2 Course ObjectivesUnderstand the functions in Profit Center Accounting.Explain Profitability management in SAP.Understand and maintain CO-PCA master data.Identify the source of actual values.Execute planning.Use the CO-PCA information system.
3 Table of contents Overview Profitability Management Master Data Transfer PricesPlanningActual DataInformation System
4 PCA OverviewProfit center accounting, in conjunction with transfer pricing, enables:-Structuring of the A Group according to Strategic Business Units (SBUs), leading to:Full Income Statements according to lines of business (Product Groups rolled up to SBU/Sectors)Selected reporting of Balance Sheet items by Product Group/SBU and Sector (e.g. Payables/Receivables, Fixed Assets. Inventories).The ability to reflect material movements between SBUs at commercial prices rather than cost
5 Terms used in Profitability Management Accounting MethodsPeriod AccountingCost-of-Sales AccountingValuesGross SalesNet SalesVariancesRatiosReturn on InvestmentMarginsEconomic ProfitCash FlowContribution MarginThe period accounting approach distinguishes between individual cost and revenue elements (such as material costs). The total costs for the period are compared with the total operating output for the period. The output of products manufactured within the period but not yet sold (stock increases), are added to the sales revenues, and the costs of the products produced in past periods but sold in this period (stock decreases), are taken away. Together with additional capitalized internal activities and other revenues, this yields the total operating output for the period.In the cost-of-sales accounting approach there is no differentiation according to cost elements. Here the sales revenues are compared with the manufacturing costs for the products sold (cost of sale). The manufacturing costs may include material and personnel costs, which were incurred in previous periods. Costs which cannot be directly assigned to the sale, such as sales and administration costs, are displayed separately. The cost-of-sales procedure therefore also indicates whereabouts in the company costs were incurred.Profit Center Accounting supports a representation of profits according to both cost-of-sales accounting and period accounting. The profitability approach takes place on a period for period basis in an account-based representation (using accounts).By assigning balance sheet items, you also have the possibility of displaying additional success key figures (return on investment, profit-sales ratio, etc.).
7 Aspects of Profitability Management PCAPAProfitability AnalysisResponsibility Accounting(Company oriented)By Market segment(Market oriented)ProfitabilitySegmentsRevenueRevenueExternal MarketDiscountsSalariesCOGSMaterialsContr. MarginProfitAdvertisingProfit CentersProfitability Reporting: Profitability Analysis (CO-PA) lets you analyze the profitability of segments of your external market. These segments can be defined according to products, customers, countries, and numerous other characteristics, as well as your internal organizational units such as company codes (i.e. 9100) or distribution channels (I.e. direct, wholesale, e-Commerce).The aim is to provide your executive management, sales, marketing, planning, and other groups in your organization with decision-support from a market-oriented viewpoint.Responsibility Reporting: EC-PCA lets you analyze internal profit and loss for profit centers. This makes it possible for you to evaluate different areas or units within your company. You can structure profit centers according to region (branch offices, plants), function (production, sales), or product (product groups, as in A Grp). Profit Center Accounting is a component of the "Enterprise Controlling" module.EthylenePharmaPowerTelecom
9 Typical Questions in Profit Center Acctng. Contribution ofWhat is the operating profit for a profit center?organizationalunitReturnWhat asset value is attributed toA profit center?oncapitalCostWhich responsibility areasExceeded their plan for last month?managementA profit center is a management-oriented organizational unit used for internal controlling purposes. Dividing your company up into profit centers allows you to analyze areas of responsibility and to delegate responsibility to decentralized units, thus treating them as "companies within the company". EC-PCA lets you set up your profit centers according to product (product lines, divisions), geographical areas (regions, offices or production sites) or function (production, sales).ManagementWhat goods and services are exchanged withinThe corporation?of internalsales & services
10 Responsibility Accounting EC-PCA lets you calculate internal operating results for profit centers. A profit center represents an organizational subunit that operates independently on the market and bears responsibility for its own costs and revenues. You organize your organization into profit centers by assigning the master data of each profit-relevant objects (materials, cost centers, orders, projects, sales orders, assets and cost objects) to a profit center.All the business transactions in the R/3 System which are relevant for cost and profits are updated in the profit centers at the same time they are processed in the original module, and organized according to cost and revenue elements. This transforms all the flows of goods and services within the company into exchanges of goods and services between profit centers. This profit center structure applies for both actual postings and profit center plan data.It is also possible to treat a profit center as an investment center. In addition to the flows of goods and services, you can transfer selected balance sheet line items (fixed assets, payables and receivables, material stocks, and work in process) to profit centers on a periodic basis. This makes it possible to calculate such key figures as profit on sales, return on investments and cash flow.The period accounting approach distinguishes between individual cost and revenue elements (such as material costs). The total costs for the period are compared with the total operating output for the period. The output of products manufactured within the period but not yet sold (stock increases), are added to the sales revenues, and the costs of the products produced in past periods but sold in this period (stock decreases), are taken away. Together with additional capitalized internal activities and other revenues, this yields the total operating output for the period.In the cost-of-sales accounting approach there is no differentiation according to cost elements. Here the sales revenues are compared with the manufacturing costs for the products sold (cost of sale). The manufacturing costs may include material and personnel costs, which were incurred in previous periods. Costs which cannot be directly assigned to the sale, such as sales and administration costs, are displayed separately. The cost-of-sales procedure therefore also indicates whereabouts in the company costs were incurred.Profit Center Accounting supports a representation of profits according to both cost-of-sales accounting and period accounting. The profitability approach takes place on a period for period basis in an account-based representation (using accounts).By assigning balance sheet items, you also have the possibility of displaying additional success key figures (return on investment, profit-sales ratio, etc.).
11 Valuation Views A Group Legal Profit Center Company 1A LtdCompany 2A1 LtdCompany 3A2 LtdProfit Center 1Profit Center 2In Profit Center Accounting this field controls whether data is to be managed from a legal view, group view or profit center view.In the legal view goods movements are posted between profit centers at the sales price which was agreed between internal trading partners who produce a balance sheet/profit and loss statement independently.In the group view the goods movements are posted at the group production cost price which is used for clearing within a group without transfer price surcharges.In the profit center view goods movements are posted between profit centers at negotiated transfer prices which are used for internal profit determination and corporate management.You use valuation views to represent different ways of viewing business transactions in a company.Legal view (Individual enterprise) – For transactions between company codes.Group view – For a consolidated view of the corporation.Profit center view – For business transactions between profit centers.
12 Parallel Currencies in Profit Center Acctn. Profit Center AccountingEC-PCASpecialCompanyTransactionECPCACodeCurrencyCurrencyCurrencyAmount in transaction currency (coming from a posting document, i.e. USD)Amount in company code currency (i.e. CCod A Ltd – INR)Amount in profit center local currency (EUR – Profit Center Valuation View)You can select the currency of the controlling area, the group currency or any special profit center currency as your report currency.Note: In the standard reports for Profit Center Accounting, the values are displayed in the profit center report currency.-
15 Master Data in Profit Center Accounting Profit CentersProfit Center GroupsAccounts P&L, Balance Sheet ItemsStatistical key figuresData that is stored in the database for long periods of time is referred to as master dataThis permanent (yet changeable) data is created for:Profit centers, cost elements, accounts and statistical key figuresAccurate master data reduces:Creation time for controlling documentsAmount of errors in the controlling process
16 Master Data - Profit Center (1) Organizational unit in Accounting that reflects amanagement-oriented structure of the organizationfor the purpose of internal control. Profit Center groupsare collections of Profit centers with similar characteristics.In the case of A Grp this structure is by Product Group.ProfitCenterA profit center is an organizational unit in accounting that reflects a management-oriented structure of the organization for the purpose of internal control.You can analyze operating results for profit centers using the period accounting approachBy calculating the fixed capital as well, you can use your profit centers as investment centers.
17 Master Data – Profit Center (2) ValidityPeriodCompany CodeAssignmentProfitCenterAddress /CommunicationsDataA profit center is assigned to a controlling area. When creating a profit center, you enter the name of the profit center and the period of validity. Profit center master data is time-based; therefore, you can create different data for different periods of time.You can copy the master data information from an existing profit center.You maintain the important master data on the basic screen, such as the profit center name and description, the person in charge, and the department.The Profit center group field defines the assignment to the standard hierarchy.You can enter more information for the profit center on additional screens, such as address and communication data and long text about your profit center.By default, a profit center is assigned to all company codes assigned to the controlling area. You can deselect certain company codes for a profit center by choosing Company codes. This setting is also used by functions in Consolidation (EC-CS) in order to create consolidation units.Basic data
18 Master Data – Dummy Profit Center ValidityPeriodIndicators:Dummy Profit CenterDummy ProfitCenterAddress /CommunicationsDataIn practice you may inadvertently forget to assign a particular controlling object or material to a profit center. In such case if costs or sales are posted to this object, the corresponding data is posted to the dummy profit center in Profit Center Accounting. This ensures that reconciliation between EC-PCA and Financial Accounting is still possible in such instances. You can also discover missing assignments by analyzing the postings to the dummy profit center what should be done during end-period procedure.Basic data
19 Profit Center Accounting Profit Center Accounting Accounts in PCAA Grp Chart of AccountsFinancial AccountingFinancial Accounting12348ExpenseRevenueAssetsLiabilitiesEquityaccounts123489CurrentNon-MaterialPrimaryRevenueSecondaryopera-inventoryfinancialcostcosttingelementsassetselementselementscosts,andrevenueThe transaction data in Profit Center Accounting is stored in the accounts contained in the controlling area chart of accounts. These accounts include:Those from Financial Accounting which are used in Controlling (revenue and primary cost elements)Accounts which occur only in Controlling (secondary cost elements)Accounts from FI which are not used in Controlling (payables/receivables, material stocks, work in process, and so on)You can maintain revenue and cost elements directly in Profit Center Accounting.As with profit centers, you can define any number of hierarchical structures of accounts for use in the information system, allocations, and planning. These structures, called account groups, are maintained in the same way as profit center groups. Unlike profit centers, however, a standard hierarchy of accounts is not required.Account groups are valid only in Profit Center Accounting. If you want to use the same balance sheet account groups used in Financial Accounting, you can copy these groups into Profit Center Accounting.short-termControllingControllingcapitalProfit Center AccountingProfit Center Accounting
20 Master Data Groups Profit center Chemicals Ethylene Propylene Benzene A profit center group is an alternative hierarchy to the standard hierarchy. These are useful in the information system, for allocations, and for planning. In addition to the standard hierarchy for your controlling area, you can also create alternative profit center hierarchies -- so-called "profit center groups" -- for use in the information system, allocations and planning. In contrast to the standard hierarchy, these profit center groups do not have to contain all the profit centers in the controlling area. On the contrary, profit center groups let you select only certain profit centers and reorganize them to allow you more flexibility.You can define any number of hierarchical structures of accounts for use in the information system, allocations and planning. These structures are called "account groups". You can create new account groups as well as display or change existing ones.
21 Profit Center Assignments ProfitabilityProfitabilitySegmentSegmentSales orderCost centerCost centerProfitProfitCenterCenterAssetInternal orderInternal orderProduction orderBy assigning all the objects which incur costs or revenues in your system to profit centers, you determine how your company is to be divided into profit centers. These assignments also make it possible to display selected balance sheet items. All relevant account assignment objects are assigned to the respective profit centers using Customizing functions.These assignments mean that it is not necessary to post data explicitly to profit centers each time. Instead, it is posted automatically in Profit Center Accounting when it is posted to the original object.Generally, revenue and goods input are transferred to Profit Center Accounting based on the assignment of sales order items (derived from material master), direct costs based on the assignment of production orders and cost objects, and overhead costs based on the assignment of the account assignment objects in Overhead Management (cost centers, internal orders, and so on).Materials are always assigned at the plant level. You can assign materials directly in the material master or using the fast assignment function. Material master maintenance is divided into several views. If you have already created the ‘Sales: plant data’ view, you can enter the profit center there. If this view is not created (for example, with raw materials), you can maintain the profit center in the ‘Costing 1 view’ and after that it will be copied to other views (advisable).Assets are not assigned directly, but via appropriate cost center from their master data.Material
22 Monitoring Assignments NotCheck Assignments for:assignedMaterialsCost CentersOrdersObjects perprofit centerProfitCenterProfit centerswithoutThe assignment monitor (1KE4) provides you with an overview of all the assignments you have made to profit centers and supports you when you make or change assignments. For example, you can call up a list of cost centers which have not been assigned to a profit center or those cost centers which are assigned to a particular profit center or profit center group. When you display the list online, you can jump from there directly to the transaction for changing the object. That way you can make any missing assignments or correct any incorrect ones.The menu Material also contains the option Fast assignment, which lets you assign a large number of materials to a profit center quickly.Note: Incorrect assignments lead to incorrect transaction data in Profit Center Accounting. This is normally quite difficult to correct. Therefore check assignments to profit centers very carefully.cost centersMaterial fastassignment
24 Definition of a Transfer Price A transfer price is a price used to valuate the transfer of goods and services between independent organizational units.Transfer prices are maintained as conditions. You should take into consideration the price from material master stored in ‘Group currency, profit center valuation’ field in Accounting 1 view.Currently transfer pricing has only been realized in R/3 for goods movements.The transfer of goods and services between profit centers should be conducted at a set transfer price.Transfer prices have to be maintained for materials of the pipeline material type (I.e. electricity). Prices are required for creation of cost estimates for Profit Center Valuation View .
25 Enterprise Controlling Legal View – that of independent legal companiesGroup View – that of the organization as a wholeProfit center view - that of the decentralized responsibility areasThe way profits are shown might look entirely different depending on your viewpoint on the organization.When you analyze the organization as a whole, you do not see the individual companies within the group, but rather only the group itself as one company.For the individual companies, on the other hand, only the results of the company are relevant.Managers of profit centers, meanwhile, only want to look at their individual profit center as if it were an independent company.
26 Transfer Prices in SAP CO Transfer price from the group viewpoint = Controlling area (Corporate Group)Transfer price from the group viewpoint=group production costsTransfer price from the profit center viewpoint=management priceTransfer price from the legalviewpoint=sales and purchase priceFor the purpose of parallel valuation, the corporate group is represented by the controlling area. The transfer prices from the group view result from a group cost estimate.In the profit center view, transfer prices are the prices negotiated by the managers for goods and services.The legal view is the viewpoint of the individual company, represented by the company code. The transfer prices for this view are the sales and purchase prices.
27 Transfer Pricing Assumed Plan = Actual => No Variances A3 Ltd A Ltd Company code 9100A LtdA3 LtdCompany code 9200A1 LtdCompany code 9300PrCtr1PrCtr2PrCtr2CCtr 10PrCtr3CCtr20L 80L 120PrCtr3100+5G 80G 100P 8585P 120L 70L 80L 120220LL 70L 100G 70G 100GG 80G 70P 70G 100P 120220PP 85P 70P 85From the viewpoint of the profit centers involved, the goods transfer from profit center 1 to profit center 2 appears as a sale valuated with a special price defined in PCA.The goods withdrawal from profit center 2 for an order in profit center 3 is a sale from both the profit center viewpoint and the legal viewpoint, and is valuated separately using the appropriate PCA price and legal price. The same applies to the stock transfer to profit center 3 at the end.If your organize decides to use transfer prices from the profit center viewpoint, you can calculate special managerial prices for all goods movements between profit centers.This transfer price is a negotiated price between profit centers. It may be oriented on the market price, or it may be determined as a markup on the cost of goods manufactured as seen from the group view or legal view. These markups can depend on a number of factors, such as the profit centers involved, the product, plant, date, and so on.Material flow: Ethylene -> Butene 1 -> Polyethylene -> PolyethyleneAssumedPlan =Actual=>No VariancesEthyleneButene-1Butene-1PolyethylenePolyethylene
28 Transfer prices in PCA PCA Profit Center 1 Profit Center 2 120 FI/CO ProductionMaterialorder120FI/COYou can define transfer prices (markup) for goods movements between profit centers. The markup will be added to the material price stored in Profit Center Valuation View.Parallelvalue flowsLogisticsQuantity flow
30 Profit Center Planning Objectives Plan IntegrationPlanning MethodsPlan Data Transfer
31 Plan Integration MS Excel Profit Center Plan Profit Center Plan Sales 100,000Discounts5,000Cost of Sales50,000Marketing Expenses10,000Admin. Expenses15,000Number of Sales Orders ,000….Profit center planning is a part of short-term corporate planning and thus encompasses as span of one fiscal year. Short-term corporate planning generally consists of the following partial plans:Sales planMaster production scheduleCost planSales revenue planSales Plan: The starting point for short-term planning is the sales plan, in which you determine the quantities you expect to sell during the planning period. The sales plan is usually created by the sales department. The planned sales quantities are then passed on to production planning so that the planned capacities and activities can be coordinated.Cost Plan (Cost Center Plan) Once the activity units have been planned, it is necessary to plan the costs expected for these activities.Sales and Profit Plan: The planned costs and sales quantities can then be used to derived planned contribution margins. The costs from cost center planning and the planned sales quantities (valuated based on the expected revenue) are used in sales revenue planning.InternalCostProduction OrderOrderCenter
32 Planning methods in PCA Copy existing dataExcel-UploadPlan data transferManual entryNew PlanPlanAllocationsThe planning process is not a one-time activity, but rather an iterative process, which is usually performed in several steps. You need to pay special attention to the sequence in which the planning activities are carried out, and which planning areas need to be coordinated with one another.The overall planning process therefore needs to be supported by a number of different planning methods. Profit center planning offers you the following methods of planning:Copying existing plan or actual data to a planPosting plan data simultaneously (online) by transaction from other applicationsManual planning of profit centersAssessment and distribution of data between profit centers (separate cycles per company code)Execution of various plan reports for comparison of different plan versions.Final Plan
33 line Plan Data Transfer Plan Profit CenterCost CenterOn-line Plan Data TransferRevenue 100,000AND/ORMarketing 50,000Internal/Subsequent PostingsAdmin ,000CO Production Order….….It is possible to transfer plan data real-time from cost centers and internal orders to Profit Center Accounting for each activity. The system reflects every planning activity in Profit Center Accounting. This lets you observe the progress of your profit center plan. If you do not transfer plan data for CO objects to Profit Center Accounting online, you can post this data en bloc, for single objects or for a single plan version and fiscal year .Planned overhead (planned primary costs, results analysis, distribution, planned secondary costs, assessment, and so on) is posted to profit centers via the assignment of cost centers and internal orders.Production costs are planned on CO production orders (order type CP03) on the product level of detail. If there is no average data per year you have to plan these costs on separate orders per period. This process was prepared for planning such costs not directly on Profit Centers to avoid manual data entry. Since CO production orders are not plan integrated you should post them to plan subsequently.
35 Actual Values Overview Flow of Actual values in Profit Center AccountingOverviewFlow from Profit and Loss accountsFlow from materials managementFlow from sales and distributionFlow from Balance Sheet items – Period end closingFlow from Asset ManagementTransfer of Material StockTransfer of Work In ProcessFlow from Accounts payable and receivableFlow from controlling – Period end closingFlow from Overhead Cost ManagementProfit Center Document EntryAssessment & Distribution
36 Actual Values Overview Flow of Actual Values in Profit Center AccountingOverview
37 Overview of Value Flow in PCA EC-PCAProfit Center AccountingVVAALLUUEEEFICO-OMPrimary CostsCO-PAFFLLOOWWCO-PCWhich data is transferred to Profit Center Accounting?All postings affecting revenue and cost elementsP&L postings directly coded to a profit centerP&L accounts maintained with automatic account assignment in PCA customizingBalance Sheet accounts maintained with automatic account assignment in PCA customizingP&L accounts related to transactions in LogisticsThe data is posted to other objects and passed on from there to a profit center in Profit Center Accounting. This makes it possible to display your company’s results by profit center based on the original postings and with no additional work.Actual data is reflected in Profit Center Accounting from the account assignment objects for both postings in Financial Accounting (revenues, primary costs) and allocations in cost accounting. In addition, you can reflect changes in stock from Materials Management (MM) and changes to work in process from production orders, as well as revenues directly from Sales and Distribution (SD) in Profit Center Accounting.GoodsProcurementProductionMovementSales/BillingMMPPMMSD
38 Actual Values Overview Flow of Actual Values in Profit Center AccountingFlow from Profit and Loss accountsFlow from materials managementFlow from sales and distribution
39 Determination of Profit Centers in P&L Source TransactionBilling DocumentBilling DocumentMaterial/Plantof SalesOrderSubstitutionInvoice ReceiptInvoice ReceiptMaterial/Plantof PurchaseOrderGoods MovementGoods MovementMaterial/PlantWhen you post data directly in Financial Accounting, all primary cost elements require an additional assignment to a CO object. The assignment of this CO object (cost center, order, and so on) to a profit center ensures that the data is passed on to Profit Center Accounting.It is necessary to assign SD sales orders (items) to profit centers in order to reflect sales revenues and sales deductions. The profit center is derived from material master and afterwards can be changed manually.All the goods movements between profit centers are created in Materials Management and, where necessary, reflected from a profit center point of view via a special account determination.When you post a purchase order, the system posts the goods usage immediately upon goods receipt if the purchase order has an account assignment.At invoice receipt, if the amount on the invoice is different from the standard price of the material purchased, price differences arise when you post the invoice receipt. This difference is also reflected in Profit Center Accounting.Direct Posting fromDirect Posting fromFIFIIndirect/ManualAssignmentOtherOtherP&L AccountsP&L AccountsCustomized AutomaticAccountAssignment
40 Flow from materials management (1) Material Expense400000EC-PCA500Material Expense400000FI500CO-PCRaw MaterialsMaterial Expense 500500The above example shows the processing of a production order, where materials are issued to a production order (consumption). The material document also results in a posting in Profit Center accounting for the material expense. The profit center will be determined based on the materials produced.
41 Flow from materials management (2) Production OutputM. ExpenseEC-PCA450500Finished ProductsFI450CO-PCProduction OutputProduction Output-450450The above example shows the processing of a delivery from a production order to inventory. The transaction credits the product order expense, and debits factory output. Both transactions are reflected in Profit Center Accounting. Balance on hand for the material delivered to stock will be debited. Any resulting variances are typically charged to a price difference account, another posting which would then be reflected in profit center accounting during order settlement.
42 Flow from sales and distribution (1) Inventory- Finished Product (FG)119430EC-PCAStock6,Cost of Goods Sold462002Change StockFI6,028.50The assignment of a sales order to a profit center is passed from the sales order to the delivery note and then on to the billing document.The profit center is assigned at the item level of the sales order.The Financial Accounting document and the profit center document are supplied from the original document in SD via the same interface.The change in stock is posted to the profit center upon goods issue (cost of sales). The material price from Profit Center Valuation View in material master will be taken into consideration.
43 Flow from sales and distribution (2) 810000EC-PCA10,000FIReceivables…10,000Sales81000010,000The following data is transferred from bills and debit and credit memos to Profit Center Accounting.RevenuesSales deductions (shipping, discounts, and so on)Accruals (e.g. from rebate agreements)
44 Actual Values Overview Flow of Actual Values in Profit Center AccountingFlow from Balance Sheet items – Period end closingFlow from Asset ManagementTransfer of Material StockTransfer of Work In ProcessFlow from Accounts payable and receivable
45 Determination of Profit Center for B/Sheet The system determines the profit center to which balance sheet accounts are assigned as follows :Receivables are divided according to the corresponding revenue line items and assigned to the profit centers. Payables are posted to the profit center of the material ordered for purchases orders to stock, and to that of the account assignment for purchase orders to account assignment objects.The assignment of material stocks and assets is based on the assignment made in the master record of a material.Because postings for down payments do not reference an invoice, it is not possible to automatically assign the down payment to profit centers. However, you can assign them manually.
46 Flow from Asset management Online Transfer: Assets are assigned to profit centers indirectly via their assignment to an internal order or cost center.
47 Flow of value in AP and AR Before you can transfer payables and receivables, you first need to calculate the payables and receivables to be split in Financial Accounting. In this step, the payables and receivables are broken down according to profit center based on sales order line item assignments.Within PCA you can transfer the data to Profit Center Accounting. Select the desired company codes and choose the periods you want to transfer. The payables and receivables are posted to Profit Center Accounting in the reconciliation accounts in the general ledger. No Financial Accounting documents are created in the process.If you choose line items, the system creates a line item for each customer and vendor in Profit Center Accounting.
48 Actual Values Overview Flow of Actual Values in Profit Center AccountingFlow from controlling – Period end closingFlow from Overhead Cost ManagementProfit Center Document EntryAssessment & Distribution
49 Transfer from Controlling (1) All primary postings to account assignment objects in Controlling are posted to profit centers using the same cost element.For allocations in cost accounting (distribution, assessment, cost allocation, transfers, order settlement, calculation of overhead), the following records are updated in Profit Center Accounting:The profit center of the crediting account assignment object is “credited” using the same cost element, and the profit center of the object to be debited is used as the partner profit center.In addition, the profit center of the “receiver” is debited using the same cost element, and the profit center of the sender is used as the partner profit center.
50 Transfer from Controlling (2) All the secondary transfers between CO objects are selected and represented in the assigned profit centers.You can represent the data in Profit Center Accounting by reflecting the original document directly.The exchange of services between profit centers is represented as internal cost allocations in CO. If elimination of internal business volume is active, as in A Group, Profit Center Accounting only reflects those services which are provided by one profit center for another one or between different controlling object type (e.g. cost center and internal order)
51 AssessmentIn case you cannot assign the final cost centers or materials to one profit center, you can collect the data in an allocation Profit center and then assess it in Profit Center Accounting.We only assess postings to P&L accounts since for allocation of Balance Sheet accounts we use distribution.When you define assessment (XXGA1A - Assess Other PC to Product PCs), you collect all the sender-receiver relationships in segments. You then store these segments in different cycles, which are stored with a time reference.Note that for technical reasons, a cycle is always defined for one company code. You can create more than one cycle for a company code if allocation or performance aspects make this necessary. The cycles will be processed in sequence.
53 Information System Overview ProfitCenterReportList-Interactive ReportingorientedReportsInformation System in the Profit Center Accounting can be classified into 3 groups:Drilldown reports (Interactive Reports)Report Painter reports (and Report Writer reports)Line item reportLine ItemReports
54 Report Output Types List – Oriented Reports Variable output areas Navigation tree / drag & dropCumulative display functionalityInteractive ReportingInterface Report-to-ReportPrinting optionsIntegration with MS OfficeList – Oriented ReportsThe standard report tree delivered with the system encompass a number of Report Painter reports. These are provided in so-called report groups. A report group usually consists of two reports of one type (such as plan/actual comparison). One report displays the data with elimination of intercompany sales (IOC) between profit centers, the other without. When you display these reports, you can switch between the two versions.