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Cost Element Master in SAP

Cost Element Master in SAP

Primary / Revenue Cost element :

Primary / Revenue Cost Element is a carrier for transmitting cost or revenue respectively from FI to CO module. Items in a chart of accounts that are relevant to cost or revenue are referred to as either Primary or Revenue Cost element in controlling.

Secondary Cost element :

Secondary Cost Element is a cost element that is used to allocate costs for internal activities, overhead cost and assessment.  Secondary cost elements do not correspond to any G/L account in Financial Accounting. They are used only in Controlling and consequently cannot be defined in FI as an account. Cost element category determines which cost elements can be used for which business transactions.

Following are the primary cost element categories.

Primary Cost element Categories    | Description    | Usage

01 |    Primary Cost / Cost- reducing revenues    | FI to CO postings of expenses
11 |    Revenues                | FI to CO postings of revenues
90 |    Cost elements for Balance Sheet Accounts in FI | Budget checking for capital procurement

Following are the secondary cost element categories.

Secondary Cost element Categories |    Description    | Usage

21 |    Internal settlement        | Cost object to Cost object settlement within  CO
31 |    Order/project results analysis    | WIP Calculation for Production orders & Project System
41 |    Overhead Rates             | Overhead cost sheet
42 |    Assessment            | Allocation Cycle in CO ( Cost Center )
43 |    Internal activity allocation    | Used in Activity Allocation to Production Orders

Note :

Finance : All cost & revenue transactions occurring directly or indirectly through cross module integration in FI will be carried to respective Cost object (eg.Cost Center, Internal Order, WBS etc ) through primary cost element.

Planning : Planning of cost, revenue and activity related to production is carried out in respective cost object through primary & secondary cost element.

SAP T Code to be Used

Create Primary Cost Element :    KA01
Create Secondary Cost Element :    KA06
Change Cost Element    : KA02
Display Cost Element    : KA03
Delete Cost Element    : KA04
Display Change to Cost Element    : KA05
Display Cost Elements-Collective :    KA23
Delete Cost Elements-Collective    : KA24
Create Cost Element Group    : KAH1
Change Cost Element Group    : KAH2
Display Cost Element Group    : KAH3

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