Analyzing the Concept of Segment Accounting for Internal and External Purposes


After completing this lesson, you will be able to:

  • Describe the purpose of segment reporting to satisfy GAAP and IFRS requirements.
  • Demonstrate the concept of document splitting and how it relates to segment reporting.
  • Compare the options available for splitting scenarios.
  • Analyze the enhanced data by using the document splitting expert mode in posting simulations and post documents.
  • Analyze the entry and ledger views of posted documents.
  • Generate a segmented financial statement.

Reporting Requirements

James would now like to create financial statements for different divisions of the company.

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Segment Reporting

What is Segment Reporting?

Segment reporting breaks down the operations of a company into manageable pieces, or segments, to satisfy GAAP and IFRS reporting standards. You can define segments in SAP S/4HANA.

Annual financial statements supplemented by the segment information from segment reporting provide deeper insights into the financial position, asset position, and profit situation of a company.

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Splitting Scenarios

Document splitting enables you to draw up complete financial statements for the following dimensions at any time:

  • Segments
  • Profit centers
  • Business areas
  • Customer-defined dimension (customer field)

You use this object to specify the dimensions for which document splitting is performed and the dimensions for which financial statements are possible.

The system creates enhanced data by using a set of rules defined in the system (Active Split). In the case of a related follow-on document, such as a customer payment with or without cash discount, instead of using the rules, the system will be able to refer to the related document, such as an outgoing invoice, to determine the correct enhancement (Passive Split).

Document Splitting Expert Mode

How do we analyze the enhanced data by using the Document Splitting Expert Mode in posting simulations?

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Entry View and Ledger View

For entries that are manually added into the system, you are able to display the original entry as it was inputted (Entry View), as well as the enhanced entries made by the document splitting process (General Ledger View). In contrast, for line items created by system processes, the data is created with the needed data used in document splitting and therefore no Entry View can be displayed.

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Display Line Items in General Ledger

Segmented Financial Statement

Financial statements can be created by each characteristic configured in the document splitting settings. When executing the balance sheet / income statement application, you can choose the financial statement version and ledger to display and select the characteristic desired.

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