1. Objective and Scope

1.1. Objective of this Operation

The purpose of this procedure is to explain how to maintain a hierarchy of cost elements in SAP. 

The hierarchies of cost elements are important in

• the costing model: they are used in assessment cycles
• in the reporting: they are used in fixed costs reports & Co$ta

There are 2 core hierarchies to be maintained carefully:

• XCS-ALL is used to split variable / fixed / depreciation cost elements in PF1 & WP1. It is also used in the assessment cycles of some cost centers in PF1 and in the reporting iMEP.
• ZRCS-FC is used in assessment cycles in PF1 & WP1 and in fixed costs reports & Co$ta. From 01 Jan 2022 it is replaced by the hierarchy ZSOLV and ZRCS-FC will not be maintained anymore.

When you change one of these cost elements hierarchies, you must carefully follow the following rules: 

1. A cost element hierarchy needs to be maintained in all controlling areas: CHEF, Z001, Z006, Z013, Z025, Z026, Z028. It means you create or move a subgroup, it has to be done 1 time in PF1 and 6 times in WP1 (to change the controlling area in the prompt of the transaction KAH2 - Change Cost element group, go to the menu "Extras" and choose "Set Controlling Area")
2. All cost elements should be included in the core hierarchies
3. A hierarchy is unique. A cost element can not be included in 2 groups (even if SAP does not prevent you from doing it). There are 10 exceptions in the hierarchy XCS-ALL in WP1 (no new exceptions are accepted without prior validation by an expert)
4. There is a standard number of levels in each core hierarchy, do not create new ones. 
5. All cost elements should be included in the lowest group. 

1.2. Scope

All entities in WP1& PF1

2. Definitions

See Finance Glossary

3. Tasks description

3.1. I update the cost element hierarchy

3.2. I communicate that the cost element hierarchy has been updated