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Primary And Secondary Cost Elements

Primary Cost Elements / Revenue Elements:

When creating a primary cost element or revenue element, it must be listed first as a G/L account in the chart of accounts and defined as an account in Financial Accounting. In other words, primary cost elements and revenue cost elements require counterparts in FI. When you create a primary cost/revenue element, the SAP System checks whether a corresponding account exists in FI.
Secondary Cost Elements:

Secondary cost elements are used exclusively in Controlling (CO) and need not be defined in FI. It can be used for internal allocation purpose.

Integration with FI (Financial Accounting): 

Cost Elements track the type of costs or spend. They form categories of costs that are independent from external or financial reporting requirements, but help management to track costs according to internal accounting policies. The primary Cost Elements are more or less mirror images (copies) of P&L revenue and expense accounts from the financial chart of accounts. The integrated mass processing moves (and allocates) costs from primary into secondary Cost Elements. Those secondary Cost Elements no longer are tied to the accounts used by financial and tax reporting (chart of accounts).

Adapted from Gemeinkosten-Controlling mit SAP  by Uwe Brück and Alfons Raps © 2004, 2008


  1. Unknown User (lsp4hg2)

    I'm hoping that I might get a bit more explanation on the meaning/usage of these - especially when dealing with creation of activity types.   If all actual and planned costs are being consolidated at the project level, and then settled to a primary cost object (WBS in Project Systems) - what are the impacts of establishing these secondary recievers?

  2. Unknown User (h87ig6b)

    Hi, it is better if you give us more explanation of the P&L account which are not created as primary Cost Elements such as Cost of Good Sold.

    Best Regards