Could you please check the below question and advise me , What needs to create as Business Area?
enterprise entities do you wish to create individual internal balance sheets and/or profit and loss statements or other internal reports? Please provide details of your reporting requirements.
A: The University requires full internal balance sheets for each of its 21 budgeting entities by fund groups. Please see list of entities. The fund groups are:
11 (Current Unrestricted)
13 (Auxiliary Unrestricted)
16 (Hospital Unrestricted)
21 (Current Restricted)
23 (Auxiliary Restricted)
26 (Hospital Restricted)
40 (Life Income)
51 (Unexpended Plant Funds)
52 (Plant Funds for Retirement of Indebtedness)
53 (Plant Funds for Renewal and Replacement)
54 (Invested in Plant Funds)
90 (Agency Funds)
Please see Code Support for a list of budgeting entities. Under the current streamlining plan the number of entities may be reduced.
Q: 2) Are there entities within your enterprise that are not independent legal entities, but that you treat as independent legal entities?
Q: 4) Does the organization have to produce segmented financial statements for public reporting (e.g. FAS-14 in the US)?
A: Yes, however, the University is a governmental entity. Rather than FAS 14, the University has a requirement to report at the fund group level and by budget entity/campus.
1. General Explanation
Business areas are units, within an institution, for which a balance sheet and income statement can be produced. In higher education, business areas are typically used to represent fund groups such as Current Unrestricted, Current Restricted, etc. for which balance sheets and income statements are required. In addition to balance sheets by fund groups, the University of Tennessee requires a separate internal balance sheet and income statement for each budget entity such as Knoxville, Martin, Chattanooga, etc.
The University will have business areas that represent a unique combination of Fund Group and Budget Entity. All existing fund groups and budget entities will be set up as business areas. For asset and liability entries, these business areas will be entered by users. For revenue and expenditure entries, these business areas will be automatically defaulted from cost centers and WBS Elements.
2. Naming Convention
The naming convention for the business area u2013 the first two characters represent the Fund Group and the third and forth characters represent the Budget Entity. For example, business area 1301 is Current Unrestricted Auxiliary Funds (13) for Knoxville (01).
3. Definition of Organizational Units
A business area is an organizational unit within accounting that represents a separate area of operations or responsibilities in a business organization. In higher education, business areas are typically used to represent fund groups such as Current Unrestricted, Current Restricted, etc. for which balance sheets and income statements are required.
4. Assignment of Organizational Units
You can assign all balance sheet items, such as fixed assets, receivables and payables, as well as the entire P&L statement directly to business areas. You can only assign banks, equity, and taxes manually to business areas if you do this indirectly. We will use the split ledger to assign business areas across these types of accounts