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SAP Controlling Area (Part – II)

The creation of Controlling Area is further divided into Activation of Components and Assignment of Company Codes.

Activation of Components In this section, we have to activate the relevant components as explained below:

Cost Centres The cost centre accounting is activated here. We have following options with regards to CCA activation

Inactive CCA is not activated

Active CCA is activated without limitations and cost centres can be used as account assignment objects

Active with validation CCA is not active. Cost centers are validated against the cost center master. The cost centers can be used as account assignment objects but the relevant CO files are not updated on posting. If CCA is implemented at a later date, you can subsequently post the cost-relevant business transactions in cost centers to the relevant CO files.

Active for existence checks Same as Active. The only difference is that the cost centers are not  created in full, but only in part using the “Rough entry” function.

Account Assignment Activity type Active This indicator controls whether the activity types can be used as account assignment objects for actual postings.

If this indicator is selected, actual primary costs can be assigned directly to the activity type of a cost center.

Order Management This indicator controls the setting for order management

Inactive Order are not validated and can’t be used as account assignment object.

Active Order management is active without limitations. Orders are validated and can be used as account assignment object.

Active for validations Order management is inactive. Orders are validated against master data and can be used as account assignment objects, but the corresponding CO files are not updated.

Active for existence validation Functions the same as indicator Active except that orders are checked to see if they exist and not whether they are allowable for the relevant posting transaction.

Commitment Management Controls whether commitments are updated for the controlling area or not.

Profitability Analysis Activation of Profitability Analysis is done separately in CO-PA component of Controlling Module.

Activity Based Costing Indicates whether Activity Based Costing component of Controlling is active or not.

Profit Centre Accounting Indicates whether PCA component of Controlling is active or not.

Projects This indicator controls whether CO files are to be updated as additional account assignments for posting transactions that use WBS elements and networks or not.

Indicator selected CO files are updated. The WBS element and network numbers are validated with the corresponding master data. Indicator not selectedCO files are not updated. Note that, even if you do not select this indicator, the system validates the master data for additional account assignments to a WBS element. The network number, however, is not validated. Select this option if you are planning to implement PS Module.

Sales Order This indicator controls the use of Sales Orders in Make to Order production.

Indicator selected System allows following

  1. Posting of actual costs and revenues to the Sales Order.

  2. Production Order, Networks to settle the costs to the Sales Order Item.

Result Analysis

Indicator not selected If the indicator is not active, the SAP system neither checks the CO object for sales order items during posting to Financial Accounting, nor updates costs and revenues to the sales order item.

Variance This indicator activates calculation of variance.

This Indicator controls whether the system calculates price variances for primary cost postings by transaction (that is, by posting) and posts them in the Controlling component (CO). If the indicator is active, the system makes the calculations and postings.

Assignment of Company Codes In this section we assign the Company Codes to Controlling Area. The Company codes can be assigned to controlling area if following conditions are met:

  1. Controlling Area and Company Codes have same Chart of Accounts

  2. Controlling Area and Company Codes have same Fiscal Year Variant

If any of the above two conditions are not met, system does not allow assignment of company code to the controlling area.

Reference Material

Controlling Area I Controlling Area II Controlling Area III

Tags# Activation of Components in Controlling Area, Assign COA & Fiscal year Variant to Controlling Area, Assignment of Company Code to Controlling Area, SAP Controlling Area,

Part I

#ControllingAreainSAP #SAPControlling #ControllingArea #SAPConrollingArea #SAPCO

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