How To Fix FARR_FOUNDATION840 - Account &1 is not valid; recognized costs account must be a P/L account

SAP Error Message - Details

• Message type: E = Error

• Message class: FARR_FOUNDATION - Revenue Accounting - Foundation

• Message number: 840

• Message text: Account &1 is not valid; recognized costs account must be a P/L account

What causes this issue?

The validation for the recognized costs account failed because the
determined account is not a profit and loss account.

System Response

The system issues an error message and will not allow you to continue with this transaction until the error is resolved.

How to fix this error?

Check the account configuration under
<DS:SIMG.FI_GL_MD_FS00_DC>Edit G/L Account Centrally</>.

Procedure for System Administrators

Error message extract from SAP system. Copyright SAP SE.

Smart SAP Assistant

• What is the cause and solution for SAP error message FARR_FOUNDATION840 - Account &1 is not valid; recognized costs account must be a P/L account ?

  The SAP error message FARR_FOUNDATION840 indicates that the account specified (denoted as &1 in the message) is not valid for the operation you are trying to perform. Specifically, it states that the recognized costs account must be a Profit and Loss (P/L) account. This error typically arises in the context of Asset Accounting (FI-AA) or when dealing with financial transactions that require specific account types.
  Cause:
  
  Account Type Mismatch: The account you are trying to use is not set up as a P/L account in the chart of accounts. It may be a balance sheet account or another type that is not suitable for the transaction.
  Configuration Issues: The account may not be properly configured in the system, or it may not be assigned to the correct account group.
  Incorrect Account Assignment: The account may have been incorrectly assigned in the configuration settings for asset accounting or in the transaction you are trying to execute.
  
  Solution:
  
  
  Check Account Type:
  
  Go to the transaction code FS00 (G/L Account Master Record) and check the account type of the account in question. Ensure that it is set as a P/L account.
  If it is not a P/L account, you will need to either change the account type or select a different account that is a P/L account.
  
  
  
  Review Configuration:
  
  Check the configuration settings in the Asset Accounting module. You can do this through the transaction code SPRO and navigating to:
  
  Financial Accounting (New) > Asset Accounting > Integration > Define Account Determination.
  
  
  Ensure that the account determination settings are correctly configured to use P/L accounts for recognized costs.
  
  
  
  Correct Account Assignment:
  
  If you are entering a transaction, ensure that you are using the correct account that is designated for recognized costs. If necessary, consult with your finance team to identify the appropriate account.
  
  
  
  Consult Documentation:
  
  Review SAP documentation or help resources for further details on account types and their usage in financial transactions.
  
  
  
  Testing:
  
  After making the necessary changes, test the transaction again to ensure that the error is resolved.
  
  
  
  Related Information:
  
  Transaction Codes: 
  
  FS00: G/L Account Master Record
  SPRO: Customizing Implementation Guide
  
  
  Account Types: Understand the difference between P/L accounts and balance sheet accounts, as this is crucial for proper financial reporting and compliance.
  SAP Notes: Check for any relevant SAP Notes that may address this specific error or provide additional guidance.
  
  If the issue persists after following these steps, it may be beneficial to consult with your SAP support team or a functional consultant who specializes in Financial Accounting.