A unit in an enterprise, grouping product and market combinations as homogeneously as possible for the purpose of developing unified business policy.
A business area is an organizational unit of financial accounting that represents a separate area of operations or responsibilities within an organization. Financial accounting transactions can be allocated to a specific business area.
Business areas are used in external segment reporting across company codes based on the significant fields of operation (for example, product lines) of a business enterprise.
All essential balance sheet items, such as fixed assets, receivables, payables, and inventories, and all items of the profit and loss statement can be assigned directly to a business area. The balance sheet items for banks, capital, and taxes, however, cannot be directly assigned to business areas. They need to be assigned manually. This means that business area financial statements cannot be drawn up for commercial and tax lax. Business area balance sheets and income statements are used only for internal reporting purposes.
The system can determine the appropriate business area from information such as the material, plant, or cost center you enter in a business transaction like a goods movement. Assignments you make, for example, between cost centers and business areas, or the combination of information you specify, for example, a plant and a particular division, form the basis the system uses to determine the appropriate business area to assign to an item.