The system follows the functional area derivation rules as indicated below, if functional areas is active for profit and loss accounts and CO internal postings.

• The system checks whether a CO object is assigned to an account.

If so, the system checks whether a functional area is entered in the master record of the assigned CO object; if a functional area has been entered, the system uses this value as a provisional functional area.

• The system checks whether a functional area is entered in the master record of the G/L account or the cost element.

If so, this functional area has higher priority: A functional area derived from the master record of a CO object is overwritten by the functional area of the G/L account (or cost element).

The substitution, the user can define his or her own criteria for deriving a functional area, by using substitution.

The substitution has the highest priority: If a functional area is determined from the substitution, this functional area applies. This means that the functional area previously determined from the CO object or cost element is overwritten.

• Manual entry while keying transaction

For some postings, such as when entering G/L account postings, it is possible to enter a functional area. This functional area is transferred directly to the document, without the system running any of the checks described above

The priority rule for derivation of the functional area is CO object => P&L account or cost element => Substitution => Manual update.