What is allocation structure in SAP CO - Controlling?

SAP Term: allocation structure

• Component: CO

• Component Name: Controlling

• Description: A tool that allocates the costs incurred on a sender by cost element or cost element group. The allocation structure is used for settlement and for assessment. An assignment assigns a cost element or cost element group to a settlement or assessment cost element. Each allocation structure contains a number of such assignments. The allocation structure must meet the following criteria: Completeness - For a settlement or assessment to be executed correctly, the allocation structure must represent all cost elements under which costs are incurred. Unambiguity - There must be only one cost element in an allocation structure.

Smart SAP Assistant

• 
  Key Concepts: 
  Allocation structure is a feature of SAP Controlling (CO) that allows users to define the distribution of costs and revenues between different cost centers or profit centers. It is used to allocate costs and revenues in a systematic way, based on predefined criteria. Allocation structures can be used to allocate costs and revenues between different cost centers or profit centers, or even between different company codes. 
  
  How to use it: 
  To use an allocation structure, users must first define the criteria for the allocation. This includes defining the source and target cost centers or profit centers, as well as the percentage of costs or revenues that will be allocated to each target. Once the criteria have been defined, users can then create an allocation structure in SAP Controlling (CO). The allocation structure can then be used to automatically allocate costs and revenues between the source and target cost centers or profit centers. 
  
  Tips & Tricks: 
  When creating an allocation structure, it is important to ensure that the criteria are properly defined. This will ensure that the correct amount of costs and revenues are allocated to each target cost center or profit center. Additionally, it is important to ensure that the allocation structure is regularly updated to reflect any changes in the criteria. 
  
  Related Information: 
  For more information on how to use allocation structures