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Account Type of "Non-operating Expense or Income"

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Dear

The account type of the following account codes is "Non-operating Expense or Income",

And these account code don't have cost element.

These accounts codes is cost of sales goods, so I think these accounts codes need cost element.

Why are account type of these accounts "Non-operating Expense or Income"?

And what kind of journal entries will be created automatically? 

Account Code Text

50200000 COGS Trade

51900000 Consptn Subct.w/o CE

54040000 Inv Chg Reserve

54070000 Inv Chg Rcpt w/o PO

Best Regards

Hirose

Accepted Solutions (1)

Accepted Solutions (1)

Lucian
Product and Topic Expert
Product and Topic Expert
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Hi Hirose,

please check the general help page for chart of accounts in S4 HANA Public Cloud:

Chart of Accounts Maintenance: Overview

Details and examples are provided for each account.

Also, the Best Practice Explorer content can help,see SAP Best Practices for SAP S/4HANA Cloud‎

Please review documents

Account determination global:

https://rapid.sap.com/bp/assetsdownload/?publishedUrl=https%3A%2F%2Fsupport.sap.com%2Fcontent%2Fdam%...

and

Account determination local:

https://rapid.sap.com/bp/assetsdownload/?publishedUrl=https%3A%2F%2Fsupport.sap.com%2Fcontent%2Fdam%...

All these accounts are used in different scenarios, and you need to check and find if they are needed/activated in your system or not.

Regards,

Lucian

joshua_utazi
Explorer
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the first link is not opening, do you know why?

Lucian
Product and Topic Expert
Product and Topic Expert
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Hi Utazi,

Thanks for the notification.

The broken link was updated

Regards,

Lucian

Answers (2)

Answers (2)

former_member613804
Participant
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Hi yasutohirose

You are right. Account type "non operative expense"is for P&L accounts for which controlling integration is not required.

Operating activities are all the things a company does to bring its products and services to market on an ongoing basis. Non-operating activities are one-time events that may affect revenues, expenses or cash flow but fall outside of the company's routine, core business.

Any P&L GL Account, not of operating in nature (as per above definition) shall not be created as a cost element.

Hope this clears a bit..!

Thanks & Regards,

joanzhu
Explorer
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Hi Satyanarayana,

I just wonder that even for "non operating expense/income" (as per your above definition), we need to assign the cost center so that these expenses/income can be managed in controlling or be allocated.

I still cannot understand why "non operating expense/income" cannot have cost elements.

What is the design concept of this account type "non operating expense/income"?

Looking forward to your reply. Thanks and best regards.

Ying

former_member613804
Participant

Hi @Ying Zhu,

Surprised to see a comment after 2 years of the post, He hey...

First of all, let me correct your comment. It is not "Cannot have cost element". It is "need not have cost element". which means, it is not a rule, its an option available. If we feel that a cost or expense need to be posted to a department and thereby be part of apportions or redistributions and thereby be part of product profitability analysis, we bring it to CO module through Cost element in SAP. Otherwise, you can choose Non-operating category.

As discussed in previous comment, a non-operating expense is a business expense which is not essential or not related to core operations.

For example,

The company Sold Air conditioner and got some income out of this transaction. So, below could be points of consideration.

1. Selling of Air conditioner is not part of business operations and hence to be categorized as non-operating activity.

2. This non-operating income shall not be treated as "Income from business" and hence shall not be part of "product profitability analysis"

3. Usually we capture expense from GL to CO through cost element, and then be part of allocations or reposting's to another dept. etc., and finally be allocated to the product. But here, this is no way connected to the product and hence we need not consider this portion to product profitability.

4. Beyond the product profitability, when we analyze the financials of the business as a whole; then we take this in to consideration in FI or probably be part of COPA.

Hope this helps.

Thanks & Regards,

former_member132363
Active Contributor
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Here are some SAP resources you may review based on your topic "tcode,cost,trade,journal entries,account type,tcodes,sales"

SAP Globalization Services

Learn how a Ports and Logistics Company keeps Global Trade Afloat During the ... customs, and conditions of all your markets; Take into account diverse legal?...

https://support.sap.com/en/product/globalization.html