SYMPTOM:
Users might not be able to create new report even though they are granted with "desktop designer" and "desktop analyse" privileges. In desktop, when right-clicking in the blank space and choosing "New", there is no "Report" option available, as shown below:

When trying to save a modified report, an error appears, as shown below:

Sample Code/Error
"You do not have access privileges to create object of type report definition"
CAUSE:
The user should have the "Create application objects" privileges (under Common Privileges) in order to create and save a report.
ACTION:
Grant the user the "Create application objects" privilege at the user level:
