ch3.1

Financial accounting

Records and reports financial information for external users, following standards like GAAP or IFRS.

Management accounting

Provides financial and operational information for internal managers for planning, controlling costs, and evaluating performance.

External auditing

An independent examination of an organization’s financial records to determine if they fairly present the information and comply with standards.

Tax accounting

Focuses on calculating taxable income and ensuring compliance with tax laws.

Internal order

A controlling object used to track costs for a specific temporary task, event, or project.

Cost center

An organizational unit that collects and monitors ongoing costs.

Settlement profile

Defines rules and parameters for settling an internal order’s costs.

Statistical key figure (SKF)

A measurable quantity used to allocate costs.

Distribution

Allocates primary costs to controlling objects while preserving the original cost element.

Assessment

Allocates costs by combining primary/secondary costs and transferring them using a secondary cost element.

Internal activity allocation

Charges one cost center for work performed by another using an activity type and price.

External settlement

Settles internal order costs to an external receiver like a general ledger account.

Settlement

Transfers costs collected on an internal order to designated receiver(s) according to rules.

Profitability analysis

Examines revenue, costs, and profit to assess profitability.

Primary cost element

Costs originating outside the controlling system, linking to a general ledger account.

Secondary cost element

Costs transferred or allocated within management accounting.

Statistical cost information

Used for tracking or analysis without direct actual-cost posting.

Activity

Work or service performed by a cost center, measured through an activity type.

Cost center hierarchy

A structured grouping of cost centers for organizing and reporting costs.

Controlling area

Main organizational unit for management accounting, defining the framework for cost accounting.

Activity type

Identifies a kind of work or service provided by a cost center.

Supplies expense

A typical primary cost from purchasing supplies from an external supplier.

Programming cost element

A cost element used to track programming-related costs.

Number of employees

An example of a statistical key figure for cost allocation.

Internal order status

Indicates the current stage of an internal order’s lifecycle.

Created (internal order status)

The order is created but not yet released.

Released (internal order status)

The order is authorized for processing.

Technically complete (internal order status)

The operational work is complete but may require further financial processing.

Closed (internal order status)

The order is closed to further processing after completing required activities.

Settlement configuration

Determines how costs are transferred from an internal order to its receivers.

Define settlement permissions and parameters

Determines which receivers are permitted and settlement rules that apply.

Create company codes

Defined in financial accounting organizational configuration.

Record employee hours

Recorded as activity quantities or other time data but not the purpose of a settlement profile.