Hello
The profit and loss statement of an organization can be created according to two different procedures:
· Period accounting
· Cost of sales accounting
Cost of sales accounting compares the sales revenue for a given accounting period with the manufacturing costs of the deducted activity. The expenses are allocated to the commercial functional areas (production, sales and distribution, administration, and so on). Expenses and revenues that cannot be assigned to the functional areas are reported in further profit and loss items, sorted according to expense and revenue type.
With this type of grouping, cost of sales accounting identifies where costs originate in a company. It identifies the economic reason for a particular expense.
Activating Cost of Sales Accounting
Purpose
You can activate cost of sales accounting in your system.
Process flow
To do this, you need to make various settings. You make these settings in Customizing, under Financial Accounting ® Financial Accounting Global Settings ® Company Code ® Cost of Sales Accounting.
...
1. Define your functional areas. To do this, choose Define Functional Area.
2. Activate cost of sales accounting for preparation.To do this, choose Activate Cost of Sales Accounting for Preparation.
The functional area field in the master data of the objects is ready for input.
The functional area is not yet derived for postings.
3. Enter the functional area in the master data of the desired objects.
For more information, see Functional Area in Master Data.
4. In addition, you can define a substitution for derivation of the functional area. To do this, select the activities under Setting up Substitution for Cost of Sales Accounting.
You should only define a substitution if you have additional requirements for the derivation of the functional area. Check beforehand whether if would suffice to enter the functional area in the master data of the objects.
5. Define a ledger for cost of sales accounting. To do this, choose Set up Ledger for Cost of Sales Accounting.
6. Activate cost of sales accounting for your company codes. To do this, choose Activate Cost of Sales Accounting.
Deriving the Functional Area
Use
In order that expenses can be sorted according to corporate functions, the system derives the functional area for the following postings.
● Primary postings (postings in Financial Accounting) to a profit and loss account
● Secondary postings (allocations in Controlling)
The functional area is derived for both objects involved in the allocation.
No functional area is derived in the following cases:
● Postings to balance sheet accounts
● When creating statistical key figures in Controlling
The system derives the functional area after saving. The derived functional area is thus first available in the document created and not on the entry screen.
Prerequisites
In order that the functional area can be derived when a posting is carried out, cost of sales accounting has to be active for the company code in which the posting is carried out.
Features
The system derives the functional area according to the following logic:
...
1. The system derives the functional area from the master data of the assigned objects.
If an object is assigned during a posting, the system checks whether a functional area has been entered in the master record of the object. The system retains this functional area. However, it may be overwritten by subsequent checks.
2. The system derives the functional area from the master record of the G/L account or the cost element.
The system checks whether a functional area is entered in the master record of the cost element or the P&L account. This functional area overwrites the functional area derived from the assigned object.
3. The system derives the functional area via substitution for the component Financial Accounting, Event 0005. If a functional area has already been defined, this is overwritten with the functional area obtained via substitution.
Definition of a substitution is necessary:
○ Where you are not able to enter a functional area in the master data of an object, for example business process or real estate objects.
○ When you want to specify exceptions where derivation from the object should not occur.
You can create a profit and loss statement with cost of sales accounting. The profit and loss statement is organized according to your functional areas
To distinguish general administration costs from sales costs or R&D costs, it is not necessary to post on separate G/L accounts. The costs from all areas can be posted on the same G/L account but must be distinguished by entering the responsible functional area in the posting document.
Both postings were made on the same G/L account. When creating the Profit and Loss statement, the expenses of the sales area can be distinguished from the expenses of the administration by reading the functional area.
The field functional area must be made ready for posting in the field status variant used for the postings on expense accounts. The functional areas are created by choosing Enterprise Structure ® Maintain Structure ® Definition ® Financial Accounting ®Maintain Functional Area.
The functional area can be entered manually in the document or deducted automatically from the cost center. Substitution rules can be created to deduct the functional areas from the cost center type or any other specification entered in the document line. Choose menu path Financial Accounting ® Financial Accounting Global Settings ® Company Code ® Prepare cost of sales accounting.
Reg
*Assign points if useful
You must be a registered user to add a comment. If you've already registered, sign in. Otherwise, register and sign in.