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profit centre, cost centre

Former Member
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hi all

pls tell what is the role of profit centre and cost centre in MM module

thanks

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Former Member
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<b>Profit Center</b>

For cost accounting purposes, a fixed asset can either be assigned to a cost center or to an order.

Both CO objects are assigned to a company code, a business area, and a profit center when business

area balance sheets or profit center accounting are activated.

n When procurement and manufacturing costs are posted to the fixed asset, the business area and the

profit center are then derived from the cost center or the order. The periodic depreciations are also

posted to the business area or the profit center.

<b>Cost Center</b>

Each asset belongs to a company code and business area. All postings made for the asset

(acquisitions, retirements, depreciation, etc.) are applied in the assigned company code and business

area.

n Additionally, you can assign the asset to various CO objects (cost center, internal order, activity

type) and logistic organizational units (for selection purposes only).

During document entry, different fields are displayed depending on the transaction and the accounts

used. For example, when posting expenses, a cost center and tax information is usually required.

However, when posting cash, this same information is not necessary. These different displays during

document processing are controlled by field status

For each category of general ledger account, e.g., cash accounts, expense accounts, you need to

determine the status of every document entry field. Will text be required, suppressed or optional

for document entry when using these GL accounts? Will cost center be required, suppressed or

optional for document entry when using these GL accounts? Etc. etc.

For cost accounting purposes, a fixed asset can either be assigned to a cost center or to an order.

Both CO objects are assigned to a company code, a business area, and a profit center when business

area balance sheets or profit center accounting are activated.

n When procurement and manufacturing costs are posted to the fixed asset, the business area and the

profit center are then derived from the cost center or the order. The periodic depreciations are also

posted to the business area or the profit center.

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Regards

Sanjay l