Apr 22, 20214 min read

SAP CO- Controlling Area Setup

Updated: Feb 7, 2022

Controlling Area

Controlling area in SAP CO module is a central organizational unit under which all the internal reporting takes place. A controlling area may contain one or more company codes, which can operate in different currencies, if required. The company codes within a controlling area must all use the same operational chart of accounts. A controlling area may contain one or more company codes, which can operate in different currencies, if required. The company codes within a controlling area must all use the same operational chart of accounts.

The company code and controlling area do not have to exist in a one-to-one relationship. You have the following options for this assignment:

a. The company code can correspond to exactly one controlling area

b. Several company codes can correspond to one controlling area

How to maintain Controlling Area-

Step 1- In SPRO mode, enter T code 'OX06' or follow the following path.

You get the following screen..

Step 2- Click on "Maintain Controlling Area" >> You get the following screen

Click on New Entries for creating a new Controlling Area. You get the following.

Enter the data in respective fields:-

a. Controlling Area- You can define it with a four digit alphanumeric number.

b. Name - Enter a description to describe it.

c. Person Responsible- If you want any specific person to be responsible then assign it here.

d. COArea=CCode -This field will define the company code relationship with the controlling area. If you want one to one relationship then (i.e. one CO area for one company code) you must select the first option i.e. “CO area same as company code”.

Or If you have decided for one to many relationship (i.e. more than one company code to be assigned to one controlling area) then the second option need to be selected i.e. “cross-company cost accounting”

e. Currency type & currency- We have following options to choose .

10 Company code currency- If you choose currency as 10 then the company code currency and controlling area currency will be same.

20 CO area currency- If you have chosen currency type as 20, then the controlling area currency will be different from the company code currency and that needs to be assigned in the next field “Currency”.

30 Group currency - If you chose group currency as your controlling area currency then you need to define it and then assign the currency in the currency filed after selecting the type of currency here. Group currency is assigned to reconcile controlling area ledgers with the financial accounting.

40 Hard currency

50 Index-based currency - Currency 50 is used where the country has a high inflation.

60 Global company currency - Currency 60 is used where you have global companies.

f. Chart Of Accounts- All company codes assigned under one controlling area must use one operating chart of accounts. If you plan to use company code with different operating chart of accounts then it won't work. You need to create separate controlling area on the basis of operating chart of accounts used.

g. Fiscal Year Variant- You can assign any fiscal year variant to your controlling area but the fiscal year variant must be the same for all company codes assigned to the controlling area.

Click on Save , Hence Controlling Area has been created.

Assigning Company code to Controlling Area

After Controlling Area is created successfully, company code must be assigned to Controlling Area. The Company codes should have the same Fiscal Year Variant and Chart Of Accounts which are used while creating Controlling Area.

The company code and controlling area organizational units can be combined in a number of ways. Using these combinations you can represent organizations with different structures.

a. One Controlling Area is Assigned to One Company Code- In this example , the Financial Accounting and Cost Accounting views of the organization are identical.

b. Multiple Company Codes Assigned to One Controlling Area- This is an example of Cross-Company Code Cost Accounting . It depends on the input selection for CoCd->CO Area entry while creating Controlling Area.

Here, Cost accounting is carried out in multiple company codes in one controlling area. All cost-accounting relevant data is collected in one controlling area and can be used for allocations and evaluations. In this case, the external and internal accounting perspectives differ from each other. Eg -This method can be used if the organization contains a number of independent subsidiaries using global managerial accounting. Cross-company code cost accounting gives you the advantage of using internal allocations across company code boundaries.

Enter T code 'OX19' or follow the below path

You get the following screen.

Now Double Click on "Assignment of company code(s)"> & then click on New Entriesyou get the following screen.

Enter the Company Code in the required field. Click on Save button to save changes. Company code has been assigned to Controlling Area.

Maintain Number Ranges for Controlling Documents

Step 1- Enter T code "KANK" or follow the below path.

Step 2- Enter the Controlling Area code , and click on Copy option. It asks you the destination Controlling Area code, i.e. to which number ranges have to be copied. You get the following screen.

Step 3- A number range interview transport window displays, and ignore the warning the message, press enter to continue.

A message pops up as copying is successful.

Step 4- You can check the copied number ranges for controlling documents by entering the CO area and click on display "Intervals" option. You get the following screen.