A company might have several company codes. Each company code prepares its own financial reports. But business requires consolidated reports of the entire group. To generate reports at group level, data from various company codes need to be pulled in together for consolidation. This consolidation of financial data is achieved by using group chart of account in sap.
Consider below example for understanding the use of group chart of account
A company has two company codes.
Company code 1 uses operational chart of account COA1 and company code 2 uses operational chart of account COA2.
Both company codes prepare their own financial reports using operational chart of account. But for financial reports of company both financial data needs to be consolidated. Since list of accounts in both company codes are different hence consolidation becomes challenging. Here comes group chart of account to resolve this problem of consolidation.
Below picture showing financial data in company code 1 and company code 2
Now below picture shows how these financial data can be consolidated in SAP to arrive at group’s data.
Consolidation in group chart of account
As you can see above, general ledger account in operational chart of account is mapped to general ledger account in group chart of account.
Multiple GL accounts in operational chart of account can be mapped to single GL account in group chart of account.
This mapping enables consolidation of data.
How operational chart of account is mapped to group chart of account in sap?
While setting up operational chart of account, group chart of account is also assigned as shown below.
In above example, operational chart of account ZRAK is mapped with group chart of account ZZZZ.
After above mapping, every general ledger account created in operational chart of account requires mapping to a group account as shown below.
General ledger account belonging to multiple company codes will be assigned to group account. This mapping enables to prepare consolidated financial statement.