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TFIN22_2Management Accounting II

mySAP ERP Financials

Date

Training Center

Instructors

Education Website

Instructor HandbookCourse Version: 2006/Q2Course Duration: 2 DaysMaterial Number: 50080907Owner: Michael Janning (D034089)

An SAP Compass 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 theexpress 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 softwarecomponents of other software vendors.

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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 ofCitrix Systems, Inc.

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Disclaimer

THESE MATERIALS ARE PROVIDED BY SAP ON AN "AS IS" BASIS, AND SAP EXPRESSLYDISCLAIMS ANY AND ALL WARRANTIES, EXPRESS OR APPLIED, INCLUDING WITHOUTLIMITATION WARRANTIES OF MERCHANTABILITY AND FITNESS FOR A PARTICULARPURPOSE, WITH RESPECT TO THESE MATERIALS AND THE SERVICE, INFORMATION, TEXT,GRAPHICS, LINKS, OR ANY OTHER MATERIALS AND PRODUCTS CONTAINED HEREIN. INNO EVENT SHALL SAP BE LIABLE FOR ANY DIRECT, INDIRECT, SPECIAL, INCIDENTAL,CONSEQUENTIAL, OR PUNITIVE DAMAGES OF ANY KIND WHATSOEVER, INCLUDINGWITHOUT LIMITATION LOST REVENUES OR LOST PROFITS, WHICH MAY RESULT FROMTHE USE OF THESE MATERIALS OR INCLUDED SOFTWARE COMPONENTS.

About This HandbookThis handbook is intended to complement the instructor-led presentation of thiscourse, and serve as a source of reference. It is not suitable for self-study.

Typographic ConventionsAmerican English is the standard used in this handbook. The following typographicconventions are also used.

Type Style Description

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

Also used for cross-references to other documentationboth internal (in this documentation) and external (inother locations, such as SAPNet).

Example text Emphasized words or phrases in body text, titles ofgraphics, and tables

EXAMPLE TEXT Names of elements in the system. These include reportnames, program names, transaction codes, table names,and individual key words of a programming language,when surrounded by body text, for example SELECTand INCLUDE.

Example text Screen output. This includes file and directory namesand their paths, messages, names of variables andparameters, and passages of the source text of a program.

Example text Exact user entry. These are words and characters thatyou enter in the system exactly as they appear in thedocumentation.

<Example text> Variable user entry. Pointed brackets indicate that youreplace these words and characters with appropriateentries.

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

About This Handbook TFIN22_2

Icons in Body TextThe 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'spresentation.

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

ContentsCourse Overview ...... . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . vii

Course Goals.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .viiCourse Objectives .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . viii

Unit 1: Structures..... . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .1Overview of Operating Concern .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .3Data Structures .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22

Unit 2: Master Data..... . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 53Introduction to Characteristic Derivation and Valuation... . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 55Characteristic Derivation.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 61Valuation .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 85

Unit 3: Actual Data ..... . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .133Flow of Actual Data... . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .135Transfer of Overhead .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .142

Appendix 1: Appendix ..... . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .189

Index ..... . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .225

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Contents TFIN22_2

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

Course OverviewThis course describes the functions in Profitability Analysis and outlines how toimplement the component. It covers how to set up the structures of an operatingconcern and characteristic derivation and valuation. In addition, it explains how theflow of actual values from the SD, FI, and CO modules works. It also examines howto create planning layouts, reports, and report forms.

Target AudienceThis 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 PrerequisitesRequired 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 Duration DetailsUnit 1:StructuresOverview of Operating Concern 40 MinutesExercise 1: Operating Concerns 10 MinutesData Structures 50 MinutesExercise 2: Data Structures 15 MinutesExercise 3: Maintain the Operating Concern 15 Minutes

Unit 2: Master DataIntroduction to Characteristic Derivation andValuation 30 Minutes

Characteristic Derivation 40 Minutes

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Course Overview TFIN22_2

Exercise 4: Derivation 20 MinutesValuation 50 MinutesExercise 5: Valuation 10 Minutes

Unit 3: Actual DataFlow of Actual Data 30 MinutesTransfer of Overhead 50 MinutesExercise 6: Cost Center Assessment 10 MinutesExercise 7: Internal Orders 15 MinutesExercise 8: Activity Allocation 10 Minutes

Course GoalsThis course will prepare you to:

� Understand the functions in Profitability Analysis and obtain an insight on howto 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 ObjectivesAfter completing this course, you will be able to:


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

� Explain how the integration works between Sales Order Management, FinancialAccounting, and Management Accounting

� Create planning layouts, reports, and report forms

SAP Software Component InformationThe information in this course pertains to the following SAP Software Componentsand releases:

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

TFIN22_2 Course Overview

Revised: in December 2004 for mySAP ERP. Only minor changes have been made.For example, exercises and solutions have been amended and terminology has beenupdated. We have changed the terminology in the course book only and not in theinstructor handbook. Terminology changes are listed in the following table:

old newR/3 system SAP systemcontrolling Management AccountingSD Sales Order ManagementFI Financial Accountingreporting analytics

SAP Contact(s)

Walldorf

N.A.

Subsidiaries

Andrea Anderson - SAP America

Peter Jones - SAP America

Revisions to Previous Instructor Guide

Created on: 12/29/99

Revised: July, 2003 for Release R/3 Enterprise

For Release R/3 Enterprise, you will find only minor changes in the course material.Exercises and solutions have been amended and four new graphics have beenintegrated:

�Activity Allocation� in �Flow Data� because as of Release R/3 Enterprise, it ispossible to post the cost component split of a price to CO-PA

�Variables in Planning� in �Planning� because you can use variables in either planninglevels or planning packages

�Copying Plan Data: Transformation of Characteristics� in �Planning�, whichhighlights a new feature in the copy function.

�Planning sequence� in �Planning,� which shows how you can combine severalautomatic planning functions, such as copy and revaluation in one sequence

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


Besides these new graphics, nothing has changed in the course material.

Course Details

Duration

5 days

The course has been extended to a standard 5-day course as of Release 4.6. There area number of optional exercises, which can be used at your discretion.

The appendix contains a number of additional topics, which are not intended as part ofthe course content. Instead, these topics explain concepts that are not covered in thestandard course materials, but that may be discussed by more experienced participants.

Course Materials and Other Materials (Training Manual)

Normally, you should make use of the standard presentation material for the course.To convey difficult concepts, you can also make use of whiteboards, a flip chart, andan overhead projector.

� Participant handbook� my SAP ERP system� SAP Knowledge Warehouse� Whiteboards� Flip chart� Overhead projector

Country-Specific Chapters

None

Course Instructor Profiles

Level of Knowledge Required

In-depth knowledge of managerial accounting theory. Familiarity with course AC040.Basic knowledge of the sales order management module, such as pricing, sales, andbilling, and the financial accounting module.

The course instructor should have already taught other CO courses. Course AC410 isparticularly helpful. Note that AC605 should not be the first CO course that you areholding.

Recommended Preparatory Courses

AC040 Cost Management and Controlling

AC410 Cost Center Accounting

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


AC415 Overhead Orders

AC505 Product Cost Planning

AC510 Cost Object Controlling for Products

AC515 Cost Object Controlling for Sales Orders

AC610 Profit Center Accounting

The level 2 courses in financial accounting and sales order management are alsorecommended. Extensive knowledge of the sales order management module, such aspricing, sales, and billing, is extremely advantageous.

Recommended Preparatory Online Help

WinHelp documentation for the CO-PA module

CO-PA Implementation Guide

IDES Demo Scripts for CO-PA

Hints on Preparing This Course

To conduct this course successfully, it is a good idea to attend the above recommendedcourses and work through the course flow and exercises. Attend the course whenanother instructor holds it, and make sure to co-teach the course at least once beforeyou teach it alone. CO-PA covers a lot of functions in and around the CO application,with which you will not immediately be familiar. For further practice, there areexcellent demo scripts in the IDES system.

Training System

Required Data

Refer to Example Data for the Instructor section.

User IDs and Password for Course Participants

User IDs: Create your own

Password: INIT

To create participant user IDs, use transaction ZUSR and copy user AC605-99 (!).This user has been set up with a special authorization profile that prevents users frommaintaining the operating concern tables. If you copy another user, you will encountermajor problems during class. This is because only one operating concern is availablefor each course and it should be maintained only by you.

System Preparation

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A CATT has been created to post a goods receipt of 10,000 items to the stock ofmaterial P-100 in storage location 0002. This CATT should be executed automaticallybefore the class, but you should check the balance manually. If no stock is available,use:

Movement type:

Plant:

Storage location:

Material: P-100

Quantity:

Logistics→Materials management→ Inventory management→ Goods movement→ Goods receipt→ Other

Master data, such as the customer numbers for each participant and for the course,is already available in the training system. The required transaction data also exists.The course instructor or participants during the course create some of the requiredtransaction data.

If you want to deactivate the locking mechanism to maintain tables, use transactionSE38 to start the ZSENQOFF program. (The ZSENQON program reactivates thelocking mechanism.) Switch ENQ to off.

Example ABAPs

None

Technical Hints

Since this course covers both the costing-based and account-based approaches withinProfitability Analysis, there are points at which you can choose to demonstrate eitherapproach. As most customers use mainly costing-based CO-PA, with account-basedapproach being used additionally or not at all, this course focuses on the costing-basedapproach. In fact, account-based PA is seldom discussed in the presentation materials,but there are a number of optional exercises that work with account-based PA.

When examples in the system are used, you can assume that the examples arecosting-based. If the account-based approach is used (for example, a report for theaccount-based approach is defined), this is stated explicitly.

Most Customizing examples require Customizing in CO-PA. Transaction ORKEsupports all of the menu paths required for configuration. Transaction SPRO accessesthe IMG. The menu paths to access the IMG will not be repeated in the followingscripts.

Example Data

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Data in the training systemOperating concern IDEAControlling area 1000Company code 1000Sales organization 1000Distribution channel 10Plant 1000Storage location 0002, 0001Shipping point 1000Division 00Material P-100, P-101, P-102, P-103, M-01 to

M-20Customer 1000, T-CO05 A01 through T-CO05

A20 (participants)Order type OR, TA (Customer order)Order type 0450 (Internal order)Cost center 3200 (Assessment)Assessment cost element 691000Primary cost element VariousG/L account 113100Cost center 4120 (Activity allocation)Activity type 1412Currency UNIBusiness area 1000Plan version VariousCosting sheet ACT001

The transaction data for the Actual Data unit is generated using the above information.

Predefined planning layouts, report forms, and reports for the Planning andInformation System units are available in the IDES system. It is a good idea to defineyour own planning layouts, report forms, and reports during the course so that theparticipants get a better idea of how this is done. Course-specific reports and layoutshave been created as samples.

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


This course teaches participants how to set up and use Profitability Analysis and howto adjust the system to company-specific requirements in the planning and informationsystem areas. It also introduces the interfaces for the flow of actual values.

Course Structure and Flow

Units 1 through 3 introduce the Profitability Analysis application and ProfitabilityAnalysis customizing. The Actual Data, Planning, and Information System unitsprovide further information. Finally, unit 7 takes a closer look at additionalProfitability Analysis functions.

The following paragraphs provide a brief introduction to the important topics withineach unit:

The Profitability Management unit introduces participants to profitability accountingin the SAP system and highlights the differences between the CO-PA module andthe EC-PCA module. This is done by comparing the two modules in the light ofvarious criteria.

The Structures unit describes the individual structures in Profitability Analysis andteaches participants how to set up an operating concern in Customizing.

The Master Data unit introduces the concepts of characteristic derivation andvaluation. This unit explains how to customize characteristic derivation and set upthe valuation for costing-based Profitability Analysis.

The Actual Data unit manages the various sources of Profitability Analysis data, suchas billing documents, cost center, cost assessment, and order settlement.

The Planning unit demonstrates the planning methods supported in ProfitabilityAnalysis. Participants are given an overview of the planning functions for manualand automatic planning. Integrated planning within Profitability Analysis is outlinedextensively.

The Information System unit conveys elaborate information about the drill-downanalytics and its functions. Participants are additionally taught how to create their ownreports and report forms and to use the line item analytics function.

The Tools unit describes the various tools that have often proved essential for thesuccessful implementation of Profitability Analysis. The topics of PerformanceTuning and Realignments are discussed.

In addition, a lesson has been added to address the Workplace in context withProfitability Analysis. This lesson is optional and should be given at your discretion.At the time of publishing, no system strategy for Workplaces was available and sono demos were created.

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


You can easily make up time in the Information System unit by reducing the numberof exercises. If you have been particularly quick, you can extend the course using thenumerous exercises provided. The Tools unit can also be handled either very brieflyor extensively, and the exercises should also be seen as optional.

Familiarize the participants with the organizational aspects of the course. Describe thecourse goals and the course content. Give participants the opportunity to introducethemselves to the group, say what relevant experience they have, and explain whatthey expect to gain from the course. Show the participants the overview diagram forthe course. This is designed to give an overview of the course flow. The main businessscenario is designed to introduce the example company, which will be used throughoutthe course. Further business scenarios add more information to the initial picture.

If participants are unfamiliar with the role-based Easy Access menu, explain some tipsand tricks. You can have participants add a favorite for transactions ORKE and SPRO,so they do not have to go through the menu path every time.

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

Unit 11 Structures

Explain to the participants how to create characteristics and value fields from differentfield sources and define the operating concern attributes. Demonstrate how to copycharacteristics and value fields into Data Structure Definition and generate theoperating concern environment. In addition, help them to identify and set nonsegmentlevel characteristics.

Unit OverviewThis unit introduces you to the organizational structures from a Profitability Analysisperspective. It helps you to know the data structures used within Profitability Analysis.It explains the CO-PA characteristics and value fields and the possibilities that thesystem offers to define these data structures.

Unit ObjectivesAfter 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 ContentsLesson: Overview of Operating Concern .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .3

Demonstration: Organizational Structures .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .5Demonstration: Characteristics and Value Fields .. . . . . . . . . . . . . . . . . . . . . . . . . . 11Demonstration: Operating Concern and its Attributes ... . . . . . . . . . . . . . . . . . . . 15

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

Unit 1: Structures TFIN22_2

Exercise 1: Operating Concerns .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17Lesson: Data Structures .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22

Demonstration: Segment Level and Non-Segment Level Characteristics 29Demonstration: Operating Concern Templates.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32Exercise 2: Data Structures .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33Exercise 3: Maintain the Operating Concern ... . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39

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

TFIN22_2 Lesson: Overview of Operating Concern

Lesson:2

Overview of Operating ConcernLesson Duration: 40 Minutes

Lesson OverviewThis lesson describes the various organizational units. In addition, it covers theconcepts, characteristics, and value fields of an operating concern. It also definesan operating concern and its attributes.

Lesson ObjectivesAfter completing this lesson, 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

In this lesson, explain to the participants, the various organizational units. Identify thebasic concepts, characteristics, and value fields of an operating concern. In addition,describe extensively, an operating concern and its attributes, to the participants.

Business ExampleThe management of your company wants to implement a profitability accountingapplication in the SAP system. As a member of the project team, you are supposedto advise on the question of whether to implement CO-PA or EC-PCA in the SAPsystem. You then will be responsible to implement the selected applications. Bothcross-company and company-specific reporting of contribution margins is requiredin multiple currencies. Multidimensional analysis of sales information, cost-of-salesinformation, production variances, and period cost information is required for thevarious market segments. Estimated costs are required for the actual costs posted onlyat the month-end. Actual period costs (S, G, and A) for the various organizationalentities are to be reflected at the month-end. Analytics by value category and byincome statement account is required.

For this purpose, you need to identify the operating concern, which represents a salesand marketing reporting unit for a corporation. You also need to understand theconcept of characteristics and value fields.



Introduction to Organizational Units

Make the participants aware of the fact that only one user at a time can change thedata structures of an operating concern. Because the operating concern has to beregenerated each time a change is made, no changes should be made to the operatingconcern, IDEA. Instruct the participants that they can display the configuration butmust not make any changes. The user master records created for the course preventthe participants from having the authorization to change the operating concern.

This topic is designed to give the participants an overview of the organizationalunits and the significance of the operating concern. The business scenario emphasizesthat the company is an international company divided into various legal entities. Forthis reason, several different currencies are used. The various characteristics and valuefields needed are indicated by the different analytics requirements.

First, explain the relationship between the various organizational units. In contrastwith other CO modules, the sales organization and the corresponding master data playan important role in CO-PA. Explain that several Controlling areas can be groupedin one operating concern, however all Controlling areas must use the same fiscalyear variant.

Figure 1: Organizational Units



The operating concern is the key organizational unit within CO-PA. It defines theextent of the marketing and sales information that can be reported in combination bythis component. One or more controlling areas are assigned to an operating concernwhen organizational structures are defined. In most cases, corporations have onlya single operating concern, which is recommended for the sake of simplicity andconvenience if all controlling areas and company codes share the same fiscal calendar.

The controlling area is an organizational unit delimiting the independent costaccounting operations of the organization, such as cost center accounting, profitcenter accounting, and order accounting. Company codes are assigned to controllingareas when organizational structures are defined. Mostly, a 1:1 relationship existsbetween the company code and the controlling area. Notice that a controlling areacan also incorporate several company codes to take cross-company cost allocationsinto account.

The company code is an independent accounting unit within a client. The legalrequirements of a balance sheet or a profit and loss statement are fulfilled on thecompany code level. Plants are assigned to company codes when organizationalstructures are defined.

The plant represents a production center. It is the primary organizational unit inoperations and manufacturing.

Demonstration: Organizational Structures

PurposeTo demonstrate how to display the operating concern and assign the company codeand the controlling area

System DataSystem:Client:User ID:Password:Set up instructions:1. In structure maintenance, display the operating concern, IDEA.

IMG→ Enterprise Structure→ Definition→ Controlling→ Create OperatingConcern

2. Under �Assignment�, show how the company code, 1000, is assigned tothe controlling area, 1000, and the controlling area, 1000, is assigned to theoperating concern, IDEA.



IMG→ Enterprise Structure→ Assignment→ Controlling→ AssignCompany Code to Controlling Area

3. Inform the participants that the controlling area can only be assigned to anoperating concern after the operating concern has been generated.

4. Under �Assignment�, show how the plant, 1000, is assigned to the companycode,1000, and how the sales organization, 1000, is assigned to the companycode, 1000.

IMG→ Enterprise Structure→ Assignment→ Logistics - General→ AssignPlant to Company Code

IMG→ Enterprise Structure→ Assignment→ Sales and Distribution→Assign Sales Organization to Company Code

5. As an alternative or supplemental demonstration, you may want to show thecustomizing monitor, a new tool as of Release 4.6. It shows a complete summaryof the organizational assignments for a particular operating concern.

CO-PA Customizing→ Tools→ Analysis→ Check Customizing Settings→Overview: Organizational Structures

Basic Concepts: Characteristics and Value Fields

Explain that certain characteristics that are known as the fixed characteristics, areautomatically included in all operating concerns. There are also certain technicalfields, such as posting period, which are also automatically contained in the datastructures. Notice that in account-based profitability analysis, the cost element is afixed characteristic. The job of the user is to define any characteristics required butnot already available as fixed characteristics.

Value fields are created based on information requirements. They differ from onecompany to the next and only play a role in costing-based Profitability Analysis.Explain that value fields normally represent a group of cost or revenue elements. Thevarious accounts for discounts can be grouped into one value field. Value fields aredefined as either a quantity field or an amount field. Mention that the data structuresare valid across all the clients of a system.



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 definewhat items or objects the user can evaluate. Several characteristics, such as salesorganization, customer, and product, are predefined automatically for every operatingconcern. These are known as fixed characteristics.

In addition to the fixed characteristics, up to 50 non-fixed non fixed characteristicscan 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 operatingconcern. The characteristics in the field catalog can be accessed in any client.

The field catalog originally contains some suggested characteristics which mightbe used in a new operating concern definition. There are two ways to add othercharacteristics to the field catalog:

� Choose an existing field from certain SAP tables, which must be five characterslong or less.

� Create a characteristic independently, which should begin with WW and befour to five characters total.

Behind every characteristic, there is potentially a check table with the validcharacteristic values for CO-PA. In this way, the data that flows into CO-PA arechecked. When manually creating a new characteristic in the field catalog, you candecide whether the system should generate a check table for this.



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 thatalready exist in other applications when you define your operating concerns. Forexample, you can copy the fields from the tables for the customer master records,material master records, and sales documents. You can also copy the partnerroles 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 inProfitability Analysis. To derive the values for these characteristics, you need todefine your own derivation strategy.

� Predefined characteristics: In addition to the fixed characteristics, a numberof other predefined characteristics are available in the field catalog and can beadded to your operating concern, if required. These include the customer group,customer district, and country characteristics.

� Fixed characteristics: A number of fundamental characteristics areautomatically predefined in every operating concern. These include theproduct number, company code, billing type, business area, and sales ordercharacteristics.



Figure 5: Categories of Value Fields

Meaning of Value Fields

� In costing-based Profitability Analysis, value fields store the base quantities andamounts for reporting. Value fields can either be highly summarized, such asrepresenting a summary of cost element balances, or highly detailed, such asrepresenting just one part of a single cost element balance.

� The sales-related key figures (e.g. revenue types, discounts, surcharges) arenormally presented in a very detailed way. By comparison, items basedon periodic costs (for example, period cost types) are aggregated. Unlikecharacteristics, 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 anew operating concern. The value fields in the field catalog can be accessed inany client. The field catalog originally contains some suggested value fields,which might be used in a new operating concern. Value fields can also bedefined independently. These should begin with VV..., and should be four tofive characters in total.

� You do not need to create the value fields for calculated items, such as net salesand contribution margin. These items are normally calculated from the basevalues stored in the value fields during the report execution progress. Thisminimizes 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. Eachamount 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 ProfitabilityAnalysis.

Demonstration: Characteristics and Value Fields

PurposeTo demonstrate the use of characteristics and value fields

System DataSystem:Client:User ID:Password:Set up instructions:1. Begin by displaying all characteristics and show the information behind a

characteristic. Example: Customer group. Highlight the type of characteristic,origin, and explain the concept of a check table.

IMG → Controlling→ Profitability Analysis→ Structures→ DefineOperating Concern→Maintain Characteristics: Customer group



Display the fixed fields and explain that fixed fields are delivered by SAP. Showthe technical fields. Explain that they are related to report dimensions andtechnical identifiers, which are saved with each record.

2. Create two characteristics. Choose the first characteristic from the table, MARA(reference table), by selecting the field, �LABOR� (Laboratory or Office).Create the second characteristic as the user-defined characteristic, WWMGR,and name it �Regional Manager�. It has the data type, CHAR, and is a three-digitfield. Mention the corresponding check tables, T25**, and the fact that thesetables are created either automatically or manually. Save and Activate eachof the characteristics.

IMG → Controlling→ Profitability Analysis→ Structures → DefineOperating Concern→Maintain Characteristics: Change/Create

Explain some of the other possible options when creating characteristics, forexample, creating characteristics by referring to the ANY data element.

3. Display the list of value fields. Explain that value fields come in two categories,quantity or currency, and can have various aggregation levels. Example:

Revenue: Each posting made to this field should be SUMMARIZED.

Number of employees: Only the LAST posting for a given period should bereflected in CO-PA.

Available stock: The AVERAGE number of items on hand should be reflected inCO-PA.

Create a value field, VVSPE, and name it �Special Handling �.

Choose �summation� as the aggregation type and �Amount� as the value fieldcategory.

Save and Activate the value field.

In account-based PA, the account number serves as the counterpart to the valuefield. Account-based PA works with a fixed basic key figure, meaning that, inaddition to the sales quantity, every posted value on a cost/revenue elementis listed in three currencies.

IMG→ Controlling→ Profitability Analysis→ Structures→ OperatingConcern→ Maintain Value Fields



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 ofthe operating concern.

In costing-based Profitability Analysis, you also need to select the value fields youwant 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 havedifferent effects, depending on the type of Profitability Analysis you are working in.

Currency types

Operating concern currency- In costing-based Profitability Analysis, the actual datais always updated in the operating concern currency. You can change the operatingconcern 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 theoption of storing all data in the currency of the relevant company code. This makessense if your organization operates internationally and is concerned with exchangerates that change daily. It allows you to avoid differences due to different exchangerates 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 thelegal company code, valuation view, you can also store data in both of these currenciesvaluated 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 companycode assigned to each of the controlling areas, can have its own fiscal year variant, thevariant you choose for the operating concern must agree with that for the other areas.



Demonstration: Operating Concern and its Attributes

PurposeTo demonstrate how to create an operating concern and define its attributes

System DataSystem:Client:User ID:Password:Set up instructions:1. Create an operating concern named T001. Maintain the attributes and mention

the fiscal year variant and the various currencies that can be displayed.

IMG → Controlling→ Profitability Analysis→ Structures→ DefineOperating Concern→ Maintain Operating Concern

2. Create the data structures for the operating concern, T001. When you arechoosing characteristics, make sure you choose the characteristics you havecreated. Similarly, implement this for the value fields.

IMG → Controlling→ Profitability Analysis→ Structures→ DefineOperating Concern→ Maintain Operating Concern

Change Operating Concern, IDEA, and add the above Characteristics and ValueFields:

LABOR

WWMGR

VVSPE

STDPR

3. Save, Activate, and Generate the operating concern, at minimum IDEA. Whenthis takes place, you may want to explain that no one can maintain the operatingconcern or make postings to any of its tables because data tables are beingrebuilt. Begin presenting the next graphics as your operating concern begins thegeneration process. Note that to get to the �Generate� step, you need to use thegreen arrow once. In addition, �Activate� normally �Saves� as well.



11 Exercise 1: Operating ConcernsExercise Duration: 10 Minutes

Exercise ObjectivesAfter 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 ExampleThe 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 groupcurrency and in each of the legal entity�s local currency. The sales managers requiresummarized sales performance figures, such as revenue, discounts, and surchargesboth 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 theoptions available for the organizational structures for CO-PA.

Task 1:

1. Check the basic settings and organizational assignments for the IDEA operatingconcern 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 thecontrolling 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-basedProfitability 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-basedProfitability Analysis. Select the reporting date for the previous year with a planversion.

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

Profit Center

Strategic Business Unit

Company Code



Solution 1: Operating ConcernsTask 1:

1. Check the basic settings and organizational assignments for the IDEA operatingconcern 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 thecontrolling 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 � CheckCustomizing 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 Codehave the same chart of accounts.

All assigned organizational units are listed in the overview of theorganizational structures of the operational concern; detailed informationfrom the respective master data are also displayed.




Task 2:Call the profitability report AC605-ORDER (order analysis) in the costing-basedProfitability 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. Thereport contains the data on incoming sales orders or revenue. The differencerepresents 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-basedProfitability Analysis. Select the reporting date for the previous year with a planversion.

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� Understand the basic concepts, characteristics and value fields, of an operating

concern� Define an operating concern and its attributes



Lesson:16

Data StructuresLesson Duration: 50 Minutes

Lesson OverviewThis lesson defines data structures and identifies the transaction data structures. It alsocovers the CO-PA database structures and the operating concern templates.


� Define data structures� Identify transaction data structures� Describe the CO-PA database structures and the operating concern templates

In this lesson, you must define the importance of data structures in an operatingconcern. You must identify for the participants, the transaction data structures. Youmust also describe the CO-PA database structures and the operating concern templates.

Business ExampleThe management of your company wants to implement a profitability accountingapplication in the SAP system. As a member of the project team of your company, youare supposed to advise on the question of whether to implement CO-PA or EC-PCA inthe SAP system. You will be responsible to implement the selected applications. Bothcross-company and company-specific reporting of contribution margins is required inmultiple currencies. The multidimensional analysis of sales information, cost-of-salesinformation, production variances, and period cost information is required for variousmarket segments. Estimated costs are required for the actual costs posted only at themonth-end. Actual period costs (S, G, and A) for various organizational entities are tobe reflected at the month-end. Reporting by value category and by income statementaccount 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

Explain to the participants that several steps are involved in defining an operatingconcern. First, the characteristics and value fields are defined as independent ofany operating concern. Operating concerns are then created on the basis of thesecharacteristics and value fields.

Figure 9: Operating Concern Data Structures

Defining Data Structures

To define data structures, copy the required characteristics and value fields to theoperating 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, youmust activate them and generate the operating environment.

This process generates all the tables, programs, and technical objects required tosupport the operating concern you have defined.

After you generate the operating concern and before you activate Profitability Analysisfor data entry, add the valid characteristic values to the check tables generated forthe new characteristics.

Changing the Data Structures



You must reactivate the environment after you change the data structures of anoperating concern. For example, reactivate the environment after you add a newcharacteristic or a value field.

The regeneration process does not affect any existing transaction data. Notice thatit also does not automatically back-populate any new fields for existing transactiondata although this sometimes may be carried out using the CO-PA realignment orperiodic valuation functions.

The regeneration process will not affect any characteristic values that have alreadybeen entered in check tables for user-defined characteristics.

Transaction Data Structures

You may want to draw up a simple example of a sales order. It is important thatparticipants understand what a profitability segment is and how it is created. The firstthing to explain is that they get dynamically created by the system when a uniquecombination of characteristic values is posted to CO-PA:

Sales Order 1000:

Customer 1000 Product X:

Revenue 100,000 Tables: CE1, CE3,CE4

Product Y: Revenue 120,000 Tables:

CE1,CE3,CE4

Sales Order 2000:

Customer 1000 Product X:

Revenue 50,000 Tables: CE1, CE3

Content in CE4: Profitability segment 1

Customer 1000, Product X�

Content in CE3: Profitability segment 1

Revenue 150,000�



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

Costing-based CO-PA stores its transaction data in its own data tables, which arecreated when activating and generating the operating concern. This means that its datawill 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 forOverhead Cost Management. This means that its data will affect the execution speedof reports for other CO applications that share the same transaction data tables.

The definitions of profitability segments for both CO-PA sub modules are storedin the same table, CE4XXXX, where XXXX = operating concern. The systemalways accesses this segment definition table when posting the transaction data forcosting-based or account-based CO-PA.

Profitability segments, which represent the account assignment objects for profitabilityanalysis, are unique combinations of characteristic values that the system creates andnumbers 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 summarizedtransaction 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 accessedthrough 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 characteristicsare stored in the data division of the table, CE4xxxx. The key of the CE4xxxxbasically consists of the profitability segment number that is used as a join field for thetable, CE3xxxx. The key of the table, CE3xxxx, consists of the profitability segmentnumber and the posting-period and some other technical fields that are not listed. Thevalue fields are specified in the data division.

The table, CE4xxxx, represents the profitability segments, created based on thebusiness considerations that are defined when an operating concern is created. Thetable, CE3xxxx, contains the values posted to the profitability segments that areadditionally available broken down into the posting period. Typical record lengths:

CE4xxxx = 250 bytes, CE3xxxx = 2000 bytes.

Segment Level and Non-Segment Level Characteristics

You first have to name an operating concern and then define its attributes. Explainthe various currency options and the period type, �Weeks�. This period type storesdata in weeks and posting periods, which increases data volumes drastically. Thesetting is only possible in costing-based Profitability Analysis. After the attributes



are defined, you can define the data structures for the operating concern. To do this,select the required value fields and characteristics for the profitability segment. Then,you must save these, activate them and generate the data structures. During thegeneration process, the system creates the tables, CE1XXXX, through CE8XXXX andcheck tables. The tables from CE1 through CE4 are of particular significance for themarket segments. It is important to mention that the data in costing-based profitabilityanalysis is stored in separate tables, and the data for account-based profitabilityanalysis is stored in the same tables as the other CO modules.

CE4 contains only the characteristic values and profit segment numbers. CE3 isthe table access by drill-down analytics. It contains the profit segment number,certain technical characteristics, and the values for value fields. CE1 contains allcharacteristics and value fields as well as technical characteristics.

Figure 13: Segment-Level Characteristics

For reasons of performance, we recommend that the number of profitability segmentsbe kept as low as possible so that the quantity of the totals records required in theprofitability segment also remains low. You can achieve this by restricting theselection of characteristics for the profitability segment.

You can to configure the system so that certain characteristics are not used indefining 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 beavailable 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 SDin every CO-PA line item (CE1). However, it is not necessary to save a new totalsrecord in the object level (CE3) for every line item that is created during the transferfrom 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 atobject level and make different settings for the costing-based and account-basedprofitability analysis. Certain fixed characteristics are generally not used at objectlevel. However, this can be changed if required.

SAP recommends that data be summarized on a higher level, something other thanthe customer or product level, for account-based CO-PA to minimize the number ofsummary records. This is because its transaction data is stored in the tables that areshared with other Management Accounting applications.

Demonstration: Segment Level and Non-Segment LevelCharacteristics

Purpose

To demonstrate the segment level and non segment level characteristics in ProfitabilityAnalysis

System DataSystem:Client:User ID:Password:Set up instructions:1. Display the segment level characteristics in Profitability Analysis and explain the

significance and impact of the settings. All characteristics are contained in thistable. You can see that you have set these characteristics to �not used�, and youhave not defined the characteristics at object level either for the costing-basedonly or for the costing-based and account-based profitability analysis. Thistable works somewhat backwards because you define here which characteristicsshould be non segment level. The example that is normally cited is the salesorder number or sales order line number that you want to see at the line itemlevel but you probably will not want as a drill-down characteristic.

IMG → Controlling→ Profitability Analysis→ Structures→ DefineProfitability Segment Characteristics (Segment-Lvl Characteristics)



Operating Concern Templates

Operating Concern Templates are a new concept from Release 4.6. In previousReleases, very little example data and configurations were set up for Client 000. Thatis why, to test the profitability analysis up to now, a complete configuration wasexecuted. Templates are a simple option for creating example data for checking thepossibilities of the profitability analysis. Note that the profitability analysis is often a�Phase II� project and the implementation plan has to be �justified� to the executiveboard. This demo tool is a great help here. Quickstart takes this concept a step further.To create an operating concern quickly, it is sufficient to simply copy a template or toexecute the basic configuration steps using the documentation.

Figure 14: Operating Concern Templates

CO-PA provides you with operating concern templates, predefined sample operatingconcerns, an environment in which to display the Customizing for these operatingconcern, 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 usethe 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 operating concerntemplate as required, copy these and then use the copied and adjusted operatingconcern productively.

Figure 15: Quickstart

Use SAP Operating Concern Templates.

This is where you can gain an initial overview of Profitability Analysis without theneed to have any specialist knowledge and without the need to have made any settingspreviously. 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 concern templates. At any time, youcan reset the templates to their original settings.

Start the transaction for operating concern templates. The template for the consumerindustry is loaded automatically.

The details view provides you with an overview of the delivered settings and of themodifications that you can make. By choosing Application examples, you can viewreports and planning layouts. The system fills them with example data to demonstratemore 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, youfirst have to copy it. You can find this function under �Tools�. This is also where youcan choose to reset an operating concern template back to its initial state.

Demonstration: Operating Concern Templates

PurposeTo demonstrate the use of operating concern templates

System DataSystem:Client:User ID:Password:Set up instructions:1. Show operating concern templates and the use of sample data.

CO-PA Configuration→ Structures→ Define Operating Concern→ SampleOperating Concerns Templates→ Use SAP Operating Concern Templates→Application Examples→ Prepare Application Examples: Create ExampleData

2. Select a year:

This will generate sample data for reporting and planning. In addition, point outthe context sensitive help on the right Run a sample report.

Execute Application Examples→ Execute Profitability Report: SCPBO.

3. Use the customer group, 01, and the year of your sample data.

4. To access a configuration activity, simply double-click one of the steps.

Note: It has been found several times after the system was upgraded,or new hot packages installed, that the sample operating concern hasto be reconfigured. If this situation is encountered, confirm to rebuildthe operating concern when prompted. Then, proceed with the abovedemonstration. You might also want to show the report, SCPB0, firstto demonstrate the fact that no data exists before you generate the datafor 1999.



25 Exercise 2: Data StructuresExercise Duration: 15 Minutes

Exercise ObjectivesAfter completing this exercise, you will be able to:� Understand the concepts of value fields and characteristics� Evaluate the different sources of characteristics� Explain the settings available for value fields

Business ExampleThe following requirements apply for the value fields and characteristics needed forprofitability reporting in your organization:

Your sales manager requires summarized sales performance figures, such as grossrevenue, discounts, and surcharges both along as well as across the lines of the salesstructure, product lines, and customers of the company. The sales manager also wantsto 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, youdetermine that the following characteristics and value fields are required for reporting.In the data structures of the operating concern, determine which of the followingitems 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 Numberof Employees.

Note: The overview list contains all user-defined characteristics, defaultcharacteristics, and the characteristics selected from the reference tables. Itdoes 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 isthe Strategic Business Unit?

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

Why and with what consequences?



Solution 2: Data StructuresTask 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→ DefineOperating 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, youdetermine that the following characteristics and value fields are required for reporting.In the data structures of the operating concern, determine which of the followingitems 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 Numberof Employees.

Note: The overview list contains all user-defined characteristics, defaultcharacteristics, and the characteristics selected from the reference tables. Itdoes 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?


Select 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→ OperatingConcern→ 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 andin Profitability Analysis (CO-PA) planning. This means the aggregationrule is SUM. The aggregation rules, Last value and Average, are usefulonly 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 isthe Strategic Business Unit?


Select All Characteristics→ Display

Select the strategic business unit WWSBU and then Detail: User-definedfield with 8 characters.

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




Why and with what consequences?


Select : Display All Characteristics. Select the characteristic REGIO (notRegion before Rel. 4.5) and, in the detailed display, click: Show compoundcharacteristic

The REGIO characteristic is grouped with the COUNTRY characteristic.This takes into consideration that the table for maintaining the master datavalues for the REGIO characteristic is also maintained for the COUNTRYcharacteristic, 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 ofthe selection.

The result is that, when saving data next to the region, the country is alsosaved. When you call a report, the country is also displayed, even if youhave only assigned the REGIO characteristic to the report.



31 Exercise 3: Maintain the Operating ConcernExercise Duration: 15 Minutes

Exercise ObjectivesAfter completing this exercise, you will be able to:� Determine the attributes of the operating concern� Add characteristics and value fields to the operating concern

Business ExampleYou need reports in both the group and company currency because your organizationconducts business in foreign countries.

Your sales manager and product manager ask you which data fields you specificallyrequire for reporting.

Task 1:Attributes of the Operating Concern

You have decided to use both company code and operating concern currencies incosting-based PA.

1. Display the currency settings for the operating concern, IDEA. What settingsare 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 areactive 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 IDEAprofitability 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 this information

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 incosting-based PA.

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

a) You have decided to use both company code and operating concerncurrencies in costing-based PA.

Display the currency settings for the operating concern, IDEA. Whatsettings are configured?

IMG→ Controlling→ Profitability Analysis→ Structures→ DefineOperating 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 areactive 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 followingcharacteristics are active for the operating concern:

Material Group, Customer, and Postal Code

Which of these characteristics are selected for the operating concern?

IMG→ Controlling→ Profitability Analysis→ Structures→ DefineOperating Concern→ Maintain Operating Concern

Choose→ Display and then select the Characteristics tab on the DataStructure 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 madeavailable in the operating concern:

Sales Order Quantity, Scrap, Marketing Projects


a) Your product manager has requested that the following value fields areavailable in the operating concern:

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


IMG→ Controlling→ Profitability Analysis→ Structures→ DefineOperating Concern→ Maintain Operating Concern

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

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?

a) IMG→ Controlling→ Profitability Analysis→ Structures→ DefineProfitability Segment Characteristics (Segment-Lvl Characteristics)

No profitability segments are formed for the characteristics Order and SalesOrder Item. However, this does not mean that the data cannot be evaluatedaccording to these characteristics. The line item report and the profitabilityreport based on line items are available for this.

2. When data are posted into the costing-based and account-based IDEAprofitability 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-basedprofitability 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 informationrequirements of the users in the account-based or costing-based profitabilityanalysis.




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 thisinformation be important?

IMG→ Controlling→ Profitability Analysis→ Structures→ DefineOperating Concern→Maintain Operating Concern: 'Environment' tab

Status = Active

This means that the environment of the operating concern has beengenerated, all data tables are active, and attributes created. If any of thesteps, Save, Activate, or Generate have been left out, no postings can bemade to the tables of the operating concern. This would result in an error inany data transaction that affects the operating concern.



Lesson Summary

You should now be able to:� Define data structures� Identify transaction data structures� Describe the CO-PA database structures and the operating concern templates


Unit Summary TFIN22_2

Unit SummaryYou should now 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


TFIN22_2 Test Your Knowledge

39Test Your Knowledge

1. What does a controlling area represent?

2. In costing-based Profitability Analysis, store the basequantities 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

.Fill in the blanks to complete the sentence.

6. In costing-based Profitability Analysis, the actual data is always updated inthe 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 andvalue 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.Fill in the blanks to complete the sentence.

9. If you want to implement an operating concern template as a template for yourProfitability Analysis, you first need to copy it using the copy function under

.Fill in the blanks to complete the sentence.

10. What must be done after you generate the operating concern, and before youactivate Profitability Analysis for data entry?

11. Costing-based CO-PA stores its transaction data in the transaction data tables forOverhead Cost Management.Determine whether this statement is true or false.□ True□ False

12. State the advantages of operating concern templates.



41Answers

1. What does a controlling area represent?

Answer: The controlling area is an organizational unit delimiting theindependentcost accounting operations of the organization, such as cost center accounting,profit center accounting, and order accounting. Company codes are assigned tocontrolling areas when organizational structures are defined.

2. In costing-based Profitability Analysis, value fields store the base quantities andamounts 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 foreach fiscal year. Each controlling area assigned to the operating concern andeach company code assigned to each of those controlling areas can have its ownfiscal year variant. For this reason, the variant you choose for the operatingconcern 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 asfixed 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 theoperating concern currency.



7. To define data structures, you need to copy the required characteristics andvalue fields to the operating concern.

Answer: True

To define data structures, copy the required characteristics and value fields tothe operating concern and save them.

8. Costing-based CO-PA stores its transaction data in its own data tables, which arecreated when activating and generating the operating concern.

Answer: Costing

9. If you want to implement an operating concern template as a template for yourProfitability Analysis, you first need to copy it using the copy function underTools.

Answer: Tools

10. What must be done after you generate the operating concern, and before youactivate Profitability Analysis for data entry?

Answer: After you generate the operating concern and before you activateProfitability Analysis for data entry, you need to add the valid characteristicvalues to the check tables generated for the new characteristics.

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

Answer: False

Account-based CO-PA stores its transaction data in the transaction data tablesfor 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 theneed to perform extensive Customizing.

2. The operating concern templates simplify the Customizing in theprofitability analysis. If necessary, you can adjust your Customizingsettings for an operating concern template as required, copy these and thenuse the copied and adjusted operating concern productively.


Unit 245 Master Data

This unit covers characteristic derivation and valuation. When you explaincharacteristic derivation, explain in-depth the cases in which participants mustdefine their own derivation steps. In addition, when you explain valuation, explainextensively that for actual data in particular, valuation is used only if the participantwants to calculate or estimate values to supplement the existing actual values.

Unit OverviewThis unit discusses the concepts of derivation and valuation. It explains the derivationstrategy and how to evaluate the derivation techniques. In addition, it discussesvaluation using product cost information and outlines valuation using a CO-PAcosting sheet.


� 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 ContentsLesson: Introduction to Characteristic Derivation and Valuation ... . . . . . . . . . . . 55Lesson: Characteristic Derivation .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 61

Demonstration: Check Tables .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 63


Unit 2: Master Data TFIN22_2

Demonstration: Characteristic Derivation .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 64Demonstration: Characteristic Derivation with Move ... . . . . . . . . . . . . . . . . . . . . 73Exercise 4: Derivation .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 75

Lesson: Valuation .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 85Demonstration: Valuation Using a Product Cost Estimate .. . . . . . . . . . . . . . . . 98Demonstration: Valuation Using a Costing Sheet .. . . . . . . . . . . . . . . . . . . . . . . . .101Demonstration: Valuation Strategy.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .102Demonstration: Periodic Valuation .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .103Demonstration: Customizing Monitor .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .105Exercise 5: Valuation.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .107


TFIN22_2 Lesson: Introduction to Characteristic Derivation and Valuation

Lesson:46

Introduction to Characteristic Derivation and ValuationLesson Duration: 30 Minutes

Lesson OverviewThis lesson helps you to understand the concept of characteristic derivation. It alsodescribes the concept of valuation.


� Explain the derivation concepts� Explain the valuation concepts

Characteristic derivation is used to determine the value of one characteristic basedon the value of another, provided there is a logical dependency between the two.It is important for the participant to realize that most derivation steps are createdautomatically by the system during generation. Explain extensively the cases in whichthe users must define their own derivation steps and the possibilities that the systemoffers for doing this.

Valuation can only be used in the costing-based approach and it can be used for bothplanning and actual values. Explain that for actual data in particular, valuation is onlyused if the user wants to calculate or estimate the values to supplement the existingactual values. Valuation is also used to read cost estimates for materials and, as aresult, retain the cost component split for the cost of goods manufactured. This costcomponent split for the cost of goods manufactured is the only way in which fixed andvariable manufacturing costs can be displayed separately, and contribution marginaccounting according to full and partial costs can be realized.

Business ExampleThe management of your company wants to implement a profitability accountingapplication in the SAP system. As a member of the project team, you are supposedto advise on the question of whether to implement CO-PA or EC-PCA in the SAPsystem. You then will be responsible to implement the selected applications.

Mr. Udo, Mrs. Veloce, and Mrs. Schnell require profitability reports for manycharacteristics, some of which are available on the selling and invoicing transactions(the sales organization, sold-to, product, etc.), and some of which are availableonly on master records (the product group, state, etc.). Mr. Udo requests that, forsales 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 bederived from the sold-to party. Mrs. Veloce is familiar with the customer hierarchythat is defined in the Sales Order Management and insists on being able to reportalong the lines of that hierarchy even in the Profitability Analysis. In addition, sherequires profitability reports on the special characteristic Strategic Business Unit,which is only determined via the product group. This special categorization of productgroups is only used within CO-PA. The true freight costs are not known at the time ofinvoicing but are known only at the period-end when the invoices have been receivedfrom 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 toestimate 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 beplanned with regard to the material requirements in the profitability analysis. Here,price and cost information should be read by the system and automatically applied tothe planned quantities, so that the respective revenues and cost of sales - and thus theprofit - can be determined with sufficient accuracy. The Product Costing module isbeing used. The detail results are to be imported into CO-PA so that true cost-of-salescan be analyzed extensively and different types of margins can be calculated andanalyzed, such as the margin after fixed costs and the margin after all costs.

For this purpose, an understanding about the characteristic derivation and valuationconcepts is required.

Characteristic Derivation: Central Points

� Some keys point about derivation:

� Derivation supplements or overwrites certain automatically mappedcharacteristic values.

� A derivation strategy is a sequence of steps, where each step uses onederivation technique to calculate one or more values for one or morecharacteristics, respectively.

� Control attributes can be assigned to each step, such as conditions forexecution, reactions when unsuccessful, and overwrite authority.

� Some derivation steps are created by the system at generation time, ofwhich some are modifiable. Others are created by the configurator fromthe beginning.



Evaluation: Central Points

� Some key points about valuation are:

� Valuation supplements the data being passed directly from transactions intoControlling Profitability Analysis with calculated, retrieved, or otherwiseaccessed values.

� A valuation strategy can contain CO-PA costing sheets, Sales OrderManagement pricing procedures (in planning), product costing calls, anduser 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 anattempt 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 lineitems in CO-PA. The data created in CO-PA are defined by automatic and manualassignments as well as the configuration of the characteristic derivation and thevaluation.



For each sales order management transaction, the system automatically imports thesales organization, distribution channel, division, customer, product, profit center,business area, and any sales order management partners for each sales order or invoiceitem. Notice that the values for all of these, except customer and product, can beoverwritten with derivation.

In addition to those values determined through the automatic mappings, derivationcan access additional information, such as characteristic values, both on and off theoriginating transaction. For example, it could supply the sales district from the invoiceand the product group from the material master.

In addition to the values imported through the manual mappings, valuation can importinformation that is off of the originating transaction as well. For example, it couldsupply in-depth product cost breakdown information from Product Costing, whichis not available on the sales document.

All CO-PA-relevant transactions are affected by derivation configuration, and some ofthese are affected potentially by valuation configuration, which is optional.



Facilitated Discussion

Discussion QuestionsUse the following questions to engage the participants in the discussion. Feel free touse your own additional questions.

Outline the use of characteristic derivation and valuation.



Lesson Summary

You should now be able to:� Explain the derivation concepts� Explain the valuation concepts


TFIN22_2 Lesson: Characteristic Derivation

Lesson:51

Characteristic DerivationLesson Duration: 40 Minutes

Lesson OverviewThis lesson helps you to understand the derivation strategy. In addition, it explainshow to evaluate derivation techniques.


� Explain the derivation strategy� Evaluate derivation techniques

In this lesson, establish that the system automatically generates a derivation strategywhen you generate your operating concern. Describe the standard derivation steps.Next, show the options available for users to add derivation steps. Underline that thisis normally only required for the user-defined characteristics that were not transferredfrom an SAP table.

Business ExampleThe management of your company wants to implement a profitability accountingapplication in the SAP system. As a member of the project team of your company, youare supposed to provide advise on the question of whether to implement CO-PA orEC-PCA in the SAP system. You then will be responsible to implement the selectedapplications.

Mr. Udo, Mrs. Veloce, and Mrs. Schnell require profitability reports for manycharacteristics, some of which are available on the selling and invoicing transactions(the sales organization, sold-to, product, etc.), and some of which are available onlyon master records (the product group, state, etc.). Mr. Udo requests that, for salesreports, 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 derivedfrom the sold-to party. Mrs. Veloce is familiar with the customer hierarchy that isdefined in the Sales Order Management and insists on being able to report along thelines of that hierarchy even in the Profitability Analysis. In addition, she requiresprofitability reports on the special characteristic �Strategic Business Unit�, which isonly determined via the product group. This special categorization of product groupshas 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. Theproduct group and product hierarchy information is required from the material masterrecord. The country and state are required from either the ship-to record or the sold-torecord. The customer hierarchy information is required for each business transaction(or simply �transaction") involving a customer. Product groups are to be categorizedinto special categories called �strategic business units� for reporting.

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

Characteristic Derivation Concept

Characteristic Derivation Concept

At this point, question the course participants about the following points: Whatcharacteristics can the system read from one simple sales order? Possible answers are:Item, customer and sales organization. The next question is � where could the systemfind values such as the customer group and the product group? In addition, explainthe concept of check tables extensively at this point. Highlight the fact that mostcheck tables are maintained in other applications but the check tables for user-definedcharacteristics need to be maintained by someone with access to CO-PA configuration.Further, point out that the system �attempts� to derive all characteristic values.



Figure 17: Characteristic Derivation Concept

For each CO-PA-relevant transaction, if the derivation strategy is complete, the systemtries to derive a characteristic value for each characteristic in the operating concern.Notice that derivation is not always successful. If the system cannot determine acharacteristic value for a characteristic, then a blank, null, or unassigned characteristicvalue is posted.

The total combination of (segment-level) characteristic values for a given transactionconsists of the definition of the relevant profitability segment. The profitabilitysegment is the account assignment object for the Profitability Analysis.

Demonstration: Check Tables

PurposeTo demonstrate the steps to check tables

System DataSystem:Client:User ID:Password:Set up instructions:



1. Show the check table for �Sales District��.

Application menu→ CO-PA→Master Data→ Display Characteristic Values:All Characteristics On/Off→ Referenced Characteristics→ Sales District→ Define Sales Districts: Execute

Maintain the check table for the characteristic, WWMGR, which you created inthe previous chapter:

001 = Miller

002= Jones

003= Smith

Emphasize that so far we have not instructed the system under whichcircumstances Miller, Jones, or Smith will be the Regional Manager.

Demonstration: Characteristic Derivation

PurposeTo demonstrate the characteristic derivation concept

System DataSystem:Client:User ID:Password:Set up instructions:1. Create a line item in Profitability Analysis:

Accounting→ Controlling→ Profitability Analysis→ Actual Postings→Create Line Items

Posting date: Today�s date

Record type: F

Customer:

Sales organization:

Distribution channel:

Company code:



Product: P-100

Plant:

Execute the derivation function. Talk about the derivation analysis function.

Extras→ Derivation Analysis.

Point out that certain fields were derived while others, such as the sales orderreason, were not derived.

Invoiced quantity in sales units: 100 units

Revenue:

Post the document.

Display the line item and call up the characteristics.

Accounting→ Controlling→ Profitability Analysis→ Information System→Display Line Items→ Actual/Plan.

In a second session, use these characteristic values to explain the derivationtechniques table look-up and the derivation rule. To do this, display thecharacteristic derivation function in Customizing and demonstrate three differentviews of characteristic derivation.

IMG→ Controlling→ Profitability Analysis→Master Data→ Characteristicvalues→ Define Characteristic Derivation.

Explain that the Initial screen displays only customer-specific derivation steps.

Use �Expand All� to show all derivation steps. Highlight the following examplefor each derivation technique:

Standard derivation: Function call: Company Code from plant

Table look-up: Sales district: Sales district from Customer/SalesOrg./Dist.Chan-nel/Division

Derivation rule: Strategic business unit: Product category + Division→Strategic business unit

Show the information behind the table look-up and explain the concept of akey field (in another application), which accesses the table in which the targetcharacteristic value is stored. This means the key field values need to be knownif derivation is to be successful for a particular field. The required field in thattable is mapped to a CO-PA characteristic. Customers usually do not dealwith the setting up of table look-ups. However, they must understand how



the look-ups work to be able to decide whether they even want this type ofderivation. A good example is the field �Division�, which can be derived fromthe sales order, the customer, or the product.

Show the derivation rule and rule entries. Underline that derivation rules accessonly the characteristic values in CO-PA and function on the principle of sourcefield(s) derive target field(s).

Set up your own derivation rule for the Regional Manager:

IMG→ Controlling→ Profitability Analysis→Master Data→ CharacteristicValues→ Characteristic Derivation→ Display <-> Change: Create

Choose: Derivation Rules and name them: Regional Managerfrom Sales District

Source: Sales District Target: Regional Manager

Save and create �Rule Entries�.

First turn column On/Off so you can enter from – to values. Next, enterthe following information:

Sales District 00001- 00005 = Regional Manager 001

Sales District DE0010 � GB0025 = 002

Sales District IT0010 � US0025 = 003

Most derivation steps can be modified and enhanced with the following options:

Properties: Define the system reaction if no value is found. This can be an errormessage (default) or no message. An example could be that the sales district,00006, is added in the SD module, and a posting is made to the sales district.The derivation of the regional manager in this case would fail because no ruleentry has been maintained. Should the system post anyway or issue an errormessage to the user?

For derivation rules, you can also define effective dates if required. Condition:This feature controls whether a particular derivation step should be executedonly under certain conditions, for example, if the plant = 1000.

Sequence of operations: Certain derivation steps have to take place before otherscan be successfully executed. The Derivation strategy table allows the user tomove steps up or down the list. If you intend to demo this feature, make sure youdo not save your entries. To highlight a derivation step, click the square to theleft. To select the destination, click the description field. Do not select the square.Next, click the �Move� button. All steps are executed from the top to the bottom.



Enter another line item to test the Derivation Strategy.

Derivation Strategy and Techniques

Figure 18: Derivation from a Customizing Viewpoint

A derivation strategy consists of a number of different steps, which derive the differentcharacteristic values. Each derivation step defines the logical interrelationshipbetween known source characteristics and the characteristics to be derived.

The system automatically creates a standard derivation strategy for each operatingconcern. This strategy contains the derivation steps for all the dependencies that arealready known between characteristics. You can then change this strategy to meet therequirements of your organization. If you define your own characteristics that need tobe derived from other characteristics, you need to add your own derivation steps to thestandard strategy to define this derivation.



Figure 19: Options for Derivation Steps

The system goes through a sequence of steps in attempting to locate a characteristicvalue for each characteristic for a COPA-relevant transaction. This step sequence isknown as the derivation strategy.

The steps are performed in a customizable sequence to maximize the possibilities tolocate or determine valid characteristic values. The following items can be configuredfor 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 canbe determined in a single step.

Derivation occurs for every CO-PA-relevant transaction, including direct entry intoCO-PA and external data uploads into CO-PA. Note: For more information oncustomer 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 beused to determine their values. These may take the form of one of the six standardderivation techniques or may be function calls.

You can use other derivation steps to overwrite the values determined through thefixed derivation steps. This can be normally achieved with all characteristics, exceptfor 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 enhancethe possibility of reconciliation with data in other modules in the SAP system, atother levels.



Figure 21: Derivation through Table Lookup

A table lookup is a derivation method used by CO-PA to access the characteristicvalues from SAP master data tables when this information is not available on theoriginating transaction. For example, an invoice may not contain the purchasing groupfor a material that is being sold. Notice that CO-PA can capture this information forthe invoice item using a table lookup.

Table lookups can be performed when the key of the table to be accessed can be filledwith 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 isbecause the customer is the only key to the KNA1 table that contains general customerinformation, such as addresses.

The ability to customize table lookup derivation allows the configurator to controlexactly which types of characteristic values are used to access other characteristicvalues. For example, you can configure the table lookup for the characteristic countryto 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 thefields in the tables in which keys can be filled with the known characteristic valuesfor transactions. For example, the derivation lookup for product hierarchy couldbe configured to import the entire product hierarchy value or only the first severalcharacters of the hierarchy into CO-PA.



Some table lookups are generated automatically on the basis of a characteristic�sdefinition. These are generated when the operating concern environment is generated.Notice that the nonfixed lookups can be modified. Other tables lookups, such as theones for user-defined characteristics must be created from the beginning.

Figure 22: Derivation Rule

Derivation rules are used to determine characteristic values through user-definedlogic. They are frequently used with user-defined characteristics although they arenot limited to this application.

With derivation rules, characteristic values, known as target values, are determineddirectly 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 forall situations or to only apply when certain conditions are met (for example, only forsales organization 1000). Accordingly, you can also configure the derivation rules toproduce an error message when a characteristic value cannot be determined throughthe rule entries. You can also ignore the error and proceed.

In contrast to other derivation steps, derivation rule entries can be configured tobe either related to a specific interval or time, which is being time-dependent, orapplicable for all times, which is being time-independent. Derivation rules can be setup in sequence with other derivation steps and methods to produce complex derivationlogic.



Figure 23: Derivation with Move and Clear

With a move, you can directly transfer a characteristic value or a part of thecharacteristic value to another characteristic. Under certain conditions, you can alsomove a constant to a characteristic.

In the above example, the sold-to value is copied into the ship-to value with the movefunction 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 acharacteristic. In addition, the employee value is cleared to �not assigned� whenthe product is a specific value because the employees should not get sales creditfor certain items.

The system automatically generates a move derivation step to move the dummyprofit center value from EC-PCA into CO-PA if no profit center can be determinedby other steps.



Customizing Monitor Derivation Analysis

Figure 24: Customizing Monitor: Derivation Analysis

The Customizing Monitor provides an overview of all derivation steps. Additionalfunctions are available when you use the SAP list viewer to display derivationanalysis. You can search for specific value fields and determine their use in derivation.

Demonstration: Characteristic Derivation with Move

PurposeTo demonstrate the steps to perform characteristic derivation with Move

System DataSystem:Client:User ID:Password:Set up instructions:1. We have set up an example for �Move�. Show the custom step: Ship-to party



IMG→ Controlling→ Profitability Analysis→Master Data→ Characteristicvalues→ Characteristic Derivation: Display.

Customizing Monitor:

IMG→ Controlling→ Profitability Analysis→ Tools→ Analysis→ CheckCustomizing Settings→ Analyze Derivation→ Characteristic Derivation→Search for a Regional Manager via: Edit→ Find or scroll down the list.



61 Exercise 4: DerivationExercise Duration: 20 Minutes

Exercise ObjectivesAfter completing this exercise, you will be able to:� 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 ExampleThe country and area are required from either the ship-to record (if there is one) orthe 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 andwould like to know whether the values for these fields can be read directly fromcustomer master and sales document tables.

Note: The term characteristic value refers to an actual individual quantitydefined for a particular characteristic. All data transferred to CO-PA ischecked against the valid characteristic values, which are stored in checktables. These check tables can either already exist in the original component ofthe characteristic or can be maintained manually in the Profitability Analysis.The characteristic derivation describes the determining of characteristic valuesfor 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 ProfitabilityAnalysis. The first screen only shows user-defined derivation steps. You can expandthe 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. Whatare 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 valuecombinations used to derive a new value, the strategic business unit. What is therule used to determine the CHEMFOOD strategic business unit?

4. Display the table lookup for the Customer Classification from Customercharacteristic. 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→ DefineCharacteristic 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 derivationrule 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 theproduct P-100 using the transaction Simulate Evaluation. Select Derivation toexecute. As you can see, some of the fields have remained blank. Use the derivationanalysis to view the various derivation steps.

Posting Date: Today's dateRecord Type: FPoint of valuation: 01Legal view: XCustomer: T-CO05A##Product: P-100Plant: 1000Sales Org.: 1000Distribution Channel: 10Company Code: 1000

1. The order reason field is blank. Why?

2. How did the system determine the �Customer Group� field?



Solution 4: DerivationTask 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 thefollowing characteristics, and find two valid values for each characteristic:

Accounting→ Controlling→ Profitability Analysis→ Master Data→ Characteristic Values → Display Characteristic Values → AllCharacteristics On/Off→ referenced characteristics→ Sales District→ Define Sales Districts:

Sales District:

Sales District: District Name000001 Northern region000002 Southern region000003 Western region000004 Eastern region


Use the same menu path as above, but select Strategic Business Unitunder user-defined characteristics.

Strat.Business Unit Name:CHEMAGRA Agricultural ChemicalsCHEMCHEM ChemicalsCHEMFOOD Food chemicalsCOMPINDU Industrial computers




Task 2:Display the derivation strategy in the Customizing settings of the ProfitabilityAnalysis. The first screen only shows user-defined derivation steps. You can expandthe 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 theProfitability Analysis. The first screen only shows user-defined derivationsteps. You can expand the display to view all derivation steps, includingpredefined derivation steps.

IMG: Controlling→ Profitability Analysis→ Master Data→ DefineCharacteristic Derivation: View→ Display All Steps

Why can some derivation steps be modified and others cannot?

Nearly all fixed characteristics have programmed derivation steps thatcannot be changed for technical reasons, for example, the derivation of thecompany code from the sales organization.

2. Display the derivation rule for the Strategic Business Unit characteristic. Whatare 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 valuecombinations used to derive a new value, the strategic business unit. What is therule used to determine the CHEMFOOD strategic business unit?

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

Rule values have been defined that determine the valid characteristic valuecombinations used to derive the strategic business unit. What is the ruleused to determine the CHEMFOOD strategic business unit?

Select the derivation rule Prod.Cat. + Industry → SBU. ClickMaintain Rule Values.

Product category Industry key

SBU

CHEM FOOD

= CHEMFOOD

4. Display the table lookup for the Customer Classification from Customercharacteristic. What is the table of origin for this characteristic?


a) Display the table lookup for the Customer Classification from Customercharacteristic. What is the table of origin for this characteristic?

Select Table Lookup for customer classification from Customer andthen select : KNA1


This field is populated from the customer master general data table. Inthis case, the Profitability Analysis derives the customer classificationdirectly from this table. That is why no special rules (check tables) arerequired in the Profitability Analysis.

Task 3:In the Customizing settings for Profitability Analysis, under Master Data→ DefineCharacteristic 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 derivationrule only under certain conditions. What is the attribute for this derivation step?





a) In the Customizing settings for Profitability Analysis, underMaster Data→ Define Characteristic Derivation:

Display the MOVE step for the Ship-to Party characteristic. What arethe 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

An attribute has been maintained for this characteristic, to apply thederivation rule only under certain conditions. What is the attribute forthis derivation step?

Select the Condition tab. This derivation step is only carried out if theShip-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 and theproduct P-100 using the transaction Simulate Evaluation. Select Derivation toexecute. As you can see, some of the fields have remained blank. Use the derivationanalysis to view the various derivation steps.

Posting Date: Today's dateRecord Type: FPoint of valuation: 01Legal view: XCustomer: T-CO05A##Product: P-100Plant: 1000




Sales Org.: 1000Distribution Channel: 10Company Code: 1000

1. The order reason field is blank. Why?

a) To test the derivation strategy, enter a line item for your sample customerand the product P-100 directly in the costing-based Profitability Analysis.Select Derivation to execute. As you can see, some of the fields haveremained blank. Use the derivation analysis to view the various derivationsteps.

The order reason field is blank. Why?

IMG→ Controlling→ Profitability Analysis→ Tools→ Analysis→Valuation Simulation.

Record Type: FPosting Date: TodayPoint of valuation: 01

Choose Continue.

Customer: T-CO05A##Product: P-100Company Code: 1000Plant: 1000Sales Org.: 1000Distribution Channel: 10

Select Derivation, then Extras→ Derivation Analysis. Select valuesbefore/after, order reason is empty

Save the derivation step in the derivation analysis. The Customer OrderReason field is empty, because the source field Customer Order Number(initial) is empty. That means that the order reason is derived from theSales Order Document field. This is not a sales order document, but asimulated derivation analysis. That is why the Order Reason field cannotbe created or derived from the simulation.




The derivation of the ORDER REASON field can be reproducedin Customizing under the derivation rules. IMG→ Controlling→Profitability Analysis→ Master Data→ Characteristic Values→ DefineCharacteristic 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. Thesource fields for this derivation step are Customer, Sales Organization,Distribution Channel, and Division.

The system has derived the customer group from the customer masterrecord



Lesson Summary

You should now be able to:� Explain the derivation strategy� Evaluate derivation techniques


TFIN22_2 Lesson: Valuation

Lesson:71

ValuationLesson Duration: 50 Minutes

Lesson OverviewThis lesson helps you to understand valuation using the product cost information. Italso outlines the valuation using a CO-PA costing sheet.


� Understand valuation using the product cost information� Outline valuation using a CO-PA costing sheet� Use the Customizing Monitor to perform valuation analysis

Explain that with the valuation function, you can supplement the informationprovided directly by a transaction. Valuation can be performed both when updatingactual values and within planning. It is used in costing-based profitability analysisonly because account-based profitability analysis is reconciled with the FinancialAccounting and does not use estimated values.

There are various valuation techniques within CO-PA, such as valuation withconditions and costing sheets, valuation using material cost estimates, and valuationusing user-defined valuation routines or user exits.

The condition technique can be used to estimate the values that are needed foranalysis in Profitability Analysis but which are not known at the time the document isposted. As a result, to evaluate a sales transaction, any commissions, cash discounts,discounts, or freight costs, which are not known at the time of invoicing, can beestimated.

The product cost estimate technique is used to determine the manufacturing costswhen data is updated to Profitability Analysis. This technique can be used tosupplement the revenues and sales deductions transferred from the invoice in the caseof a sales transaction with the fixed and variable manufacturing cost componentsbelonging to the product.

User-defined valuation routines are supported to allow you to determine the valuesthat cannot be determined using the other two techniques. This allows for theimplementation of user-defined valuation logic, should this be required.

Valuation Using Material Cost Estimates



Valuation using material cost estimates is primarily used to determine themanufacturing costs when billing documents are transferred to Profitability Analysis.By valuating transactions using cost estimates from Product Cost Planning, you cansupplement the revenues and sales deductions transferred from the billing documentwith the fixed and variable manufacturing cost components belonging to the product.Transactions can be valuated with up to six different cost estimates in parallel. Thisoption is available only for the costing key assigned to �other� characteristics.

The cost component split can be transferred in either the company code currencyor the Management Accounting area currency. The manufacturing costs can betransferred to Profitability Analysis both according to the cost component split and theprimary cost component split. Based on the customizing settings made for ProductCost Planning, the cost component split and the primary cost component split arestored either in the main cost component split or in the auxiliary cost componentsplit of a cost estimate.

The relevant cost estimates are assigned either on the basis of the material ormaterial type or on the basis of any other characteristics in an operating concern.Either using the plant of the CO-PA line item or a special valuation plant stored incustomizing can access the costing data. To set up valuation using material costestimates, work through the steps described in Customizing. There, you will alsofind further information on this subject.

Valuation Using a Costing Sheet

The condition technique in the case of CO-PA is used to determine estimatedvalues. Some technical terms need to be explained to familiarize participants withthis technique. Explain that the condition technique is widely used throughout SAPsystem. Although participants do not need to become experts on conditions, they needto have at minimum a basic understanding.

The background for the condition technique is explained extensively in the unit,Actual Data, and in the online documentation.

Business ExampleThe management of your company would like to implement a profitability accountingapplication in the SAP system. As a member of your the project team, you aresupposed to advise on the question of whether to implement CO-PA or EC-PCA in theSAP system. You then will be responsible for implementing the selected applications.

Mrs. Schnell has requirements for profitability reports along the lines of manycharacteristics, some of which are available on the selling and invoicing transactions,such as the sales organization, sold-to, and product, and some of which are availableonly 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 invoicesare received from the freight vendors. These costs are not applied in a cost-based wayin FI, but are calculated in the profitability analysis. This is why Mrs. Schnell was ableto 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 beplanned with regard to the material requirements in the profitability analysis. Here,price and cost information should be read by the system and automatically applied tothe planned quantities, so that the respective revenues and cost of sales - and thus theprofit - can be determined with sufficient accuracy. The Product Costing module isbeing used, and the detail results are to be imported into CO-PA. This is to analyzetrue cost-of-sales extensively, and to analyze and calculate the types of margins, suchas 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 itemon each order/invoice (transaction-based billing). Revenue and COGS are to beprojected automatically for the materials with planned quantities in aggregate. TheDetail Product Costing information is to be brought in for each line item on eachorder/invoice (transaction-based billing).

For this purpose, the valuation strategy and techniques need to be used.

Valuation Concept

Valuation: Overview

Emphasize that valuation is relevant only for costing-based CO-PA. In addition,explain that many value fields will be populated through the Sales Order Managementand Management Accounting interfaces. As a result, valuation will populate valuefields if the data was not transferred from any other source.



Figure 25: Valuation Concept

In costing-based Profitability Analysis, you can configure a function known asvaluation to supplement the performance information provided directly by atransaction. The additional information may be estimated, calculated, or retrievedfrom a different source. For example, you can set your system so that it automaticallycalculates the internal commissions and freight costs that are to be expected in therespective business transaction, when you transfer billing data into CO-PA. In thisway, you can evaluate the expected profit from the business transactions without allactual data having been posted. Similarly, you can access the detailed product costinginformation.



Figure 26: Valuation: Overview

Valuation can be used with either actual or planning data. It is often used inControlling Profitability Analysis (CO-PA) planning to access the pricing and productcost information for the products that have planned quantities. This enables theautomatic calculation of projected revenue and cost-of-sales figures.

Valuation can be configured to function either in real-time, which means at the timedata is first posted to CO-PA, or periodically, which means at some later point whenmanually triggered. The periodic evaluation provides advantages when many postingsare executed, thereby causing a higher system load for real-time evaluation. Byputting off the evaluation to a later date, you ease the system. Similarly, it gives theoption of re-evaluating the posted data.

Valuation Strategy and Techniques

Valuation Using Costing Sheets: Customizing

Valuation Using a Costing Sheet

Condition Types � Condition Records

Begin by explaining the terms: Condition type, condition records, access sequence,and base versus calculated values.

Use the example of the condition type, Outgoing Freight (OUTF). The conditiondefinition is a surcharge or reduction, meaning the value to be calculated will eitherbe positive or negative so in the case of freight, it is a freight cost or a freight charge.



The Detail button reveals the plus/minus sign logic, which controls whether thecondition results in an amount that is negative or positive. A negative amount is adiscount and a positive amount is a surcharge. This logic also controls whenever bothpositive and negative amounts are possible.

The surcharge or reduction overhead type determines whether a percentage of acertain value should be calculated or an absolute value multiplied by a quantity fieldshould be calculated. The issue to be decided is whether the freight should be 10% ofCOGS or $10 for each pound shipped.

Scales are basically look-up tables for the percentage or quantity-based values.Examples are weight = 10 pounds, freight rate = 5 USD, weight = 100 pounds andfreight = 8 USD. Scales are not necessary, even when you can only take into account aflat rate or a percentage.

The Access Sequence is directly related to the condition record. It defines at whichorganizational level a particular value is calculated. For example, if the freight rate inplant 1000, access sequence �Plant� is 10 USD and in Plant 2000 12 $. The conditionrecord itself contains the value.

The costing sheet combines calculated conditions and so called Base Conditions.Base Conditions are used in calculations. If you therefore want to calculate the freightbased on the COGS, you have to create these as base conditions. The value for thebase condition originates in an application other than CO-PA.

Draw a map:

Condition Type Value Field CostingSheet

From/To Source

OUTF = OutgoingFreight

VV280 Step 60 30 N/A

COGS = Cost ofGoods Sold

VV140 Step 30 SDInterface



Figure 27: Valuation Strategy

The valuation strategy is central to valuation configuration. A valuation strategy maycontain references to multiple valuation techniques, such as costing sheets, user exits,and product costing information, which are to be applied to a given COPA-relevanttransaction.

You need to decide to what record types, F, A, B, C, and 0-9, and at what points, knownas points of valuation, each valuation strategy should apply. Similarly, if a strategy isto 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 costestimates for materials. The results of a product cost estimate can be viewed indifferent 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 extensivecost-of-sales information into CO-PA for flexible margin reporting.

In configuration, cost components are mapped to value fields. You can map eachcomponent to its own value field or multiple components to a single value field. Youcan 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 andmultiple 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 costingvariant should be used with which validity date for valuation. By assigning a costingkey, you control which cost estimate, standard, modified standard, or current costestimate should be used in which case, depending on the material, material type, orany other combination of characteristics.

If an entry exists for the material, this has priority over the entry for the materialtype. The entry for the material type has priority over any entries defined for othercharacteristics.

In the assignment lines, you determine which values of the cost component structureare 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 avalue for the period indicator. Using the plan period indicator, you specify the datefor 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 costestimate valid on the first day of the period. This refers to the future, current, or pastperiod for which the standard cost estimate is valid according to the entries in thevaluation segment of the relevant material master record. If you enter 3 or 4 forthe plan period indicator, the system reads the standard cost estimate valid on the givenposting 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 assignthe costing keys to any combination of characteristics. This allows greater flexibilityand control in using costing keys.

You can use up to three characteristics as source fields�, such as plant, product, andgroup. In this way, you do not need to assign costing keys to one specific materialor material type. You can also assign costing keys to a combination of differentcharacteristics. This makes it possible to access the cost of goods manufactured fromdifferent plants, which is useful if you want to use the costs from the production plantwhen 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 orcalculated. They are the central piece to the condition technique, a method usedthroughout SAP for performing calculations.

Costing sheets consist of a sequence of user-defined condition types, each of whichaccesses a value or performs specific calculations, as dictated by the definitions ofthe condition types. Each condition type is mapped to a value field in the operatingconcern.



Figure 33: Condition Types - Condition Records

A condition type represents one step in a costing sheet. What calculation the systemcarries 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 salesdeduction should be dependent on the quantity sold or a value scale.

Scale basis: The scale basis determines how the system interprets the value or quantityscale 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 thathave already been populated through other means. These condition types must haveon their master record, a condition category of �K�, a calculation rule of �B�, and acondition class of �B�.

Calculation condition types perform calculations on the lines in the costing sheets thatrepresent subtotals of amounts, such as base amounts. These condition types actuallypopulate the value fields with values. Notice that their definitions can vary.

A calculation condition type is assigned an access sequence here with correspondingcondition records. The condition records contains deductions or additions or absolutevalues that refer to certain combinations of characteristic values.

For complete information about how to use the condition technique, refer to pricingdocumentation or take a class on pricing or the condition technique.

Demonstration: Valuation Using a Product Cost Estimate

PurposeTo demonstrate the steps to perform valuation using a product cost estimate

System DataSystem:Client:User ID:



Password:Set up instructions:1. Begin your demonstration by entering another line item. This time focus on the

value fields and point out that certain value fields, such as Material Input, werepopulated although there was no billing document.

Accounting→ Controlling→ Profitability Analysis→ Actual Postings→Create Line Item


Record type: F

Customer: 1000 1000

Sales organization: 1000 1000

Distribution channel: 10 10

Company code:1000 1000

Product: P-100

Plant:


Record type: F

Execute the valuation function and take a look at the value field, Material Input.

As of release 4.6, you can analyze how the system populated a value field. Select:

Extras→ Analyze valuation

2. Open up another session and display the material cost estimate for the material,P-100:

Costing Variant: PPC1

Plant: 1000 1000

Costing version: 1 1

Valid on: Today

3. Call up the cost Component view for the currently released material cost estimate.

Accounting→ Controlling→ Product Cost Controlling→ Product CostPlanning→ Material Costing→ Cost Estimate with Quantity Structure→Display



To get to the cost component view, you may have to click the �Cost comp�icon next to the magnifying glass. It will then display in the lower section ofthe screen. Explain cost components as high level breakdown of product costinformation.

4. In your second session, review the line item in Profitability Analysis:

If you have not done so, execute the valuation function and take a look at thevalue field, Material Input.

5. Based on the valuation analysis, show the individual customizing steps, whichlead to this result. You know that the costing key, I10, was used to populatevalue field, �Material Input�. Depending on the expertise and interest in theclass, you can spend more or less time on the following demonstration. This isnot an easy topic so be prepared to reiterate the main points.

Assign costing key to product→ Costing key, I10.

Explain that with this step, you define what type of cost estimate will betransferred (costing variant) and which date the system will look at. Standard costestimates allow the user to define whether to transfer current, future, or past, andthe date control here defines whether the cost estimate should be brought over asof goods issue date, posting date, or the date on the material master. Here, youalso define which cost component split to use. Additive costs refer to the costsnot included in the quantity structure and added manually to the cost estimate.

Define access to material costing (costing key I10). This can be done at theproduct level, the material type level, or on the level of any other characteristic,such as Plant. When showing the related tables, explain the concept of �Point ofValuation� (when) and record type (for what type of transaction).

Assign value fields (cost component structure, 01). The confusion here is �where does the cost component structure come from. It is configured in thePersonal Computer and is basically a roll-up of cost elements into higher levelcategories � cost components.

IMG→ Controlling→ Profitability Analysis→ Master Data→ Valuation→ Product Costing ...

6. Mention the possibility of assigning the costing key to any other characteristics.An example has been set up for the material type and material type/plantlevel. The advantage of using this table is that you not only decide for whichcharacteristics product cost information should be pulled but also determineunder which circumstances it should be pulled, such as only if the plant is 1000.In addition, effective dates are not required in this table.



Demonstration: Valuation Using a Costing Sheet

PurposeTo demonstrate the steps to perform valuation using a costing sheet

System DataSystem:Client:User ID:Password:Set up instructions:1. Create a line item in Profitability Analysis:


Record type: F

Customer:

Sales organization:


Company code:

Product: P-100

Plant: 1000 1000

Revenue:

Customer discount:

Price reduction:

Cost of goods sold:

Execute the condition analysis function and display the value field, OutgoingFreight�.

Accounting→ Controlling→ Profitability Analysis→ Actual Postings→Create Line Item

Extras→ Analyze valuation

2. Next, show the individual customizing steps that lead to this result and explainthe terms in their context:

Condition types and Costing sheet i.e. ACT001



Access sequences i.e. Z200

Condition tables i.e. 502

Value field assignment

IMG→ Controlling→ Profitability Analysis→Master Data→ Valuation→Define Conditions and Costing Sheets ...

3. When you get to the condition types, refer to the IMG documentation. Here, allthe options relating to the condition types in CO-PA are described and examplesare given.

Demonstration: Valuation Strategy

PurposeTo demonstrate the valuation strategy

System DataSystem:Client:User ID:Password:Set up instructions:1. Show the valuation strategy, 001, and explain the idea behind the individual

steps. Make sure to point out that without a valuation strategy, none of the aboveconfiguration will take effect. Explain the concepts of periodic revaluation andvaluation in planning. Periodic valuation enables users to select the actual datathat has already been posted and revaluate the data using a valuation strategyspecially defined for the point of valuation, 02 � periodic revaluation � actual.With periodic valuation you can use the updated costs or the actual manufacturingcosts to revaluate the line items posted with standard manufacturing costs at thestart of the period. The difference between the original values of the line itemand the newly determined values is posted to CO-PA as a delta line item.

If periodic valuation is carried out more than one time, a new delta line item isposted every time a difference is determined. When periodic valuation has takenplace, the Information System can be used to display the updated values.

IMG→ Controlling→ Profitability Analysis→Master Data→ Valuation→Define and Assign Valuation Strategy



Display the assignment of the valuation strategy, 001, and explain the point ofvaluation and the record type.

IMG→ Controlling→ Profitability Analysis→Master Data→ Valuation→Define and Assign Valuation Strategy

Demonstration: Periodic Valuation

PurposeTo demonstrate the steps to perform periodic valuation

System DataSystem:Client:User ID:Password:Set up instructions:1. Show the periodic valuation function.

Accounting→ Controlling→ Profitability Analysis→ Actual Postings→Periodic Adjustments→ Periodic Valuation



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 toProfitability Analysis. You can find inconsistencies by looking at the individual valuefields. The report shows you what value flows the value field is involved in and whatcondition types or cost elements it gets its values from. In all, you can analyze thefollowing actual value flows:

� Transfer of billing documents and incoming sales orders from Sales OrderManagement.

� 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. Noticethat you have the possibility of checking valuation by simulating the entry of singleline items. You can specify different valuation points in time and in this way checkdifferent valuation strategies.

To analyze the valuation errors during billing document transfer, you can execute asimulation of previously transferred billing documents and then analyze the results ofyour valuation strategies. For further options for the simulation of billing documenttransfers, refer to the section, Tools.

Demonstration: Customizing Monitor

PurposeTo demonstrate the steps to use a Customizing Monitor

System DataSystem:Client:User ID:Password:Set up instructions:



1. IMG → Controlling → Profitability Analysis→ Tools→ Analysis→Customizing Monitor→ Valuation Analysis

Point of valuation: 01

Record type: Billing document

Execute

Expand the hierarchy in which the first level is the overall valuation strategyused for this point of valuation and record type, the next level are the valuationtechniques within the valuation strategy, and the following level shows how avalue field will be populated.



85 Exercise 5: ValuationExercise Duration: 10 Minutes

Exercise ObjectivesAfter completing this exercise, you will be able to:� 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 ExampleYour controlling manager wants to ensure that sales and product managers understandthe key cost components for the manufactured products.

You want to determine the estimated costs for packing the finished products. Thisis normally 1.50 for each unit.

Note: If you implement material costing in your SAP system, you can transferextensive information to CO-PA, to calculate and analyze the estimatedcost of sales and different contribution margins, such as the margin afterfixed costs, and the margin after all costs. Valuation signifies the concept ofsupplementing the performance information provided directly by a transactionand allows access to in-depth material costing information.



Task 1:In the Customizing settings for CO-PA, display the entries configured under CostingKeys 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 thesystem accesses the material costing information. You can assign a valuationstrategy to determine the transactions valuated. To allocate the estimatedproduction costs, such as materials and labor, to CO-PA value fields, you canassign the cost components of a material cost estimate to value fields.

1. Display the costing key assignment for product P-100. Which is the assignedcosting 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 anddescription?

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-PAunder Tools→ Analyze Value Flows→ Simulate Valuation. Fill in the header data asrequired, and enter product P-100 in plant 1000 in the line item entry screen. Aftercarrying out derivation, enter 100 pieces in the Invoiced Quantity field with a Revenueof $100,000. Carry out valuation.

Posting Date: Today's dateRecord Type: F

Point of valuation 01

Customer: T-CO05A##Sales Org.: 1000Distribution Channel: 10Company Code: 1000Product: P-100Plant: 1000Invoiced Quantity: 100Revenue: 100,000

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

2. Next, execute a valuation analysis: How was the �Material overheads� fieldfilled?

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, Valuefield VV250 was connected to cost component 080 in cost component structure01.


Task 3:The true costs for packaging and accessories are not known at the time of invoicingbut are known at the month-end when the packaging materials are posted and allocatedto various cost centers. These costs are not accrued during the month in FI but they areto be estimated in CO-PA so that your Plant Manager can estimate true profitability ofall plants prior to the month-end. You can use valuation to configure the system tocalculate 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 basisis used to calculate estimated packaging (OUPA)?

2. Display the condition record for the condition type, OUPA. Which conditiontype is used?

3. What overhead type is used for OUPA?

4. In the plant, 1000, what rate does the system use to estimate the packagingfor 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 InvoicedQuantity, 10,000 for Revenue, and 8,000 in the Cost of Goods Sold field. Carryout 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 thatcorresponds to your group number.

# A B C D E F G H I K K M N O P R S TNo. 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## afterthe 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 configurationsettings you have made. It also allows you to evaluate the existing settings, the use ofcharacteristics, 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 thesystem valuate your data, assuming you are using the version, 100?

Field Name or Data Type ValuesPoint of Valuation 03Plan Version 100Record Type Billing

2. Next, you try to establish where the characteristic, WWSBU, is used in yourclient. Which origin and target fields are assigned in this step? Use theCustomizing Monitor to establish this.




Reports:



Solution 5: ValuationTask 1:In the Customizing settings for CO-PA, display the entries configured under CostingKeys 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 thesystem accesses the material costing information. You can assign a valuationstrategy to determine the transactions valuated. To allocate the estimatedproduction costs, such as materials and labor, to CO-PA value fields, you canassign the cost components of a material cost estimate to value fields.

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

a) In the Customizing settings for CO-PA, display the entries configuredunder Costing Keys for Valuation.

IMG: Controlling→ Profitability Analysis→Master Data→ Valuation→ Set Up Valuation Using Material Cost Estimate→ Define Access toStandard 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, amaterial type, or any characteristic, such as a plant. This stepdefines the level at which the system accesses the product-costinginformation. You can assign a valuation strategy to determine thetransactions valuated. To allocate the estimated production costs,such as materials and labor, to CO-PA value fields, you can assignthe cost components of a material cost estimate to value.

Display the costing key assignment for product P-100.

Which is the assigned costing key?

IMG: Controlling→ Profitability Analysis→Master Data→ Valuation→ Set Up Valuation Using Material Cost Estimates→ Assign CostingKeys 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 costingkey, 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,I10, for the product, P-100?

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 anddescription?

a) Display the currently released (status FR) standard cost estimate for theproduct, P-100, in the Product Cost Planning component.

Accounting→ Controlling→ Product Cost Controlling→ Product CostPlanning→Material Costing→ Cost Estimate with Quantity Structure→ Display

Field Name or Data Type ValuesMaterial P-100Plant 1000Costing Variant PPC1Costing Version 1Date Leave Default

Click Find Cost Estimates (Binoculars icon) and make sure the costingstatus is set to FR. Choose Execute.

After you have accessed the product cost estimate, click the CostComponent icon on the toolbar. Click the Cost Comps icon (bottom right).

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

IMG: Controlling→ Profitability Analysis→Master Data→ 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-PAunder Tools→ Analyze Value Flows→ Simulate Valuation. Fill in the header data asrequired, and enter product P-100 in plant 1000 in the line item entry screen. Aftercarrying out derivation, enter 100 pieces in the Invoiced Quantity field with a Revenueof $100,000. Carry out valuation.

Posting Date: Today's dateRecord Type: F

Point of valuation 01

Customer: T-CO05A##Sales Org.: 1000Distribution Channel: 10Company Code: 1000Product: P-100Plant: 1000Invoiced Quantity: 100Revenue: 100,000

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

a) To test your valuation strategy, enter a valuation simulation for yourcustomer directly in CO-PA. Fill in the header data, as required, and enterthe product P-100 in plant 1000 in the entry screen. After carrying outderivation, enter 100 pieces in the �Invoiced Quantity� field with a revenueof 100,000. Carry out valuation.

Accounting→ Controlling→ Profitability Analysis→ Tools→ AnalyzeValue Flows→ Simulate Evaluation.

Field Name or Data Type ValuesPosting Date Today's dateRecord Type F

Select Continue: Tab �Characteristics�




Field Name or Data Type ValuesCustomer T-CO05A##Product P-100Distribution Channel 10Plant 1000Sales organization 1000Company code 1000

Select the Value fields tab.

Field Name or Data Type ValuesInvoiced Quantity 100Revenue 100000

Select the Origin data tab.

Field Name or Data Type ValuesGoods Issue Date Today's date

Select Valuation

What is the value for Material Input? Why?

Compare this with the product costing. The standard cost estimatefor product P-100 in online valuation was assigned to CO-PA viathe costing key. In addition, the Material Input value field has beenmapped to cost component 01 of the cost estimate.

2. Next, execute a valuation analysis: How was the �Material overheads� fieldfilled?


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, Valuefield VV250 was connected to cost component 080 in cost component structure01.


a)




Task 3:The true costs for packaging and accessories are not known at the time of invoicingbut are known at the month-end when the packaging materials are posted and allocatedto various cost centers. These costs are not accrued during the month in FI but they areto be estimated in CO-PA so that your Plant Manager can estimate true profitability ofall plants prior to the month-end. You can use valuation to configure the system tocalculate 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 basisis used to calculate estimated packaging (OUPA)?

a) The true costs for packaging and accessories are not known at the time ofinvoicing but are known at the month-end when the packaging materialsare posted and allocated to the various cost centers. These costs are notaccrued during the month in FI but they are to be estimated in CO-PA soyour plant manager can estimate true profitability for her plants prior to themonth-end. You can use valuation to configure the system to calculate theestimated values for packaging supplies at the time an invoice is billed.

Display the costing sheet under the Valuation settings in the IMG. Whatbasis is used to calculate estimated packaging (OUPA)?

IMG: Controlling→ Profitability Analysis→Master Data→ Valuation→ Set Up Conditions and Costing Sheets→ Create Condition Typesand Costing Sheets.

From the Surcharge/reduction list, select the condition type OUPA(double click).

The addition is calculated quantity-dependent with the calculationtype..

Select→ Records for Cond. Type. The quantity-related addition is3.00 per pc.

Hint: The quantity field assigned to the valuation strategy is usedautomatically .




2. Display the condition record for the condition type, OUPA. Which conditiontype is used?

a) Display the condition record for the condition type, OUPA. Whichcondition type is used?

IMG: Controlling→ Profitability Analysis→Master Data→ Valuation→ Set Up Conditions and Costing Sheets→ Create Condition Types andCosting Sheets. Select OUPA from the list of �pricing procedures� inthe 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 packagingfor one piece of the material, P-100?

a) In the plant 1000, what rate does the system use to estimate packaging forone piece of the material, P-100?

Select CondRcrds-Access and display the condition record for plant1000.

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 InvoicedQuantity, 10,000 for Revenue, and 8,000 in the Cost of Goods Sold field. Carryout valuation. What is the value for Dispatch Packaging?

a) To verify that the costing sheet has been configured correctly, enteranother line item in CO-PA. Enter your customer and all other associatedinformation. Enter product P-100. In this entry you will manually enter10 for the Invoiced Quantity, 10,000 for Revenue, and 8,000 in the Costof Goods Sold field. Carry out valuation. What is the value for DispatchPackaging?

What value appears in the Dispatch Packaging field? A rate of 30 wascalculated, 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 thatcorresponds to your group number.

# A B C D E F G H I K K M N O P R S TNo. 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.Continued on next page



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## afterthe 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 configurationsettings you have made. It also allows you to evaluate the existing settings, the use ofcharacteristics, 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 thesystem valuate your data, assuming you are using the version, 100?




Field Name or Data Type ValuesPoint of Valuation 03Plan Version 100Record Type Billing

a) You can use the Customizing Monitor to analyze in one step all theconfiguration settings you have made. It also allows you to evaluate theexisting settings, the use of characteristics, and value fields.

Analyze the Customizing settings for the planning data entered manually.

IMG→ Controlling→ Profitability Analysis→ Tools→ Analysis→Check Customizing Settings

Choose Overview of Valuation :

If you decided to create a sales plan for the billed orders manually, howdoes the system valuate your data, assuming you are using the version, 100?

Field Name or Data Type ValuesPoint of Valuation 03Plan Version 100Record Type Billing Document

Execute.

The system first accesses the Costing Sheet, COPA10, and then theCosting Sheet, ACT001. It then looks for information about material costestimates and finally, it accesses a user exit.

2. Next, you try to establish where the characteristic, WWSBU, is used in yourclient. 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 yourclient. Which origin and target fields are assigned in this step? Use theCustomizing Monitor to establish this.

IMG→ Controlling→ Profitability Analysis→ Tools→ Analysis→Check customizing settings

Choose Where-Used List.

Field Name or Data Type ValuesCharacteristic WWSBUClient 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� Outline valuation using a CO-PA costing sheet� Use the Customizing Monitor to perform valuation analysis



Unit SummaryYou should now be able to:� 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




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 transactionsinto CO-PA with calculated, retrieved, or otherwise accessed values.Fill in the blanks to complete the sentence.

4. What is a derivation strategy?

5. A consists of a number of different steps,which derive different characteristic values.Fill in the blanks to complete the sentence.

6. Characteristic derivation signifies the process to determine the characteristicvalues for all CO-PA characteristics.Determine whether this statement is true or false.□ True□ False

7. What is a table lookup?



8. The system automatically creates a standard derivation strategy for eachoperating concern.Determine whether this statement is true or false.□ True□ False

9. What is the Product Costing module used for?

10. The scale basis determines how the system interprets the value or quantityscale for a condition. These scales can be dependent on a ora .Fill in the blanks to complete the sentence.

11. Identify the actual value flows that can be analyzed using the value field analysisfunction.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 shouldbe used with which validity date for valuation.Fill in the blanks to complete the sentence.

13. What do costing sheets consist of?



14. The value field analysis function enables you to analyze all the flows of actualdata to Profitability Analysis.Determine whether this statement is true or false.□ True□ False



108Answers

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 pricingprocedures, product costing calls, and user exit calls in a sequence that can becustomized.

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 usesone derivation technique to calculate one or more values for one or morecharacteristics, 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 characteristicvalues for all CO-PA characteristics.

Answer: True

Characteristic derivation signifies the process to determine characteristic valuesfor all CO-PA characteristics.

7. What is a table lookup?

Answer: A table lookup is a derivation technique that is utilized by CO-PA toaccess the characteristic values from SAP master data tables.



8. The system automatically creates a standard derivation strategy for eachoperating concern.

Answer: True

The system automatically creates a standard derivation strategy for eachoperating concern. This strategy contains the derivation steps for all thedependencies that are already known between characteristics. You can thenchange 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 theproduct cost estimates for materials.

10. The scale basis determines how the system interprets the value or quantity scalefor a condition. These scales can be dependent on a quantity or a currencyamount.

Answer: quantity, currency amount

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

Answer: A, B, C

The value field analysis function enables you to analyze the actual valueflows, such as transfer of billing documents, incoming sales orders from Salesand Distribution, direct postings from Financial Accounting and MaterialsManagement, and external data transfer.

12. Using a costing key, you can determine which cost estimate should be usedwith 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 bythe definitions of the condition types.



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

Answer: True

The value field analysis function enables you to analyze all the flows of actualdata to Profitability Analysis. You can find inconsistencies by looking atindividual value fields.


Unit 3111 Actual Data

This unit covers the flow of actual values. Participants should be made aware ofthe modules from which Profitability Analysis can be supplied with data. Forcosting-based Profitability Analysis in particular, it is important that the participantslearn how to maintain the respective interfaces to obtain the corresponding data.Further, explain the differences between the value flows from the point of view ofcosting-based Profitability Analysis and account-based Profitability Analysis. Theselected example processes and the exercises help to deepen the understanding ofthe participants.

Unit OverviewThis unit explains the flow of actual data. It explains condition types and the transferand allocation of costs. In addition, it provides an overview of settlement orders anddiscusses direct and automatic posting, variance calculation, and schedule manager.


� 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 ContentsLesson: Flow of Actual Data.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .135

Demonstration: Steps to set up number assignment .. . . . . . . . . . . . . . . . . . . . .138Lesson: Transfer of Overhead .. .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .142

Demonstration: Assessing Cost Center and Process Costs.. . . . . . . . . . . . .149Demonstration: Settling Orders.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .155


Unit 3: Actual Data TFIN22_2

Exercise 6: Cost Center Assessment.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .159Exercise 7: Internal Orders... . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .167Exercise 8: Activity Allocation.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .175


TFIN22_2 Lesson: Flow of Actual Data

Lesson:112

Flow of Actual DataLesson Duration: 30 Minutes

Lesson OverviewThis lesson should provide you with an understanding of the value flows in theProfitability Analysis. Furthermore, you will become familiar with the steps requiredto prepare the Profitability Analysis for actual value flows.


� Explain the flow of actual data in CO-PA� List the sources of value fields

Value flow: This lesson gives the participants an initial impression of the actualvalue flows in Profitability Analysis. Based on the example report for costing-basedor account-based Profitability Analysis, first explain the modules from which theindividual values in a profitability report are derived.

Business ExampleThe management of your company wants to implement a profitability accountingapplication in the SAP system. As a member of the project team, you are supposedto advise on the question of whether to implement CO-PA or EC-PCA in the SAPsystem. You then will be responsible to implement the selected applications.

Your corporate controller asks you to explain the differences in the actual valueflows in the costing-based and account-based profitability analysis. Your Japanesesales manager is very familiar with the sales order process. He asks you to explain atwhat point data is posted to CO-PA. Furthermore, he wants to know what order dataare specified in CO-PA.

In order to be able to allocate completely the spending levels for research anddevelopment that are currently collected at the production group level via internalorders, Mr. Cash tries to find out whether the internal orders can be calculated inCO-PA. The logistics department in your company would like to allocate costs acrossthe two manufacturing plants and the distribution centers in Canada, the US, andJapan. They can track the services they provided at the division level and want toensure that Logistics costs are included in the contribution margin reports.



Your Marketing department has spent an extensive amount of time training the worldwide sales force and product management on the advantages of the new 'Blue Bicycle'product line. They have tracked training hours and want to allocate costs to all theproducts within the �Blue Bicycle� product group. The product manager for Taiwanhas 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 thecost of production variances due to the scrap and use of reflectors for the three modelswithin the �Blue Bicycle� product group.

Value Flows in Actual: Overview and Results

Flow of Actual Values � Overview

Flow of Actual Values � Results

Sources of Value Fields

Explain the steps required to prepare Profitability Analysis for actual value flows.Demonstrate briefly the number assignment and the function for activating CO-PA. Inaddition, explain the concept of the record types and show where (if required) otherrecord types can be configured. A reason may be that data is manually transferredfor planning.

Figure 37: Flows of Actual Values - Overview



Revenues and discounts are transferred to profitability segments in ProfitabilityAnalysis at the point of billing in Sales Order management. Quantities sold arevaluated at the same time with the standard cost of goods manufactured according tothe cost component split from Product Cost Controlling (CO-PC).

In Overhead Cost Controlling, primary postings are posted to the objects in OverheadCost Controlling and allocated to the cost object by the most source-related meansavailable. 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 ofProfitability Analysis, this leads to under absorption or over absorption for the costcenters performing the activity and production variances for the corresponding costobjects, such as production orders.

Production variances: The difference between the actual costs of goods manufacturedand the standard costs determined for cost objects, in this case production orders, aredivided into variance categories and settled to profitability segments.

Overhead costs remaining on the Overhead Cost Controlling objects are allocated tothe originating profitability segments.

Figure 38: Flow of Actual Values � Results



The method of determining period operating results in Profitability Analysis is basedon the assumption that the success of a company can be measured primarily onthe basis of its transactions with other companies. The aim is to supply the sales,marketing, product management, controlling, and corporate planning teams withdecision-support information.

This sales-oriented approach in Controlling Profitability Analysis means that nocontribution to the success of the organization is made until a sales transaction iscompleted. As a result, the products sold are transferred to CO-PA in accordancewith the cost of sales accounting method and provide the information about the salesrevenue and sales deductions.

This net revenue is compared with the cost of sales. The costs consist of the cost ofgoods manufactured, products sold, or services rendered in addition to any productionvariances known.

To complete your profitability data, you can also assign overhead costs to profitabilitysegments in the course of your period-end closing activities.

Demonstration: Steps to set up number assignment

PurposeTo demonstrate the steps to set up the number assignment.

System DataSystem:Client:User ID:Password:Set up instructions:1. Show how to set up the number assignment.

IMG→ Controlling→ Profitability Analysis→ Flow of Actual Values→Initial Steps→ Define Number Range for Actual Postings

Make the participants aware of the fact that this is the number assignmentfor costing-based Profitability Analysis and that number assignment foraccount-based Profitability Analysis is located under the general Controllingmenu of IMG.

IMG→ Controlling→ General Controlling→ Organization→ MaintainNumber Ranges for Controlling Documents



Demonstrate the Activate Profitability Analysis function. Here, you not onlydecide to activate PA but also which type of PA to use.

IMG→ Controlling→ Profitability Analysis→ Flow of Actual Values→Activate Profitability Analysis.

To demonstrate how to define additional record types:

IMG→ Controlling→ Profitability Analysis→ Tools→ Data Transfersbetween CO-PA and Other Systems. → Initial Steps→ Define Record Types.

Sources of Value Fields

Figure 39: Sources of Value Fields

The value fields in the costing-based CO-PA contain the amounts and quantities thatyou want to report on. They represent the finest level of detail at which costs andrevenues are broken down. One of the most important tasks in Customizing for thecosting-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 requiresin the Information System.



Facilitated Discussion

Discussion QuestionsUse the following questions to engage the participants in the discussion. Feel free touse your own additional questions.

Outline the flow of actual values in Profitability Analysis.



Lesson Summary

You should now be able to:� Explain the flow of actual data in CO-PA� List the sources of value fields



Lesson:117

Transfer of OverheadLesson Duration: 50 Minutes

Lesson OverviewThis lesson helps you understand the transfer and allocation of costs. It also explainssettlement of orders.


� Explain the transfer and allocation of costs� Explain the settlement of orders

Transfer of Overhead

Explain the business concept behind assessing the cost center and process costs inProfitability Analysis. To allow full analysis of the costs that have arisen in OverheadCost Controlling, you can periodically transfer the overhead costs that are not directlyattributable to the cost centers or business processes to Profitability Analysis. Theseare sometimes referred to as below the line expenses or SG expenses.

These costs can be allocated to any market segment or profitability segment and, asa result, to any level of the contribution margin hierarchies. This function allows youto transfer the sales, marketing, and administration costs, as well as the variances inservice cost centers or production cost centers to Profitability Analysis. Underline thefact that CO-PA uses the same assessment tool as Overhead Cost Controlling.

Remind the participants that the product cost information can be retrieved whentransferring sales order management documents. Highlight the differences betweencondition type VPRS and other COGS or COGM fields that are populated throughvaluation. VPRS can be reconciled to Financial Accounting. It is the legal Cost ofSales, and COGM or COGS may indicate a future or current standard cost estimate.

To familiarize yourself with the concept of customer agreements, there is an excellentIDES demo script on this topic, which you can execute in the training system if timepermits.


TFIN22_2 Lesson: Transfer of Overhead

Business ExampleThe management of your company would like to implement a profitability accountingapplication in the SAP system. As a member of your the project team, you aresupposed to advise on the question of whether to implement CO-PA or EC-PCA in theSAP system. You then will be responsible for implementing the selected applications.

Your corporate operations department would like to allocate costs across the twomanufacturing plants and the distribution centers in Canada, the US, and Japan. Theycan track the services they provided at the division level and want to ensure that theLogistics 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

Allocating Processes

Describe the process of activity allocations. Mention that this starts from the CostCenter Accounting screens.

Accounting→ Controlling→ Cost Center Accounting→ Actual Posting→ ActivityAllocation→ Enter→ Controlling Area 1000

Comment on the options under screen variant→ profit segment/cost ctr.

After the screen has changed, to show this screen variant, direct your attention to theProfitability Segment arrow appearing on the receiver side.



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 overheadcosts for the cost centers and the business processes that are not allocated to theinventory. This can be done using periodic assessment.

In addition, you can execute a direct or indirect allocation of internal activities intoCO-PA for Cost Centers and business processes. Along wíth the sender (cost center orprocess) and the receiver (profitability segment), you enter the quantity of the activityperformed and valuate it with the planned price of the activity type. The amount thatis arrived at is credited to the sender and debited to the profitability segment receivingthe quantity. The amount that is arrived at is credited to the sender and debited to theprofitability segment receiving the quantity. This means that a transport activity canbe directly posted to particular customers without the need to be posted to a costcenter or an order.

If you use the cost component split in Cost Center Accounting or Activity-BasedCosting for price calculation, you can update the prices divided into cost componentsduring 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 periodicTemplate allocation Process Quantity Price periodic

Figure 41: Activity Allocation

You can transfer overhead costs from Cost Center Accounting either on anactivity-allocation or a periodic basis. You can transfer the activities either directlyor indirectly to Profitability Analysis.

You can use a PA transfer structure to control the secondary cost element of activityallocation 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 thecost elements in the various value fields.



Figure 42: Assessing Cost Center and Process Costs

The Overhead Cost Controlling Activity-Based Costing (CO-OM-ABC) applicationcomponent provides an alternative form of overhead control that is particularly usefulwhen indirect activities generate a large share of the value added to products. It usescost drivers to allocate the internal activities to the overhead processes, which canthen be transferred to profitability segments using the process assessment function.Reference values for the transfer can be quantities and values posted in CO-PA oradditional cost driver information, such as the number of sales orders created.

The assessment of cost center costs function allows you to transfer the variances inproduction cost centers as well as the costs in sales and administrative cost centersto Profitability Analysis.

The cost centers and processes are credited by the amount allocated. As a result, allcosts can only be allocated one time. You assess cost center and process costs in thesame way as done within Overhead Cost Controlling, which is by defining cycles andexecuting them on a periodic basis. These cycles contain the control information forthe 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 informationabout the senders, receivers, sender rules, receiver rules, and tracing factors. Eachcycle can contain a number of segments. The segment describes a combination ofsenders and receivers that are to be processed together.

In theory, you could create one cycle for transferring all the overhead costs toProfitability Analysis. Notice that for performance reasons as well as for technicalones, it is a good idea to create several cycles and process them sequentially in theorder entered.

You should divide your assessment into separate cycles if you want to allocate thedifferent areas of your organization to CO-PA at different times. This also has theadvantage that when errors or changes occur, you only need to repeat the affectedcycles.

A cycle can contain the sender cost centers or sender processes from one controllingarea and can use the values from either costing-based or account-based ProfitabilityAnalysis as tracing factors.

The sender cost centers or processes are credited in the assessment cost elementspecified in the segment of the cycle.



The receiver is defined by a combination of characteristic values, which means aprofitability segment. The values are debited to the profitability segment using theassessment cost element, such as account-based CO-PA and value fields, such ascosting-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 profitabilitysegments, such as a sales organization, to Profitability Analysis. Notice that hereyou transfer the valuated process quantities and not the activity type quantities aswith cost centers.

When you create the process allocation, you can specify a profitability segment asthe receiver by selecting the Profit segment field. Then, when you press ENTER, thesystem displays a dialog box in which you can specify the characteristic values towhich you want to allocate the process.

The process quantity is then valuated using the planned price for that process andcredited to the cost center as actual data with the allocation cost element that wasassigned 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 therequired value field in the PA transfer structure CO.



In dynamic process allocation, you can determine to a great extent, which profitabilitysegment used the process and, as a result, should receive the process costs. In thiscase, you can use a process template to define the formulae and functions that selectthe cost drivers from Profitability Analysis or other sources to assign the costs mostaccurately to their cause.

In Customizing, you assign this process template to characteristics, which are usedto select the cost drivers. Then, you need to assign update characteristics, whichultimately determine the profitability segments to which the business process costsare allocated.

Demonstration: Assessing Cost Center and ProcessCosts

Purpose

To demonstrate the steps to assess the cost center and process costs

System DataSystem:Client:User ID:Password:Set up instructions:1. In Financial Accounting, post expenses (account, 417000) to the cost center for

sales and distribution of pumps (3200).

Document date: Today�s date

Company Code: 1000 (should appear as standard value)

G/L Account:

Amount:

Sign: Debit

Tax code: 0l

Cost center:

Account:

Sign: Credit

Amount:



Choose Post

Accounting→ Financial Accounting→ General Ledger→ Posting→ EnterG/L Account Document

2. Define an assessment cycle, which assigns the cost center, 3200, to Division,01, 02, and 06, in Profitability Analysis, according to the rule, fixed percentagerates. Explain the effects of the tracing factor field. Explain the following centralpoints: The assessment of costs is not done via the Cost Center accounting(�Push�), but via CO-PA (�Pull�). Allocations cannot cross controlling areas.Assessment is the only value allocation method available. Distribution andPeriodic Reposting do not work in conjunction with PA. During the allocationrun, postings are made to both account-based and costing-based PA. The recordtype for the postings made to costing-based PA is �D�. Derivation takes placeduring the allocation run. Not all the expenses in CCA have to be allocated toPA. For example, production-related expenses, such as production labor, isalready included in the cost of goods manufactured. Cycle: H100

Start date:

01/01/XXXX

Controlling area:

Tracing factor:

Select: Attach Segment and create the segment header:

Assessment cost element:

Value field: VV380 (fixed and var.)

Sender values: Rule 1; Percentage 100%

Receiving Tracing Factors: Rule 3

Select Sender/Receiver.

Sender: Cost Center 3200

Receiver: Division 01 to 06

Choose Receiving Tracing Factors.

Maintain the percentage rates and save the cycle.

Accounting→ Controlling→ Profitability Analysis→ Actual Postings→Period End Closing→ Transfer Cost Center Costs/Process Costs→ Assessment:Extras→ Cycle→ Create

3. Start the cycle you have created, H100, for the current period with updating,which means not as a test run.



Cycle→ Execute

4. Display the plan/actual comparison for the cost center, 3200, and the currentperiod.

Accounting→ Controlling→ Cost Center Accounting→ Information System→Reports for Cost Center Accounting

Drill down to the line item and explain the audit trail and object type.

5. Display the line items in Profitability Analysis. Take account of the fact that incosting-based Profitability Analysis, the assessment is posted under the recordtype, D.

Accounting→ Controlling→ Profitability Analysis→ Information System→Display Line Item List.

Settlement of Orders

Settlement of Orders

In SAP system, internal orders (CO), sales orders (SD), projects (PS), and productionorders (PP), can be settled to profitability segments. Briefly explain the variousorders in SAP system. Make clear that essentially settlement to Profitability Analysisalways follows the same pattern. Here, the settlement process is demonstrated usingan internal order.

Give the business example of an internal order, which captures the costs for a tradefair or collects the various marketing costs, such as that of TV, radio, and newspapersfor each product, and settles them to Profitability Analysis. Take some time todescribe the PA transfer structure and its significance for costing-based ProfitabilityAnalysis. Then, draw a diagram to depict the overall picture:

Settlement Structure:

Assignments Source Rec Type Settlement CESupplies 400000 � 417000 PSG 650000 Mktg

SuppliesPersonnel 420000 � 431000 PSG 651000 Mktg

Labor

PA Transfer Structure:



Assignments Source Value FieldSupplies 400000 � 417000 VV380 Marketing ExpensePersonnel 420000 � 431000 VV381 Marketing Labor

Figure 45: Settlement of Orders



In the SAP system, you settle internal orders, sales orders, projects, as well asproduction orders, and run schedules with production cost collectors to profitabilitysegments. These objects are used for the various purposes that are relevant toProfitability 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 postedto the order and collected there. At the end of the activity, they are settled to theappropriate profitability segments, such as the product range and sales area.

� You can also use Management Accounting orders to calculate the anticipatedvalues to be able to evaluate the accuracy of your accrual method. First, youcredit 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 areposted to that order as well so that the difference between the anticipated costsand the actual costs can be displayed at the order level.

� A third possible use of internal orders or projects is in make-to-ordermanufacturing. If you are handling sales orders, a customer project or aManagement Accounting order to which revenue postings are allowed, you canpost costs, such as production costs and S costs, as well as revenue and salesdeductions to the order or project. When the product is complete, the costsand revenues can be settled to Profitability Analysis. You can also transfer theaccrued 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. Whenyou create an order, you need to specify an order type. The system uses this ordertype to determine which settlement profile and, as a result, which settlement structureand PA transfer structure to use.

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

In costing-based CO-PA, costs are settled from the original cost elements to the valuefields 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 valuefields 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 assignmentline contains the assignment of one interval or a group of cost or revenue elements tothe 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 orrevenues must be assigned to a value field in the PA transfer structure.

� The assignments must be unique: Each cost or revenue element can only occurone time within a PA transfer structure.



Settlement structure: During settlement, the costs incurred under the primary andsecondary cost elements by a sender are allocated to one or more receivers. Whenyou settle by cost element, you settle using the appropriate original cost element. Anallocation structure consists of one or several settlement assignments. An assignmentdefines which costs (Origin: Cost element groups from debit cost elements) are tobe settled to which receiver type (for example, cost center or order). You have twoalternatives 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.

Demonstration: Settling Orders

PurposeTo demonstrate the steps to settle orders

System DataSystem:Client:User ID:Password:Set up instructions:1. Create an internal order for the Marketing expenses with the order type, 0450,

and the settlement rule, Profitability segment.

Order type:

Choose Settlement rule

Choose Detail

Maintain the settlement rule for the profitability segment

Product: P-100

Sales organization:


Division:

Show the Settlement Structure and the PA Transfer structure defaulted for thisorder. Save the internal order and make a note of the number.



Accounting→ Controlling→ Internal Orders→ Master Data→ Order→Create

2. In Financial Accounting, post the marketing cost, 477000, to the order youhave created.

Document date: Today�s date

Company Code: 1000 (should appear as standard value)

Account:

Sign: Debit

Amount:

Tax code: V0

Order: Enter order number.

Account:

Sign: Credit

Amount:

Choose Post

Accounting→ Financial Accounting→ General Ledger→ Posting→ EnterG/L Account Document

3. Settle your order in the current period.

Accounting→ Controlling→ Internal Orders→ Period-End Closing→Single Functions→ Settlement→ Individual Processing:

4. Display the plan/actual comparison for your order.

Accounting→ Controlling→ Internal Orders→ Information System→Reports for Internal Orders

5. Display the line item in Profitability Analysis. Take account of the fact thatin costing-based Profitability Analysis, the order settlement is posted underthe record type, C.

Accounting→ Controlling→ Profitability Analysis→ Information System→ Display Line Items.

6. Go to Customizing and explain the PA transfer structure, 10, and its connectionto the settlement profile, 100.



IMG→ Controlling→ Profitability Analysis→ Flows of Actual Values→Order and Project Settlement.



127 Exercise 6: Cost Center AssessmentExercise Duration: 10 Minutes

Exercise ObjectivesAfter completing this exercise, you will be able to:� Allocate costs using Cost Center Assessment

Business ExampleThe costs of a marketing survey conducted by an outside service provider are to beallocated 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 ordermanagement billing. The primary source of period costs, such as sales andadministration costs, for CO-PA is normally Cost Center Accounting. Withcost center assessments, you can allocate responsibility-oriented costs acrossprofitability segments for P&L reporting.

Task:Post an invoice from the marketing company CEB Berlin against this cost center topay for a market survey it conducted. AC605-##

The credit entry in this case will be posted to the vendor account number, and thedebit entry will be posted against the cost center using the external services accountnumber. The posting is made in the company code, 1000.

Vendor : 1000 C.E.B BerlinInvoice Number: 1234##Invoice Amount: 10,000.00Account Number: 417000 External ServicesAccount Assignment: Marketing Cost Center

AC605-##

1. In the costing-based profitability analysis, apportion a cost assessment for theCost Center to products P-101 and P-102. The costs should be divided equallybetween the two products.




2. Create an allocation cycle, CYC-##, starting January 01, XXXX, to allocate themarketing costs to the Marketing Costs value field. Use the assessment costelement, 692000, Marketing Assessments.

Field Name or Data Type ValuesSender Selection Type 1 (unsplit costs)CO Area 1000Tracing factor 1 (costing-based CO-PA)

Attach Segment 1.

Field Name or Data Type ValuesSegment Number/Name 1Assessment Cost Element 692000Value field VV380Sender Values Posted AmountsShare in % 100Rule 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 andaccount-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-basedCO-PA?



Solution 6: Cost Center AssessmentTask:Post an invoice from the marketing company CEB Berlin against this cost center topay for a market survey it conducted. AC605-##

The credit entry in this case will be posted to the vendor account number, and thedebit entry will be posted against the cost center using the external services accountnumber. The posting is made in the company code, 1000.

Vendor : 1000 C.E.B BerlinInvoice Number: 1234##Invoice Amount: 10,000.00Account Number: 417000 External ServicesAccount Assignment: Marketing Cost Center

AC605-##

1. In the costing-based profitability analysis, apportion a cost assessment for theCost Center to products P-101 and P-102. The costs should be divided equallybetween the two products.

a) Post an invoice from CEB Berlin the Marketing firm against this costcenter to pay for a market survey it conducted.

The credit entry in this case is posted to the vendor account number, andthe debit entry is posted against the cost center using the external servicesaccount number. The posting is made in the company code, 1000.

Accounting→ Financial Accounting→ Accounts Payable→ DocumentEntry→ Invoice:

Field Name or Data Type ValuesVendor 1000Invoice Date Today's datePosting Date Today's dateAmount (due to vendor) 10,000Account Number 417000D/C Debit




Amount 10,000Tax Code 0ICost Center AC605-##

Post your document.

Hint: During your posting, several messages may appear that theaccount, 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 themarketing costs to the Marketing Costs value field. Use the assessment costelement, 692000, Marketing Assessments.

Field Name or Data Type ValuesSender Selection Type 1 (unsplit costs)CO Area 1000Tracing factor 1 (costing-based CO-PA)

Attach Segment 1.

Field Name or Data Type ValuesSegment Number/Name 1Assessment Cost Element 692000Value field VV380Sender Values Posted AmountsShare in % 100Rule 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 CostCenter on products P-101 and P-102. The costs should be divided equallybetween the two products.




Create an allocation cycle, CYC-## , valid as of January 01, XXXX, toallocate the marketing costs to the Marketing Costs value field. Use theassessment 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

Field Name or Data Type ValuesCycle Name CYC-##Start Date 1/1/XXXX

Enter:

Field Name or Data Type ValuesSender Selection Type 1 (unsplit costs)CO Area 1000Tracing Factor 1 (costing-based CO-PA)

Attach Segment 1.

Select: Attach Segment: Segment Header

Field Name or Data Type ValuesSegment Number/Name 1Assessment Cost Element 692000Value Field VV380Sender Values Posted AmountsrShare in % 100Rule for Receiver Tracing Factor Fixed percentages

Choose Sender/Receiver.




Field Name or Data Type ValuesCost Center AC605-##Cost Element 417000Receivers 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 andaccount-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-basedCO-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 TestRun 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

Field Name or Data Type ValuesRecord Type DPeriod/Year CurrentEntered by Your user IDProduct 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 oraccount-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 (seeCustomizing CO-PA, characteristic use).



135 Exercise 7: Internal OrdersExercise Duration: 15 Minutes

Exercise ObjectivesAfter completing this exercise, you will be able to:� Allocate the costs collected on an internal order to profitability analysis

Business ExampleYour sales manager has planned to participate in a number of trade fairs this year. Thecosts for the trade fairs are collected on internal orders to track the cost for each fairseparately from the recurring cost center costs.

Note: In CO, internal orders can be used to collect the costs for specificprojects, such as research and development, or marketing events. Theyallow you to view and monitor costs on an alternate controlling object andperiodically settle these costs to a cost center or profitability segment. Thisallows 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 orderare allocated at the period close. The settlement receiver is a profitabilitysegment. In the settlement information, you need to specify that the settlementwill 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 frombank account, 113100.

Financial Accounting document number:

3. In the CO internal order application, process the internal order settlement for thecurrent period to Profitability Analysis.

Amount settled:

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

Which value fields were populated? Why?

5. In the IMG, view the settlement configuration for the order type, 0450. To whichsettlement profile is this order type assigned?

Display the settlement profile settings. What allocation structure is used inthe 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 OrdersTask: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 orderare allocated at the period close. The settlement receiver is a profitabilitysegment. In the settlement information, you need to specify that the settlementwill 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 inLas Vegas.

Accounting→ Controlling→ Internal Orders→ Master Data→ SpecialFunctions→ Order→ Create:

Field Name or Data Type ValuesOrder Type 0450Short Text Fun & Rec ShowCompany Code 1000Business Area 5000Profit Center 1000

Check whether the internal order is released.

Select the Control data tab. If the system status is CRTD, click Releaseto change the system status to FREE.

Create a settlement rule that determines where the costs for your internalorder are allocated at the period close. The settlement receiver is aprofitability segment. In the settlement information, you need to specifythat the settlement will be made to the material group, 001.

Select Settlement Rule. From the Settlement rule entry screen, selectDetails. From the Distribution Rules screen, select Profitability. EnterMaterial Group, 001, and select Enter to continue. To view the profitsegment 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

All costs are exempt from tax, tax code V0. These costs have been paid frombank account, 113100.





a) Charge costs to the internal order with a journal entry in FinancialAccounting. So far, you have incurred the following costs for the LasVegas trade fair:

Amount:1000.00 Cost Element:

All costs are exempt from tax, tax code V0. These costs have been paidfrom the bank account, 113100.

Accounting→ Financial Accounting→ General Ledger→ Posting→Enter G/L Account Document

Header

Field Name or Data Type ValuesDocument Date Today's date

Row 1:

G/L Account 476000D/C DebitAmount 1000Tax Code V0Order Your internal order number

Row 2:

Field Name or Data Type ValuesG/L Account 113100D/C CreditAmount 1000

Post your document.


3. In the CO internal order application, process the internal order settlement for thecurrent period to Profitability Analysis.




Amount settled:

a) In the CO internal order application, process the internal order settlementfor the current period to Profitability Analysis.

Accounting→ Controlling→ Internal Orders→ Period-End Closing→Single Functions→ Settlement→ Individual Processing:

Field Name or Data Type ValuesPurchase Order Number Your order numberSettlement Period CurrentFiscal Year CurrentTest Run Not selected

Amount settled: 1000

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


a) Accounting→ Controlling→ Profitability Analysis→ Information System→Display Line Items→ Actual:

Field Name or Data Type ValuesRecord Type CPeriod/Year CurrentEntered by Your user ID


Settings→ Layout→ Change

Select Marketing Activities from the column set.

Marketing Activities - Based on the configuration of the PA transferstructure 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 whichsettlement profile is this order type assigned?

Display the settlement profile settings. What allocation structure is used inthe settlement profile?





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

IMG:Controlling→ Internal Orders→ Order Master Data→ DefineOrder Types: Select 'Detail' for the order type 0450.

The settlement profile is 100.

Display the settlement profile settings. Which allocation structure is usedin 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 besettled 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 forSettlement

Select : Structure 10→ Assignment lines

Select: All costs→ Value fields

VV410 � Marketing Activities



143 Exercise 8: Activity AllocationExercise Duration: 10 Minutes

Exercise ObjectivesAfter completing this exercise, you will be able to:� Allocate the costs from Overhead Cost Accounting to CO-PA using activity types

Business ExampleYour R&D cost center manager wants to allocate R&D costs to products wheneverpossible. The Product Engineering group spent 10 hours last month in improvingproduct 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 allocatethe costs from cost centers to Profitability Analysis. The activities in the SAPsystem are normally defined as the productive output of a cost center and canbe measured in time increments or units. Activity prices can be plannedmanually 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 activitytype category is 1 because the costs are allocated manually. The secondary costelement, 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 bluebicycles.

In Cost Center Accounting, choose Planning→ Activities/Prices to plan a rateof 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 CenterAccounting.

The screen variant, Profitability Segment/Cost Center, allows you to allocate thecosts from a cost center to a profitability segment using an activity type. Savethe document.

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

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

Hours consumed:

Document number:

Task 4:1. Display the line items you have created during the allocation in CO-PA. Which

record type was used to post the line item?

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



Solution 8: Activity AllocationTask 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 activitytype category is 1 because the costs are allocated manually. The secondary costelement, 621000, will debit the activity receiver and credit the cost center.


a) Create the activity type EH## for the development time in hours. Validityperiod from 1 January of the current year to 31 December 9999.

All the cost center categories should be able to use this activity. Theactivity type category is 1 because the costs are allocated manually. Thesecondary cost element, 621000, will debit the activity receiver and creditthe cost center.

Accounting→ Controlling→ Cost Center Accounting→ Master Data→Activity Type→ Individual Processing→ Create:


Name: Development Hours

Activity Unit HCCtr Category: *ATyp Category: 1Allocation Cost Element: 621000Price Indicator: 3

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 bluebicycles.




In Cost Center Accounting, choose Planning→ Activities/Prices to plan a rateof 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 inthe plan version, 0.

The development department plans to spend 1200 hours R&D time onblue bicycles.

In Cost Center Accounting, choose Planning→ Activities/Prices to plan arate of 100 for the activity type, EH##, and the cost center, 4500.

Controlling → Cost Center Accounting→ Planning → ActivityOutput/Prices→ Change:

Field Name or Data Type ValuesVersion 0Period 1 �12Fiscal Year CurrentCost Center 4500Activity Type EH##

Select Form-based.

Select Overview and enter the following:

Plan Activity: 1200Fixed 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 CenterAccounting.

The screen variant, Profitability Segment/Cost Center, allows you to allocate thecosts from a cost center to a profitability segment using an activity type. Savethe document.

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




Recipient: Profitability segment (product, P-101, company code, 1000, businessarea, 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 inCost Center Accounting.

You can use a screen variant to allocate the costs from a cost center to aprofitability 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 chooseIndividual Entry.

Field Name or Data Type ValuesSend. CCtr (Sender Cost Center) 4500SAtyTyp (Sender Act.Type) EH##Total Quantity: 10Receiver: Choose the profitability segment

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

record type was used to post the line item?





a) Display the line items you have created during the allocation in CO-PA.Which record type was used to post the line item?

Accounting→ Controlling→ Profitability Analysis→ InformationSystem→Display Line Items→ Actual

Record Type: DPeriod/Year : CurrentEntered by : Your user IDProduct: P-101


Settings→ Layout→ Change

Select Marketing Activities from the column set.

Marketing Activities. The PA transfer structure, CO, is referenced duringthe activity allocation to CO-PA.



Lesson Summary

You should now be able to:� Explain the transfer and allocation of costs� Explain the settlement of orders



Unit SummaryYou should now be able to:� 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




1. and discounts are transferred to profitability segments inProfitability Analysis at the point of billing in Sales Order Management.Fill in the blanks to complete the sentence.

2. How are production variances calculated?

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.Determine whether this statement is true or false.□ True□ False

4. in the costing-based CO-PA contain the amounts andquantities on which you want to report.Fill in the blanks to complete the sentence.

5. You can transfer the overhead costs from Cost Center Accounting either on anactivity-allocation or a basis.Fill in the blanks to complete the sentence.

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

7. The application componentprovides an alternative form of overhead control.Fill in the blanks to complete the sentence.



8. In , costs are settled to thesettlement cost element specified in the settlement structure.Fill in the blanks to complete the sentence.



153Answers

1. Revenues and discounts are transferred to profitability segments in ProfitabilityAnalysis 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 theactual 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 toassign your costs and revenues to the required value fields.

4. Value fields in the costing-based CO-PA contain the amounts and quantitieson which you want to report.

Answer: Value fields

5. You can transfer the overhead costs from Cost Center Accounting either on anactivity-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 formof overhead control.

Answer: Activity-Based Costing



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

Answer: account-based CO-PA


TFIN22_2 Course Summary

Course SummaryYou should now be able to:


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

� Explain how the integration works between Sales Order Management, FinancialAccounting, 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 differentUoMs into a single UoM of universal application. This conversion can occur in twodifferent ways.

First, you can define the standard UoM in such a way that the UoM transferred fromthe source quantity field's previous applications can be converted into the standardCO-PA UoM for all materials. When you do this, ensure that the UoM that is selectedas standard is also maintained in the material master for all materials, either as a baseUoM or as an alternative UoM.

If you cannot define a uniform standard UoM due to the heterogeneity of the materialsaffected, you can define a comparable standard UoM using the methods for derivingcharacteristics. To do this, use a characteristic value (such as a product group) asyour 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 specificallyin the period concerned. This means that the periodic sender values posted are settledon the basis of the tracing factors defined in this period.

Note that if these tracing factors are subject to significant periodic fluctuations, youcannot allocate the values according to their cause.

As of Release 4.0A, you can use the Aggregated tracing factor indicator to eliminatethe fluctuations between periods.



Figure 52: CO-PA Derivation: (1)

Characteristic derivation refers to the system's attempts to determine the characteristicvalues for the characteristics for all COPA-relevant transactions (supplementing theautomatic mappings).

By supplementing the values determined by automatic mapping, derivation can accessadditional information (characteristic values) both within and outside the originatingtransaction.

For every COPA-relevant transaction, the system will attempt to derive a characteristicvalue for each and every characteristic in the operating concern if the derivationconfiguration is complete.

Derivation is not always successful. Unsuccessful derivation for a characteristicresults 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 businesstransaction defines the respective profitability segment. The profitability segment isthe CO-PA account assignment object.

The dependant characteristics, such as the customer group and the sales district can bederived 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-definedlogic. They are frequently used with user-defined characteristics, although they arenot limited to this application.

With derivation rules, characteristic values (also known as �target values�) aredetermined 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 eitherall situations or only when certain conditions are met (for example, when a salesorganization is 1000).

If a value cannot be determined by the rule entries, derivation rules can also beconfigured to produce an error or to ignore this failure and proceed.

Unlike other derivation steps, derivation rule entries can be configured so that theyapply 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 toproduce complex derivation logic.

If a CO-PA derivation rule is not maintained properly, the system will issue an errormessage when CO-PA derivation is performed. An incorrect derivation rule mayprevent 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-characterfield that is logically divided into different levels. If you simply choose this fieldfrom the reference table, the tables MARA or MVKE, as you would for othercharacteristics, the Information System cannot recognize its encrypted hierarchicalstructure. 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 torepresent 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 thirdwith the length 8. This means that the first level of the product hierarchy is of thelength 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 followingthree 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 besupplied with the values from a product hierarchy. By maintaining the appropriatederivation table entries, you can supply these levels automatically with the producthierarchy contained in the material master. For more information, see SAP Note62690. 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 threecharacteristics, 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� characteristicto 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 Relevantto Sales→ Define Product Hierarchies.

The PAPH1 and PAPH2 fields are generated in CO-PA to correspond to the producthierarchy 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 maintainany characteristic values or derivation rules when you adopt the characteristics froman SAP table.

You can still use any user-defined characteristics for the product hierarchy that youwere 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 useit as a characteristic in Profitability Analysis.

The PAREG field is available through the �Transfer from SAP table� function inCO-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 to maintainany characteristic values or derivation rules when you adopt the characteristics froman 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 customerhierarchy from SD. You can add these characteristics to your operating concern's datastructure from the PAPARTNER structure. Each individual level of the customerhierarchy is assigned to a separate CO-PA characteristic, HIE01, HIE02, and HIE10.

When you transfer sales orders or billing documents, the customer hierarchydetermined by SD is automatically transferred to CO-PA with the order or document.In other Profitability Analysis transactions, the customer hierarchy is derived uisng thecustomer, sales organization, distribution channel, and division characteristics. Thecustomer hierarchy category that is assigned to the corresponding operating concernshould 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, youcan define your own partner functions in SD. The customer-defined partner functionscan also be transferred to the Profitability Analysis data structures as characteristics.



A clear distinction must be made between the standard partner functions and theuser-defined partner functions. For both the standard partner functions and theuser-defined partner functions, a further distinction is made between personnelrepresentative functions and partner functions, which signify the customer master datatable and the KNA1 or LFA1 vendor master data tables. Partner functions, whichrefer to the customer master data table or the vendor master data tables, are assignedto the corresponding master data tables (KNA1 or LFA1) as value tables. Personnelrepresentative functions do not have any value tables. The sales employee is anexample of a personnel representative function, which is available in the standardsystem.

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 aCO-PA value field in CO-PA Customizing. Even so, note that only certain conditiontypes in SD can be transferred to CO-PA. These are:

� Revenues and sales deductions, the G/L account for which was created in COwith the cost element types 11 = �Revenue� or 12 = �Sales deduction�

� Conditions that are defined as statistical in SD, such as the VPRS conditiontype, which contains the costs of goods sold. Statistical conditions do not leadto a posting to a G/L account. In addition, note that only active conditionsare transferred to CO-PA. Inactive conditions are not transferred. If all theconditions 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 isfilled), 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 fromthe gross revenues. The reason for this procedure is that the revenues in the differentSAP applications have different plus and minus (+/-) signs. The revenues in theSD component are managed as positive amounts, but in the FI component they arenegative 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 requirescondition types that are managed as negative amounts in SD, such as discounts, tobe assigned to other CO-PA value fields as positive condition types, such as specialrevenues.



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 anexpected 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 revenuesand 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 thebilling document is transferred to costing-based CO-PA using a statistical �CashDiscount� condition.

The cash discount is calculated during the run of the payment program in FI. Totransfer the actual cash discount to CO-PA, you have two options.

First, you can use automatic account assignment to post actual cash discount at ahigher level into CO-PA.

Second, you can start the �Profit and Loss Readjustment� program (SAPF181) in yourperiod-closing activities as shown above. Actual cash discount will now be assignedto the customer level to trace your actual customer profitability.



In both cases, make sure that accrued cash discounts and actual cash discounts arestored 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 forall the valuation views from legal valuation and profit center valuation. Currently,individual valuation views can be processed separately within a top down valuationrun.

In cases where you use both valuation views but require details for only one, it is agood idea to perform top down distribution just for this view. This allows you toreduce runtimes in top down distribution and avoid generating unnecessarily largevolumes of data.



Figure 69: Top Down Distribution of Various Record Types

With top down distribution, you can concurrently distribute data from several recordtypes, in a single run. This eliminates the need to re-enter the same parameters forseparate 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 orthe 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 becumulated or handled separately.

If you choose �Cumulate Record Type�, the reference data is summarized at recordtype 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 samefor the actual data and the reference data. Processing observes the sequence in whichthe record types are entered for the multiple selection. Actual data with the first recordtype is thus distributed in accordance with the reference data of the record typeoccurring 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 thesales of products.

As of Release 4.5, events can be taken into account in manual and automatic salesand profit planning.

From a functional perspective, an event can be seen as a revaluation key linked to aspecific length of time.

Events can influence the data of an entire plan or be defined with reference to specifiedcharacteristics, 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 typesof 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 special features:

� You cannot make any further alterations to the position of the data in Excel whenplanning. You cannot delete columns or move cells at this stage.

� You can add new entries in the SAP spreadsheet only in the lines below thetotals line.

� To display possible entries, you can use the button in the R/3 environmentdesigned for this purpose.

� All other R/3 planning functions require you to select the required line in Exceland 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 whichdata 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 orcalculate data using models.

After you have finished working on the appropriate record, data is transferred backto 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 solutionoutside 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 bedisplayed, such as the key, characteristic name, or both. You can now use attributesto display further information from the characteristic master data tables in the leadcolumn.

Choosing �Settings → Characteristic display� allows you to determine howcharacteristics are displayed in the lead column. The characteristic name is displayedin the above example.

If you select the lead column and choose �Settings→ Characteristic display→ Leadcolumn�, a dialog box appears prompting you to select the attributes to be displayedin the additional columns of the report list. The �City� attribute was selected in theabove example.

Finally, choosing �Extras→ Attributes� allows you to display a dialog box showingall 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, thereis a 1:1 ratio between R/3 instances and database servers. In addition, there are atleast three instances for each SAP project: for development, integration testing, andproduction activities.

Each operating entity within an instance is called a �client�. There are normally severalclients in any instance, which are used for different tasks, such as �playgrounds�,development, unit testing, and backups. The way in which the clients and instancesare 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 areclient-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 masterdata, configuration data, and transaction data. Master data should be maintainedon the user side of system. Configuration data represents the settings that definetransactions for R/3 Enterprise.

Transaction data is produced by the transactions in R/3 Enterprise. Transportingindicates the SAP process of moving items between clients within an instance andamong instances.

With transporting, items (such as objects and data) are collected into transportablebundles, which are then processed at the operating system level by a systemsadministrator. Normally, configuration data can be transported between clients within



or among instances. Master data and transaction data, on the other hand, cannot betransported in this way. However, they do not have to be transported between clientssince they are client-independent.

Figure 79: The Transport Concept (2)

Each independent installation of R/3 is known as an R/3 instance. Normally, thereis a 1:1 ratio between R/3 instances and database servers. In addition, there are atleast three instances for each SAP project: for development, integration testing, andproduction activities.

Each operating entity within an instance is called a �client�. There are normally severalclients in any instance which are used for different tasks, such as �playgrounds�,development, unit testing, and backups. The way in which the clients and instancesare 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 areclient-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 masterdata, configuration data, and transaction data. Master data should be maintainedon the user side of system. Configuration data represents the settings that definetransactions for R/3 Enterprise.



Transaction data is produced by the transactions in R/3 Enterprise. Transportingindicates the SAP process of moving items between clients within an instance andamong instances.

With transporting, items (such as objects and data) are collected into transportablebundles, which are then processed at the operating system level by a systemsadministrator. Normally, configuration data can be transported between clients withinor among instances. Master data and transaction data, on the other hand, cannot betransported in this way. However, they do not have to be transported between clientssince they are client-independent.

Figure 80: Transports in CO-PA

The transport function for CO-PA is flexible and sophisticated, allowing for a numberof ways to accomplish the required goals.

Option 1: Most CO-PA Customizing changes are automatically included in changerequests when the change management system is active for a client. The changerequests can be transported with standard functions. This approach is encouraged forsmall configuration changes, especially deletions.

Note: Not all Customizing settings can be transported using this option, as not allCustomizing settings create change requests automatically. However, deletions ofmappings must be transported with this option.



Option 2: Most configuration which takes the form of entries in a table (technicallyspeaking, that configuration which is modified through view maintenance) can beselectively added to manually triggered transports. Manually created transports aretriggered by an option in the Table View menu.

Note: This option is for transporting selected entries in a table, such as mappings ofcondition 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 anoperating concern.

Notes: Other such objects are listed below.

Option 4: Copying of certain items, such as reports, forms, line item layouts, reportline structures, and planning layouts, from client to client within an instance andwithin an operating concern is possible with an import tool, without going throughany CTS procedures at all.

Figure 81: CO-PA Transport Tool � Operating Concern



The method used to process transports generated by the three CTS-relevant transportoptions (remember that this excludes the import tool) depends on the location of thereceiver.

� If the receiver is a client in a different SAP instance, then the standardsystem-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 copied inaccordance with the transport request. This ignores any client-independentobjects.

It is recommended that you regenerate the operating concern and summarization levelsin the target after transporting any configuration changes. This ensures that all thenecessary items in the DDIC are updated for the change.

The special transport tool can transport Customizing data separately or together. Youcan 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 transportedwith the transport tool. However, the number intervals themselves have to betransported separately. It is a good idea to use the same number range intervals in allinstances 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. Theseauthorization objects consist of up to 10 fields, each of which represents anelement that has to be protected, such as �Operating concern�, �Form�, and�Activity�.

Authorizations are defined by selecting an authorizations object and assigningcorresponding values to the relevant fields. Authorizations contain specificcombinations of values that are to be allowed for the fields of an object during atransaction that accesses that particular object.

You can summarize different authorizations in one profile, and these authorizationscan be assigned either to the users directly or to profiles. (These profiles can then beassigned to users or more compex profiles.) These frequently represent a collection ofall the authorizations an individual needs to perform the job.

A user can have more than one assigned profile. This means that it is possible todefine profiles as a set of duties and then assign the profiles to all persons by theduties 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 ofpredefined authorization objects are shipped with the standard system. You can usethese to create authorizations and profiles and protect the Customizing and applicationfunctions in the CO-PA components.

For example, most CO-PA users will be authorized only to enter planning data andexecute reports. Cost accountants may be allowed to perform cost center assessmentsand other allocations to CO-PA. Other support employees may also be authorized tocreate 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 certaincharacteristics, value fields, and key figures. The default settings for an operationconcern state that all data is unprotected (freely accessible) at data level until a customauthorization object is created for a field or combination of fields.

For example, you can create an authorization object to protect information aboutindividual sales employees (such as sales commission) or about certain productcosting 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 fullauthorizations for all the delivered CO-PA authorization objects. This means thata user with this profile can perform any function in CO-PA, provided that nocustom authorization objects have been created. If objects have been created, thenauthorizations 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 dataupload feature. You may need to do this if a company is not implementing theSD module but wants sales details in CO-PA to take advantage of the module'smultidimensional reporting capabilities. It might also be used to load historic datain CO-PA or to load the data for company divisions that do not use the ERP systemproductively.

With this feature, data is uploaded directly from text files on the operating systemlevel 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 ofa consistent format, where each field is allocated a fixed number of characters, andwhere records are not separated by characters or carriage returns.

If you upload data through the external data interface, you need to define the structureof the file to be uploaded and assign the fields of that structure to the fields of theoperating concern. The fields are mapped to each other through the aid of assignmentgroups. 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 isconducted in the application menu. The function is available for both actual data andplanning data. However, you have to transfer these separately. Derivation, valuation,and validation occur during the upload, just as they would for any other transactionthat transfers data to CO-PA.

Any records that do not pass the validation checks are written to an error file, whichcan be corrected. These files can then be uploaded to the CO-PA component. Thisprocedure 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 becausethe system logs the files to ensure that the data is not duplicated. Multiple files can beuploaded 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 deletemovement data. In the ERP system, archiving means copying data from ERPdatatables to archive files. Deletion means removing data from ERP datatables. As aresult, you can archive with or without deletion. If you archive with deletion, you canconfigure 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 onlybe deleted once a year. Actual and planning data, as well as data in costing-based andaccount-based Profitability Analysis, is archived and deleted separately. Data recordscan also be archived and deleted by record type.

Incidentally, there are standard functions in the Implementation Guide to reorganize ordelete the other types of data and other items in CO-PA, such as frozen data, reportdefinitions, form definitions, planning layouts, and line item layouts. Note thatdeleting security data does not delete movement data from the standard tables but onlydeletes 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 standardbusiness applications. Through enhancements, customers can implement their ownfunctions without needing to modify the standard SAP code. Each enhancementhas a specific purpose.

Enhancements are beneficial because they provide the exits and entrances at theappropriate 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 harmSAP transactions nor upgrades.

To use enhancements, custom functions must be programmed into the enhancements.The enhancements must be assigned to enhancement projects. In addition, eachproject must be activated for all of the functions contained in the related enhancementsto take effect.

Figure 87: CO-PA Enhancement Overview (1)



With the COPA0001 enhancement, you can program steps to determine characteristicvalues during derivation. These steps can be given step IDs and sorted in yourderivation strategy as required. For example, this enhancement might be used todetermine the value for a special user-defined characteristic, which is determined bycomplex logic not achievable through derivation rules.

With the COPA0002 enhancement, you can program the steps to calculate or retrievethe special values during valuation. Separate calculations can be defined for theplanned and actual data. Calculations are assigned user exit numbers, which must beplaced in active CO-PA valuation strategies for the calculations to occur during theposting of data. For example, this enhancement might be used to delete certain valuesfor 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 conjunctionwith additional conditions (instead of just one report) whenever manual assignment toa profitability segment is required. This means the same transaction could require thespecification of values for different characteristics when different situations arise.

For example, you can use this enhancement to determine a characteristic groupaccording to the account that is posted, so that product-related accounts have theproduct number and customer-related accounts have the customer as a required fieldin the profit segment.

Figure 88: CO-PA Enhancement Overview (2)



With the COPA0004 enhancement, you can reprogram the exchange rate type thatshould be used for currency transaction when actual data is processed in costing-basedCO-PA.

For example, for actual postings you can change the average exchange rate (�M�) tothe bank buying rate (�G�) or the bank selling rate (�B�).

With the COPA0005 enhancement, you can change or define characteristic values orfield values on the interfaces with other applications by using information from thesource document. This cannot be done with the enhancements for derivation andvaluation, since these only use information that is contained in the CO-PA component.

For example, this enhancement might be used to change the characteristic valuesbeing derived for an FI journal entry to CO-PA based on information in the allocationfield or the text field of the document.

With the COPA0006 enhancement, you can program the special functions forprocessing planning data during the manual and automatic planning processes. Eachfunction is given an exit number, which must be specified when conducting the tasksto access the required calculations.

For example, this enhancement can be used to for distribution using acharacteristic-specific distribution key, for revaluation using a time-dependentrevaluation factor, or for moving plan/actual variances to future periods.

With the COPA0007 enhancement, you can program special processing instructionsfor externally uploaded data only. This means you can modify the line items that aretransferred to costing-based CO-PA over the standard interface using customizedsource code.

Figure 89: Recommended Follow-Up Activities

Data Used in the Exercises

Data Data in TrainingSystem

Data in IDES System

Operating Concern IDEA IDEAControlling Area 1000 1000



Company Code 1000 1000Sales Organization 1000 1000Distribution Channel 10 10Division 00 00Products P-100, P-101, P-102,

P-103P-100, P-101, P-102, P-103

Customer T-CO05A## T-CO05A##Sales Order Type TA TAInternal Order Type 0450 0450Cost Center 4500 4500Activity Type EH##Currency UNI UNIBusiness Area 5000 5000Plan Version 100 5## 100


IndexAAssignment lines, 93BBase condition types, 98CCalculation condition types, 98Calculation Type, 97Characteristic derivation, 63Characteristic Values, 7Characteristics, 7�8CO orders, 153CO-PA relevant transaction, 57Company code, 5Condition type, 97Controlling area, 5Controlling ProfitabilityAnalysis (CO-PA), 89

Costing key, 93Costing sheets, 96Customizing Monitor, 73DDerivation rules, 71Derivation strategy, 67OOperating concern, 5

Overhead Cost Controlling, 137Overhead Costs Controlling,144

PPA transfer structure, 154Period indicator, 94Periodic valuation, 89Plant, 5Product Cost Controlling(CO-PC), 92

Product Costing, 91Production variances, 137Profitability Analysis, 88, 138Profitability segment, 63Ssales order managementtransaction, 58

Scale Basis, 97settlement profile, 154TTable lookup, 70VValuation analysis, 105Valuation configuration, 91Value Fields, 10


Index TFIN22_2


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