Difference between Company Code and Segment level for external financial reporting

[Former Member]

Hello everyone,

We have a question for you on the difference between Company Code and Segment.

Our situation is the following : We have a single legal entity with two regulated activities, hence requiring separate external reporting and Financial Statements for each activity. This means that Activity A has to produce its own financial statements (P&L, balance sheet, etc), and Activity B has to do the same.

In this context, we are looking into the possibilities offered by SAP to create these split external financial statements and in particular, we would like to understand (with the help of the SAP community!) the difference it would make for us between:

1) Having each activity inside a specific Company Code

2) Having both activities handled under the same Company Code and the split done at Segment level

a) What would be the differences in terms of functionalities between these two options? In particular regarding the compulsory publication of the financial statements?

b) Are there functionalities that are available in Option 1 (at the CC level), which we wouldn’t have access to in Option 2 (at the segment level)?

Thanks everyone for your very precious help!

Best,

Quentin

[João_FI_FIN-CS]

Hi Quentin,

If you're using FAGLFLEXT totals table, you can find the segment field. And this table can store tahe amounts by the totals.

I recommend that you check the note below:

1085921 - Document split

JPA

[former_member184878]

Hello,

My point of view. I hope I can bring some input for your discussion.

1. Take a look on the picture

We have the client

Within the client we have company codes.

Normally Financial Statement (consisting of P&L, Balances Sheet and Notes) is made per Company Code.

2. SAP New GL - Segment and document splitting

Using SAP New GL you have functionality of document splitting.

The main advantage is:

You can splitt amount of one invoice to several eg segments.

Each FI document is posted to a segment, which means you can make full Financial Statement per Segment.

Segemment ABC + DEF = Financial Statement of Company Code.

3. Balance sheet per segment

It is possible making fully FI Statements per eg Segment because of using document splitting.

4. Document splitting.

You can find a lot of information about nGL on SAP Marketplace.

Examples for vendors, GL and customer postings.

Putting it in a nutshell >> You have PC and/or Segement information available also in

Reconciliation accounts.

See example below

5. Document Splitting example for vendor invoice

Find an example here. This video shows posting a vendor invoice via FB60 and using document splitting

SAP New GL document splitting - YouTube

6. Conclusion:

SAP nGL offers full Fi Statement ( Balance,  PL, notes are normally made manually and supported by SAP) per profit center and/or segment.

It depends on local tax authorities if they accept the reports.

Example: One vendor invoice and splitt it in one company code. One invoice recipient but values in 2 FI Statements?

Is this accepted by local law?

So the same procedure as known:

1. Make concept

2. Blueprint in SAP

3. Check with tax auditor

4. Check with local tax authorities

all the best Erwin

[Former Member]

Hi Erwin,

Thank you so much for this very clear and complete explanation.
It seems to me that this is possible, provided I check it with tax auditor and my authorities as well.

If I may ask one last little clarification question:

How are balance sheets consolidated with a segment split in the new SAP GL?

>> For instance, when you have intercompany movements (e.g. Business Unit A sells something to Business Unit B): do the intercompany movement increase the balance sheet or arethey automatically netted?

Thanks you very much!

Best,

Quentin

[former_member184878]

Hello,

1. Posting within one company code >>> there is no intercompany matter.

For this we use internal activity allocation in CO.

Take a look on SAP Help.

Example:

You have DE on one cost center/prctr/segment and CE entry on other cost center

This is done with so called seondary costs

This has no impact on FI statement!

Internal Activity Allocation - Integration with Controlling - SAP Library

2. Making a consolidation of segment reporting

You just run balance and P&L report without selecting eg segments.

This is what you should check every month

Segment FI Statement ABC + DEF = Financial Statement at company code level

960 + 240 = 1200 ( in our very simple FI statement)

If you have some further queries. Ask me and I will do my best.

PS: You also have segment and splitting information available at postings concerning tax.

all the best erwin

[former_member184878]

Hello Quentin,

Do you have any further queries?

If yes, please let me know.

all the best erwin

[siwar_taleb]

Hello Quentin,

In relation to your description, i ‘d like to share the following information :

The segment reporting has been introduced by the NEW G/L  in SAP ERP (One component and Many functions) which offers the following advantages compared to the classic GL.

As a result of document splitting, financial statements of entities such as segments, profit centers and business area are possible.

In fact,the segment field/characteristic is a new standard account assignment object in order to create evaluations for entities below the company code level.

The objective is to give a detailed look at the various business activities (markets or products) ) at a (broad-based) enterprise.

You can obtain an overview of the advantages of using new G/L in SAP note number 756146.

  Also the note 918675 has a detailed PDF attachements about the basis architecture of New GL accouting in SAP ERP.

Best regards,

Siwar

[Former Member]

Thanks a lot for your answer Siwar,

If I get your point correctly, it is possible to produce financial statements at the segment level (and also at Business Aera and Profit center level).

There is just one point which I don't precisely get

We need to publish external financial statements (as required by law for our activities). Being able to have an internal reporting is useful but not sufficient.

Does the new SAP segment reporting allow to do external reporting?

Thank you very much for your help!

Best,

Q