Concept of Assessment Cycle in SAP S/4HANA

Concept of Assessment Cycle in SAP S/4HANA.

In SAP S/4HANA Controlling (CO), the Assessment Cycle is a powerful allocation method used to distribute costs from one cost center (or other sender object) to one or more receiver objects based on specific rules or statistical key figures. This helps in better cost transparency, reporting, and internal accounting.

What is an Assessment in SAP CO?

An Assessment is used to allocate primary and secondary costs from one or more senders (like cost centers, internal orders, or business processes) to one or more receivers (like cost centers or profitability segments).

The key feature of assessment is that it aggregates the costs and transfers them in lump sum, meaning you lose the original cost element detail in the receiver. The receiver will see the costs under a secondary cost element (typically of type 42).

Key Features of an Assessment Cycle

• Uses a secondary cost element for allocation.
• Sends costs based on fixed percentages, statistical key figures, or equivalence numbers.
• Maintains sender/receiver traceability through documents.
• Commonly used for period-end closing activities.

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Basic Components of an Assessment Cycle

1. Cycle Name – The identifier for the cycle (e.g., ZAST001).
2. Segments – Each cycle can have multiple segments, defining different sender/receiver relationships.
3. Sender Rules – Define what cost centers or cost elements to use as sender.
4. Receiver Rules – Define the distribution basis (e.g., statistical key figure like number of employees).
5. Receiver Tracing Factor – Defines how the costs are split among receivers.

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Example Scenario: Allocate Admin Costs to Production Departments

Business Context

A company has an administration cost center (ADM1000) that incurs general expenses (e.g., rent, salaries, IT services). These costs need to be fairly distributed to production cost centers (PROD1000 and PROD2000) based on the number of employees in each department.

Step-by-Step Setup:

1. Create a Statistical Key Figure

Create a SKF like NUM_EMP (Number of Employees) and plan values:

• PROD1000 = 60
• PROD2000 = 40

2. Create Secondary Cost Element

Create a secondary cost element of type 42 (e.g., 920000) for assessment cycle.

3. Define the Assessment Cycle

Transaction Code: KSU1 (Create Cycle)

• Cycle Name: ZAST_EMP
• Sender: ADM1000
• Cost Elements: All relevant cost elements
• Receiver: PROD1000 and PROD2000
• Tracing Factor: NUM_EMP (60:40 ratio)

4. Execute the Cycle

Transaction Code: KSU5 (Execute Actual Assessment)

This will allocate the costs from ADM1000 to the production cost centers proportionally.

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Output Example

Let’s say ADM1000 has a total of $10,000 costs in the current month.

After running the cycle:

• PROD1000 receives $6,000 (60%)
• PROD2000 receives $4,000 (40%)

Each will receive the cost under secondary cost element 920000, while ADM1000’s balance reduces accordingly.

SAP FICO Configuration topics:

• SAP Finance Enterprise structure: Click here
• SAP Finance GL Accounting: Click here
• SAP Finance Accounts Payable: Click here
• SAP Finance Accounts Receivable: Click here
• SAP Finance Bank Accounting: Click here
• SAP Finance New Asset Accounting: Click here
• How to Create a Controlling area in SAP: Click here
• SAP Controlling – Cost Element Accounting: Click here
• SAP Controlling – Cost Center Accounting: Click here

Concept of Assessment Cycle in SAP S/4HANA