Controlling Area (Part - I )

Definition
A Controlling Area is an organization unit used for Cost accounting purpose. A controlling area can be assigned to multiple company codes at the same time.

Controlling Area is a very important organization unit in SAP Controlling. This organization unit contains the most important configurations required for whole controlling module.

Use
Controlling Area receives primary costs from other modules like Finance, Sales & Distribution, Material Management, Production Planning, Project Systems etc. Controlling Area has its own processing of values, which is done using Cost Elements. These costs are broadly known as Secondary Costs.


Implementation Consideration
IMG Path: Controlling > Controlling > Organization > Maintain Controlling Area > Maintain Controlling Area

Here we can create a new Controlling Area.

Upon creation of Controlling Area, following assignments/settings are to be done for the same

Name
Enter the appropriate name for the Controlling Area.

Person Responsible
Here we can assign the User ID of the person responsible for this Controlling Area.

CoCd -> CO Area (Allocation Indicator)


Here we specify whether 

• The controlling area will be assigned to multiple company codes
  
• The controlling area will be assigned to single company codes. In this case, the code of Company Code and Controlling Area has to be the same. For e.g. Company Code 1000 and Controlling Area 1000.
  

Currency Type
The controlling area currency type determines which currency is allowed as controlling area currency and whether the CO area currency can differ from the currency of the assigned company codes.

The assignment control indicator, together with the currency type, determines the controlling area currency and whether to activate or deactivate the Other company code currency indicator. The following settings are possible:

You can select currency type 10 only if all company codes assigned to the controlling area use the same currency.

 If you select 1 as the assignment control, the system uses the default setting 10 as the currency type.

Currency
Enter the currency. If the allocation control indicator is set to 1, the SAP system makes an entry in the field automatically. If the indicator is set to 2, you must make an entry in the field yourself.

Chart of Accounts
Enter the Chart of Accounts here, note that the Company Code(s) assigned must use same Chart of Account as assigned here.

Fiscal Year Variant
Enter the Fiscal Year Variant here, note that the Company Code(s) assigned must use same Fiscal Year Variant as assigned here.

Cost Centre Standard Hierarchy
Enter the Hierarchy here.


Tags#
Activation of Components in Controlling Area, Assign COA & Fiscal year Variant to Controlling Area, Assignment of Company Code to Controlling Area, SAP Controlling Area, 

Part II