Controlling Area in SAP
ADHARSH K S
Sep 23, 2023
3 min read
Updated: Oct 3, 2024
Controlling is a module in SAP that helps Planning, Managing, Analyzing and Reporting related to Costs
and profits. It is used for Internal Reporting purpose and for management's decision making purposes.
In 'General Controlling' under CO :- Configure Organization Structure of Controlling which includes to
maintain CO Area and define ledger for CO version.
Path: SPRO > IMG > Controlling > General Controlling> Organization
In IMG Screen:
Controlling Area in SAP
Controlling Area:
⦁ A Controlling Area(CO Area) is the highest organizational level used for Cost accounting purpose. It is
used for management of Costs and profits.
⦁ Multiple Company Codes can be assigned to Same Controlling Area with multiple Currency but using
Same Operative Chart of Accounts.
⦁ All the companies using the same controlling area should use the same Chart Of Account and Fiscal
Year Variant.
⦁ The Controlling Area is a fundamental element in SAP CO and is closely integrated with SAP FI.
⦁ You cannot remove Company code already assigned to Controlling Area, if already created master data
in it.
To Maintain CO Area (Using T-Code OKKP ) :
Path: SPRO > IMG > Controlling > General Controlling> Organization>Maintain Controlling Area.
Controlling Area in SAP
STEP 1: Select New Entries or Copy CO Area
Either Create New CO Area by Selecting 'New Entries' tab
or Copy from Standard CO Area "0001" provided by SAP by selecting 'Copy As..'
Controlling Area in SAP
STEP 2: To create CO Area first fill all the mandatory* Basic fields.
Controlling Area in SAP
1. Controlling Area : Select your Company Code
Here, CO Area = Company Code which Uniquely identifies CO Area and also provide a Name for your
Controlling Area.
2. CoCd>CO Area : If you choose -
Controlling Area same as Company Code: which mean only one company code to a Controlling Area.
Cross-Company Code-Cost Accounting: You can assign multiple Company codes (which use the same
Fiscal year variant and same Chart of Accounts) to same CO Area.
3. Currency Type & Currency : The CO Area currency type determines which currency is allowed as CO
Area currency and whether the CO Area currency can differ from the currency of the assigned company
codes. Currency like INR, USD, EUR etc., in Currency Field.
4. CCtr Std. Hierarchy : Cost Center Standard Hierarchy is a structured arrangement of cost center group
and cost centers within an organization.
STEP 3: To Activate Cost Center Accounting(CCA).
Controlling Area in SAP
1. Fiscal Year : A time period (usually 12 months) for which a company is required to provide its physical
inventory count and balance sheet.
2. Cost Center Component Active:
If Component is active: The Cost Centers are validated and can be used as account assignment objects.
If Component is not active : The Cost Centers are not validated and cannot be used as account
assignment objects
STEP 4 : Assignment of Company Codes to CO Area (can also use T-Code OX19 )
In this step you assign the Company Codes for which you want to carry out common cost controlling to a
CO Area.
You may carry out cross-company-code cost accounting only by assigning the company codes to a
controlling area.
Controlling Area in SAP
Define Ledger for CO Version:
CO Version - This enables to record and manage different set of plan data and actual data. When you
create a CO Area, the SAP system automatically creates "version 000" valid for five fiscal years. Actual
primary cost data entry and actual data from internal activity allocation all post to version 000.
To assign G/L ledgers to CO versions - either select New Entries and create new or Copy from Standard
CO Area '0001'.
Controlling Area in SAP
In this activity, you assign G/L ledgers to CO versions. This means that controlling will then read the
Actual data (postings) from the G/L ledgers you specify here.
CO versions must be assigned to Leading ledger (0L) and Save it, not to any extension ledger.
Controlling Area in SAP
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