General Information on Actual Settlement in Cost

Object Controlling (CO-PC-OBJ)

https://wiki.scn.sap.com/wiki/pages/viewpage.action?pageId=449282373

 Created by Isabell Berger, last modified by Humberto Ordosgoitia on Jul 18, 2017

 1 Purpose
 2Overview
 31. Transactions for Actual Settlement
 42. Reports for Actual Settlement
 53. Business Transactions for Actual Settlement
 5.1 3.1 Settlement of Actual Costs
 5.23.2 Settlement of Work in Progress
 5.33.3 Settlement of Variances
 5.43.4 Settlement of Cost of Sales/Sales Revenue
 64. Tables updated during Actual Settlement

Purpose
The purpose of this page is to clarify the understanding of the system logic and
requirements concerning Actual Settlement.

Overview
This document contains general information about transaction codes and reports of
actual settlement and the general procedure of actual settlement on business
transaction point of view (actual costs, WIP, variances).

1. Transactions for Actual Settlement

These are the most relevant transactions for the actual settlement of different CO
objects:

Tcode Description

KO88 Individual order settlement (you can process any order category)

KO8G Collective settlement of internal orders

CO88 Settlement of production orders, process orders, product cost collectors

CJ88 Individual project settlement

 Tcode Description

CJ8G Collective project settlement

KK88 Individual settlement of cost objects

KK89 Collective settlement of cost objects

KK87 individual settlement of production cost collectors

VA88 Collective settlement of sales orders

2. Reports for Actual Settlement

You can also call up each collective processing in the background, while in the
transaction. This triggers off a background report, which you start with the SE38
transaction.
From 4.0 there is a background report for each collective settlement: RKO7XXXX
(XXXX= transaction name), e.g. RKO7CO88 for settlement of production orders,
process orders, product cost collectors. SAP provides complete support for the use of
these reports. They provide the same user interface as the online transactions.

3. Business Transactions for Actual Settlement

Settlement has many uses in business that are reflected by the settlement transactions.
For actual settlement transactions, the following business transactions may be relevant:

 Settlement of actual costs

 Settlement of work in progress
 Settlement of variances
 Settlement of cost of sales/sales revenues

Settlement transactions are determined in routine VRGNG_GET.

3.1 Settlement of Actual Costs

The first type of settlement is the classical settlement of actual costs. This is the
settlement of actual costs that were incurred on the sender. These are settled to the
receiver specified in the settlement rule.
KOAO is the business transaction for actual settlement. If it is selected, then the actual
costs of the sender are settled to the receiver specified by the settlement rule. This
means that the debits from the COSS and COSP tables with value type "04" are read.
 3.2 Settlement of Work in Progress
Senders that have a results analysis key and that cannot carry revenues can build up
work in process. For example a production order with 100% FUL rules for settlement to
material, or a WIP element.
The business significance of the WIP calculation and the following settlement is to post
WIP to Financial Accounting and to Profit Center Accounting. Material consumption is
posted during the period to the objects, which means that costs from balance sheet
accounts are posted to P&L accounts. In the SAP System, WIP must be calculated at
the end of the period and is posted with the settlement. If an order has been completed,
that is, finally delivered or technically completed, then the WIP is broken down again,
and the actual costs of the object are settled to the receiver specified by the settlement
rule.
To settle WIP, the following is required:

 The sender has a results analysis key, and WIP has already been calculated
 In Customizing for the results analysis version (transaction OKG9), the "Transfer to
Financial Accounting" indicator must be set.
 In Customizing for results analysis, the posting rules for all results analysis categories
that are relevant to settlement must be stored (transaction OKG8)

Caution: You can only calculate and settle WIP for orders that do not have a revenue
indicator or settlement rule to material if the "WIP on dependent orders" indicator has
been set in the results analysis version (transaction OKG8).
KOAW is the business transaction for settling data of WIP calculation or results
analysis. If this is selected it is read from the COSB table with value type “32”. If the
sender carries revenues, then only this data is interpreted during the actual settlement,
and the COSS and COSP tables are not read.

3.3 Settlement of Variances

Production orders, process orders, product cost collectors and cost objects can
calculate variances and scrap using variance calculation.
The business significance of this is to explain the variances between target and actual
costs on the objects in terms of categories (input quantity variances, input price
variances and so on). The settlement posts these variance categories to different value
fields in CO-PA. When a product is sold, the revenues and the standard costs for the
material are transferred to CO-PA. The variances can now be periodically transferred to
CO-PA using settlement.
The variances for objects that have FUL settlement are only calculated once the object
has been finally delivered or is technically completed. The variances for objects that
have PER settlement are calculated periodically.
When variances are settled, they are settled to costing-based profitability analysis as
variance categories. This type of settlement is not to be confused with settlement of
price differences to FI, which takes place at the same time, but independently of the
variance settlement. There is often confusion with this, as the total of the price
differences is of course the same as that of the variance total. The settlement to FI is a
pure actual cost settlement to material. The settlement to CO-PA is a settlement of the
variance categories (determined in the variance calculation) to the different value fields
in CO-PA.
SAP note 35507 contains the prerequisites for variance settlement.
KOAV is the business transaction for settlement of variances to profitability analysis for
production orders. If this business transaction is selected, then the variance data is
selected from table COSB with value type "31", scrap is "30". The settlement rule for
variances is generated by the system during the first variance settlement.

3.4 Settlement of Cost of Sales/Sales Revenue

Senders that have results analysis keys and revenues (sales orders, billing elements
and orders with revenue indicators) are part of the results analysis, and settle the
resulting data.
The business significance of the results analysis is to smooth costs and revenues
during the periods and to provide correct period results for profitability analysis.
Example: In a customer project, only costs are incurred during the first few periods, and
in the last period, revenue is posted. If you would post the costs and revenues to CO-
PA like they occured, then the initial period result would look very poor, and at the end
very good. The period result does not provide any clues to the success of the period.
Therefore, you use results analysis to try to distribute the costs and revenues over the
runtime of the project, and to post them accordingly, providing a different view of the
costs. It calls the calculated costs "cost of sales", and the calculated revenues "sales
revenue". The costs incurred that are not yet cost of sales are displayed as WIP and
posted to FI.
In this case (even after changing the status to technically completed), settlement does
not post the actual costs, but always the cost of sales, the sales revenue and the
reserves for imminent loss. The corresponding categories cannot be changed by the
user, which makes sure that FI and CO-PA are reconciled (see SAP note 441994).
Results analysis has another special feature: Summarization of costs in hierarchies. For
example, if you have a project in which the top WBS element is a billing element with a
results analysis key, then results analysis summarizes the costs for the whole project on
the top WBS element. This means that the dependent objects do not need to be settled
at all. The settlement of the top WBS element is sufficient to settle the costs of the entire
project (see SAP note 76354).

4. Tables updated during Actual Settlement

 We recommend to analse the CO objects with report RKACSHOW. See documentation
in SAP note 28145.

 AUAK Document Header for Settlement Document*

 COSPD Settled values from COSP (Cost Totals for External Postings)
 COSSD Settled values from COSS (Cost Totals for Internal Postings)
 COSBD Settled values from COSB (Total Variances/Results Analyses)

The system updates all tables during actual settlement if debits exist in the
corresponding tables. A credit line in COSSA/COSPA with BEKNZ (Debit/credit
indicator) = “A” (Special: Sender credit from settlement) is made. COSBA is filled with
WIP data (value type 32) during WIP calculation and filled with variances (value type
32) during variance calculation. To get the WIP values and variances updated in
COSBD one has to execute settlement.
The settlement document consists of more than one table:

 AUAK Document header, which contains global information, such as document

number, sender, settlement period etc.
 AUAA Receiver segment. The AUAA contains the sender and receiver for the
settlement in routine SENDTAB_CHECK and RECEIVER_CHECK
 AUAV settlement transactions used (determined in routine VRGNG_GET)
 AUAS Totals Segment. The AUAS contains the settled values from this settlement
run. The system updates a row for each receiver and original debit totals record. The
KEY01 field contains the database key for this record. The PLFNR field displays the
receiver (= the record from AUAA, whose sequential number is the same as the
PLFNR). If the AUAS-PLFNR field is blank, then the system does not settle to a receiver
(currently only for the WIP transfer to FI).
 AUAW Accounts for the WIP settlement. The AUAW contains the accounts to which
the WIP was settled. One row is updated for each original debit total record in the
COSB table and each account pair. The AUAW table is filled in the
K_SETTLEMENT_CHECK function module according to the posting rules in results
analysis Customizing. When a WIP settlement is reversed, the accounts in the AUAW
table are used, and the account determination is not called up again. This ensures that
the accounts in the reversal are the same as those in the original settlement, should the
posting rules be changed.

*Regarding table AUAK it contains some interesting fields regarding dates:

 BUDAT: Posting date. The settlement document has the last day of the posting
period as posting date.
 CPUDT: Date Document Was Created. This is the date when the actual settlement
was executed.
 WSDAT: Value Date for Currency Translation. This date is the one relevant for the
currency translation, which matches the Posting date.