Fullfiling Legal Reporting Using the General Ledger Accounting

Objective

After completing this lesson, you will be able to describe how general ledger accounting fulfils legal reporting

Legal Reporting

Definition and Use of Company Code

The figure shows an excerpt of the universal journal with different columns, such as ledger, company code, fiscal year, document, line item, G/L account, segment, profit center, functional area, cost center, amount, and currency. Company Code is highlighted.

Definition of Company Code

A Company Code is the smallest organizational unit of external accounting for which a complete, self-contained set of G/L accounts can be created

Use of Company Code

A Company Code is a legal entity of Financial Accounting for which you draw individual financial statements (Balance Sheet and Profit & Loss Statement) for the purpose of external statutory reporting.

Example of Company Code

The figure illustrates a global map highlighting the concept of company codes, with specific examples from the U.S. (1710) and Germany (1010). It shows various company locations.

Bike Company

Bike Company has 2 legal entities: one company in Germany and one company in U.S. In SAP S/4HANA this is reflected as 2 Company Codes:

  • Company Code 1010: German company
  • Company Code 1710: U.S. company

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