Primary Cost elements are cost carriers from Financial Accounting (FI) to Controlling (CO) module and created to compare the G/L accounts of profit loss statements. A Primary Cost element is used to transfer cost from Financial Accounting (FI) to Controlling (CO) Module.

Each Financial Accounting (FI) general ledger account in profit and loss statement are created as primary Cost element in Controlling (CO). Every cost related transaction from Financial Accounting (FI) will be carried over to Controlling (CO) by Primary Cost element only. A Primary cost element can be directly posted.

Primary cost element is linked to a G/L account and must be created in the FI Chart of Accounts first. Primary Cost elements sub divided into below categories: -

  • 1: Primary Costs
  • 11: Revenue
  • 12: Sales Deduction
  • 22: Settlement
  • 3: Accrual/Deferral per Surcharge
  • 4: Accrual/Deferral per Debit=actual

Primary Cost element can be created in two ways –

  1. Manual using KA01 Transaction.
  2. Automatically by the system when each profit and loss General Ledger account created in SAP Financial Accounting (FI).

Manual Primary Cost Element creation requires G/L account should be created first.

Manual G/L Account Creation -

Below process is to create G/L account 79797979 without template.

Step-1: Enter the transaction code FS00 in the SAP command field and click Enter to continue.

Primary Cost Elements

(OR)

Click on SAP Menu ->Accounting -> Financial Accounting -> General Ledger -> Master Records -> G/L Accounts -> Individual Processing -> FS00 - Centrally.

Primary Cost Elements

Step-2: Enter the below details and click on create icon.

  • G/L Account.
  • Company Code
Primary Cost Elements

If needs to create G/L account with a template, use With Template button.

Step-3: Enter the below details in Type/Description tab.

  • Account Group -- Specify the account group from the list.
  • select either the P&L Statement Acct or the Balance Sheet Account radio button based on the G/L Account.
  • Short description in short text field for the new GL account.
  • G/L Acct Long Text field
  • Specify the Trading Partner company code.
  • Specify the Group Account Number G/L account
Primary Cost Elements

Step-4: Click on Create/Bank/Interest tab and enter Field Status Group.

Primary Cost Elements

Step-5: Once all the details entered, click on Save button to save the details.

Primary Cost Elements

Step-6: Status bar displays the below message once the General Ledger Account created successfully.

Primary Cost Elements

Manual Primary Cost Element Creation -

Below process explains creating a Primary Cost Element by using the manually created P&L G/L Account 79797979.

Step-7: Click on Edit Cost Element to create primary Cost Element.

Primary Cost Elements

(OR)

Enter the transaction code KA01 in the SAP command field and click Enter to continue.

Primary Cost Elements

Note:

This process requires the G/L Account should already created in FI using FS00.

(OR)

Expand Accounting → Controlling → Cost Center Accounting → Master Data → Cost Element → Individual Processing → KA01 - Create Primary .

Double Click on it to open.

Primary Cost Elements

Note:

This process requires the G/L Account should already created in FI using FS00.

Step-2: - In the next screen, enter the below details and press Enter.

  • Cost Element -- Specify cost element same as G/L account number from FI
  • Valid From -- Specify cost element effective date
Primary Cost Elements

Step-3: - In the next screen, enter the below details and press Enter.

  • Name -- Specify Primary Cost Element name (Same as G/L Account)
  • Description -- Specify Description (Same as G/L Account Description)
  • CElem Category -- Select the primary element category from the list
Primary Cost Elements

Step-4: Click on Save button to save the changes.

Primary Cost Elements

Step-5: Status bar displays the below message once the primary cost element saved successfully.

Primary Cost Elements

Technical details -

  • Transaction: KA01
  • Menu Path: Accounting → Controlling → Cost Center Accounting → Master Data → Cost Element → Individual Processing → KA01 - Create Primary