What is the significance of company code?

Why do we create company code, what is its significance especially in relation with Personnel Area.
Thanks,
Rahsmi

Hi Rashmi,
Company code is at the top of hirarchy to devide ur financial accounts. And assignment is based on the balance sheet, profit and loss account as well as GL accounts of the organization.
So u can have 1 company code for more than 1 site of the organization or u can create seperatly for each of them. Any combination can b done. Only restriction on the SAP system is that u can't have same comany code for more than 1 country that is u cn have atleast 1 company code for 1 molga.
For example- if u r using same balance account for 2 site then u have to linked both the sites with same company code.
AS i mentioned its on the top of hirarchy for a seperate system(For a specific client of SAP system) and the enterprise structure(Personnel Area, Personnel subarea etc) has to be assigned to this for SAP-HR.
Regards,
Praveen

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What is the significance of company code?

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