Difference between Segment & Business Area

Question

Hi All,
Could any one please help me in explaining what the difference between Segment & Business Area? And what does it mean by “We can create financial statements at any time for the Segment dimension. For this, you need to set up a zero balance setting for the Segment characteristic” can any one could please help me on this.
And also please explaining what this Document Splitting is? How is it helpful? Please give an example in real time senior. I have already gone through Help document, please don’t suggest me that.
Thanks in Advance to all.
Regards,
Giridhar

Answer 1

Dear Giridhar
Earlier in SAP we used to have very limited reporting hierarchies, in which business area is one like Company Code. But obviously in FI or CO either user/ partner/ management always interested in viewing the business on different entities in different forms of reports.
So, with the newGL SAP has given a provenance to users to create their own reporting entities. So, with the newGL customers can generate balance sheets by almost any dimension by defining a SEGMENT, meaning:  cost center, plant, etc even you can define business area as a segment.
For this purpose was create the SEGMENT entity. So that it helps customer in segment level reporting.
We Can create financial statements means we can generate balance sheet or profit and loss statement on segment.
For lay mans terms I can tell Business Area is on example of Segment. Hope it clarifies..
In order to understand document split you should be familiar with New GL / Ledger accounting...
Regarding Document Splitting: Consider following realtime example
Invoice ( Example: Split on profit center)
Entry View
Vendor Invoice
PK     Account     Pr.Ctr     Cost.Ctr       Amount
40      Expense    PC01      CC01           400
40      Expense    PC02      CC02           600
31      Vendor                                      1000 -
Say Document number 156123
General Ledger view above document becomes as follows..
PK     Account     Pr.Ctr     Cost.Ctr       Amount
40      Expense    PC01      CC01           400
40      Expense    PC02      CC02           600
31      Vendor      PC01                          400 -
31      Vendor      PC02                          600 -
Suppose you got discount while paying above invoice then
Vendor Payment (entry view)
PK     Account     Pr.Ctr     Cost.Ctr       Amount
25      Payable                                      1000
50      Bank                                             970-
50      Discount                                         30 -
the enhanced document of the above will be as follows... discount will be splitted across profit centers ...
PK     Account     Pr.Ctr     Cost.Ctr       Amount
25      Payable                                      1000
50      Bank                                             970-
50      Discount    PC01      CC01               12 -
50      Discount    PC02      CC02               18-
For the above document the general ledger view will be as follows..
PK     Account     Pr.Ctr     Cost.Ctr       Amount
25      Payable      PC01                          400
25      Payable      PC02                          600
50      Bank           PC01                          388-
50      Bank          PC02                           582-
50      Discount    PC01      CC01               12 -
50      Discount    PC02      CC02               18-
Basically the document split will distribute the money depending on your split method you have configured in SPRO.
Don't confuse too much, it is very easy if you go step by step in SPRO -- especially Finanacial Accounting (new) configuaration.
Hope I tried to answer your query.
Regards
Siva