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Author's profile photo Vijay Arumugam

Universal Allocations – COPA Assessment Cycle

This blog post explains COPA assessment cycle in S/4HANA Margin analysis (Account based COPA) through Universal Allocation apps.

COPA Assessment Cycle:

This function makes it possible to allocate actual overhead costs from cost centers to market segments as per requirements based on fixed percentages, amounts, or portions and then assign them to any level of your contribution margin hierarchies.

Pain points resolved:

  • Cost and revenue information is always 100% reconciled with financial accounting in real time which ensures greater transparency and makes the information easy to use.
  • Transparency is achieved by means of the universal journal entry, which represents a single source of truth for financial data.
  • Standard apps such as 1) Display Line items – Margin Analysis, 2) Market segments – Actuals are available to evaluate market segment values in different dimensions.

The below scenario is taken for illustrating COPA assessment in Margin analysis. Costs are posted to the cost center without any profitability segment and allocated to margin analysis (from cost center to profitability characteristic dimension – Customer group) with receiver basis as Revenue GL account.


Figure 1:Scenario taken for illustrating COPA assessment in Margin analysis

Creation of COPA Assessment Cycle:

App Name: Manage Allocations

Key Features:

  • Use the Cost Centers, Profit Centers, and Margin Analysis allocation contexts for allocation cycles
  • Use the Distribution, Overhead Allocation/Intercompany Allocation, and Top-Down Distribution, allocation types for allocation cycles
  • Edit, create, copy, or delete allocation cycles/Segments
  • Conduct checks of allocation cycles and allocation segments
  • Navigate directly to the Run Allocations app to initiate the allocation run for one or more allocation cycles or view the details of completed allocation runs
  • Upload allocation cycle and segment definitions using a preformatted .xlsx file template.


Figure 2:Creation of new OH allocation cycle in Margin Analysis


Figure 3:Allocation cycle Header Details


Figure 4:Allocation cycle segment – sender details


Figure 5:Allocation cycle segment – Receiver basis

Run Allocation:

App Name: Manage Allocations

Allocation cycle can be executed from the app Manage allocation or from the app Run allocations.

Original postings are made in cost centers without any profitability segments and these costs will be allocated to profitability dimension ‘Customer Group’ with receiver basis as Revenue GL account through COPA assessment GL account.

Line-item display report for original cost postings:


Figure 6:Fiori App-Display line items – Margin Analysis – Before Allocation


Figure 7:Fiori App – Run Allocation

Allocation Result:


Figure 8:Fiori App – Allocation Results

Reporting after Allocation:

App Name: Display Line Items – Margin Analysis

This app provides journal entry line items that are relevant for margin analysis.


Figure 9:Fiori App-Display line items – Margin Analysis – After Allocation

App Name: Market Segments – Actuals

This analytical app provides insight for management reporting at multiple dimensions.


Figure 10:Fiori App-Market Segments – Actuals


This blog post provides some insights on COPA assessment in Margin analysis for allocating overhead costs to market segments. Share your feedback in the comment section.

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      Author's profile photo praveen Ch
      praveen Ch

      Nice presentation

      Author's profile photo Vijay Arumugam
      Vijay Arumugam
      Blog Post Author


      Author's profile photo Francisco Javier Gurbindo
      Francisco Javier Gurbindo


      I want to allocate actual overheads costs from cost centers to market segment based on revenues. But revenues are posted to wbs and has market segment attributed items. Is it posible to use this revenue attributed items as a reference in allocations? Or first I have to settle wbs and then run allocations?


      Author's profile photo Gustavo Hermoza Azaldegui
      Gustavo Hermoza Azaldegui

      Dear Vijay,

      Thank you very much for your all explain and clarify many point using margin analysis.

      then i understand that if we are using margin analysis and as i can observe in your examples that we dont need to choose any fields of values. are we right? Coudl you confirm us if it will be in this way?


      In fact, when we show information from ke24 transaction we only see two fields as ValCOAcurr or ValueTcurr.

      Then it does not make sense that the keu1 transaction has this field as mandatory and The same when we put a PA structure because the PA structure need the fields of values from a approch using margin analysis but if someone want to using field of values then we understand that it is using modelo cost based.

      However, there is no point in continuing to use the cost-based model if it is going to become obsolete and it is now more functional for us to use margin analysis.

      we appreciate your answer on this point and please, let us know any note oss that explain to us this changes or design of v2022.

      Best regards.