Cost elements : 

Are required for accounting cost objects. They identify the cost type / expenses / revenues occurred in a cost object. Are common for all CA once the description is at the chart of account level.

• Primary cost elements : are a mirror image of the results accounts (chart of accounts). Every account in FI is mandatory in CO.
• Statutory accounts ( initial number 8 ) do not have cost elements assigned.
• Secondary cost elements : are used only in CO in order to identify cost transfer between cost objects in the same CA. They have specific codification for assessment cycles of cost centers, activity types, etc

There are different types of category defined in the primary cost elements :

• Category 01 : the account can use a cost element or a profitability segment
  • The sign used in the account in FI is the same used in CO-PA
• Category 11 : the account must use a profitability segment
  • The sign used in the account in FI is inversed in CO-PA (KE24)
  • The report re-inverse the sign in the line (KE30)
  • We cannot mix the 2 categories in the same CO-PA value field
  • Be careful in the assessment cycles from cc to CO-PA (rules need to be followed)
• Category 22 : external settlement > used in the primary cost elements defined as a counter part of a cost object settlement to a balance account (ex: wbs UAC in Europe )

There are 3 different types of category defined in the secondary cost elements :

• Category 21 : internal settlement > used in the cost elements of PM orders settlement (ex: 99210030 services)
• Category 42 : assessment > used in the assessment cycles of cost centers (ex: 99423100 Dep Shared services)
• Category 43 : internal activity allocation > assigned to the activity types. Every one could represents a fix cost or a variable cost , never mixed cost. (ex: 99430020 direct labor)