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Control expenditures on Fixed Assets with

Statistical Internal Orders and Statistical cost

elements

Ordinarily, when we talk about postings to a Cost Assignment Object we use the cost element as a

vehicle to do so, and when we talk about Cost Elements, we are talking about P & L items. However, you

may have a business requirement to control expenditures on fixed assets (which is a balance sheet

item), in order to avoid spending above the budgeted amount.

In this post we will go through the process of how we could control expenditures on fixed assets

(balance sheets items) through statistical internal orders and by defining the fixed asset reconciliation

GLs as statistical cost elements (category 90).

Pre-requisite 1) Necessary Fixed asset settings must have been done It is assumed that all necessary fixed asset settings especially the account determination settings are done. Without this, you will not be able to create the statistical Cost Elements.

2) All necessary Fixed Assets G/L Accounts are created It is assumed that all necessary fixed assets G/L Accounts are created. If they are not, then create the

G/L accounts using transaction FS00. It must be noted that you cannot create a Cost Element without

at first creating the corresponding G/L account.

3) The Cost Assignment Object (Internal order) should be a statistical order

Create a statistical Internal Order using transaction KO01, or if the internal order already exists confirm

that the “Statistical order” option is selected otherwise use KO02 to change the order.

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Configuration Step

1) Create Statistical Cost Elements In this step we create the asset balance sheet accounts (asset General Ledger accounts created above)

as statistical cost elements (category 90)

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Follow the menu path:

IMG-- Financial Accounting (New) -- Asset Accounting—Transactions-- Budget Monitoring with

Statistical Orders/WBS Elements-- Create Statistical Cost Elements

Or use transaction OAK7

Note: You cannot create a balance sheet account as a cost element (statistical cost element category 90)

in the same way you are creating a normal cost element with transaction KA01. If you attempt it you

may get an error “GL Account xxxxxxxx is a Balance Sheet Account".

Click on “create cost elements for project/order account assignment” to Start the program for defining

your asset balance sheet accounts as statistical cost elements

The system then automatically creates statistical cost elements (cost element type 90) for all of the APC

balance sheet accounts belonging to your account determination in Asset Accounting (depreciation

area 01).

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Enter your Controlling Area

Define the validity period of the statistical cost elements you are about to create

Execute in test mode first and see the result. Then go back and remove the test run tick and execute

again.

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Three cost elements are created with type “90” as above.

Use transaction KA03 to display the cost elements to see that they are created with category “90”.

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Now click on “Transport cost elements” to transport to your Production environment.

With this settings in your production environment, you can control expediture on fixed assets through

Internal order budgetting the same way you control expendition on P & L items (both through the CO

availabilty control functionality).

2) Activate Availability Control It is assumed that you have activated the availability control functionality. If you have not follow the

menu path below to activate it.

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IMG – Controlling -- Internal Orders -- Budgeting and Availability Control -- Maintain Budget

Profile

Click on Maintain Budget Profile

Click on your Budget Profile

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Select as per your requirement and save

Conduct asset acquisition transaction

We can now try to procure an asset.

1) We assume that the master data of the asset in question exists, if not create it using transaction

AS01.

2) We assume that the budget exists on this asset and the corresponding internal order (account

assignment object). If not follow the menu path below to allocate the budget:

Accounting – Controlling -- Internal Orders – Budgeting -- Original Budget – Change

Or use transaction KO22

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Enter your statistical Order and Click on Original Budget.

Note: No need to input currency if you have chosen to budget in your controlling area currency

in your settings. If you do, you may have the message below.

This simply means that, “you have chosen to budget in the controlling area currency in the

budget profile or planning profile, but have entered a transaction currency”. The system will

automatically determine the controlling area currency and chooses it as the transaction

currency.

Note: also that the order type is derived automatically from the master data of the Internal

order, even if not inputted in the transaction.

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3) Procure the asset

Use the menu path: Accounting -- Financial Accounting -- Fixed Assets – Posting – Acquisition -

- External Acquisition -- With Vendor

Or use transaction F-90

Enter all the necessary fields

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Press enter to continue

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Press enter to continue

Note that we are inputting an amount of USD 210,000 which will be translated to the controlling

area currency at the exchange rate of the transaction.

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Click on the simulate icon

Document 1900000019 was posted in company code 9999

Now run the Internal Order report using transaction S_ALR_87013019 - List:

Budget/Actual/Commitments

As can be seen above, with a budget of XDR 200,000 in step 2 above, we procure an asset of

USD 210,000, equivalent in XDR 144,727.77. We now have a balance of XDR 55.272.23. If you

have the availability control functionality active the system will only allow another procurement

under the balance.