Company and company code – Relationship in sap fico

Company and company code - Relationship in sap ficoSap has two organizational units in financial accounting module which is always confusing. Many FICO consultants do not know why we have these two units in SAP FI i.e. company and company code (CC).

CC represents an independent legal accounting entity which is created in sap to generate balance sheet and profit or loss account as required by law.  Many companies are having international business and to satisfy those country’s legal requirements these companies are required to register themselves in all such countries by creating separate CC for each such country.

CC can be created with transaction code OX02.  You can also create it by copying one existing CC with transaction code EC01. 

Sap has delivered with some standard CC templates which can be used by you based on the country for which you are creating the CC. By copying these templates, one can copy all the country related settings for plant, controlling area and other modules.

Company is the highest organizational unit in SAP FI module. It represents the corporate group and CC under it are representing its individual subsidiaries. If we have more than one legal entity then all those legal entities will be defined under one corporate group called company. For each CC we can create separate legal financial statements and these financial statements can be consolidated at company level.

Example of company and CC

Assume for a moment that we have one group called G. G has two subsidiary company which are registered in India under the companies act called A and B. Now as per the legal requirements company A and B have to have its own financial statement to be filled with registered of companies (ROC) and income tax department. Management also wants company A’s and B’s financial data to be consolidated at G. To fulfill all these requirements, company A and B will be defined as a CC in SAP where as G will be defined as Company.

There can be some other situations where you will be requiring financial data of two or more companies to be consolidated at company level.

To establish this group and subsidiary relationship we assign CC to company in sap. More than one CC can be assigned to one company but more than one company can not be assigned to one CC.

If we do not have more than one CC then the same company should be created as company and CC in sap. After such creation both should be assigned to fulfill the requirements of SAP.

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