Creation of Cost Elements

Cost Element Accounting

In SAP system, you do not need to enter cost data separately. This is because each business transaction that involves costs updates the CO component itself. Each consumption transaction in Material Management (MM), each billing in Sales and Distribution (SD) (= revenue), and each external transaction for invoice verification flows directly through the G/L Account (= cost element) to the corresponding account assignment object.

Master Data

1.     Creation of Primary Cost Element

Before creating a Primary Cost element there has to a G/L account with the same account number.

Accounting à Controlling à Cost Element Accounting à Master Data à Cost element à Individual Processing à KA01- Create Primary

Transaction Code: KA01

Enter Controlling Area: 1000

Press ENTER

Enter the following details in the screen above:

1.      Cost Element: Enter the Cost Element number (Same as G/L account no.)

2.      Valid from: Enter valid from date eg: 01.04.2000

Click on Master Data

Click on Save or press Ctrl + S

You will get a message that cost element has been created.

2: Creation of Secondary Cost Element

Secondary Cost Elements are created for internal purpose only, they do not have any corresponding G/L account in FI.

Accounting à Controlling à Cost Element Accounting à Master Data à Cost element à Individual Processing à KA06- Create Secondary

Transaction Code: KA06

Enter the following details in your screen:

1.      Cost Element: Enter secondary cost element number.

2.      Valid From: Enter valid from date eg: 01.04.2000

Click on Master Data

Enter the following details in the above screen:

1.      Name: Name of the secondary cost element

2.      Description of the secondary cost element

3.      Cost Element Category: Enter category 41, 42 or 43 accordingly.

Click on Save or Press Ctrl + S.

You will get a message that cost element has been created.

3: Change cost element

Accounting à Controlling à Cost Element Accounting à Master Data à Cost element à Individual Processing à KA02- Change

Transaction Code: KA02

Enter the cost element number in the screen below.

Click on Master Data.

 4: Display cost element

Accounting à Controlling à Cost Element Accounting à Master Data à Cost element à Individual Processing à KA03- Display

Transaction Code: KA03

Enter the cost element number in the screen below.

Click on Master Data.

Here you can view the master data details.

5: Delete cost element

Accounting à Controlling à Cost Element Accounting à Master Data à Cost element à Individual Processing à KA04 - Delete

Transaction Code: KA04

Enter the following details in the above screen:

1.      Cost Element: Enter the cost element number you want to delete.

2.      Test Run: Select test run before actually deleting a cost element.

 Click on Execute.

Now if you want to delete the cost element then go back and deselect the Test Run button.

Click on Execute.

 You will get the following message:

Do you want to delete

the cost element ??

yes    No  cancel

Click on Yes, cost element will be deleted.