Difference between Segment & Business Area

[Former Member]

Hi All,

Could any one please help me in explaining what the difference between Segment & Business Area? And what does it mean by “We can create financial statements at any time for the Segment dimension. For this, you need to set up a zero balance setting for the Segment characteristic” can any one could please help me on this.

And also please explaining what this Document Splitting is? How is it helpful? Please give an example in real time senior. I have already gone through Help document, please don’t suggest me that.

Thanks in Advance to all.

Regards,

Giridhar

[Former Member · Accepted solution]

Hi,

Segment to my knowledge is used as "Profitabilty Segment" in CO-PA (Controlling-> Profitability Analysis). CO-PA uses Characteristics/ Value Fields as elements for reporting.Business Area is more from FI perspective.

Both faciliate Segment Reporting (in business jargon and not in SAP terms) has its own pros & cons for implementation.

Document Splitting -> Extract from an SAP document. Please drop in your email id and I will send you the document.

Document splitting is an appropriate tool for determining

missing account assignments according to cause in common

accounting processes in SAP software (invoices, payments, or

clearing). For each financial-account document, document

splitting applies account-assignment information to nonassigned

accounts according to assignment rules set in the

customizing area. Take the example of a vendor invoice. You

can assign profit centers to expense accounts manually, derive

the assignment automatically, or make the assignment using a

substitute cost center. Document splitting places these profit

centers in the payables accounts of the invoice document.

This function can help you create balance sheets for entities

that extend beyond the scope of the company code. Typical

examples include balance sheets at the segment or profitcenter

level or balance sheets based on company-specific or

industry-specific entities.

There are also mechanisms to determine all account assignments

outside of document splitting – in the delivering component

itself. This determination would include postings from SAP

human capital management or materials management software.

The document-splitting function is based on the following

model. Accounting documents contain accounts with assignments,

such as revenues or expenses. Such accounts provide

dependent accounts (accounts payables, accounts receivables,

and taxes, for example) with account assignments based on

context (such as invoice or payment). The model is processoriented:

account assignments from original processes are

projected into the subsequent processes, thereby enabling

account assignments according to cause in the subsequent

processes. Document-splitting information is built at two

technical points: document creation and the accounting interface.

Document Splitting at Document Creation->

A typical example of this instance is the clearing transaction –

during which cash discount and realized exchange rate differences

are split according to source. (That is, according to the

proportions of the account assignments in the expense or

revenue lines of the original document, such as an invoice.)

What is special here is the specific reference to the original

transaction or line item. Controlling functions in the software

are updated accordingly and reconciled with the general-ledger

accounting functions. Another example of item-related document

splitting is foreign-currency valuation of open items. This

function transfers exchange-rate differences to the controlling

software.

It’s important to note that the balance-valuation function

has no reference to items or transactions. Here, the dimensionspecific

balance of the account (such as the balance for each

segment) is used as the basic value.

Rgds.

[Former Member · Accepted solution]

thanks, here is my mail ID ggiridhar_10@yahoo.co.in

[Former Member · Accepted solution]

Hi,

I have sent it. Please reward points if useful.

Rgds.

[siva_boni]

Dear Giridhar

Earlier in SAP we used to have very limited reporting hierarchies, in which business area is one like Company Code. But obviously in FI or CO either user/ partner/ management always interested in viewing the business on different entities in different forms of reports.

So, with the newGL SAP has given a provenance to users to create their own reporting entities. So, with the newGL customers can generate balance sheets by almost any dimension by defining a SEGMENT, meaning: cost center, plant, etc even you can define business area as a segment.

For this purpose was create the SEGMENT entity. So that it helps customer in segment level reporting.

We Can create financial statements means we can generate balance sheet or profit and loss statement on segment.

For lay mans terms I can tell Business Area is on example of Segment. Hope it clarifies..

In order to understand document split you should be familiar with New GL / Ledger accounting...

Regarding Document Splitting: Consider following realtime example

Invoice ( Example: Split on profit center)

Entry View

Vendor Invoice

PK Account Pr.Ctr Cost.Ctr Amount

40 Expense PC01 CC01 400

40 Expense PC02 CC02 600

31 Vendor 1000 -

Say Document number 156123

General Ledger view above document becomes as follows..

PK Account Pr.Ctr Cost.Ctr Amount

40 Expense PC01 CC01 400

40 Expense PC02 CC02 600

31 Vendor PC01 400 -

31 Vendor PC02 600 -

Suppose you got discount while paying above invoice then

Vendor Payment (entry view)

PK Account Pr.Ctr Cost.Ctr Amount

25 Payable 1000

50 Bank 970-

50 Discount 30 -

the enhanced document of the above will be as follows... discount will be splitted across profit centers ...

PK Account Pr.Ctr Cost.Ctr Amount

25 Payable 1000

50 Bank 970-

50 Discount PC01 CC01 12 -

50 Discount PC02 CC02 18-

For the above document the general ledger view will be as follows..

PK Account Pr.Ctr Cost.Ctr Amount

25 Payable PC01 400

25 Payable PC02 600

50 Bank PC01 388-

50 Bank PC02 582-

50 Discount PC01 CC01 12 -

50 Discount PC02 CC02 18-

Basically the document split will distribute the money depending on your split method you have configured in SPRO.

Don't confuse too much, it is very easy if you go step by step in SPRO -- especially Finanacial Accounting (new) configuaration.

Hope I tried to answer your query.

Regards

Siva

[Former Member]

Hi Siva,

Thanks a Lot almost my doubt is cleared. So now there is no need of using BA Right. One more thing is, i understood what is the document splitting, but all my doubt is how they make use of it in Accounting & in pulling reports.

Thanks a Lot in Advance.

Regards,

Giri

[former_member193516]

Thanks, this is a very good post.

One question here for you: what does that mean for cost elements? When posting to the segments, are there CO documents created for B/S accounts?

Thanks!

Hein

[Former Member]

Hi,

please see the below sites for compleate documentation

Segment:

http://help.sap.com/saphelp_erp2005vp/helpdata/en/6d/11743cdcf47b4ee10000000a11405a/frameset.htm

Business Area:

http://help.sap.com/printdocu/core/Print46c/en/data/pdf/FIBUSI/FIBUSI.pdf

Document splitting:

http://help.sap.com/saphelp_erp2005vp/helpdata/en/58/24d24047dd702ae10000000a155106/frameset.htm

http://help.sap.com/saphelp_erp2005vp/helpdata/en/1c/2ed140ed61712ae10000000a155106/frameset.htm

nagesh