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  1. SAP Glossary ›
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  3. internal activity allocation


What is 'internal activity allocation' in SAP CO - Controlling?


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internal activity allocation - Overview

  • Component: CO

  • Component Name: Controlling

  • Description: Method of internal cost allocation by which valued cost center activities allocation bases are allocated to cost receivers in acco rdance with the cause of the cost.


internal activity allocation - Details

  • Term: Internal Activity Allocation

    Component: CO - Controlling

    Definition: Internal Activity Allocation is a process in SAP Controlling where costs incurred in one cost center are allocated to other cost centers based on the internal activities performed. It involves quantifying the consumption of services or activities provided internally within an organization and distributing the related costs accordingly.

    How It’s Used: In real SAP projects, internal activity allocation is used to accurately assign overhead or shared service costs from service-providing cost centers (like IT, Maintenance, or HR) to the cost centers that consume these services. For example, the IT department's costs are allocated to production and sales cost centers based on the number of support hours or service units consumed. This ensures that cost reporting reflects the true cost of operations and supports better decision-making.

    Important Configuration:

    • Define activity types representing the internal services or activities (T-code KL01 to create activity types).
    • Assign activity types to cost centers (T-code KP26 to plan activity quantities and costs).
    • Maintain activity prices for internal activities (T-code KP26 or KP46).
    • Execute internal activity allocation using the assessment cycle or distribution cycle in T-code KSU5 or via periodic allocations in KSV5.
    • Set up allocation cycles in Customizing under Controlling > Cost Center Accounting > Period-End Closing > Allocations > Assessment or Distribution.

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internal activity allocation - Related SAP Terms

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