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 PF2 & WP2. It is also used in the assessment cycles of some cost centers in PF2 and in the reporting IMEP.
• ZRCS-FC is used in assessment cycles in PF2 & WP2 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 WP2 & PF2. For instance if you do a change in the hierarchy in WP2, you have to do it in PF2 (or vice versa). 
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 WP2 (no new exceptions are accepted without prior validation by a costing 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