Define Assignment

In this step you assign the cost elements under which costs are updated in the cost estimate used as a basis for valuating work in process and scrap (preliminary order cost estimate or version-specific cost estimate to line IDs.

The line IDs sort the costs for the material to be produced into groups such as the following:

Note that for WIP calculation you must ensure that the results of the cost estimated that was used for the valuation of work in process are updated in the form of cost elements.

These groups (that is, the line IDs) should be oriented to the structure of the cost of goods manufactured in the cost component structure. (See Maintain cost component structure and Define cost components)

The category flags the cost elements under which costs are updated in the standard cost estimate as relevant or not relevant to WIP calculation. The category is specified in the step Define update.

Capitalization of work in process

In the assignment, you specify how the process that must be shown due to these costs should be capitalized. For example, you can specify that

You also specify the validity period of the assignment.

You assign the cost elements that have been grouped into line IDs to one of the following groups:

You then specify

This assignment is taken into account in the posting rules. Three categories in the posting rules are created from this assignment:

WIPR WIP with requirement to capitalize costs
WIPO WIP with option to capitalize costs
WIPP WIP with prohibition to capitalize costs

You will usually define a posting rule that assigns the work in process with requirement to capitalize costs to the G/L accounts for unfinished products (balance sheet) and stock changes (P+L).

Note the following:


You must already have carried out the following steps:

Standard settings

The standard system contains predefined line IDs. However, you must assign the cost elements in your list of cost elements to the standard line IDs before you can calculate work in process.


1. Determine what cost elements you must assign to line IDs. To display the cost elements that are valid in your controlling area, go to Cost Center Accounting and choose Information system -> Master data index -> Cost elements.
2. Enter the controlling area, your results analysis version and, if necessary, your results analysis key.
3. Enter the cost elements according to your cost element list under which primary costs are updated in the standard cost estimate. With material consumption accounts you can also specify an origin.
You can mask your entries.
4. Enter the secondary cost elements under which internal activity allocations are updated in the standard cost estimate. With secondary cost elements you can also specify a cost center and an activity type.
You can mask these entries too.
5. If necessary, set the fixed/variable indicator.
The debit and credit indicator is of no significance for the production cost collector.
6. Specify the validity period for the assignment.
7. Specify the following:
requirement to capitalize costs
option to capitalize costs
prohibition to capitalize costs