Primary and secondary cost element in SAP FICO – Difference between both

Primary Cost Elements in SAP are created to match the General ledger accounts of profit and loss statements in FI. These primary cost elements carries expenses from SAP-FI module to Controlling module.

Each general ledger account in a profit and loss statement are created as a primary cost element in SAP CO Module to have a proper reconciliation between SAP FI and CO.

There are two ways of creating these primary cost elements in SAP, one is manually through transaction KA01 and the other one is automatic creation where system creates these primary cost elements automatically for each and every PL General Ledger accounts created in SAP FI module.

Primary and secondary cost element in SAP FICO - Difference between both

Primary elements in SAP are divided into different categories as follows;

  • Primary Costs (Category: 1)
  • Revenues (Category: 11)
  • Sales Deduction (Category: 12)
  • External Settlement (Category: 22)
  • Accrual/deferral per surcharge (Category: 3)
  • Accrual/deferral per debit=actual (Category: 4)

Secondary Cost Elements in SAP

Secondary Cost Elements in SAP are created in controlling module and have no relationship with the general ledger accounts. These secondary cost elements are created in controlling module for internal assignment within the module.

Posting to these secondary cost elements does not have any impact on financial statements. Secondary cost elements are used to transfer costs within controlling without having any impact on FI module.

Followings are different categories of secondary cost elements in SAP;

  • Internal Settlement (Category: 21)
  • Assessment (Category: 42)
  • Overhead rates (Category: 41)
  • Internal Activity Allocation (Category: 43)
  • Order/project results analysis (Category: 31)
  • Project related incoming order: Sales related
  • Project related incoming order: other related

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