SYMPTOM:
A user may want to create a Derived Element in a grid on a Report Services document whose dataset is not based on an Intelligent Cube. However, there is no option in the document to create Derived Elements as shown in the image below:

CAUSE:
Derived Elements can only be created from reports that are not based on Intelligent cubes when the object to be displayed is saved as grid/graph.
ACTION:
Change the object view to Grid and graph to enable Derived elements as shown below: .

Note that this option only appears if the dataset is based on a report that was saved as a grid/graph. Datasets based on reports that are saved as a grid or a graph will not show this option.