Process Cost Elements 1

Terminal Learning Objective Action: Process Cost Elements Conditions: You are a Budget Analyst with access to a computer, the GFEBS training database, applicable GFEBS references, and awareness of Operational Environment (OE) variables and actors Standards: With a minimum 80% accuracy, learners must demonstrate proficiency with: Correlate Cost Elements and Revenue Elements 2

Cost & Revenue Elements Provide an overview of the costs and revenues that occur within an organization. They also typically indicate the type of cost or revenue associated with a posting. (FI) Financial (CO) Controlling External Reporting Legal Reporting Company Code USSGL G/L Account Financial Statements Proprietary vs. Budgetary Cost Element is Bridge Internal Reporting Mgmt Reporting Cost and Revenue Elements Plans and Budgets Cost Center Internal Order Cost Elements is a bridge between Financial and Controlling. 3

Cost Element: Financials (FI) and Cost (CO) Bridge Every Primary Cost Element must have one, and only one corresponding G/L Revenue or Expense account in the FI Module of GFEBS. But every G/L account will not have a corresponding Primary Cost Element – since most G/L accounts do not track revenue or expenses and do not have a “Costing” Function. The GL accounts and Primary Cost Elements are linked together so that every time a posting occurs to the G/L account in FI, the same posting also occurs to the corresponding Primary Cost Element in CO. This allows for the Controlling Module to maintain a mirror image of the expense values posted in FI. FM SC CO RM FI PP&E All Modules are Linked - Working together in GFEBS 4

Financials and Cost Bridge (Cont.) Primary Cost Elements and expense G/L Accounts are also linked to Commitment Items in the Funds Management (FM) Module so that any time a budget-relevant posting occurs in FI and/or CO, the Funds Management Module is updated. Commitment Items in FM will be used to tack budget execution. Every value posted against a Primary Cost Element must also be associated with at least one cost object (CC, IO, BP or WBS Element) To allow the system to record the nature of the revenue or cost (the Primary Cost element) and the consumer/driver (the cost object). Primary Cost Elements will be created or changed automatically each time a corresponding G/L revenue, expense account, or gains/loss is created or changed in the FI Module. 5

Primary / Secondary Elements What are primary cost elements? Elements of cost with a Corresponding Expense account in the General Ledger (G/L). Similar to the current elements of resource (EORs) or Commitment Item. What are secondary cost elements? - Elements of cost that Do not have Corresponding Expense Accounts in the General Ledger. - Track the internal movement of costs, such as allocations or settlements. - Provide a more accurate view of where costs are incurred within the organization. - Can be thought of as “Summary” Cost Elements. 6

Revenue Elements What are revenue elements? -Record types of revenue (or earnings) within a controlling area. -Each has a corresponding revenue account in the General Ledger. Army activities that generate revenue include, but are not limited to: -Foreign Military Sales -Forestry -Fish and Wildlife License Sales 7

GFEBS Cost Objects VS. Legacy Data Elements Primary Cost Elements and Secondary Cost Elements their purpose and corresponding Legacy Data Elements 8

Conduct Practical Exercises 9 9

Walkthrough: Transaction Code KA01 Conduct Practical Exercise 15.1 Practical Exercise: Create Primary Cost Element Walkthrough: Transaction Code KA01 Conduct Practical Exercise 15.1 All Master Data (Cost Element) are created in the system. Perform this Transaction; The system will display an Informational Message “that the Cost Element already exist. Example: Create Cost Element 6100.11B1 (O/E Military Pay). 10

Walkthrough: Transaction Code FS00 Practical Exercise: Display GL Account / Primary Cost Walkthrough: Transaction Code FS00 Follow the Menu Path to access Edit G/L Account chart of Accts Data. Menu>Environment>Create General Ledger Account>In Chart of Accounts Using T-Code KA01 (Primary) or KA06 (Secondary) 11

Walkthrough: Transaction Code KA06 Conduct Practical Exercise 15.2 Practical Exercise: Create Secondary Cost Element Walkthrough: Transaction Code KA06 Conduct Practical Exercise 15.2 Use this procedure to create a Secondary Cost Element. Secondary Cost Elements track the internal movement of costs, such as allocations or Settlements that provide a more accurate view of the beneficiary of costs. Secondary Cost Elements can be thought of as “Summary” cost elements. Perform this procedure when you receive notification that a secondary cost element needs to be created. 12

Walkthrough: Transaction Code KA02 Conduct Practical Exercise 15.3 Practical Exercise: Change Cost Element Walkthrough: Transaction Code KA02 Conduct Practical Exercise 15.3 This is a Master Data Element: Only the Centralized or Decentralized Master Data Maintainer may change Master Data. The Cost Element already exist in the system with a corresponding G/L Account. 13

LSA #1 Check on Learning Q1: Name two Army activities that generate revenue, but are not limited to. A1: Q2: T/F A Primary Cost Element does not have a corresponding expense account in the General Ledger (G/L)? A2: Q3: What cost elements provide a more accurate view of where costs are incurred within the organization? A3: Q: Name two Army activities that generate revenue, but are not limited to. A: Q: T/F A Primary Cost Element does not have a corresponding expense account in the General Ledger (G/L) Q: What cost elements provide a more accurate view of where costs are incurred within the organization? Facilitator’s Note: Additional questions for the students; Q: True or False? Any time a posting hits the expense account in the General Ledger, a posting is also made to the Primary Cost Element? 14

LSA #1 Summary 15

Questions? 16

TLO Summary Action: Process Cost Elements Conditions: You are a Budget Analyst with access to a computer, the GFEBS training database, applicable GFEBS references, and awareness of Operational Environment (OE) variables and actors Standards: With a minimum of 80% accuracy, learners must demonstrate proficiency with: Correlate Cost Elements and Revenue Elements 17