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TERP21 Intro Into Processing in Financial Accounting

TERP21 Intro Into Processing in Financial Accounting

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Published by Sandeep Patil

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Published by: Sandeep Patil on Oct 23, 2011
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09/10/2014

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The Business Area is one significant Organizational Unit in FI, although the use of a Business Area
is optional in enterprise reporting. Let us now understand what is a Business Area. To illustrate,
assume that your Company Code has 2 areas of operations, Machine Construction and Plant
Construction. You now want to see the results of each area of operation separately, in addition to the
overall results of the company code. You can set up 2 business areas–for each area of activity and
create financial statements for each. Please note that the Business areas are not attached to
Company Codes.
This leads us to the question: why cannot we attach a business area to a Company Code? Take for
example, your corporate group has 2 company codes and both have two areas of operations,
Machine Construction and Plant Construction. It would not be logical to restrict any of these two
areas to any particular Company Code. Both Company Codes should be permitted to operate in any
area of operation. This is the reason is why there are no attachments or “assignments” of business
areas to Company Codes–they are free-flowing units that are freely definable. Remember – the use
of the Organizational Unit “Business area” is NOT mandatory!

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