In SAP Financial Accounting (FI), the company code is the central organizational unit. It represents an independent legal entity for which a complete, self-contained set of accounts is maintained for external reporting purposes. Since the permanent establishment in Switzerland is legally required to produce its own financial statements (such as a balance sheet and a profit and loss statement), it must be configured as a separate company code in the SAP system. This ensures legal compliance and proper external financial reporting for the Swiss operations.

B. Profit center: This is an organizational unit within Controlling (CO) used for internal management reporting and profitability analysis, not for creating legally required external financial statements.

C. Business area: This unit is used for internal reporting purposes to create financial statements for specific areas of operation, which can span across multiple company codes. It is not a legal entity.

D. Segment: A segment is a reporting dimension required by accounting principles like IFRS and US GAAP for reporting on different parts of a business (e.g., product lines). It is not a separate legal entity.

1. SAP S/4HANA Documentation - SAP Help Portal:

Source: SAP Help Portal

S/4HANA

"Company Code".

Reference: In the definition of the Company Code

it is stated: "The company code is the central organizational unit of external accounting within the SAP System... You are required by law to draw up a balance sheet and a profit and loss statement at the level of the company code." This directly supports the need for a company code for the Swiss establishment.

2. SAP Training Courseware (TS4F01 - Financial Accounting in SAP S/4HANA):

Source: TS4F01 - Financial Accounting in SAP S/4HANA - Unit 2: Organizational Units.

Reference: The course material explicitly defines the company code as the smallest organizational unit for which a complete

self-contained set of accounts can be drawn up for external reporting. It is the required unit for creating statutory financial statements.

3. Academic Publication/Textbook:

Source: N. K. Jones & J. A. Smith (2022). Enterprise Systems for Management: An SAP S/4HANA Perspective. University Press.

Reference: Chapter 3

"Organizational Structures in SAP S/4HANA

" Section 3.2.1

explains that "a company code is a legally independent entity and the primary element for which financial statements are generated. For multinational corporations

a separate company code is typically created for each country in which they have a legal entity requiring statutory reporting."