A Segment is a division of a company for which financial statements for external reporting can be created.
Segment reporting provides insight into different business activities of a diversified company. According to international accounting principles (IFRS 8 and ASC 280 in US-GAAP), companies are obliged to provide information in their reports on the financial results of business segments (operating segments).
You use segment reporting to portray the items in the financial statements by segment. The detailed results are then presented by segment. 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.
In SAP S/4HANA financial statements can be produced on the Company Code level, which represents legal units. Financial statements based on segments can group business activities across Company Codes.
associated with a specific identifier: Segment 1000_A for Bikes, Segment 1000_B for Spare Parts, and Segment 1000_C for Service." width="" height="" />
In Bike Company, both Company Codes (the legal units in Germany and US) offer the following business activities which are required for segment reporting:
So, beside financial statements for the German and U.S. Company, additional financial statements can be produced which groups the activities from those companies, for example a balance sheet and P & L statement for Bikes.
