Business Unit Accounting Reference
How to treat P&L, assets, liabilities, and consolidated reporting by Business Unit.
Guiding Principle
Profit and Loss transactions should carry a Business Unit whenever the income or expense belongs to a unit. Balance Sheet accounts should carry a Business Unit only when the asset or liability genuinely belongs to a unit.
This keeps unit profitability useful without creating artificial or misleading balance-sheet splits.
Assets
Cash And Bank
Usually central. Use BU only when a bank account, till, or petty-cash float is genuinely controlled by one unit.
Receivables
Receivables should usually inherit BU from the Sales Invoice so AR can be analyzed by the unit that generated the sale.
Inventory
Use BU if stock is operationally separated by unit or warehouse. If inventory is shared centrally, keep it central.
Fixed Assets
Tag the Asset master with BU when the asset belongs to one unit. Shared assets should remain central or be allocated monthly using an approved rule.
Liabilities
Payables
Payables can carry BU from the Purchase Invoice when the underlying expense belongs to one unit.
Tax Liabilities
VAT, WHT, PAYE, and other statutory liabilities are normally central obligations. The source transaction may carry BU, but the liability account should not be treated as unit-owned unless finance explicitly wants that view.
Loans And Borrowings
Tag BU only when the borrowing is specifically for one unit. General company loans should remain central.
Accruals
Tag accruals by BU when the underlying expense is unit-specific. Keep general accruals central.
Example Treatment
| Scenario | BU Treatment |
|---|---|
| Water Park ticket sale | Tag Water Park |
| Restaurant food sale | Tag Restaurant |
| Central marketing campaign for all units | Central or allocated by approved rule |
| Go Cart spare parts purchase | Tag Go Cart |
| Shared generator purchase | Central unless assigned to one unit |
| VAT payable | Central statutory liability |
| Customer invoice from Arcade | Receivable inherits Arcade |
| Loan for park expansion generally | Central |
| Loan specifically for Water Park upgrade | Tag Water Park |