I have two questions:

1. SAP Book says "Accrued costs do not have a corresponding expense in Financial
Accounting. They are only accrued for cost-accounting purposes."

My question: if this is the case why SAP requires to create accrual account as primary cost
element with CE categor 3 or 4. This means that we should define expense G/L first? & also if
this, for cost-accounting purposes why it's allowed by SAP to transfer document from CO to FI ,
after executing T-code KSA3?
2. I read also that "You would only establish accruals in CO for costs that should not be spread in
FI, but you want them to be spread across periods for costing purposes. for example, labor costs
relevant to salaries, such as bonuses".

My question: what is the benefit to calculate accrual via CO only, even for bonus we can use
Recurring Entries functionality which will be created in FI and Passed to CO?
Could anyone give me any practical example from his/her experience for any kind of costs that
should not be spread in FI and should be calculated in CO only?

https://help.sap.com/saphelp_globext607_10/helpdata/en/66/bc726043c211d182b3
0000e829fbfe/content.htm?no_cache=true

Accrual Calculation

Use

Operating expenses are often allocated differently in financial accounting than in cost accounting. If, for
example, an expense incurred in external accounting covers a whole year, you must assign a proportion
of the whole to each individual cost accounting period. You distribute irregularly-occurring expenses,
according to cost-origin, on the months in which they are incurred. This allows you to avoid irregularities
within cost accounting. Costs allocated in this manner are termed accrued costs.

The even distribution of a one-off expense is referred to as time-based accrual calculation. With the aid of
the accrual calculation functions, you can take these costs into account in the Controlling component.

Features

You can calculate accruals in two ways.

  You can post accruals in the Financial Accounting component (FI) using recurring
entries and pass the accruals along to the Controlling component using a special cost
element for accrual allocation. Here, the accruals (or imputed costs) are calculated in
financial accounting, not internal accounting.
 You can calculate accruals in the Controlling component based on the costs posted
there. To do so you can use the following approaches:

Accrual calculations using the percentage method

Accrual calculations using the target=actual method

If you use either of these procedures, you must ensure that subsequent postings are
made in the Financial Accounting component if you want to display the accruals postings
there as well.

Actions

To execute accrual calculation, you must define the necessary data and carry out the following steps,
according to the accrual calculation method you are using:

 For accrual cost calculation using the percentage method, you must first create an overhead
structure (see: Defining the Percentage Method).
  For accrual calculation using the target=actual or the plan=actual methods, you must create the
corresponding accrual cost elements. You must also carry out cost element and activity type
planning (see: Maintain Data for Target=Actual Accrual Calculation).

You can maintain data for an overhead structure, as well as for target=actual credits, during system
configuration and for the application component itself. You must enter this data as controlling area
dependent.

This controlling area dependent data includes:

 For the percentage method

Calculation bases

Overhead percentage rates

Credit objects

 For the target=actual method

Target=actual credits

The cost element category has a technical control function. It determines whether one can post to a
cost element directly or indirectly.
Direct posting means that one can post a fixed amount to an account by specifying the account
number. Indirect posting means that the system determines the account automatically at the time of
posting
The following cost element categories can be used for primary cost elements:
01: Primary cost element: This category of cost element can be debited with all primary postings, for
example, in Financial Accounting (FI) or Materials Management (MM).
03: Accrual cost element / percentage method: This cost element category may only be used in Cost
Center Accounting (CO-OM-CCA) with the percentage method of accrual calculation. One can post
directly in Financial Accounting to register when actual costs are incurred. The system uses this cost
element category to post accrued costs in Cost Center Accounting. If one does not want to consider
actual costs (for example, additional costs), one can create this category of cost elements
exclusively in Controlling. One can define the account in the chart of accounts, but do not need to
create the account as a G/L account in Financial Accounting.
04: Accrual cost element / target=actual method: This cost element category may be used only in the
target=actual method of accrual calculation with Cost Center Accounting.
11: Revenue elements: The cost element category is used to post revenues. The revenues are
displayed in Controlling with a negative sign (-). An exception to this is Profitability Analysis (CO-PA).
In CO-PA revenues are displayed with a positive sign (+).
22: External settlement: Cost elements of this category are used to settle order, project, or cost
object costs to objects outside of Controlling. CO external objects can be, for example, assets (AM),
materials (MM) or G/L accounts (FI). The system always creates an accounting document when you
settle to external objects.
90: Cost element for balance sheet accounts in Financial Accounting: Cost elements of this category
are generated automatically when you create cost elements in Controlling that have asset
reconciliation accounts, that is, special balance sheet accounts, as corresponding general ledger
accounts in Financial Accounting.
The secondary cost elements are:
21: Internal settlement - This cost element category is used to settle (further allocate) order or
project costs to Controlling (CO) internal objects. CO-internal objects are, for example, orders,
profitability segments, cost centers and projects.
31: Order/project results analysis - This cost element category is used to save the order/project
results analysis data on the relevant order/project.
41: Overhead rates - This cost element category is used to further allocate overhead costs using
overhead rates from cost centers to orders.
42: Assessment - This cost element category is used to allocate costs using the assessment
method.
43: Allocation of activities/processes - This cost element category is used during internal activity
allocation and in Activity-Based Costing.
50: Incoming orders: sales revenues - This cost element category is used for sales revenues from
sales orders with incoming orders in the current period of the project-related incoming order.
51: Incoming orders: other revenues -This cost element category is used for other revenues, such as
imputed interest, from sales orders with incoming orders in the current period of the project-related
incoming order.
52: Incoming orders: costs - This cost element category is used for costs from sales orders with
incoming orders in the current period of the project-related incoming order.
61: Earned values - This cost element category is used for the earned values from the earned value
analysis in Project System