In SAP S/4HANA, complete financial statements, including balanced balance sheets, can be created for specific organizational dimensions. This is achieved through the document splitting functionality within the Universal Journal. Document splitting ensures that for every business transaction, postings are balanced to zero for the selected dimensions. The primary dimensions for which this is supported are the Segment, which is used for external segment reporting as required by IFRS and US GAAP, and the Profit Center, which is used for internal management reporting and profitability analysis. Both allow for a complete view of assets, liabilities, and equity at their respective levels.

B. Cost center: A cost center is a Controlling (CO) object used to capture costs and expenses. It is not designed to hold balance sheet accounts and thus cannot produce a complete balance sheet.

C. Functional area: The functional area is used for cost-of-sales accounting to classify operating expenses by function (e.g., administration, sales). It is a P&L dimension, not a balance sheet dimension.

1. SAP Help Portal

SAP S/4HANA Cloud

Document Splitting: "The standard delivery includes document splitting based on the profit center and segment characteristics. [...] This means that you can create complete financial statements for profit centers and segments." (This statement is a core principle found in documentation for both cloud and on-premise versions).

2. SAP Learning Hub

Course S4F01 - Financial Accounting in SAP S/4HANA: In the unit on "The New General Ledger

" it is explained that a key benefit is the ability to create financial statements at levels below the company code. The primary examples provided for this capability are always Profit Center and Segment

enabled by document splitting.

3. SAP Press (2022)

Financial Accounting with SAP S/4HANA: Business User Guide

Chapter 3

Section 3.3.2 - Document Splitting: "The main purpose of document splitting is to enable complete financial statements for entities

such as profit centers and segments. [...] For every document

the system ensures that the balances for the selected entities are zero." (Paraphrased for conciseness

but captures the essence of the text).