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Document Splitting in New G/L Document Splitting is activated when u want your inter unit entries to be posted automatically at the time of FI entry. Thus it helps to avoid inter unit reconciliation. Document Splitting is a new feature SAP to be able to bifurcate costs incurred in one Document for different accounting and controlling purposes. e.g. - You import an Item from China for $100000 and you pay Freight from China to US for $5000. The total cost incurred becomes $105000. Now, you would want to settle the cost of freight in your book of accounts by treating them as a separate cost (Line Item) still pertaining to One Document (transaction). Based upon your configuration need, you will set up the document splitting. Document splitting is part of New GL PCA. As per New GL PCA there are two entry views one for Entry view and General Ledger view. In General Ledger view you can find the document splitting. For example Material purchased for two different profit centers under one Invoice. Entry view Expenses Dr 100 Profit center 1 Expenses Dr 100 Profit center 2 To Vendor Cr 200 General Ledger View Expenses Dr 100 Profit center 1 Expenses Dr 100 Profit center 2 To Payable Cr 100 Profit center 1 Payable Cr 100 Profit center 2 If you see the general ledger view you can find the object of document splitting. Under Business Area concept you cannot find this facility. You can use the document splitting procedure to split up line items for selected dimensions (such as receivable lines by profit center) or to affect a zero balance setting in the document for selected dimensions (such as segment). This generates additional clearing lines in the document. Using the document splitting procedure is the prerequisite for as well as an essential tool for drawing up completes financial statements for the selected dimensions at any time.

Example Posting Key Account Segment Amount 31 Payables -100 40 Expense 0001 40 40 Expense 0002 60 If an Invoice is for 11,000/- Then we write the GL as: Vendor A/C Dr XXXX To Purchase 1 XXX To Purchase 2 XXX To Tax XX But through Document Splitting we can write it based on the %age of sharing as 80: 20%... Vendor A/C 8,800(DR) Purchase A/C 8,000(Cr) Tax 800 (Cr) Vendor A/C 2,200 (Dr) Purchase 2000(Cr) Tax 200(Cr) This is called Document Splitting

Purpose:
Document splitting enables a complex display of documents. Line items are split here for selected dimensions. This ensures that you can draw up complete financial statements for the selected dimensions at any time. Using the document splitting procedure, you can also create a segmented display of a (partial) balance sheet according to a legal requirement (for example, IAS) or according to areas of responsibility. In addition, you can allocate at the time of posting additional costs (such as realized or valuated exchange rate differences) to the CO account assignment objects that incurred the costs. Assets can also be subsequently capitalized at the time of posting. Integration Document splitting has an effect on subsequent processes such as closing operations and on processes in Controlling (CO).

Sub functions of Document Splitting The following functions are part of document splitting: 1. Passive document splitting: Clearing and similar processes The system creates a reference to existing account assignments. These account assignments are used as the basis for line items to be split. The system applies all account assignments that you have defined as document splitting characteristics in Customizing. If you have set the Zero Balance Setting indicator for the document splitting characteristic, the system then ensures that the characteristics produce a balance of zero in each document by creating clearing lines. 2. Active document splitting: Splitting a document In this sub function, the line items are split according to the settings in Customizing (the classification and assigned splitting rule). Subsequent processes 1 Clearing, for example, realized exchange rate differences. In this subsequent process, you can also post resulting, realized exchange rate differences with the CO account assignments that incurred the costs. 2 Closing operations, for example, foreign currency valuation. You can carry out closing operations according to the defined document splitting characteristics

Example
Examples of a Unique Business Process with Document Splitting Example 1: Invoice

Suppose a vendor invoice containing the following items is entered:

Posting Key 31 40 40 Account Payable Expense Expense 0001 0002 Segment Amount 100.0040.00 60.00

Document splitting then creates the following document in the general ledger view:
Posting Key 31 31 Account Payable Payable Segment 0001 0002 Amount 40.0060.00-

40 40

Expense Expense

0001 0002

40.00 60.00

Example 2: Payment

The payment for the above vendor invoice then contains the following items when entered:
Posting Key 50 25 50 Account Bank Payable Cash Discount Received Cash Discount Received Segment Amount 95.00100.00

0001 0002

2.00-

50

3.00-

Document splitting then creates the following document in the general ledger view:
Posting Key 50 50 25 25 50 Account Bank Bank Payable Payable Cash Discount Received Cash Discount Received Segment 0001 0002 0001 0002 0001 Amount 38.0057.0040.00 60.00 2.00-

50

0002

3.00-

Another benefit of New G/L which SAP explains is the Document Splitting. Document Splitting enables balanced financial statement by designated level such as Business Area or Profit Center, or the Segment. The background story of this is that, before New G/L, division balance sheet was not ready until the month end process F.5D Balance Sheet Adjustment. Cross-division (cross business area) account receivable were not divided until this process, and VAT entries were not divided. And the crossdivision entry made at CO module was not reflected onto FI module until CO-FI Reconciliation. New G/L realizes these adjustments by Document Splitting, and you dont have to wait until month end process.