Assigning Profit Centers to Account Assignment Objects

You can assign CO-OM objects (cost centers, internal orders, projects, and business processes) to profit centers to observe the value flow between Financial Accounting and CO-OM from a profit center point of view.

When you assign a Controlling (CO) object to a profit center, the system makes sure that the CO area is the same for both the object and the profit center. Cost centers and business processes are assigned to a profit center on the Master Record Basic Data screen.

The validity period defined for the profit center must be within the validity period defined for the cost center or business process. Additionally, the assignment of a cost center or internal order to a profit center also implicitly assigns all assets assigned to the cost center or internal order to the profit center. Refer to the topic, Segment Reporting in Asset Accounting, in this lesson where the Business Function FIN_AA_SEGMENT_REPORTING is discussed.

You link the internal orders to a profit center on the Order Master Data Assignments screen. Maintenance orders from the plant maintenance component are assigned to a profit center in the same way as internal orders.

Cost objects are used in product cost controlling to collect and store costs that cannot be assigned to objects at a lower level (orders, projects, or cost centers). However, in certain circumstances, you may need to assign a cost object to a profit center. The assignment logic used here is the same as the one used for assigning cost centers.

Unlike other assignment objects, profitability segments do not have master records. A profitability segment is a combination of characteristics, such as a customer, product, plant, distribution channel, and so on. The profit center is always one of the characteristics.

In a business scenario, the aim of many companies is to map characteristic balance sheets (for example, balance sheets for profit centers, segment or business area) while also taking asset transactions into account.

Basically, the system derives the segment and profit center characteristics, for example, from a cost center or an internal order. These Controlling (CO) objects are assigned directly in the asset master data.

If more than one CO object with different profit centers is assigned to the asset master record, SAP defines a complex, internal logic, which controls the derivation of the profit center while posting to the asset.

With SAP S/4HANA 1610, the business function FIN_AA_SEGMENT_REPORTING is delivered. This contains the segment reporting for assets with which you are now familiar from the business function FIN_GL_REORG_1, already known in SAP ERP.

Activate the segment reporting in Customizing for Financial Accounting under Asset Accounting→Integration with General Ledger Accounting→Segment Reporting→Activate Segment Reporting.

Display or maintain the account assignment objects for asset accounting in Customizing by following Financial Accounting→Asset Accounting→Integration with General Ledger Accounting→Additional Account Assignment Objects→Activate Account Assignment Objects.

The account assignment object is the same in asset master and posting. Select the Agreement checkbox (technical field name XIDENT) if you want to prevent the account assignment object from being changed when account assignments are made. This ensures that only account assignment to the account assignment object entered in the asset master record is possible. If this checkbox is not selected, there is no guarantee during posting that the segment and profit center values will be the same as in the asset master data.

After the activation of the profit center and segment account assignment objects, these characteristics are also available in the screen layout for asset master data in Customizing for Financial Accounting under Asset Accounting→Master Data→Screen Layout→Define Screen Layout for Asset Master Data. Choose the time-dependent logical field group.

If you maintain two CO objects in the asset and the profit center, and the segments in these two CO objects are not the same, then the message AIST009, The Profit Center is not unique appears.

The account assignment objects, cost center and internal order, refer to the following different profit centers:

• Profit center from cost center: 0001

• Profit center from internal order: 0003

If, for example, the segment characteristic is not needed, it can be suppressed. Use the screen layout in Customizing for Financial Accounting under Asset Accounting→Master Data→Screen Layout→Define Screen Layout for Asset Master Data if the segment characteristic is not needed. Choose the time-dependent logical field group.

If you miss the maintenance of the Acquisition and Production Cost (APC) values posting account assignment type for the new profit center and segment account assignment objects, the SAP system is not able to derive these characteristics from the asset master record when posting.

Former definitions, for example, for account assignment object cost center or internal order are no longer successful. You have to maintain all depreciation areas that post APC values.

If asset transactions are to be provided with Financial Accounting (FI) characteristics for the purposes of a characteristic balance sheet, this must also be the case for FI-AA depreciation documents. To derive entities while executing the depreciation posting run, specify the correct account assignment type. The different types of account assignments in our training system are as follows:

• Depreciation area 20 records cost-accounting depreciation:

  Depreciation area 20 must have the depreciation run account assignment type if area 20 is the area for posting the cost-accounting values (depreciation or interest) to Controlling. In this case, the (cost-accounting) depreciation account is defined as a cost element, and requires a CO-relevant account assignment object, when posting depreciation. However, this account assignment object (such as cost center, order, or WBS element) can only be posted if the depreciation run account assignment type is specified for those CO entities.

• Depreciation area 01 and 32 records accounting-specific depreciation:

  Without activated segment reporting in FI-AA, the system requires the depreciation run account assignment type for account assignment objects of Controlling even if the depreciation expense account is not defined as a cost element. This is the only way for the system to derive the profit center and then (possibly) the segment from the CO object for the book depreciation document. With activated segment reporting in FI-AA, the system does not require the depreciation run account assignment type for account assignment objects of Controlling. However, you still have to explicitly define the depreciation run account assignment type for the profit center and the segment account assignment objects.

You can notice the following characteristics with activated assets:

• After segment reporting has been activated, the profit center and segment fields have the initial value in all asset master records.

• Depending on customizing, the system prevents posting to these assets until the data is updated. In any case, the profit center or segment is not derived.

The technical name of the program to derive a profit center and segment for activated assets is FAGL_ASSET_MASTERDATA_UPD.

You can find the FAGL_ASSET_MASTERDATA_UPD program in Customizing for Financial Accounting under Asset Accounting→Integration with General Ledger Accounting→Segment Reporting→Fill Master Data for Segment Reporting.

You can use projects to carry out complex and long-term tasks. This makes it possible for several profit centers to be involved in a single project. For example, if the project is to construct a ship, one profit center might be responsible for producing the engine, while another would be responsible for the internal fittings. Therefore, profit centers are assigned to the various data-bearing structures in the project rather than the project definition itself.

Data-bearing structures include:

• Work Breakdown Structure (WBS) element
• Network header
• Network operation

In the project definition or the project profile, you can enter a profit center that you have to use as the default for the individual WBS elements. You can overwrite this value in the individual structures. If a WBS element is not assigned to a profit center, the system posts it to the dummy profit center.

If a network header is not assigned to a profit center, the profit center is derived from the corresponding WBS element.

If a network activity is not assigned to a profit center, the profit center is derived from the corresponding WBS element if the activity is linked to a WBS element. Otherwise, the profit center is taken from the network header.

The assignment of these structures to a profit center makes it possible for you to transfer Work in Process (WIP) from projects to PCA, as well as see all costs and revenues in the derived profit centers.

The assignment of the material masters to profit centers is the basis for the assignment of sales and production orders. Furthermore, it forms the foundation for internal goods movement transactions and the transfer of material stock to PCA.

Materials are always assigned to a profit center at plant level. The example illustrates the following options this approach provides:

• A profit center that represents a material in all plants (Profit center I).
• A profit center that represents a plant, including all materials for the plant (Profit center II).
• A profit center that represents a specific material for a specific plant (Profit center III).

The plant is assigned to a company code, which is in turn assigned to a CO area. This CO area must be the same as the CO area to which the profit center belongs.

You can assign materials directly in the material master or use the fast assignment function.

Material maintenance is divided into several views. If you select the Sales: General/Plant Data view, you enter the profit center in general plant parameters. If the view is not relevant to this material (for example, with raw materials), you maintain the profit center in the Storage 2 view, also in general plant parameters. However, the same profit center is always shown in different views.

A production order contains an assignment to a profit center in the order master record. For production planning and control (PP) production orders or process orders, you can find the Profit Center field under Header Assignment. For CO production orders, it is located on the initial screen.

When you create a production order, the default profit center is taken from the master record (general plant parameters) of the material being produced. For process orders, the system proposes the profit center for the main product in the order. Therefore, you do not have to enter the profit center manually.

All the primary and secondary costs posted to the production order are passed on to the assigned profit center, along with the credit posted when the production order is delivered or settled. This assignment is also used to transfer WIP to PCA.

Production orders are carried out in a plant. The company code assigned to the plant and the profit center assigned to the production order must be assigned to the same controlling area. This CO area and the CO area of the profit center must be the same.

Every order item in a sales order is assigned to a profit center. The profit center for the material to be sold is proposed by default. Therefore, you do not have to enter the profit center manually.

In the sales order, the profit center from the material master for the item to be sold is proposed by default. This default proposal allows a product-oriented division by profit centers (through the material), a location-oriented division (through the plant), or a combination of both.

If you want to structure your company from a sales-oriented rather than a production-oriented view, you can also determine a profit center from the available fields in the sales order header or item with the help of substitution rules.

The following is a partial list of the fields from the sales order and related information that can be used to derive the profit center assignment:

• Business area
• Customer
• Customer group
• Customer groups 1–5
• Distribution channel
• Category
• Material
• Material group
• Material groups 1–5
• Material price group
• Order reason
• Plant
• Product hierarchy
• Sales district
• Sales group
• Sales office
• Sales organization
• Storage location

If the system finds a valid substitution for a sales order, it uses this instead of the default defined in the material master record.

The assignment monitor provides an overview of all the assignments you have made to profit centers and provides support when you make or change assignments. For example, you can call up a list of all the cost centers that are not assigned to a profit center or profit center group, or a list of cost centers that are assigned to a particular profit center or profit center group. From here, you can move directly to the transaction to change the object.

You can display and check assignments as follows:

• On the SAP Easy Access screen, choose Accounting→Financial Accounting→General Ledger→Master Records→Profit Center→Current Settings→Assignment Overview (Transaction 1KE4).
• Using the SAP Fiori app Profit Center Assignment Monitor.
• You check assignments in Customizing for Financial Accounting under General Ledger Accounting→Master Data→Profit Center→Assignments of Account Assignment Objects to Profit Centers→Check Assignments.

The fast entry screen in the Material menu enables you to assign several material numbers to a profit center quickly.

You can use the Orders menu to analyze the following types of orders:

• Internal orders (CO)
• Imputed cost orders (CO)
• CO production orders
• PP production orders
• Process orders
• Network headers
• Maintenance orders

The Cost Objects menu contains the general cost objects as well as the cost objects for process manufacturing.