Company code creation...what option is better?

[Former Member]

Hi Gurus,

My client has an existing company code in US and the parant company code abroad. They have now acquired another company is US. I need to decide whether we create a new company code for the new acquired company or do we just merge the acquired company with the existing company code in US.

What are the pros and cons of merging vs, creation of a new company code?

Note: Using FI-Consolidation is out of scope.

I am not sure how the FI entries are transfered from the legacy system to the new company code or merged with an existing company code.

Would appreciate any insite and links on such a topic.

Thanks & Regards

[former_member13777]

Hi,

For FI entry Trial Balance should be prepared for the company to be acquired as on the cut of date and balances and open items must be uploaded to the existing company

Just like an entry in the exisitng company.

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Sunoj

[Former Member]

Hello

The main point of consideration is reporting. Whether there is a necessity statutorily to report on financial aspects for the new company code.

If there is no legal restrictions, better to treat the new company as an internal plant / business area or a profit center or just merge the balances.

But if there is a legal requirement, then create a new company code and set up intercompany integration settings.

Reg

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[Former Member]

Hi Sunny this is a very wide question.

Here are some questions to consider.

Do you need to show the new company code as a seperate company code?

Can they use your Chart of Accounts?

Is the new company keeping its name?

Have you got any common master data, customers, vendors?

When will you be making the transfer?

Do you use ERP 6.0? If you did not want to create a new company code you could use document splitting.

You can copy your US Company Code, and then extend any common master data, GL accounts, Customers Accounts and Vendor Accounts?

Are you buying all of the debt from the new company, if so you will need to keep the debt seperate to that of your current debtors.

Hope some of this helps.

[Former Member]

Thanks