Company Code The most important organizational unit in SAP ERP Financials is the company code.

Business transactions relevant for financial accounting are entered, saved, and evaluated at the company code level. As a rule of thumb, for every legal entity for which you want to generate statutory financial statements (balance sheet and income statements), you ll need to create a separate company code in the SAP system. Figure 2.1 shows some of the control parameters for a company code. However, most corporate structures are not as simple to set up as a single legal entity. They typically consist of several legal entities that are associated with each other in complex equity investment relationships. These types of corporate structures require grouping legal entities together in the form of a company.