herein may be changed

without prior notice.

Some software products marketed by SAP AG and its distributors contain proprietary software

components of other software vendors.

Trademarks

• Microsoft®, WINDOWS®, NT®, EXCEL®, Word®, PowerPoint® and SQL Server® are

registered trademarks of Microsoft Corporation.

• IBM®, DB2®, OS/2®, DB2/6000®, Parallel Sysplex®, MVS/ESA®, RS/6000®, AIX®,

S/390®, AS/400®, OS/390®, and OS/400® are registered trademarks of IBM Corporation.

• ORACLE® is a registered trademark of ORACLE Corporation.

• INFORMIX®-OnLine for SAP and INFORMIX® Dynamic ServerTM are registered

trademarks of Informix Software Incorporated.

• UNIX®, X/Open®, OSF/1®, and Motif® are registered trademarks of the Open Group.

• Citrix®, the Citrix logo, ICA®, Program Neighborhood®, MetaFrame®, WinFrame®,

VideoFrame®, MultiWin® and other Citrix product names referenced herein are trademarks

of Citrix Systems, Inc.

• HTML, DHTML, XML, XHTML are trademarks or registered trademarks of W3C®, World

Wide Web Consortium, Massachusetts Institute of Technology.

• JAVA® is a registered trademark of Sun Microsystems, Inc.

• JAVASCRIPT® is a registered trademark of Sun Microsystems, Inc., used under license for

technology invented and implemented by Netscape.

• SAP, SAP Logo, R/2, RIVA, R/3, SAP ArchiveLink, SAP Business Workflow, WebFlow, SAP

EarlyWatch, BAPI, SAPPHIRE, Management Cockpit, mySAP.com Logo and mySAP.com

are trademarks or registered trademarks of SAP AG in Germany and in several other countries

all over the world. All other products mentioned are trademarks or registered trademarks of

their respective companies.

Disclaimer

THESE MATERIALS ARE PROVIDED BY SAP ON AN "AS IS" BASIS, AND SAP EXPRESSLY

DISCLAIMS ANY AND ALL WARRANTIES, EXPRESS OR APPLIED, INCLUDING

WITHOUT LIMITATION WARRANTIES OF MERCHANTABILITY AND FITNESS FOR A

PARTICULAR PURPOSE, WITH RESPECT TO THESE MATERIALS AND THE SERVICE,

INFORMATION, TEXT, GRAPHICS, LINKS, OR ANY OTHER MATERIALS AND PRODUCTSCONTAINED HEREIN. IN NO EVENT SHALL SAP BE LIABLE FOR ANY DIRECT,

INDIRECT, SPECIAL, INCIDENTAL, CONSEQUENTIAL, OR PUNITIVE DAMAGES OF ANY

KIND WHATSOEVER, INCLUDING WITHOUT LIMITATION LOST REVENUES OR LOST

PROFITS, WHICH MAY RESULT FROM THE USE OF THESE MATERIALS OR INCLUDED

SOFTWARE COMPONENTS.



About This Handbook

This handbook is intended to complement the instructor-led presentation of this

course, and serve as a source of reference. It is not suitable for self-study.

Typographic Conventions

American English is the standard used in this handbook. The following

typographic conventions are also used.

Type Style Description

Example text Words or characters that appear on the screen. Theseinclude field names, screen titles, pushbuttons as well

as menu names, paths, and options.

Also used for cross-references to other documentation

both internal (in this documentation) and external (in

other locations, such as SAPNet).

Example text Emphasized words or phrases in body text, titles of

graphics, and tables

EXAMPLE TEXT Names of elements in the system. These include

report names, program names, transaction codes, tablenames, and individual key words of a programming

language, when surrounded by body text, for example

SELECT and INCLUDE.

Example text Screen output. This includes file and directory names

and their paths, messages, names of variables and

parameters, and passages of the source text of a

program.

Example text Exact user entry. These are words and characters that

you enter in the system exactly as they appear in the

documentation.

<Example text> Variable user entry. Pointed brackets indicate that you

replace these words and characters with appropriate

entries.

2006/Q2 © 2006 SAP AG. All rights reserved. iii



About This Handbook TFIN22_2

Icons in Body Text

The following icons are used in this handbook.

Icon Meaning

For more information, tips, or background

Note or further explanation of previous point

Exception or caution

Procedures

Indicates that the item is displayed in the instructor's

presentation.

iv © 2006 SAP AG. All rights reserved. 2006/Q2



Contents

Course Overview ....... ....... ....... ....... ....... ...... ....... ....... .. vii

Course Goals ....... ........ ........ ........ ........ ....... ........ .....vii

Course Objectives ... .... ... .... .... .... .... .... .... ... .... ... .... .... .vii

Unit 1: Structures ....... ....... ....... ....... ...... ........ ...... ....... ... 1

Overview of Operating Concern . ... ... .. ... .. ... ... .. .. ... ... .. ... .. .2

Data Structures........................................................ 16

Unit 2: Master Data ...................................................... 43Introduction to Characteristic Derivation and Valuation.......... 44

Characteristic Derivation............................................. 48

Valuation ....... ........ ........ ....... ........ ........ ....... ........ .. 67

Unit 3: Actual Data...................................................... 105

Flow of Actual Data..................................................106

Transfer of Overhead... ... .... .... .... .... .... .... ... .... .... .... ... 111

Appendix 1: Appendix ...... ....... ....... ....... ....... ....... ..... 147

Index ....................................................................... 181

2006/Q2 © 2006 SAP AG. All rights reserved. v



Contents TFIN22_2

vi © 2006 SAP AG. All rights reserved. 2006/Q2



Course Overview

This course describes the functions in Profitability Analysis and outlines how to

implement the component. It covers how to set up the structures of an operating

concern and characteristic derivation and valuation. In addition, it explains

how the flow of actual values from the SD, FI, and CO modules works. It also

examines how to create planning layouts, reports, and report forms.

Target Audience

This course is intended for the following audiences:

• Project team members from the Management Accounting departments• Database administrators

• Project team members from the Sales and Marketing departments

Course Prerequisites

Required Knowledge

• AC040 Business Processes and Controlling

• Basic knowledge and experience in cost accounting

• Good working knowledge of the Microsoft Windows operating environment

Recommended Knowledge

• SAP01 - SAP Overview

Course Goals

This course will prepare you to:

• Understand the functions in Profitability Analysis and obtain an insight on

how to implement the component

• Explain Profitability Management in an SAP system

• Work with CO-PA structures and master data• Identify the sources of actual values

• Execute planning

• Use the Information System and work with the additional functions in CO-PA

Course Objectives

After completing this course, you will be able to:

2006/Q2 © 2006 SAP AG. All rights reserved. vii



Course Overview TFIN22_2



• Set up the structures of an operating concern and examine characteristicderivation and valuation

• Explain how the integration works between Sales Order Management,

Financial Accounting, and Management Accounting

• Create planning layouts, reports, and report forms

SAP Software Component Information

The information in this course pertains to the following SAP Software Components

and releases:

viii © 2006 SAP AG. All rights reserved. 2006/Q2



Unit 1Structures

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 andthe 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

Unit Contents

Lesson: Overview of Operating Concern .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .2Exercise 1: Operating Concerns .. ... .. ... ... .. ... .. ... ... .. .. ... .. ... ... . 11

Lesson: Data Structures ... .... .... ... .... .... .... .... .... .... ... .... .... .... ... 16Exercise 2: Data Structures................................................ 25Exercise 3: Maintain the Operating Concern ............................ 31

2006/Q2 © 2006 SAP AG. All rights reserved. 1



Unit 1: Structures TFIN22_2

Lesson: Overview of Operating Concern

Lesson Overview

This lesson describes the various organizational units. In addition, it covers the

concepts, characteristics, and value fields of an operating concern. It also defines

an operating concern and its attributes.

Lesson Objectives

After completing this lesson, you will be able to:



operating concern


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.

Both cross-company and company-specific reporting of contribution margins is

required in multiple currencies. Multidimensional analysis of sales information,

cost-of-sales information, production variances, and period cost information isrequired for the various market segments. Estimated costs are required for the

actual costs posted only at the month-end. Actual period costs (S, G, and A) for

the various organizational entities are to be reflected at the month-end. Analytics

by value category and by income statement account is required.

For this purpose, you need to identify the operating concern, which represents a

sales and marketing reporting unit for a corporation. You also need to understand

the concept of characteristics and value fields.

2 © 2006 SAP AG. All rights reserved. 2006/Q2



TFIN22_2 Lesson: Overview of Operating Concern

Introduction to Organizational Units

Figure 1: Organizational Units

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 operating

concern 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.





Basic Concepts: Characteristics and Value Fields

Figure 2: Basic Concepts of CO-PA

Characteristics

• Answer the question: What do I want to report on?

• Examples: Divisions, Regions, Products, Customers.

Characteristic Values

• Answer the question: What values can I have for these characteristics?

• Examples: Region South; Region North.

Profitability Segments

• Answer the question: What is the technical definition of my sales channel?

• Examples: Combination of Region North, Product Prod1, Sales Rep Miller.

Value Fields

• Answer the question: What performance measures do I want to track andanalyze?

• Examples: Gross Sales, Surcharges, Discounts, Cost-of-Sales.





Figure 3: Categories of Characteristics

Meaning of Characteristics

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.


Edited by Foxit ReaderCopyright(C) by Foxit Software Company,2005-2008For Evaluation Only.




Figure 4: Categories of Characteristics in Detail

Characteristics can be categorized according to how and when they are defined:

• Characteristics transferred from SAP tables: You can use characteristics

that already exist in other applications when you define your operating

concerns. For example, you can copy the fields from the tables for the

customer master records, material master records, and sales documents. You

can also copy the partner roles defined in the structure, PAPARTNER, in the

Sales and Distribution, SD, application as characteristics in Profitability

Analysis.• Newly defined characteristics: You can create ones that are only required

in Profitability Analysis. To derive the values for these characteristics, you

need to define your own derivation strategy.

• Predefined characteristics: In addition to the fixed characteristics, a

number of other predefined characteristics are available in the field catalog

and can be added to your operating concern, if required. These include the

customer group, customer district, and country characteristics.

• Fixed characteristics: A number of fundamental characteristics are

automatically predefined in every operating concern. These include the

product number, company code, billing type, business area, and sales order

characteristics.





Figure 5: Categories of Value Fields

Meaning of Value Fields

• In costing-based Profitability Analysis, value fields store the base quantities

and amounts for reporting. Value fields can either be highly summarized,

such as representing a summary of cost element balances, or highly detailed,

such as representing just one part of a single cost element balance.

• The sales-related key figures (e.g. revenue types, discounts, surcharges) are

normally presented in a very detailed way. By comparison, items based

on periodic costs (for example, period cost types) are aggregated. Unlike

characteristics, there are no fixed value fields for a new operating concern.

Value Field Maintenance in the Field Catalog

• All value fields must exist in the field catalog before they can be used to

define a new operating concern. The value fields in the field catalog can be

accessed in any client. The field catalog originally contains some suggested

value fields, which might be used in a new operating concern. Value fields

can also be defined independently. These should begin with VV..., and

should be four to five characters in total.

• You do not need to create the value fields for calculated items, such as net

sales and contribution margin. These items are normally calculated from the

base values stored in the value fields during the report execution progress.

This minimizes the necessary data storage requirements.

Fixed Basic Key Figures (Account-Based CO-PA only)

• In account-based Profitability Analysis, all values are updated to accounts.

Each amount is stored in up to three different currencies under fixed basic

key figures, which are accessed in reporting.





Figure 6: Value Fields With New Time Aggregation Rules

You can use value fields with the aggregation rules, AVG (average) and LAS (last)

in CO-PA drill-down reports.

You define these value fields when you define the data structures for Profitability

Analysis.

Defining an Operating Concern and its Attributes

Figure 7: Steps in Defining an Operating Concern





You define the structure of your operating concern when you set up your system.

This is done by selecting the characteristics you want to use in the data structures

of the operating concern.

In costing-based Profitability Analysis, you also need to select the value fields

you want to use.

The structure of an operating concern is valid in all clients.

Figure 8: Defining Operating Concern and Attributes

The attributes are client-specific parameters of an operating concern. They have

different effects, depending on the type of Profitability Analysis you are workingin.

Currency types

Operating concern currency- In costing-based Profitability Analysis, the actual

data is always updated in the operating concern currency. You can change the

operating concern currency as long as no data has been posted in the operating

concern.

Company code currency- In addition to the operating concern currency, you have

the option of storing all data in the currency of the relevant company code. This

makes sense if your organization operates internationally and is concerned with

exchange rates that change daily. It allows you to avoid differences due to differentexchange rates and enables you to reconcile your CO-PA data directly with FI.

Profit center valuation In addition to storing data in these two currencies using

the legal company code, valuation view, you can also store data in both of these

currencies valuated from the viewpoint of individual profit centers.

Fiscal year variant





The fiscal year variant determines the number of posting periods for each fiscal

year. Because each controlling area assigned to the operating concern, and each

company code assigned to each of the controlling areas, can have its own fiscalyear variant, the variant you choose for the operating concern must agree with

that for the other areas.





Exercise 1: Operating Concerns

Exercise Objectives

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 corporation

in 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 IDEA

operating 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.

Continued on next page





Task 3:

Call the profitability report AC605-ECPCA (Profit Center) in the costing-based

Profitability Analysis. Select the reporting date for the previous year with a plan

version.

1. Obtain an overview of the actual data with regard to sales characteristics.

Profit Center

Strategic Business Unit

Company Code





Solution 1: Operating Concerns

Task 1:

1. Check the basic settings and organizational assignments for the IDEA

operating 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?

a) Use the following shortcut to display the IMG:

IMG – Controlling – Profitability Analysis – Tools – Analysis – Check

Customizing Settings.

Expand to the IDEA operating concern. Controlling area 1000 is

assigned. The Company Code 1000 is also assigned to the controlling

area 1000.

All have the same fiscal year variant. Controlling Area and Company

Code have the same chart of accounts.All assigned organizational units are listed in the overview of

the organizational structures of the operational concern; detailed

information from the respective master data are also displayed.






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.

a) SAP menu→ Accounting → Controlling → Profitability Analysis →

Information System→ Execute Report

If required, set the costing-based Profitability Analysis via SAP menu

→ Accounting → Controlling → Profitability Analysis→ Environment

→ Set Operating Concern.

Execute AC605 – ORDER order using F8 or via Report – Execute. The

report contains the data on incoming sales orders or revenue. The

difference represents the incoming sales orders = order balance still to be processed.

You can evaluate the prorated incoming sales orders or turnover,

differentiated according to strategic business units, sales organizations,

distribution channels and divisions using the assigned characteristics.

Task 3:

Call the profitability report AC605-ECPCA (Profit Center) in the costing-based

Profitability Analysis. Select the reporting date for the previous year with a plan

version.

1. Obtain an overview of the actual data with regard to sales characteristics.

Profit Center

Strategic Business Unit

Company Code

a) SAP Menu→ Accounting → Controlling → Profitability Analysis →

Information System→ Execute Report

Execute the AC605 – ECPCA report using F8 or via Report – Execute.

The report contains the data accumulated according to Profit Center.

However, reporting is done here according to cost of sales accounting, position values are not presented in CO-PA.





Lesson Summary

You should now be able to:• Describe the various organizational units


operating concern






Lesson: Data Structures

Lesson Overview

This lesson defines data structures and identifies the transaction data structures. It

also covers the CO-PA database structures and the operating concern templates.

Lesson Objectives





Business Example


application in the SAP system. As a member of the project team of your company,

you are supposed to advise on the question of whether to implement CO-PA or

EC-PCA in the SAP system. You will be responsible to implement the selected

applications. Both cross-company and company-specific reporting of contribution

margins is required in multiple currencies. The multidimensional analysis of

sales information, cost-of-sales information, production variances, and period

cost information is required for various market segments. Estimated costs are

required for the actual costs posted only at the month-end. Actual period costs (S,G, and A) for various organizational entities are to be reflected at the month-end.

Reporting by value category and by income statement account is required. For

this purpose, you need to understand the operating concern, data structures, and

segment level and non segment level characteristics.




TFIN22_2 Lesson: Data Structures

Defining Data Structures

Figure 9: Operating Concern Data Structures

Defining Data Structures

To define data structures, copy the required characteristics and value fields to

the operating concern and save them.

Activating the Environment (up to 4.6B Generation)

After you have defined the attributes and data structures of an operating concern,

you must activate them and generate the operating environment.

This process generates all the tables, programs, and technical objects required to

support the operating concern you have defined.

After you generate the operating concern and before you activate Profitability

Analysis for data entry, add the valid characteristic values to the check tables

generated for the new characteristics.

Changing the Data Structures

You must reactivate the environment after you change the data structures of an

operating concern. For example, reactivate the environment after you add a new

characteristic or a value field.

The regeneration process does not affect any existing transaction data. Notice that

it also does not automatically back-populate any new fields for existing transaction

data although this sometimes may be carried out using the CO-PA realignment or

periodic valuation functions.





The regeneration process will not affect any characteristic values that have already

been entered in check tables for user-defined characteristics.

Transaction Data Structures

Figure 10: CO-PA Transaction Data Structures (1)

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 the

system 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 Profitability

Analysis.

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

be accessed through line item display features.





CO-PA Database Structures

Figure 12: CO-PA Database Structures

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

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 thesenon-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

level. However, this can be changed if required.SAP recommends that data be summarized on a higher level, something other than

the customer or product level, for account-based CO-PA to minimize the number

of summary records. This is because its transaction data is stored in the tables that

are shared with other Management Accounting applications.





Operating Concern Templates

Figure 14: Operating Concern Templates

CO-PA provides you with operating concern templates, predefined sample

operating concerns, an environment in which to display the Customizing for these

operating concern, make changes to the Customizing settings, and copy them.

S_AL: Template for Route Profitability.

S_GO: Cross Industry Template.

S_CP: Consumer Goods Industry Template.

Operating concern templates offer the following advantages:

They enable you to gain an insight into Profitability Analysis as a demonstration,

without your having to perform extensive Customizing. This means that you can

use the templates as a basis for quickly calling up reports.

The operating concern templates simplify the Customizing in the profitability

analysis. If necessary, you can adjust your Customizing settings for an operatingconcern template as required, copy these and then use the copied and adjusted

operating concern productively.





Figure 15: Quickstart

Use SAP Operating Concern Templates.

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.









Exercise 2: Data Structures

Exercise Objectives


• Understand the concepts of value fields and characteristics

• Evaluate the different sources of characteristics

• Explain the settings available for value fields

Business Example

The following requirements apply for the value fields and characteristics needed

for profitability reporting in your organization:

Your sales manager requires summarized sales performance figures, such as gross

revenue, discounts, and surcharges both along as well as across the lines of the

sales structure, product lines, and customers of the company. The sales manager

also wants to view sales and marketing costs along these lines.

Task 1:

In the CO-PA settings menu, display all defined characteristics.

1. What is the table of origin for the Customer Class characteristic?

2. What is the check table for the Sales District characteristic?

Task 2:

Based on the requirements of your project team defined in the company scenario,

you determine that the following characteristics and value fields are required for

reporting. In the data structures of the operating concern, determine which of

the following items are value fields, non-fixed characteristics, fixed (delivered)

characteristics, and technical fields:

Customer, Customer Group, Material Group, Controlling Area, Cost

Element, Revenue, Customer Discount, Profit Center, Price Reduction, Sales

Organization, Variable Production Costs, Sales District, Posting Date, Fiscal

Year, and Number of Employees.

Note: The overview list contains all user-defined characteristics, default

characteristics, and the characteristics selected from the reference tables.

It does not include fixed characteristics or technical fields.

Assign the list of items in 2-2 to the following groups:

1. Which characteristics are non-fixed characteristics?






2. Which characteristics are fixed characteristics?

3. Which fields are technical fields?

4. Which fields are value fields?

5. What are the aggregation settings for the Number of Employees value field?

Why may you decide to use this field?

6. Display the Strategic Business Unit characteristic. What type of

characteristic is the Strategic Business Unit?

7. Display the REGIO (Region) characteristic. Is the characteristic grouped

with another characteristic?

Why and with what consequences?





Solution 2: Data Structures

Task 1:

In the CO-PA settings menu, display all defined characteristics.

1. What is the table of origin for the Customer Class characteristic?

a) IMG→ Controlling → Profitability Analysis → Structures→ Define

Operating Concern→ Maintain Characteristics

Set the indicator for “all characteristics”.

Search for the characteristic “KUKLA” (customer classification)

2. What is the check table for the Sales District characteristic?

a) Select: BZIRK and Details. The check table is T171.

Task 2:

Based on the requirements of your project team defined in the company scenario,

you determine that the following characteristics and value fields are required for

reporting. In the data structures of the operating concern, determine which of

the following items are value fields, non-fixed characteristics, fixed (delivered)

characteristics, and technical fields:

Customer, Customer Group, Material Group, Controlling Area, Cost

Element, Revenue, Customer Discount, Profit Center, Price Reduction, Sales

Organization, Variable Production Costs, Sales District, Posting Date, FiscalYear, and Number of Employees.

Note: The overview list contains all user-defined characteristics, default

characteristics, and the characteristics selected from the reference tables.

It does not include fixed characteristics or technical fields.

Assign the list of items in 2-2 to the following groups:

1. Which characteristics are non-fixed characteristics?


Operating Concern→

Maintain CharacteristicsSelect Display All Characteristics and Choose Display

Customer Group, Material Group, and Sales District.

2. Which characteristics are fixed characteristics?

a) Extras→ Fixed Fields

Customer, Controlling Area, Profit Center, and Sales Organization.






3. Which fields are technical fields?

a) Posting Date, Fiscal Year, and Cost Element

4. Which fields are value fields?

a) IMG→ Controlling → Profitability Analysis → Structures→

Operating Concern→ Maintain Value Fields

Select All Value Fields→ Display

Revenue, Customer Discount, Price Reduction, Variable Production

Costs, Number of Employees

5. What are the aggregation settings for the Number of Employees value field?

Why may you decide to use this field?

a) Select No. of Employees and Detail.

LAS (AVG and SUM also possible).

Period values are normally added together in the Information System

and in Profitability Analysis (CO-PA) planning. This means the

aggregation rule is SUM. The aggregation rules, Last value and

Average, are useful only for representing statistical, non-cumulative

values in value fields, when the most recent or average value is required

instead of the sum.

6. Display the Strategic Business Unit characteristic. What type of

characteristic is the Strategic Business Unit?



Select All Characteristics→ Display

Select the strategic business unit WWSBU and then Detail:

User-defined field with 8 characters.

7. Display the REGIO (Region) characteristic. Is the characteristic grouped

with another characteristic?






Why and with what consequences?



Select : Display All Characteristics. Select the characteristic REGIO

(not Region before Rel. 4.5) and, in the detailed display, click: Show

compound characteristic

The REGIO characteristic is grouped with the COUNTRY

characteristic. This takes into consideration that the table for

maintaining the master data values for the REGIO characteristic is also

maintained for the COUNTRY characteristic, because region without

country does not have a clear, semantic meaning.

By double-clicking the check table T005S for the REGIO characteristic,

the assignment of the country characteristic becomes visible as part of

the selection.

The result is that, when saving data next to the region, the country is

also saved. When you call a report, the country is also displayed, even

if you have only assigned the REGIO characteristic to the report.









Exercise 3: Maintain the Operating

ConcernExercise Objectives


• Determine the attributes of the operating concern

• Add characteristics and value fields to the operating concern

Business Example

You need reports in both the group and company currency because your

organization conducts business in foreign countries.Your sales manager and product manager ask you which data fields you

specifically require for reporting.

Task 1:

Attributes of the Operating Concern

You have decided to use both company code and operating concern currencies in

costing-based PA.

1. Display the currency settings for the operating concern, IDEA. What settings

are configured?

2. What is the fiscal year variant for IDEA?

Task 2:

Data Structures of the Operating Concern

Your sales manager has asked you to check which of the following characteristics

are active for the operating concern:

Material Group, Customer, Postal Code

1. Which of these characteristics are selected for the operating concern?

2. Your product manager has requested that the following value fields be madeavailable in the operating concern:

Sales Order Quantity, Scrap, Marketing Projects

Which of these value fields are configured for the operating concern?






Task 3:

1. Are own profitability segments formed on the “IDEA” operating concern for

the characteristics ORDER or SALES ORDER ITEM?

2. When data are posted into the costing-based and account-based IDEA

profitability analysis for 3 different products, how many data records

are posted in the costing-based,

account-based

profitability analysis?

Task 4:

1. What is the status of the operating concern, IDEA? Why could thisinformation be important?





Solution 3: Maintain the Operating

ConcernTask 1:

Attributes of the Operating Concern

You have decided to use both company code and operating concern currencies in

costing-based PA.

1. Display the currency settings for the operating concern, IDEA. What settings

are configured?

a) You have decided to use both company code and operating concern

currencies in costing-based PA.

Display the currency settings for the operating concern, IDEA. What

settings are configured?

IMG → Controlling → Profitability Analysis→ Structures→ Define

Operating Concern→ Maintain Operating Concern: 'Attributes' tab

Operating Concern Currency: EURO

Company Code Currency: selected

OpConCurrency, PrCtr-Valuation: selected

CompCodeCurrency, PrCtr-Valuation: selected

2. What is the fiscal year variant for IDEA?

a) What is the fiscal year variant for IDEA?

K4, Calendar Year + 4 special periods






Task 2:

Data Structures of the Operating Concern

Your sales manager has asked you to check which of the following characteristics

are active for the operating concern:

Material Group, Customer, Postal Code

1. Which of these characteristics are selected for the operating concern?

a) Data Structures of the Operating Concern

Your sales manager has asked you to check which of the following

characteristics are active for the operating concern:

Material Group, Customer, and Postal Code

Which of these characteristics are selected for the operating concern?


Operating Concern→ Maintain Operating Concern

Choose → Display and then select the Characteristics tab on the

Data Structure tab. To display the fixed characteristics select Extras

→ Display Fixed Fields).

Material Group, Customer (fixed characteristic)

2. Your product manager has requested that the following value fields be made

available in the operating concern:

Sales Order Quantity, Scrap, Marketing Projects


a) Your product manager has requested that the following value fields are

available in the operating concern:

Ordered Quantity, Scrap, Marketing Activities, and Annual Rebates.



Operating Concern→ Maintain Operating Concern

Choose Display and select the Value Fields tab on the Data Structuretab.

Sales Order Quantity, Scrap, and Marketing Activities.






Task 3:

1. Are own profitability segments formed on the “IDEA” operating concern for

the characteristics ORDER or SALES ORDER ITEM?


Profitability Segment Characteristics (Segment-Lvl Characteristics)

No profitability segments are formed for the characteristics Order and

Sales Order Item. However, this does not mean that the data cannot be

evaluated according to these characteristics. The line item report and

the profitability report based on line items are available for this.

2. When data are posted into the costing-based and account-based IDEA

profitability analysis for 3 different products, how many data records

are posted in the costing-based,

account-based

profitability analysis?

a) As the PRODUCT characteristic was only excluded for the

account-based profitability analysis, when updating

• in the costing-based profitability analysis per product,

• only 1 totals record is updated in the account-based profitability

analysis

by comparison. The reason may have to do with the different

information requirements of the users in the account-based or

costing-based profitability analysis.

Task 4:

1. What is the status of the operating concern, IDEA? Why could this

information be important?

a) What is the status of the operating concern, IDEA? Why could this

information be important?


Operating Concern→

Maintain Operating Concern: 'Environment' tab

Status = Active

This means that the environment of the operating concern has been

generated, all data tables are active, and attributes created. If any of the

steps, Save, Activate, or Generate have been left out, no postings can

be made to the tables of the operating concern. This would result in an

error in any data transaction that affects the operating concern.





Lesson Summary

You should now be able to:• Define data structures






TFIN22_2 Unit Summary

Unit Summary

You should now be able to:



operating concern








Unit Summary TFIN22_2




TFIN22_2 Test Your Knowledge

Test Your Knowledge

1. What does a controlling area represent?

2. In costing-based Profitability Analysis, store the

base quantities and amounts for reporting.

Fill in the blanks to complete the sentence.

3. State the importance of the fiscal year variant in an operating concern.

4. Which of the following is the highest reporting level within CO-PA?

Choose the correct answer(s).

□ A Operating concern

□ B Controlling area□ C Company code

□ D Plant

5. The characteristics, such as “sales organization”, “customer”, “and product”,

are predefined automatically for every operating concern and are known as

.


6. In costing-based Profitability Analysis, the actual data is always updated in

the company code currency. Determine whether this statement is true or false.

□ True

□ False




Test Your Knowledge TFIN22_2

7. To define data structures, you need to copy the required characteristics and

value fields to the operating concern.

Determine whether this statement is true or false.

□ True

□ False

8. -based CO-PA stores its transaction data in its own data

tables, which are created when activating and generating the operating

concern.


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 functionunder .


10. What must be done after you generate the operating concern, and before you

activate Profitability Analysis for data entry?

11. Costing-based CO-PA stores its transaction data in the transaction data tables

for Overhead Cost Management.


□ True

□ False

12. State the advantages of operating concern templates.





Answers

1. What does a controlling area represent?

Answer: The controlling area is an organizational unit delimiting

theindependent 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.

2. In costing-based Profitability Analysis, value fields store the base quantities

and amounts for reporting.

Answer: value fields

3. State the importance of the fiscal year variant in an operating concern.

Answer: The fiscal year variant determines the number of posting periods

for each fiscal year. Each controlling area assigned to the operating concern

and each company code assigned to each of those controlling areas can have

its own fiscal year variant. For this reason, the variant you choose for the

operating concern must agree with that for the other areas.

4. Which of the following is the highest reporting level within CO-PA?

Answer: A

Operating concern is the highest reporting level within CO-PA.

5. The characteristics, such as “sales organization”, “customer”, “and product”,

are predefined automatically for every operating concern and are known as

fixed characteristics.

Answer: fixed characteristics

6. In costing-based Profitability Analysis, the actual data is always updated inthe company code currency.

Answer: False

In costing-based Profitability Analysis, the actual data is always updated

in the operating concern currency.





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.




Unit 2 Master Data

Unit Overview

This unit discusses the concepts of derivation and valuation. It explains the

derivation strategy and how to evaluate the derivation techniques. In addition, it

discusses valuation using product cost information and outlines valuation using aCO-PA costing sheet.

Unit Objectives


• Explain the derivation concepts

• Explain the valuation concepts

• Explain the derivation strategy

• Evaluate derivation techniques

• Understand valuation using the product cost information

• Outline valuation using a CO-PA costing sheet

• Use the Customizing Monitor to perform valuation analysis

Unit Contents

Lesson: Introduction to Characteristic Derivation and Valuation .......... 44

Lesson: Characteristic Derivation .. ... ... .. ... .. ... ... .. ... ... .. .. ... .. ... ... . 48Exercise 4: Derivation ... .... ... .... .... .... ... .... .... .... .... .... .... ... .. 57

Lesson: Valuation................................................................ 67

Exercise 5: Valuation....... .... ... .... .... .... .... .... .... ... .... ... .... .... 81




Unit 2: Master Data TFIN22_2

Lesson: Introduction to Characteristic Derivation and

Valuation

Lesson Overview

This lesson helps you to understand the concept of characteristic derivation. It

also describes the concept of valuation.

Lesson Objectives




Business Example





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 requeststhat, 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 special

categorization 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




TFIN22_2 Lesson: Introduction to Characteristic Derivation and Valuation

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 mapped

characteristic 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

from the beginning.

Evaluation: Central Points

• Some key points about valuation are:

– Valuation supplements the data being passed directly from transactions

into Controlling Profitability Analysis with calculated, retrieved, or

otherwise accessed values.

– A valuation strategy can contain CO-PA costing sheets, Sales Order

Management pricing procedures (in planning), product costing calls,

and user exit calls, in a sequence that can be customized.

– Valuation strategies must be assigned to record types, points of

valuation, and plan versions when applicable to be activated.

– Using valuation is optional. It is merely a tool that can be used in an

attempt to get the most complete and useful information out of CO-PA.





Example of Characteristic Derivation and Valuation

Figure 16: Example: Example of the Characteristic Derivation and Valuation

Every CO-PA relevant activity in the SAP system (for example, billing) creates

line items in CO-PA. The data created in CO-PA are defined by automatic and

manual assignments as well as the configuration of the characteristic derivation

and the valuation.

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 sales

order 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.




TFIN22_2 Lesson: Introduction to Characteristic Derivation and Valuation

Lesson Summary

You should now be able to:• Explain the derivation concepts






Lesson: Characteristic Derivation

Lesson Overview

This lesson helps you to understand the derivation strategy. In addition, it explains

how to evaluate derivation techniques.

Lesson Objectives




Business Example


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


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 fromthe 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

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-torecord 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 business

units’ for reporting.

For this purpose, the characteristic derivation strategy and techniques need to

be used.




TFIN22_2 Lesson: Characteristic Derivation

Characteristic Derivation Concept

Figure 17: Characteristic Derivation Concept

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.





Derivation Strategy and Techniques

Figure 18: Derivation from a Customizing Viewpoint

A derivation strategy consists of a number of different steps, which derive

the different characteristic values. Each derivation step defines the logical

interrelationship between known source characteristics and the characteristics

to be derived.

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 to

meet 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

be determined in a single step.

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 steps

that 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

system, at other levels.





Figure 21: Derivation through Table Lookup

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

several characters of the hierarchy into CO-PA.





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

derivation logic.





Figure 23: Derivation with Move and Clear

With a move, you can directly transfer a characteristic value or a part of the

characteristic value to another characteristic. Under certain conditions, you can

also move a constant to a characteristic.

In the above example, the sold-to value is copied into the ship-to value with the

move function if the ship-to field is originally not populated by any previous

derivation step. When certain conditions arise, the clear function is available to

clear a value from a characteristic. In addition, the employee value is cleared to

“not assigned” when the product is a specific value because the employees should

not get sales credit for certain items.

The system automatically generates a move derivation step to move the dummy

profit center value from EC-PCA into CO-PA if no profit center can be determined

by other steps.





Customizing Monitor Derivation Analysis

Figure 24: Customizing Monitor: Derivation Analysis

The Customizing Monitor provides an overview of all derivation steps. Additional

functions are available when you use the SAP list viewer to display derivation

analysis. You can search for specific value fields and determine their use inderivation.





Exercise 4: Derivation

Exercise Objectives


• Customize derivation techniques and place them in a sequence to obtain

characteristic values from desired sources for all CO-PA-relevant transactions

• Test and analyze the derivation strategy settings

Business Example

The country and area are required from either the ship-to record (if there is one)

or the sold-to record.

Product groups are to be categorized into strategic business units for reporting.

Your Sales Manager requires reports for the customer group and sales district and

would like to know whether the values for these fields can be read directly from

customer master and sales document tables.

Note: The term characteristic value refers to an actual individual quantity

defined for a particular characteristic. All data transferred to CO-PA

is checked against the valid characteristic values, which are stored in

check tables. These check tables can either already exist in the original

component of the characteristic or can be maintained manually in

the Profitability Analysis. The characteristic derivation describes the

determining of characteristic values for every business transaction that is

relevant for Profitability Analysis.

Task 1:

1. In the CO-PA application menu, display the check tables for each of the

following characteristics, and find two valid values for each characteristic:

Sales District:

Strategic Business Unit:

Task 2:Display the derivation strategy in the Customizing settings of the Profitability

Analysis. The first screen only shows user-defined derivation steps. You can

expand the display to view all derivation steps, including predefined derivation

steps.

1. Why can some derivation steps be modified and others cannot?






2. Display the derivation rule for the Strategic Business Unit characteristic.

What are the source fields?

In which application do the source fields originate?

3. Strategic Business Unit is a user-defined field in CO-PA.

Rule values have been defined that determine the valid characteristic value

combinations used to derive a new value, the strategic business unit. What is

the rule used to determine the CHEMFOOD strategic business unit?

4. Display the table lookup for the Customer Classification from Customer

characteristic. What is the table of origin for this characteristic?

Why are there no rule values for this characteristic?

Task 3:In the Customizing settings for Profitability Analysis, under Master Data→

Define Characteristic Derivation:

1. Display the MOVE step for the Ship-to Party characteristic.

What are the source and target fields?

An attribute has been maintained for this characteristic, to apply the

derivation rule only under certain conditions. What is the attribute for this

derivation step?

What is the purpose of this particular step?






Task 4:

To test the derivation strategy, enter a line item for your sample customer and

the 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.

Posting Date: Today's date

Record Type: F

Point of valuation: 01

Legal view: X

Customer: T-CO05A##

Product: P-100

Plant: 1000

Sales Org.: 1000

Distribution Channel: 10

Company Code: 1000

1. The order reason field is blank. Why?

2. How did the system determine the “Customer Group” field?





Solution 4: Derivation

Task 1:

1. In the CO-PA application menu, display the check tables for each of the

following characteristics, and find two valid values for each characteristic:

Sales District:


a) In the CO-PA application menu, display the check tables for each

of the following characteristics, and find two valid values for each

characteristic:

Accounting → Controlling → Profitability Analysis → Master Data

→ Characteristic Values→ Display Characteristic Values→ All

Characteristics On/Off → referenced characteristics→ Sales District

→ Define Sales Districts:

Sales District:

Sales District: District Name

000001 Northern region

000002 Southern region

000003 Western region

000004 Eastern region


Use the same menu path as above, but select Strategic Business Unit

under user-defined characteristics.

Strat.Business Unit Name:

CHEMAGRA Agricultural Chemicals

CHEMCHEM Chemicals

CHEMFOOD Food chemicalsCOMPINDU Industrial computers






Task 2:

Display the derivation strategy in the Customizing settings of the Profitability

Analysis. The first screen only shows user-defined derivation steps. You can

expand the display to view all derivation steps, including predefined derivation

steps.

1. Why can some derivation steps be modified and others cannot?

a) Display the derivation strategy table in the Customizing settings of

the Profitability Analysis. The first screen only shows user-defined

derivation steps. You can expand the display to view all derivation

steps, including predefined derivation steps.

IMG: Controlling → Profitability Analysis→ Master Data→ Define

Characteristic Derivation: View→ Display All Steps

Why can some derivation steps be modified and others cannot?

Nearly all fixed characteristics have programmed derivation steps that

cannot be changed for technical reasons, for example, the derivation of

the company code from the sales organization.

2. Display the derivation rule for the Strategic Business Unit characteristic.

What are the source fields?


a) Display the derivation rule for the Strategic Business Unit (SBU)

characteristic. What are the source fields?

Select the derivation rule Prod.Cat. + Industry→ SBU. Select Choose.

WWPRC Product Category BRSCH Industry Key


CO-PA

3. Strategic Business Unit is a user-defined field in CO-PA.






Rule values have been defined that determine the valid characteristic value

combinations used to derive a new value, the strategic business unit. What is


a) Strategic Business Unit is a user-defined field in CO-PA.

Rule values have been defined that determine the valid characteristic

value combinations used to derive the strategic business unit. What is


Select the derivation rule Prod.Cat. + Industry→ SBU. Click

Maintain Rule Values.

Product category Industry key

SBU

CHEM FOOD

= CHEMFOOD

4. Display the table lookup for the Customer Classification from Customer



a) Display the table lookup for the Customer Classification from Customer


Select Table Lookup for customer classification from Customer and

then select : KNA1


This field is populated from the customer master general data

table. In this case, the Profitability Analysis derives the customer

classification directly from this table. That is why no special rules

(check tables) are required in the Profitability Analysis.

Task 3:

In the Customizing settings for Profitability Analysis, under Master Data→

Define Characteristic Derivation:

1. Display the MOVE step for the Ship-to Party characteristic.

What are the source and target fields?


derivation rule only under certain conditions. What is the attribute for this

derivation step?







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


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.


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.


Record Type: F


Legal view: X

Customer: T-CO05A##

Product: P-100

Plant: 1000

Sales Org.: 1000


Company Code: 1000

1. The order reason field is blank. Why?






a) To test the derivation strategy, enter a line item for your sample

customer and the product P-100 directly in the costing-based

Profitability Analysis. 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.

The order reason field is blank. Why?

IMG → Controlling → Profitability Analysis→ Tools→ Analysis

→ Valuation Simulation.

Record Type: F

Posting Date: Today


Choose Continue.

Customer: T-CO05A##

Product: P-100

Company Code: 1000

Plant: 1000

Sales Org.: 1000


Select Derivation, then Extras→ Derivation Analysis. Select values

before/after, order reason is empty

Save the derivation step in the derivation analysis. The Customer

Order Reason field is empty, because the source field Customer

Order Number (initial) is empty. That means that the order reason is

derived from the Sales Order Document field. This is not a sales order

document, but a simulated derivation analysis. That is why the Order

Reason field cannot be created or derived from the simulation.

The derivation of the ORDER REASON field can be reproduced

in Customizing under the derivation rules. IMG→ Controlling →

Profitability Analysis→ Master Data→ Characteristic Values→

Define Characteristic Derivation: Display All Steps.

The order reason is derived per table look-up from the sales document.






2. How did the system determine the “Customer Group” field?

a) How did the system determine the “Customer Group” field?

Select the icon next to the table lookup to view the Sales Office.

The source fields for this derivation step are Customer, Sales

Organization, Distribution Channel, and Division.

The system has derived the customer group from the customer master

record





Lesson Summary

You should now be able to:• Explain the derivation strategy





TFIN22_2 Lesson: Valuation

Lesson: Valuation

Lesson Overview

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





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,


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


transactions, 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 truecost-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

Figure 25: Valuation Concept

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 whenmany 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.





Valuation Strategy and Techniques

Figure 27: Valuation Strategy

The valuation strategy is central to valuation configuration. A valuation strategy

may contain references to multiple valuation techniques, such as costing sheets,

user exits, and product costing information, which are to be applied to a given

COPA-relevant transaction.

You need to decide to what record types, F, A, B, C, and 0-9, and at what points,

known as points of valuation, each valuation strategy should apply. Similarly, if

a strategy is to be applied to planning data, the relevant planning version must

be specified.

The various valuation techniques that populate the value fields in different ways

are:

• With costing sheets, condition types are mapped to value fields.

• From Product Costing, cost components are mapped to value fields.

• Value fields are updated directly through user exits.





Figure 28: Product Cost Estimates in Product Costing

The Product Cost Controlling (CO-PC) module is used to generate the product

cost estimates for materials. The results of a product cost estimate can be viewed

in different ways, such as by item, cost element, or cost component. Through

valuation, the product cost estimate information for CO-PC can be transferred into

CO-PA, through cost component values. This function can be used to import

extensive cost-of-sales information into CO-PA for flexible margin reporting.

In configuration, cost components are mapped to value fields. You can map each

component to its own value field or multiple components to a single value field.

You can also map the fixed and variable portions of a component to separate value

fields. This function exists so that cost-of-sales can be analyzed extensively in

CO-PA and multiple margin values can be calculated and analyzed in CO-PA.





Figure 29: Valuation using Product Costing: Customizing (1)

Using a costing key, you can determine which cost estimate, meaning which

costing variant should be used with which validity date for valuation. By

assigning a costing key, you control which cost estimate, standard, modified

standard, or current cost estimate should be used in which case, depending on the

material, material type, or any other combination of characteristics.

If an entry exists for the material, this has priority over the entry for the material

type. The entry for the material type has priority over any entries defined for

other characteristics.

In the assignment lines, you determine which values of the cost component

structure are transferred to which value fields in the operating concern.






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

what is stored in the material master.






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.





Figure 32: Valuation Using Costing Sheets

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

in the operating concern.





Figure 33: Condition Types - Condition Records

A condition type represents one step in a costing sheet. What calculation the

system carries out in that step depends on the following control indicators:

• Condition category

• Calculation type

• Condition class

• Scale basis

Calculation type: The calculation type determines how the system calculates

prices, reductions, or surcharges for a condition type. For example, it can specify

that a sales deduction should be dependent on the quantity sold or a value scale.

Scale basis: The scale basis determines how the system interprets the value or

quantity scale for a condition. Scales can be dependent on a quantity or a currency

amount.





Figure 34: Valuation Using Costing Sheet: Customizing

Base condition types form the basis for calculations. They signify the value fields

that have already been populated through other means. These condition types

must have on their master record, a condition category of “K”, a calculation rule

of “B”, and a condition class of “B”.

Calculation condition types perform calculations on the lines in the costing sheets

that represent subtotals of amounts, such as base amounts. These condition types

actually populate the value fields with values. Notice that their definitions can

vary.

A calculation condition type is assigned an access sequence here with

corresponding condition records. The condition records contains deductions or

additions or absolute values that refer to certain combinations of characteristic

values.

For complete information about how to use the condition technique, refer to

pricing documentation or take a class on pricing or the condition technique.





Customizing Monitor Valuation Analysis

Figure 35: Customizing Monitor Valuation Analysis

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 is

involved 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 executea 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.









Exercise 5: Valuation

Exercise Objectives


• Create a link to material costing, to obtain extensive information about the

key cost of manufacturing components, such as material and production labor

• Use costing sheets to determine specific values, such as the cost of packaging

materials

Business Example

Your controlling manager wants to ensure that sales and product managers

understand the key cost components for the manufactured products.

You want to determine the estimated costs for packing the finished products. This

is normally 1.50 for each unit.

Note: If you implement material costing in your SAP system, you can

transfer extensive information to CO-PA, to calculate and analyze the

estimated cost of sales and different contribution margins, such as the

margin after fixed costs, and the margin after all costs. Valuation signifies

the concept of supplementing the performance information provided

directly by a transaction and allows access to in-depth material costing

information.

Task 1:

In the Customizing settings for CO-PA, display the entries configured under

Costing Keys for Valuation.

What type of cost estimate is assigned to the costing key, I10?

For which period does the system access the material cost estimate?

Note: Costing keys can be assigned to an individual product, a material

type, or any characteristic, such as plant. This step defines the level at

which the system accesses the material costing information. You can

assign a valuation strategy to determine the transactions valuated. Toallocate the estimated production costs, such as materials and labor, to

CO-PA value fields, you can assign the cost components of a material

cost estimate to value fields.

1. Display the costing key assignment for product P-100. Which is the assigned

costing key?






What is the point of valuation at which the system will use the costing key,

I10, for the product, P-100?

What is the costing type for which the system will use the costing key, I10,

for the product, P-100?

2. Display the currently released (status FR) standard cost estimate for the

product, P-100, in the Product Cost Planning component. Use the costing

variant, PPC1. Notice that the costing lot size for the product is 100.

What is the total raw material cost? What is the Cost Component number

and description?

3. Display the value field assignments for the cost component structure, 01.

To which value field is the raw material cost component assigned?

Task 2:

To test your valuation strategy, enter a line item for your customer directly in

CO-PA under Tools→ Analyze Value Flows→ Simulate Valuation. Fill in the

header data as required, and enter product P-100 in plant 1000 in the line item

entry screen. After carrying out derivation, enter 100 pieces in the Invoiced

Quantity field with a Revenue of $100,000. Carry out valuation.


Record Type: F

Point of valuation 01

Customer: T-CO05A##

Sales Org.: 1000


Company Code: 1000

Product: P-100

Plant: 1000

Invoiced Quantity: 100Revenue: 100,000

1. What is the value for Material Input ? Why?

2. Next, execute a valuation analysis: How was the “Material overheads”

field filled?

Save the line item and write down the document number.






Carry out a valuation analysis:

Extras→ Valuation Analysis

How was the Material Overhead 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.


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 various cost centers. These costs are not accrued during the month in

FI but they are to be estimated in CO-PA so that your Plant Manager can estimate

true profitability of all plants prior to 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 the Valuation settings in the IMG. What basis

is used to calculate estimated packaging (OUPA)?2. Display the condition record for the condition type, OUPA. Which condition

type is used?

3. What overhead type is used for OUPA?

4. In the plant, 1000, what rate does the system use to estimate the packaging

for one piece of the material, P-100?

Task 4:

1. To verify that the costing sheet has been configured correctly, enter another

line item in CO-PA. Enter your customer and all other associated information.Enter product P-100. In this entry you will manually enter 10 for the Invoiced

Quantity, 10,000 for Revenue, and 8,000 in the Cost of Goods Sold field.

Carry out valuation. What is the value for Dispatch Packaging ?

Task 5:

1. Create a conditions list for the existing condition records.






2. Name your condition list Z#. For #, use the i-th letter of the alphabet that

corresponds to your group number.

# A B C D E F G H I K K M N O P R S T

No. 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18

Name of the list: Z#

Header: Condition list group #

Choose selected fields

Highlight the PLANT field and continue via AND.

Highlight only table 506 (access to plant)

Continue via “continue to list structure”.

Select for positioning: Group header of the condition list.

Select for condition type: Position level of the condition list.

Select for the text: Key field and text.

Highlight “Selection”, but leave the column for required entries

unhighlighted!

Save your condition list.

When saving, create a realignment request with the name AC605GR## after

the system requests that you do so.

Execute your condition list.

Task 6:

You can use the Customizing Monitor to analyze in one step all the configuration

settings you have made. It also allows you to evaluate the existing settings, the

use of characteristics, and value fields.

1. Analyze the Customizing settings for the planning data entered manually.

If you decided to create a sales plan for the billed orders manually, how does

the system valuate your data, assuming you are using the version, 100?






Field Name or Data Type Values

Point of Valuation 03

Plan Version 100

Record Type Billing

2. Next, you try to establish where the characteristic, WWSBU, is used in your

client. Which origin and target fields are assigned in this step? Use the

Customizing Monitor to establish this.

Reports:





Solution 5: Valuation

Task 1:

In the Customizing settings for CO-PA, display the entries configured under

Costing Keys for Valuation.



Note: Costing keys can be assigned to an individual product, a material

type, or any characteristic, such as plant. This step defines the level at

which the system accesses the material costing information. You can

assign a valuation strategy to determine the transactions valuated. To

allocate the estimated production costs, such as materials and labor, to

CO-PA value fields, you can assign the cost components of a material

cost estimate to value fields.

1. Display the costing key assignment for product P-100. Which is the assigned

costing key?

What is the point of valuation at which the system will use the costing key,







What is the costing type for which the system will use the costing key, I10,

for the product, P-100?

a) In the Customizing settings for CO-PA, display the entries configured

under Costing Keys for Valuation.

IMG: Controlling → Profitability Analysis→ Master Data→

Valuation→ Set Up Valuation Using Material Cost Estimate→

Define Access to Standard Cost Estimates


Select I10 and Details:

Costing Variant, PPC1, which is the Standard Cost Estimate


Released standard cost estimate matching goods issue date.

Note: Costing keys can be assigned to an individual product,

a material type, or any characteristic, such as a plant. This

step defines the level at which the system accesses the

product-costing information. You can assign a valuation

strategy to determine the transactions valuated. To allocate the

estimated production costs, such as materials and labor, to

CO-PA value fields, you can assign the cost components of a

material cost estimate to value.

Display the costing key assignment for product P-100.

Which is the assigned costing key?


Valuation→ Set Up Valuation Using Material Cost Estimates→

Assign Costing Keys to Products

Product, P-100, is assigned to the costing key, I10.

What is the point of valuation at which the system will use the costing

key, I10, for the product, P-100?

For real-time actual data transfer. PV = 1

What is the record type for which the system will use the costing key,


For the record type, A, incoming sales orders, and F, billed sales

orders.

2. Display the currently released (status FR) standard cost estimate for the

product, P-100, in the Product Cost Planning component. Use the costing

variant, PPC1. Notice that the costing lot size for the product is 100.






What is the total raw material cost? What is the Cost Component number

and description?

a) Display the currently released (status FR) standard cost estimate for the

product, P-100, in the Product Cost Planning component.

Accounting → Controlling → Product Cost Controlling → Product

Cost Planning → Material Costing → Cost Estimate with Quantity

Structure→ Display


Material P-100

Plant 1000

Costing Variant PPC1Costing Version 1

Date Leave Default

Click Find Cost Estimates (Binoculars icon) and make sure the

costing status is set to FR. Choose Execute.

After you have accessed the product cost estimate, click the Cost

Component icon on the toolbar. Click the Cost Comps icon (bottom

right).

What is the total raw material cost? What is the Cost Component

number and description?

3. Display the value field assignments for the cost component structure, 01.

To which value field is the raw material cost component assigned?

a) Next, display the value field assignments for cost component structure

01. To which value field is the “raw material” cost component assigned?


Valuation→ Set Up Valuation Using Material Cost Estimate→

Assign Value Fields

Use the cost component layout 01.

Cost component, 10, Raw Materials is assigned to Value Field,

VV150, Material Input .






Task 2:

To test your valuation strategy, enter a line item for your customer directly in

CO-PA under Tools→ Analyze Value Flows→ Simulate Valuation. Fill in the

header data as required, and enter product P-100 in plant 1000 in the line item

entry screen. After carrying out derivation, enter 100 pieces in the Invoiced

Quantity field with a Revenue of $100,000. Carry out valuation.


Record Type: F

Point of valuation 01

Customer: T-CO05A##

Sales Org.: 1000


Company Code: 1000

Product: P-100

Plant: 1000

Invoiced Quantity: 100

Revenue: 100,000

1. What is the value for Material Input ? Why?

a) To test your valuation strategy, enter a valuation simulation for your

customer directly in CO-PA. Fill in the header data, as required, and

enter the product P-100 in plant 1000 in the entry screen. After carrying

out derivation, enter 100 pieces in the “Invoiced Quantity” field with a

revenue of 100,000. Carry out valuation.

Accounting → Controlling → Profitability Analysis→ Tools→

Analyze Value Flows→ Simulate Evaluation.


Posting Date Today's date

Record Type F

Select Continue: Tab “Characteristics”







Customer T-CO05A##

Product P-100

Distribution Channel 10

Plant 1000

Sales organization 1000

Company code 1000

Select the Value fields tab.


Invoiced Quantity 100

Revenue 100000

Select the Origin data tab.


Goods Issue Date Today's date

Select Valuation

What is the value for Material Input ? Why?

Compare this with the product costing. The standard cost estimate

for product P-100 in online valuation was assigned to CO-PA via

the costing key. In addition, the Material Input value field has been

mapped to cost component 01 of the cost estimate.

2. Next, execute a valuation analysis: How was the “Material overheads”

field filled?


Carry out a valuation analysis:

Extras→ Valuation Analysis

How was the Material Overhead 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.


a)

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 various cost centers. These costs are not accrued during the month in

FI but they are to be estimated in CO-PA so that your Plant Manager can estimate

true profitability of all plants prior to the month-end. You can use valuation to

configure the system to calculate the estimated values for packaging supplies atthe time an invoice is billed.

1. Display the costing sheet under the Valuation settings in the IMG. What basis

is used to calculate estimated packaging (OUPA)?

a) 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 they are to be estimated

in CO-PA so your plant manager can estimate true profitability for her

plants prior to the month-end. You can use valuation to configure the

system to calculate the estimated values for packaging supplies at thetime an invoice is billed.

Display the costing sheet under the Valuation settings in the IMG. What

basis is used to calculate estimated packaging (OUPA)?


Valuation→ Set Up Conditions and Costing Sheets→ Create

Condition Types and Costing Sheets.

From the Surcharge/reduction list, select the condition type OUPA

(double click).

The addition is calculated quantity-dependent with the calculation

type..

Select→ Records for Cond. Type. The quantity-related addition

is 3.00 per pc.

Hint: The quantity field assigned to the valuation strategy is

used automatically .






2. Display the condition record for the condition type, OUPA. Which condition

type is used?

a) Display the condition record for the condition type, OUPA. Which

condition type is used?


Valuation→ Set Up Conditions and Costing Sheets→ Create

Condition Types and Costing Sheets. Select OUPA from the list of

“pricing procedures” in the table on the upper left of the screen.

The condition type is Surcharge/Reduction.

3. What overhead type is used for OUPA?

a) What overhead type is used for OUPA?

This condition type is quantity-based.

4. In the plant, 1000, what rate does the system use to estimate the packaging


a) In the plant 1000, what rate does the system use to estimate packaging


Select CondRcrds-Access and display the condition record for plant

1000.

Execute→ Choose Plant 1000→ Display.

Using this condition record, the packaging costs 3 per unit.

Task 4:

1. To verify that the costing sheet has been configured correctly, enter another

line item in CO-PA. Enter your customer and all other associated information.

Enter product P-100. In this entry you will manually enter 10 for the Invoiced

Quantity, 10,000 for Revenue, and 8,000 in the Cost of Goods Sold field.

Carry out valuation. What is the value for Dispatch Packaging ?

a) To verify that the costing sheet has been configured correctly, enter

another line item in CO-PA. Enter your customer and all other

associated information. Enter product P-100. In this entry you will

manually enter 10 for the Invoiced Quantity, 10,000 for Revenue, and

8,000 in the Cost of Goods Sold field. Carry out valuation. What is the

value for Dispatch Packaging ?

What value appears in the Dispatch Packaging field? A rate of 30

was calculated, based on the costing sheet.






Task 5:

1. Create a conditions list for the existing condition records.

a) SAP Menu→ Accounting → Controlling → Profitability Analysis →

Master Data→ Condition Lists

2. Name your condition list Z#. For #, use the i-th letter of the alphabet that

corresponds to your group number.

# A B C D E F G H I K K M N O P R S T

No. 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18

Name of the list: Z#

Header: Condition list group #

Choose selected fields

Highlight the PLANT field and continue via AND.

Highlight only table 506 (access to plant)

Continue via “continue to list structure”.

Select for positioning: Group header of the condition list.

Select for condition type: Position level of the condition list.

Select for the text: Key field and text.

Highlight “Selection”, but leave the column for required entries

unhighlighted!

Save your condition list.

When saving, create a realignment request with the name AC605GR## after

the system requests that you do so.

Execute your condition list.

a)

Task 6:

You can use the Customizing Monitor to analyze in one step all the configuration

settings you have made. It also allows you to evaluate the existing settings, the

use of characteristics, and value fields.

1. Analyze the Customizing settings for the planning data entered manually.






If you decided to create a sales plan for the billed orders manually, how does

the system valuate your data, assuming you are using the version, 100?



Plan Version 100

Record Type Billing

a) You can use the Customizing Monitor to analyze in one step all the

configuration settings you have made. It also allows you to evaluate the

existing settings, the use of characteristics, and value fields.

Analyze the Customizing settings for the planning data entered

manually.


→ Check Customizing Settings

Choose Overview of Valuation :

If you decided to create a sales plan for the billed orders manually,

how does the system valuate your data, assuming you are using the

version, 100?



Plan Version 100

Record Type Billing Document

Execute.

The system first accesses the Costing Sheet, COPA10, and then the

Costing Sheet, ACT001. It then looks for information about material

cost estimates and finally, it accesses a user exit.

2. Next, you try to establish where the characteristic, WWSBU, is used in your

client. Which origin and target fields are assigned in this step? Use theCustomizing Monitor to establish this.






Reports:

a) You now try to establish where the WWSBU characteristic is used in

your client. Which origin and target fields are assigned in this step?

Use the Customizing Monitor to establish this.


→ Check customizing settings

Choose Where-Used List .


Characteristic WWSBU

Client Current Client

Select Execute, and then Information System→ Reports→

Costing-Based

Reporting: IDES-300, IDES-310 – IDES-314

(may vary)





Lesson Summary

You should now be able to:• Understand valuation using the product cost information






TFIN22_2 Unit Summary

Unit Summary

















Test Your Knowledge

1. supplements automatically mapped characteristic

values. Fill in the blanks to complete the sentence.

2. What all can a valuation strategy contain?

3. supplements the data being passed directly from

transactions into CO-PA with calculated, retrieved, or otherwise accessed

values.


4. What is a derivation strategy?

5. A consists of a number of different

steps, which derive different characteristic values.


6. Characteristic derivation signifies the process to determine the characteristic

values for all CO-PA characteristics.


□ True

□ False

7. What is a table lookup?





8. The system automatically creates a standard derivation strategy for each

operating concern.


□ True

□ False

9. What is the Product Costing module used for?

10. The scale basis determines how the system interprets the value or quantity

scale for a condition. These scales can be dependent on a

or a .


11. Identify the actual value flows that can be analyzed using the value field

analysis function.

Choose the correct answer(s).

□ A Transfer of billing documents

□ B Incoming sales orders from Sales and Distribution

□ C Direct postings from Financial Accounting and Materials

Management

□ D Actual costs

12. Using a , you can determine which cost estimate

should be used with which validity date for valuation.


13. What do costing sheets consist of?





14. The value field analysis function enables you to analyze all the flows of

actual data to Profitability Analysis.


□ True

□ False





Answers

1. Derivation supplements automatically mapped characteristic values.

Answer: Derivation

2. What all can a valuation strategy contain?

Answer: A valuation strategy can contain CO-PA costing sheets, SD pricing

procedures, product costing calls, and user exit calls in a sequence that can

be customized.

3. Valuation supplements the data being passed directly from transactions intoCO-PA with calculated, retrieved, or otherwise accessed values.

Answer: Valuation

4. What is a derivation strategy?

Answer: 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.

5. A derivation strategy consists of a number of different steps, which derivedifferent characteristic values.

Answer: derivation strategy

6. Characteristic derivation signifies the process to determine the characteristic


Answer: True

Characteristic derivation signifies the process to determine characteristic


7. What is a table lookup?

Answer: A table lookup is a derivation technique that is utilized by CO-PA

to access the characteristic values from SAP master data tables.





8. The system automatically creates a standard derivation strategy for each

operating concern.

Answer: True

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 to meet your organization's requirements.

9. What is the Product Costing module used for?

Answer: The Product Cost Controlling (CO-PC) module is used to generate

the product cost estimates for materials.

10. The scale basis determines how the system interprets the value or quantity

scale for a condition. These scales can be dependent on a quantity or a

currency amount.

Answer: quantity, currency amount

11. Identify the actual value flows that can be analyzed using the value field

analysis function.

Answer: A, B, C

The value field analysis function enables you to analyze the actual value

flows, such as transfer of billing documents, incoming sales orders from

Sales and Distribution, direct postings from Financial Accounting and

Materials Management, and external data transfer.

12. Using a costing key, you can determine which cost estimate should be used

with which validity date for valuation.

Answer: costing key

13. What do costing sheets consist of?

Answer: Costing sheets consist of a sequence of user-defined condition

types, each of which accesses a value or performs specific calculations, as

dictated by the definitions of the condition types.





14. The value field analysis function enables you to analyze all the flows of

actual data to Profitability Analysis.

Answer: True

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 individual value fields.




Unit 3Actual Data

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


• Explain the flow of actual data in CO-PA

• List the sources of value fields

• Explain the transfer and allocation of costs

• Explain the settlement of orders

Unit Contents

Lesson: Flow of Actual Data...................................................106Lesson: Transfer of Overhead ................................................ 111

Exercise 6: Cost Center Assessment....................................121

Exercise 7: Internal Orders................................................127Exercise 8: Activity Allocation.... ... .. .. ... .. ... ... .. ... .. ... .. ... .. ... ... 135




Unit 3: Actual Data TFIN22_2

Lesson: Flow of Actual Data

Lesson Overview

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




Business Example





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 in

CO-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 allocatecosts 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.




TFIN22_2 Lesson: Flow of Actual Data

Value Flows in Actual: Overview and Results

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 accordingto 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 profitabilitysegments.

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

production variances known.

To complete your profitability data, you can also assign overhead costs to

profitability segments in the course of your period-end closing activities.




TFIN22_2 Lesson: Flow of Actual Data

Sources of Value Fields

Figure 39: Sources of Value Fields

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

organization requires in the Information System.





Lesson Summary

You should now be able to:• Explain the flow of actual data in CO-PA





TFIN22_2 Lesson: Transfer of Overhead

Lesson: Transfer of Overhead

Lesson Overview

This lesson helps you understand the transfer and allocation of costs. It also

explains settlement of orders.

Lesson Objectives




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,


EC-PCA in the SAP system. You then will be responsible for implementing the

selected applications.

Your corporate operations department 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 the Logistics costs are included in the contribution margin reports.

For this reason, you need to execute allocations and settlements of overhead costs.





Transfer and Activity Allocation

Figure 40: Transfer of Overhead Costs: Overview

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





Indirect activity allocation Cost center Quantity Price periodic

Process assessment Process costs periodic

Template allocation Process Quantity Price periodic

Figure 41: Activity Allocation

You can transfer overhead costs from Cost Center Accounting either on an

activity-allocation or a periodic basis. You can transfer the activities either

directly or indirectly to Profitability Analysis.

You can use a PA transfer structure to control the secondary cost element of

activity allocation in the value fields for costing-based profitability analysis.

You can transfer the cost component split of the prices for each Cost Center to

CO-PA. To do this, you must activate the respective settings in Customizing and

then enter the cost elements in the various value fields.





Figure 42: Assessing Cost Center and Process Costs

The Overhead Cost Controlling Activity-Based Costing (CO-OM-ABC)

application component provides an alternative form of overhead control that is

particularly useful when indirect activities generate a large share of the value

added to products. It uses cost drivers to allocate the internal activities to the

overhead processes, which can then be transferred to profitability segments

using the process assessment function. Reference values for the transfer can be

quantities and values posted in CO-PA or additional cost driver information, suchas the number of sales orders created.

The assessment of cost center costs function allows you to transfer the variances

in production cost centers as well as the costs in sales and administrative cost

centers to Profitability Analysis.

The cost centers and processes are credited by the amount allocated. As a result,

all costs can only be allocated one time. You assess cost center and process costs

in the same way as done within Overhead Cost Controlling, which is by defining

cycles and executing them on a periodic basis. These cycles contain the control

information for the assessment and can be maintained in Customizing.





Figure 43: Defining and Executing an Assessment Cycle

A cycle controls how assessment is processed. It contains all the relevant

information about the senders, receivers, sender rules, receiver rules, and tracing

factors. Each cycle can contain a number of segments. The segment describes a

combination of senders and receivers that are to be processed together.

In theory, you could create one cycle for transferring all the overhead costs to

Profitability Analysis. Notice that for performance reasons as well as for technical

ones, it is a good idea to create several cycles and process them sequentially in

the order entered.

You should divide your assessment into separate cycles if you want to allocate

the different areas of your organization to CO-PA at different times. This also

has the advantage that when errors or changes occur, you only need to repeat

the affected cycles.

A cycle can contain the sender cost centers or sender processes from one

controlling area and can use the values from either costing-based or account-based

Profitability Analysis as tracing factors.

The sender cost centers or processes are credited in the assessment cost element

specified in the segment of the cycle.

The receiver is defined by a combination of characteristic values, which means a

profitability segment. The values are debited to the profitability segment using the

assessment cost element, such as account-based CO-PA and value fields, such as

costing-based CO-PA, which you specified for each segment of the cycle.





Figure 44: Allocating Processes

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

costs are allocated.





Settlement of Orders

Figure 45: Settlement of Orders

In the SAP system, you settle internal orders, sales orders, projects, as well

as production orders, and run schedules with production cost collectors to

profitability segments. These objects are used for the various purposes that are

relevant to Profitability Analysis.

• Internal orders and projects can be used to control the costs of an internal

activity, such as the costs of an advertising campaign. The costs of the

activity are posted to the order and collected there. At the end of the activity,

they are settled to the appropriate profitability segments, such as the product

range and sales area.

• You can also use Management Accounting orders to calculate the anticipated

values to be able to evaluate the accuracy of your accrual method. First,

you credit the accrual costs calculated in CO-PA to a special cost order for

accruals, currently by manual posting only. When the costs are actually

incurred, they are posted to that order as well so that the difference between

the anticipated costs and the actual costs can be displayed at the order level.

• A third possible use of internal orders or projects is in make-to-order

manufacturing. If you are handling sales orders, a customer project or a

Management Accounting order to which revenue postings are allowed, you

can post costs, such as production costs and S costs, as well as revenue and

sales deductions to the order or project. When the product is complete, the

costs and revenues can be settled to Profitability Analysis. You can also

transfer the accrued values that are particularly important for progress billing.





Figure 46: Settling Orders - Customizing (1)

In a settlement profile, you define which receivers are allowed for order settlement.

You define a default settlement structure and a default PA transfer structure. When

you create an order, you need to specify an order type. The system uses this order

type to determine which settlement profile and, as a result, which settlement

structure and PA transfer structure to use.

In account-based CO-PA, costs are settled to the settlement cost element specified

in the settlement structure.

In costing-based CO-PA, costs are settled from the original cost elements to the

value fields to which they are assigned in the PA transfer structure.





Figure 47: Settling Orders - Customizing (2)

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

settlement cost element.









Exercise 6: Cost Center Assessment

Exercise Objectives


• 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 salesand 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, and

the 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 dividedequally 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

cost element, 692000, Marketing Assessments.







Sender Selection Type 1 (unsplit costs)

CO Area 1000

Tracing factor 1 (costing-based CO-PA)

Attach Segment 1.


Segment Number/Name 1

Assessment Cost Element 692000

Value field VV380

Sender Values Posted Amounts

Share in % 100

Rule for receiver tracing factor Fixed percentages

Enter 50% as the receiver tracing factor for each product.

3. Execute your allocation cycle without the test mode for the current period.

Display the actual line item you just created, P-101, in the costing-based and

account-based profitability analysis.

Which record type was used to post the line item?

What is the value in the Marketing Costs field?

How many line items have been posted in the account-based or costing-based

CO-PA?





Solution 6: Cost Center Assessment

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, and

the 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.

a) Post an invoice from CEB Berlin the Marketing firm against this cost

center to pay for a market survey it conducted.

The credit entry in this case is posted to the vendor account number,

and the debit entry is posted against the cost center using the external

services account number. The posting is made in the company code,

1000.

Accounting → Financial Accounting → Accounts Payable→

Document Entry→ Invoice:


Vendor 1000

Invoice Date Today's date

Posting Date Today's date

Amount (due to vendor) 10,000

Account Number 417000

D/C Debit






Amount 10,000

Tax Code 0I

Cost Center AC605-##

Post your document.

Hint: During your posting, several messages may appear that

the account, 417000, is relevant for tax. These are warning

messages. Select Enter to confirm these.

2. Create an allocation cycle, CYC-##, starting January 01, XXXX, to allocate

the marketing costs to the Marketing Costs value field. Use the assessment

cost element, 692000, Marketing Assessments.



CO Area 1000

Tracing factor 1 (costing-based CO-PA)

Attach Segment 1.

Field Name or Data Type ValuesSegment Number/Name 1


Value field VV380

Sender Values Posted Amounts

Share in % 100

Rule for receiver tracing factor Fixed percentages

Enter 50% as the receiver tracing factor for each product.

a) In the cost-based profitability analysis, apportion the costs for the Cost

Center on products P-101 and P-102. The costs should be divided

equally between the two products.

Create an allocation cycle, CYC-## , valid as of January 01, XXXX, to

allocate the marketing costs to the Marketing Costs value field. Use the

assessment cost element, 692000, and assessment result marketing.






Accounting → Controlling → Profitability Analysis → Actual Postings

→ Period End Closing → Transfer Cost Center Costs/Process Costs→

Indirect Activity Allocation: Extras→ Cycle→ Create


Cycle Name CYC-##

Start Date 1/1/XXXX

Enter:



CO Area 1000

Tracing Factor 1 (costing-based CO-PA)

Attach Segment 1.

Select: Attach Segment: Segment Header


Segment Number/Name 1


Value Field VV380

Sender Values Posted Amountsr

Share in % 100

Rule for Receiver Tracing Factor Fixed percentages

Choose Sender/Receiver.


Cost Center AC605-##

Cost Element 417000

Receivers Products P-101 to P-102

Select the Receiver Tracing Factor tab and enter 50% for each product.

Save your cycle and return to the initial assessment screen.






3. Execute your allocation cycle without the test mode for the current period.

Display the actual line item you just created, P-101, in the costing-based and

account-based profitability analysis.


What is the value in the Marketing Costs field?

How many line items have been posted in the account-based or costing-based

CO-PA?

a) Execute your allocation cycle without the test mode for the current

period.

To execute your cycle, enter its number in the field provided. Deselect

Test Run but select Detailed Lists. Execute your cycle for the current

period.

Display the actual line item you just created for the product, P-101.

Accounting → Controlling → Profitability Analysis→ Information

System→ Display Line Item List → Actual


Record Type D

Period/Year Current

Entered by Your user ID

Product P-101

Which record type was used to post the line item? D

What is the value for General Marketing Costs? 5000

How many line items have been created in the costing-based or

account-based CO-PA?

Goto the account-based CO-PA. Only 1 line item was created there.

Reason: No setting for characteristic use in the account-based CO-PA

(see Customizing CO-PA, characteristic use).





Exercise 7: Internal Orders

Exercise Objectives


• Allocate the costs collected on an internal order to profitability analysis

Business Example

Your sales manager has planned to participate in a number of trade fairs this year.

The costs for the trade fairs are collected on internal orders to track the cost for

each fair separately from the recurring cost center costs.

Note: In CO, internal orders can be used to collect the costs for specific projects, such as research and development, or marketing events. They

allow you to view and monitor costs on an alternate controlling object and

periodically settle these costs to a cost center or profitability segment.

This allows you to separate project costs from recurring expenditures.

Task:

Create an internal order in the company code, 1000, to capture the costs for the

Fun & Rec Show in Las Vegas.

Order Type: 0450 Exhibitions

Short Text: FUN & REC SHOW

Business Area: 5000

Profit Center: 1000

Make sure you release the internal order, as the costs will be posted to it.

1. Create a settlement rule that determines where the costs for your internal

order are allocated at the period close. The settlement receiver is a

profitability segment. In the settlement information, you need to specify that

the settlement will be made to the material group, 001.

Save the internal order number.

Order Number:

2. Charge costs to the internal order with a journal entry in Financial

Accounting. So far, you have incurred the following costs for the Las Vegas

trade fair:

Amount: 1000.00 Cost element: 476000






All costs are exempt from tax, tax code V0. These costs have been paid

from bank account, 113100.

Financial Accounting document number:

3. In the CO internal order application, process the internal order settlement for

the current period to Profitability Analysis.

Amount settled:

4. View the line item you created with the settlement of your internal order

in CO-PA.

Which value fields were populated? Why?

5. In the IMG, view the settlement configuration for the order type, 0450. To

which settlement profile is this order type assigned?

Display the settlement profile settings. What allocation structure is used in

the settlement profile?

Which PA transfer structure is linked to this settlement profile?

6. What is the purpose of the PA transfer structure?

To which value fields are Total Costs assigned?





Solution 7: Internal Orders

Task:

Create an internal order in the company code, 1000, to capture the costs for the

Fun & Rec Show in Las Vegas.

Order Type: 0450 Exhibitions

Short Text: FUN & REC SHOW

Business Area: 5000

Profit Center: 1000

Make sure you release the internal order, as the costs will be posted to it.

1. Create a settlement rule that determines where the costs for your internal

order are allocated at the period close. The settlement receiver is a

profitability segment. In the settlement information, you need to specify that

the settlement will be made to the material group, 001.

Save the internal order number.






Order Number:

a) Create an internal order to capture the costs for the Fun & Rec Show

in Las Vegas.

Accounting → Controlling → Internal Orders→ Master Data→

Special Functions→ Order → Create:


Order Type 0450

Short Text Fun & Rec Show

Company Code 1000

Business Area 5000

Profit Center 1000

Check whether the internal order is released.

Select the Control data tab. If the system status is CRTD, click

Release to change the system status to FREE.

Create a settlement rule that determines where the costs for your

internal order are allocated at the period close. The settlement receiver

is a profitability segment. In the settlement information, you need to

specify that the settlement will be made to the material group, 001.

Select Settlement Rule. From the Settlement rule entry screen, select Details. From the Distribution Rules screen, select Profitability. Enter

Material Group, 001, and select Enter to continue. To view the profit

segment number, go back to the distribution rule and choose Hierarchy.

Save the internal order.

Order number:

2. Charge costs to the internal order with a journal entry in Financial

Accounting. So far, you have incurred the following costs for the Las Vegas

trade fair:

Amount: 1000.00 Cost element: 476000


from bank account, 113100.







a) Charge costs to the internal order with a journal entry in Financial

Accounting. So far, you have incurred the following costs for the Las

Vegas trade fair:

Amount:1000.00 Cost Element:


from the bank account, 113100.

Accounting → Financial Accounting → General Ledger → Posting

→ Enter G/L Account Document

Header


Document Date Today's date

Row 1:

G/L Account 476000

D/C Debit

Amount 1000

Tax Code V0

Order Your internal order number

Row 2:


G/L Account 113100

D/C Credit

Amount 1000

Post your document.


3. In the CO internal order application, process the internal order settlement for

the current period to Profitability Analysis.






Amount settled:

a) In the CO internal order application, process the internal order

settlement for the current period to Profitability Analysis.

Accounting → Controlling → Internal Orders→ Period-End Closing

→ Single Functions→ Settlement → Individual Processing:


Purchase Order Number Your order number

Settlement Period Current

Fiscal Year Current

Test Run Not selected

Amount settled: 1000

4. View the line item you created with the settlement of your internal order

in CO-PA.


a) Accounting → Controlling → Profitability Analysis→ Information

System→ Display Line Items→ Actual:


Record Type C

Period/Year Current

Entered by Your user ID


Settings→ Layout → Change

Select Marketing Activities from the column set.

Marketing Activities - Based on the configuration of the PA transfer

structure that determines which costs are settled and to which value

field.

5. In the IMG, view the settlement configuration for the order type, 0450. To

which settlement profile is this order type assigned?

Display the settlement profile settings. What allocation structure is used in

the settlement profile?







a) To which settlement profile is this order type assigned?

IMG:Controlling → Internal Orders→ Order Master Data→ Define

Order Types: Select 'Detail' for the order type 0450.

The settlement profile is 100.

Display the settlement profile settings. Which allocation structure

is used in the settlement profile?

IMG: Controlling → Internal Orders→ Actual Postings→ Settlement

→ Maintain Settlement Profiles: Select Profile 100

The CO allocation structure relevant for account-based CO-PA is A1.


10

6. What is the purpose of the PA transfer structure?

To which value fields are Total Costs assigned?

a) The transfer structure determines the value fields to which costs will be

settled to. It consists of:

The settlement assignment – groups costs together.

The source – cost element group.

The value fields to which each assignment group is settled.

To which value fields the Total Costs are assigned.

IMG: Controlling → Profitability Analysis → Flows of Actual Values

→ Order and Project Settlement → Define PA Transfer Structure for

Settlement

Select : Structure 10 → Assignment lines

Select: All costs→ Value fields

VV410 – Marketing Activities









Exercise 8: Activity Allocation

Exercise Objectives


• 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.






Task 3:

1. Process the actual activity allocation for the current period to the product,

P-101, in the company code, 1000, and the business area 1000, also in Cost

Center Accounting.

The screen variant, Profitability Segment/Cost Center, allows you to allocate

the costs from a cost center to a profitability segment using an activity type.

Save the document.

Sender: Cost Center, 4500, Activity Type, EH##

Recipient: Profitability segment (product, P-101, company code, 1000,

business area, 1000)

Hours consumed:

Document number:

Task 4:

1. Display the line items you have created during the allocation in CO-PA.


Which value field has been debited with the activity allocation? Why?





Solution 8: Activity Allocation

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.


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.


a) Create the activity type EH## for the development time in hours.

Validity period from 1 January of the current year to 31 December 9999.


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.

Accounting → Controlling → Cost Center Accounting → Master Data

→ Activity Type→ Individual Processing → Create:


Name: Development Hours

Activity Unit H

CCtr Category: *

ATyp Category: 1

Allocation Cost Element: 621000

Price Indicator: 3

Task 2:1. Plan the activity price for this activity type for the current fiscal year in


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.

a) Plan the activity price for this activity type for the current fiscal year in


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.

Controlling → Cost Center Accounting → Planning → Activity

Output/Prices→ Change:

Field Name or Data Type ValuesVersion 0

Period 1 –12

Fiscal Year Current

Cost Center 4500

Activity Type EH##

Select Form-based.

Select Overview and enter the following:

Plan Activity: 1200

Fixed Price: 100

Save your plan price.

Task 3:

1. Process the actual activity allocation for the current period to the product,

P-101, in the company code, 1000, and the business area 1000, also in Cost

Center Accounting.

The screen variant, Profitability Segment/Cost Center, allows you to allocate

the costs from a cost center to a profitability segment using an activity type.

Save the document.

Sender: Cost Center, 4500, Activity Type, EH##

Recipient: Profitability segment (product, P-101, company code, 1000,

business area, 1000)

Hours consumed:






Document number:

a) Process the actual activity allocation for the current period to the

product, P-101, in the company code, 1000, and the business area,

1000, also in Cost Center Accounting.

You can use a screen variant to allocate the costs from a cost center to a

profitability segment using an activity type. Save the document.

Accounting → Controlling → Cost Center Accounting → Actual

Postings→ Activity Allocation→ Enter:

Select the Profit Segment/Cost Center screen variant and choose

Individual Entry.

Field Name or Data Type ValuesSend. CCtr (Sender Cost

Center)

4500

SAtyTyp (Sender Act.Type) EH##

Total Quantity: 10

Receiver: Choose the profitability segment

Select Profitability segment and choose Enter. Enter product P-101

for Company Code 1000 and Business Area 1000. Post your entry.

Document number:

Task 4:

1. Display the line items you have created during the allocation in CO-PA.








a) Display the line items you have created during the allocation in CO-PA.


Accounting → Controlling → Profitability Analysis→ Information

System→ Display Line Items→ Actual

Record Type: D

Period/Year : Current

Entered by : Your user ID

Product: P-101


Settings→ Layout → Change

Select Marketing Activities from the column set.

Marketing Activities. The PA transfer structure, CO, is referenced

during the activity allocation to CO-PA.





Lesson Summary

You should now be able to:• Explain the transfer and allocation of costs






Unit Summary










Test Your Knowledge

1. and discounts are transferred to profitability segments in

Profitability Analysis at the point of billing in Sales Order Management.


2. How are production variances calculated?

3. One of the important tasks in Customizing for the costing-based CO-PA is to

assign your costs and revenues to the required value fields.


□ True

□ False

4. in the costing-based CO-PA contain the amounts

and quantities on which you want to report.


5. You can transfer the overhead costs from Cost Center Accounting either on

an activity-allocation or a basis.


6. What all can you settle in SAP R/3?

7. The application component

provides an alternative form of overhead control.


8. In , costs are settled to the

settlement cost element specified in the settlement structure.






Answers

1. Revenues and discounts are transferred to profitability segments in

Profitability Analysis at the point of billing in Sales Order Management.

Answer: Revenues

2. How are production variances calculated?

Answer: The production variances are calculated as the difference between

the actual costs of goods manufactured and standard costs.

3. One of the important tasks in Customizing for the costing-based CO-PA is toassign your costs and revenues to the required value fields.

Answer: True

One of the important tasks in Customizing for the costing-based CO-PA is to

assign your costs and revenues to the required value fields.

4. Value fields in the costing-based CO-PA contain the amounts and quantities

on which you want to report.

Answer: Value fields

5. You can transfer the overhead costs from Cost Center Accounting either on

an activity-allocation or a periodic basis.

Answer: periodic

6. What all can you settle in SAP R/3?

Answer: In SAP system, you settle internal orders (CO), sales orders (SD),

projects (PS), as well as production orders.

7. The Activity-Based Costing application component provides an alternative

form of overhead control.

Answer: Activity-Based Costing

8. In account-based CO-PA, costs are settled to the settlement cost element

specified in the settlement structure.

Answer: account-based CO-PA




TFIN22_2 Course Summary

Course Summary




• Set up the structures of an operating concern and examine characteristic

derivation and valuation

• Explain how the integration works between Sales Order Management,

Financial Accounting, and Management Accounting

• Create planning layouts, reports, and report forms




Course Summary TFIN22_2




Appendix 1Appendix

Figure 48: Appendix

Figure 49: Master Data : Additional Topics




Appendix 1: Appendix TFIN22_2

Figure 50: 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.




TFIN22_2 Appendix 1: Appendix

Figure 51: Aggregating the Tracing Factor

Normally, periodic allocation is carried out using tracing factors defined

specifically in the period concerned. This means that the periodic sender values

posted are settled on the basis of the tracing factors defined in this period.

Note that if these tracing factors are subject to significant periodic fluctuations,

you cannot allocate the values according to their cause.

As of Release 4.0A, you can use the Aggregated tracing factor indicator to

eliminate the fluctuations between periods.

Figure 52: CO-PA Derivation: (1)





Characteristic derivation refers to the system's attempts to determine the

characteristic values for the characteristics for all COPA-relevant transactions

(supplementing the automatic mappings).

By supplementing the values determined by automatic mapping, derivation can

access additional information (characteristic values) both within and outside the

originating transaction.

For every COPA-relevant transaction, the system will attempt to derive a

characteristic value for each and every characteristic in the operating concern if

the derivation configuration is complete.

Derivation is not always successful. Unsuccessful derivation for a characteristic

results in the posting of a blank or unassigned characteristic value, or the value

zero.

The total of all characteristic values used at segment level for a particular business

transaction defines the respective profitability segment. The profitability segment

is the CO-PA account assignment object.

The dependant characteristics, such as the customer group and the sales district

can be derived only if the characteristic values for the independent characteristics,

customer, sales organization, distribution channel, and division are all specified.

Figure 53: CO-PA Derivation: (2)

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 (also known as “target values”) are

determined directly based on the values of other characteristic values (known as

“source values”).





As with other derivation steps, derivation rules can be configured to apply to

either all situations or only when certain conditions are met (for example, when

a sales organization is 1000).

If a value cannot be determined by the rule entries, derivation rules can also be

configured to produce an error or to ignore this failure and proceed.

Unlike other derivation steps, derivation rule entries can be configured so

that they apply at a specific interval or time (time-dependent), or at all times

(time-independent).

Derivation rules can be set up in sequence with other derivation steps and methods

to produce complex derivation logic.

If a CO-PA derivation rule is not maintained properly, the system will issue an

error message when CO-PA derivation is performed. An incorrect derivation rule

may prevent billing documents being released to accounting.

Figure 54: Special Characteristics

Figure 55: Product Hierarchy





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 56: 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

levels (in transaction KEA0):

WWPH1 ‘Product Hierarchy. Level 1' CHAR 5

WWPH2 ‘Product Hierarchy. Level 2' CHAR 10 (5 + 5 !)

WWPH3 ‘Product Hierarchy. Level 3' CHAR 18 (5 + 5 + 8 !) Next, you need to inform the system that the characteristics defined above are to be

supplied with the values from a product hierarchy. By maintaining the appropriate

derivation table entries, you can supply these levels automatically with the product

hierarchy contained in the material master. For more information, see SAP Note

62690. In CO-PA, you need to maintain master data for your user-defined fields.

For the above example, enter all the valid product hierarchy elements for all three

characteristics, WWPH1, WWPH2, and WWPH3 (transaction KES1).





Figure 57: Transfer “Product Hierarchy” Release 4.5 (1)

As of Release 4.5, you can transfer the levels of the “Product hierarchy”

characteristic to CO-PA from the material master.

The levels of the product hierarchy are defined in Customizing under: Logistics -

General → Basic Data Logistics: Material Master → Material → Data Relevant

to Sales→ Define Product Hierarchies.

The PAPH1 and PAPH2 fields are generated in CO-PA to correspond to the

product hierarchy levels. With the CO-PA Customizing function “Transfer from

SAP table”, you can transfer the required fields from table MVKE to CO-PA

as characteristics. This enables you to evaluate the individual hierarchy levels

in reporting.

In contrast to when you define your own characteristics, you do not need to

maintain any characteristic values or derivation rules when you adopt the

characteristics from an SAP table.

You can still use any user-defined characteristics for the product hierarchy that

you were already using.





Figure 58: Transfer “Region” from an SAP Table

As of Release 4.5, you can transfer the “Region” field from the customer master

to use it as a characteristic in Profitability Analysis.

The PAREG field is available through the “Transfer from SAP table” function in

CO-PA Customizing, and can be transferred from the customer master (table

KNA1). This field is composed of the characteristic values of country and region.

In contrast to when you define your own characteristics, you do not need tomaintain any characteristic values or derivation rules when you adopt the

characteristics from an SAP table.

You can still use the “Region” characteristic (possibly a user-defined characteristic)

that you were already using.





Figure 59: Customer Hierarchies

In Profitability Analysis, you use particular characteristics to map the customer

hierarchy from SD. You can add these characteristics to your operating concern's

data structure from the PAPARTNER structure. Each individual level of the

customer hierarchy is assigned to a separate CO-PA characteristic, HIE01, HIE02,

and HIE10.

When you transfer sales orders or billing documents, the customer hierarchy

determined by SD is automatically transferred to CO-PA with the order or

document. In other Profitability Analysis transactions, the customer hierarchy

is derived uisng the customer, sales organization, distribution channel, and

division characteristics. The customer hierarchy category that is assigned to the

corresponding operating concern should always be taken into account.





Figure 60: Determination of the division in SD

Figure 61: Partner functions

You can use the partner functions from SD as characteristics in Profitability

Analysis. Certain standard partner functions are available for this purpose.

Furthermore, you can define your own partner functions in SD. The

customer-defined partner functions can also be transferred to the Profitability

Analysis data structures as characteristics.

A clear distinction must be made between the standard partner functions and the

user-defined partner functions. For both the standard partner functions and the

user-defined partner functions, a further distinction is made between personnel





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 62: Value Flows

Figure 63: 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.





For make-to-order production (the VBRP-VBELV field in the billing document is

filled), data has to be transferred to CO-PA using order settlement.

Figure 64: SD/CO-PA Interface: Plus/Minus Sign Logic

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 65: FI/CO-PA Interface versus SD/CO-PA Interface: Plus/Minus Sign

Logic

Figure 66: Project System: New Analyses in CO-PA

Settlement of incoming sales orders for each billing element.

Copying the revenues and costs relating to incoming orders into CO-PA so that an

expected result can be derived from the orders that belong to the current period

(taxable under the indicator “processing type”).

Order balance = settled incoming orders together with consideration of revenues

and of the cost of sales already billed.





You can monitor the history of the value of incoming orders by distinguishing:

• New orders

• Changed orders

• Cancellations

• Change of plans

Analysis is possible in CO-PA and in the Information System.

Customizing settings - See the release notes.

Figure 67: How to Compare Estimated Values with Actuals?

When the billing document is released to Accounting, the accrued discount from

the billing document is transferred to costing-based CO-PA using a statistical

“Cash Discount” condition.

The cash discount is calculated during the run of the payment program in FI. To

transfer the actual cash discount to CO-PA, you have two options.

First, you can use automatic account assignment to post actual cash discount

at a higher level into CO-PA.

Second, you can start the “Profit and Loss Readjustment” program (SAPF181) in

your period-closing activities as shown above. Actual cash discount will now be

assigned to the customer level to trace your actual customer profitability.

In both cases, make sure that accrued cash discounts and actual cash discounts are

stored in two different value fields. Reporting must be designed accordingly.





Figure 68: 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

large volumes of data.





Figure 69: Top Down Distribution of Various Record Types

With top down distribution, you can concurrently distribute data from several

record types, in a single run. This eliminates the need to re-enter the same

parameters for separate runs for each individual record type.

Figure 70: Specifying the Currency Type for Reference Data





Top down distribution offers you more flexibility when entering reference data.

Instead of automatically applying the respective currencies of the reference data,

you can now indicate a fixed reference currency – the company code currency or the operating concern currency.

Figure 71: Reference Data with Various Record Types

In top down distribution, you can select different record types as reference data.

You can specify whether the reference data for the different record types should be

cumulated or handled separately.

If you choose “Cumulate Record Type”, the reference data is summarized at record

type level. This means that the data is processed as if the same record type applied.

If the record type is not cumulated, the number of record types needs to be the

same for the actual data and the reference data. Processing observes the sequence

in which the record types are entered for the multiple selection. Actual data with

the first record type is thus distributed in accordance with the reference data of

the record type occurring first in the sequence (for a detailed example, see the

following section). (This example is also found in the F1 Help documentation.)





Figure 72: Aggregating Record Types - Example

Additional Costing: Aggregation without Transaction Type

100 = 1000*10/ (10+40+50)

400 = 1000*40/ (10+40+50)

500 = 1000*50/ (10+40+50)3000

1600 = 2000*80/ (80+20)

400 = 2000*20/ (80+20)

Additional Costing: Aggregation with Transaction Type

360 = 1000*(10+80) / ((10+80)+(40+50+20)+50)

440 = 1000*(40+50+20) / ((10+80)+(40+50+20)+50)

200 = 1000*50 / ((10+80)+(40+50+20)+50)

1080 = 3000*(10+80) / ((10+80)+(40+50+20)+50)

1320 = 3000*(40+50+20) /((10+80)+(40+50+20)+50)

600 = 3000*50 / ((10+80)+(40+50+20)+50)

720 = 2000*(10+80) / ((10+80)+(40+50+20)+50)

880 = 2000 *(40+50+20) /((10+80)+(40+50+20)+50)

400 = 2000 *50 / ((10+80)+(40+50+20)+50)





Figure 73: Event Planning with Object-Dependent Revaluation Key

Events, such as special sales campaigns, can have a short-term influence on the

sales of products.

As of Release 4.5, events can be taken into account in manual and automatic

sales and profit planning.

From a functional perspective, an event can be seen as a revaluation key linked to

a specific length of time.Events can influence the data of an entire plan or be defined with reference to

specified characteristics, such as a specific region.

Figure 74: Additional Functions





Figure 75: Recommendations on How to Use Excel (1)

When you define your Excel template, you should distinguish between two types

of spreadsheet in Customizing:

• An SAP spreadsheet, which is used to transfer data to R/3 Enterprise

• Further Excel spreadsheets in which the planner processes the data

Macros are used to transfer data between the sheets.

When you plan with the SAP spreadsheet, you should be aware of the specialfeatures:

• You cannot make any further alterations to the position of the data in Excel

when planning. You cannot delete columns or move cells at this stage.

• You can add new entries in the SAP spreadsheet only in the lines below

the totals line.

• To display possible entries, you can use the button in the R/3 environment

designed for this purpose.

• All other R/3 planning functions require you to select the required line in

Excel and to perform the required function in the R/3 menu bar.





Figure 76: Recommendations on How to Use Excel (2)

Due to the restrictions of the SAP spreadsheet, a procedure can be followed in

which data is copied from the SAP sheet to a different Excel spreadsheet.

You can use all the Excel functions to create data, depict data with graphics or

calculate data using models.

After you have finished working on the appropriate record, data is transferred back

to the SAP spreadsheet using a macro. For more information, see the appropriateexample in the documentation.

Note: When you develop the macro, it is good idea to test your solution

outside of R/3 Customizing first and then transfer it using Cut and Paste.





Figure 77: Using Attributes to Display More Information

In previous releases, it was possible only to determine how the lead column

should be displayed, such as the key, characteristic name, or both. You can now

use attributes to display further information from the characteristic master data

tables in the lead column.

Choosing “Settings→ Characteristic display” allows you to determine how

characteristics are displayed in the lead column. The characteristic name is

displayed in the above example.

If you select the lead column and choose “Settings→ Characteristic display→

Lead column”, a dialog box appears prompting you to select the attributes to be

displayed in the additional columns of the report list. The “City” attribute was

selected in the above example.

Finally, choosing “ Extras→ Attributes” allows you to display a dialog box

showing all the attributes for a characteristic.





Figure 78: The Transport Concept (1)

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.





Figure 79: The Transport Concept (2)

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.





Figure 80: Transports in CO-PA

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

through any CTS procedures at all.





Figure 81: 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.





Figure 82: Authorization Concept

The authorization concept in the ERP system can be described as follows:

• SAP delivers certain authorization objects with the standard system. These

authorization objects consist of up to 10 fields, each of which represents an

element that has to be protected, such as “Operating concern”, “Form”,

and “Activity”.

Authorizations are defined by selecting an authorizations object and assigning

corresponding values to the relevant fields. Authorizations contain specific

combinations of values that are to be allowed for the fields of an object during a

transaction that accesses that particular object.

You can summarize different authorizations in one profile, and these authorizations

can be assigned either to the users directly or to profiles. (These profiles can

then be assigned to users or more compex profiles.) These frequently represent a

collection of all the authorizations an individual needs to perform the job.

A user can have more than one assigned profile. This means that it is possible to

define profiles as a set of duties and then assign the profiles to all persons by the

duties they perform or are responsible for.





Figure 83: Authorization Objects in CO-PA

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

assigned profile.





Figure 84: External Data Transfer to CO-PA

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.





Figure 85: Archiving and Deleting CO-PA Data

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.





Figure 86: SAP Enhancement Concept

The R/3 enhancement tool is used to add customized functions to SAP's standard

business applications. Through enhancements, customers can implement their own

functions without needing to modify the standard SAP code. Each enhancement

has a specific purpose.

Enhancements are beneficial because they provide the exits and entrances at

the appropriate places in R/3 along with the necessary data that may be used,

manipulated, and returned. Enhancements also isolate custom functions so they

will not harm SAP transactions nor upgrades.

To use enhancements, custom functions must be programmed into the

enhancements. The enhancements must be assigned to enhancement projects.

In addition, each project must be activated for all of the functions contained inthe related enhancements to take effect.

Figure 87: CO-PA Enhancement Overview (1)





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 88: 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

costing-based CO-PA.





For example, for actual postings you can change the average exchange rate (“M”)

to the bank buying rate (“G”) or the bank selling rate (“B”).

With the COPA0005 enhancement, you can change or define characteristic values

or field values on the interfaces with other applications by using information from

the source document. This cannot be done with the enhancements for derivation

and valuation, since these only use information that is contained in the CO-PA

component.

For example, this enhancement might be used to change the characteristic values

being derived for an FI journal entry to CO-PA based on information in the

allocation field or the text field of the document.

With the COPA0006 enhancement, you can program the special functions for

processing planning data during the manual and automatic planning processes.

Each function is given an exit number, which must be specified when conductingthe tasks to access the required calculations.

For example, this enhancement can be used to for distribution using a

characteristic-specific distribution key, for revaluation using a time-dependent

revaluation factor, or for moving plan/actual variances to future periods.

With the COPA0007 enhancement, you can program special processing

instructions for externally uploaded data only. This means you can modify the

line items that are transferred to costing-based CO-PA over the standard interface

using customized source code.

Figure 89: Recommended Follow-Up Activities

Data Used in the Exercises

Data Data in Training

System

Data in IDES System

Operating Concern IDEA IDEA

Controlling Area 1000 1000

Company Code 1000 1000

Sales Organization 1000 1000

Distribution Channel 10 10

Division 00 00





Products P-100, P-101, P-102,

P-103

P-100, P-101, P-102, P-103

Customer T-CO05A## T-CO05A##

Sales Order Type TA TA

Internal Order Type 0450 0450

Cost Center 4500 4500

Activity Type EH##

Currency UNI UNI

Business Area 5000 5000

Plan Version 100 5## 100




Index AAssignment lines, 72

BBase condition types, 77

C

Calculation condition types,77

Calculation Type, 76Characteristic derivation, 49Characteristic Values, 4Characteristics, 4 – 5CO orders, 117CO-PA relevant transaction,

46Company code, 3Condition type, 76Controlling area, 3Controlling Pr ofitability

Analysis (CO-PA), 69Costing key, 72Costing sheets, 75Customizing Monitor , 56

DDerivation rules, 54Derivation strategy, 50

OOperating concern, 3

Overhead Cost Controlling,107

Overhead Costs Controlling,112

PPA transfer structure, 119

Period indicator , 73Periodic valuation, 69Plant, 3Product Cost Controlling

(CO-PC), 71Product Costing, 70Production variances, 107Profitability Analysis, 68, 108Profitability segment, 49

Ssales order management

transaction, 46Scale Basis, 76settlement profile, 118

TTable lookup, 53

VValuation analysis, 79Valuation configuration, 70Value Fields, 7




Index TFIN22_2




Feedback SAP AG has made every effort in the preparation of this course to ensure the

accuracy and completeness of the materials. If you have any corrections or

suggestions for improvement, please record them in the appropriate place in the

course evaluation.

Documents

TFIN22_2 Management Accounting II