Asset Accounting.doc

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Structuring Fixed Assets

It is possible to structure fixed assets at several different levels in the system.

Balance sheet levelClassification levelAsset related level.

Group AssetAssetAsset ComponentTransaction

Balance Sheet level: Three level hierarchy

Balance sheet versionBalance sheet itemGeneral Ledger item

Classification level: At this level fixed assets can be structured using asset classes in the assetaccounting component. You use asset classes to structure assets according to legalrequirements or the demands of accounting. Every asset belongs to an asset class. You canuse account determination in the asset class to assign each asset to an item in the balancesheet.

Asset-Related level: In this, four-level hierarchy has been set up in the asset accounting.

Structure

Asset Related Classification Balance sheet

Financial Statemet Version

1. Group Asset Num

Balance sheet itemAsset Class2. Main Asset Num

G.L A/C3. Asset Sub-number

4. Line items


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Group assets make it possible to group a number of assets together forthe purpose of uniform evaluation and depreciation.

The asset main number represents an asset that is to be evaluatedindependently. It contains information for the valuation of an asset as well asorganizational information.

Below the asset main number, the asset can be further divided into itscomponents parts by the use of asset sub-numbers. You can use sub numbers todepreciate subsequent acquisitions to an asset separately from the original asset.

The lowest level consists of the transaction data per depreciation (Suchas acquisition or retirement) that belongs to asset master record. (Line items)

Asset Types1. Intangible Assets2. Fixed Assets3. Financial Assets

Asset under construction are special form of tangible assets. Depreciation is not allowed forassets under construction in most countries. For posting down payments, allow the posting ofthe transaction type group. Down payments in these asset classes.

Low value assets are depreciated in the year in which they acquired. You set the maximumamount for low value fixed assets when defining depreciation area at company code level.

1. Asset classFunctions of Asset Class:Asset classes are used to structure fixed assets. Asset classes apply to all company codes. Theasset class provides default values for all asset master records.

Account determinationOne of the most important functions of the asset class is to establish the connectionbetween the asset master records and the corresponding accounts in the generalledger in Financial Accounting. This connection is created by the accountdetermination key in asset class.

Structure of Asset Class:1. A header with the control parameters for master data maintenance and

account determination.2. A master data section with default values for the administrative data in the

asset master record.

3. A valuation section with control parameters for valuation and defaultdepreciation terms for each depreciation area.

You can assign any number of charts of depreciation to each asset class. The controlparameters and the master data section of the asset class are always valid for all companycode within a client.Special Asset classes:Assets under construction


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Low value assetsLeased assetsFinancial assetsTechnical assets

Specify account determinationSPRO Financial Accounting Asset Accounting Organization structure AssetClasses Specify account determination.Select new entriesAccount determination Number Description200000 Plant and machinery201000 Leased assets202000 Low value assets203000 Asset under construction204000 Asset under construction-Investment profile

Create Screen layout rulesSPRO Financial Accounting Asset Accounting Organization structure Assetclasses Create screen layout rules.

Screen layout Description2000 General machines3300 Low value assets4000 Asset under construction6000 Leased assets

SAVE

Define number (range) interval for assigning asset main numbers in the asset class.Transaction Code AS08.SPRO Financial Accounting Asset Accounting Organization structure Assetclasses Define number range interval.Company codeChange Interval button SelectInsert interval button Select

Number From Number To Number01 1000 199902 2000 299903 3000 399904 4000 4999


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Note Select External Check boxfor external number range

Creation of asset classes Transaction code OAOA.SPRO Financial Accounting Asset Accounting Organization structure

Asset classes Define asset classes.

Assetclass

Description Accountdetermination

ScreenLayout

Numberrange

Includeasset

Status

200000 Plant &machinery

200000 2000 01

201000 Leasedassets

201000 6000 02

202000 Assetunderconstruction

202000 4000 03 Line itemsettlement

203000 Assetunderconstruction investment

profile

203000 4000 03 Investmentprofile

204000 Low valueassets

204000 3300 04

SAVE

Create General Ledger Account for Each asset.Transaction code : FS00Asset Descripti

onGroup Statemen

tReconciliation

Lineitem

Sortkey

FSG


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200000 Plant &machinery

Assets BS Asset 018 G007

200100 Accumulated

depreciation-Plant&machinery

Assets BS Asset 018 G007

201000 Leasedassets

Assets BS Assets 018 G007

201100 AccumulatedDepreciation on

Leasedassets


202000 Assetunderconstruction


204000 Lowvalueassets


350000 Salesrevenues

of assets

Income PL 018 G007

351000 Profit onSales ofassets

Income PL 018 G007

450000 Depreciation

Expenses

PL 001 G001

451000 TaxDepreciation

Expenses

PL 001 G001

452000 Loss onsale of

assets

Expenses

PL 001 G001

453000 Scrapingof asset

Expenses

PL 001 G001

Interestpaid

Expenses

PL 001 G001

185000 Specialreserve

Liability BS 0001

G001 Openite


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m186000 Interest

clearingLiability BS 000

1G001 Op

enitem

SAVE

Use Transaction code AS92 - To enter opening values of acquisition values and accumulateddepreciation

Integration with General Ledger Accounts Transaction code AO90.SPRO Financial Accounting Asset Accounting Integration with GL Assign General

Ledger Accounts.Select company code chart of depreciation.Select Chart of accountDouble click on choose account allocation.Select Account Determination from the list to which you want to assign accounts

Transaction Account determination

200000P&M

201000L&A

202000AUC

203000AUC-IP

204000LVA

Balance sheetAcquisition account

APC

200000 201000 202000 202000 204000

RetirementClearing A/C revenuefrom asset sale

350000 350000 350000

Gain from asset sale 351000 351000 351000Loss from asset sale 452000 452000 452000Loss made on asset 453000 453000 453000


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retirementDepreciationSelect01 book depreciation

Accumulateddepreciation 200100 201100 202000 202000 204000

Expenses account forordinary depreciation

450000 450000 450000 450000 450000

Interest 441000Interest clearing 186000Special depreciationTax depreciation 451000Special reserve 185000Post depreciation to General ledger

SPRO Financial Accounting Asset Accounting Integration with General LedgerPost depreciation to general ledger Specify document type for posting of depreciation

Double click on define document typesSelect position button.In the dialog box enter document type AFChoose green tick button continue Double click AF document typeSelect number range information ButtonEnter company codeSelect Change interval buttonSelect Insert interval buttonEnter Number range 04Specify Number intervalSave

Specify intervals and posting rules. Transaction. code OAYR.SPRO Financial Accounting Asset accounting Integration with general ledger Postdepreciation to General Ledger Specify intervals and posting rules

Select Company codeDouble click Posting ruleSelect 01 Depreciation areaSelect Details buttonSelect Posting optionOption Monthly posting

BI monthly posing XQuarterly posting X


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Semi annual posting XPost interest Post revaluation Save

Back

Determine Depreciation area in the asset classTransaction code OAYZ.SPRO Financial Accounting Asset Accounting ValuationDetermine depreciation area in asset classes

Select Asset class

Asset

class

01 Book

depreciation

02 Special

taxdepreciation

03

specialreserve

20

Costaccounting

30

Group

31

Group

Screen

Layout

2000

Amount Specification

SPRO Financial Accounting Asset Accounting Valuation->Amount Specification->Specify maximum amount for low value assets +asset classes

Double click Specify low value amountSelect Low value asset classSave Asset class Low value amount

01 102 103 120 130 131 1

Double click Specify amount for low value assetsSelect Company code


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Double click Amount for low value assetAsset class LVA PO01 5000 500002 5000 500020 5000 5000

30 5000 500031 5000 5000

SAVEback

Determine depreciation area for interest calculationSPRO Financial accounting Asset Accounting Special valuation Interest Determinedepreciation areas

Asset class Interest indication01 Save & back

DepreciationThe depreciation component makes it possible to manage the following types of depreciationin the system.

Automatically calculated depreciation types

Ordinary Depreciation Special Depreciation

Depreciation types that are planned manually Unplanned depreciation

Transfer of reserves/reduction of APCOrdinary depreciation is the planned depreciation for wear & tear during normal use of anasset.

Special depreciation represents deduction for wear & tear on an asset for a purely tax basedpoint of view.

Ordinary depreciation reflects the deduction for wear & tear during the normal use of theasset. Unusual influences, such as damage, which leads to a permanent decrease in the valueof the asset, are covered by unplanned depreciation.

Transfer of Reserve/Reduction of APC allows you to reduce the depreciation base of an assetby a given amount. This type of depreciation has to be posted manually. It cannot be postedautomatically using depreciation keys like other depreciation types.

Depreciation calculation is based on the control parameters as well as planned useful life ofthe asset that is entered in the asset master record.


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Depreciation key contains all control data for the calculation of planned annualdepreciation.

The most important part of depreciation key is the calculation method. Special functions let you comply with a cut off value.

Change over Method:

Certain depreciation methods necessitate a change over to another calculation method formathematical reasons in order to depreciate the asset completely within the period of use.Therefore, when you assign calculation methods to a depreciation key, you can enter achange over method. The change over specifies when the system should change over todifferent method.

You can set up the following change over methods.

1. Change over when depreciation amount of change over method higher.

2. Change over when net book value percentage reached.3. Change over when net book value percent less or same as X%.4. Change over when net book value is less than change over amount.5. Change over when net book value is less than straight-line rate.6. Change over after the end of planned useful life.7. Change over in next year as soon as straight-line higher.8. User-defined change over using a customer enhancement.

At the time of carry forward of annual values the system checks if the change overnecessitates a change in the calculation of depreciation.Calculation Method

Maintain calculation method separately and assign it to a depreciation key. Calculationmethods depend on the chart of depreciation except the base method.The standard calculation methods are an integral part of the system and cannot be altered.The key of the calculation method has to begin with X,Y or Z. Any change over to othercalculation methods during the duration of depreciation are defined in the depreciation key.

Methods Control parameters

Base Method: Depreciation typeOrdinary depreciationSpecial depreciation

InterestCalculation methodsTreatment of the end of depreciation

Declining balance method Multiplication factorMinimum percentageMaximum percentage

Maximum amount method Maximum amount of depreciation


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Multi level method Validity date or periodBase value for each methodPercentageReduction of base valueControl indicator for calculation of

depreciationWith remaining useful life of the assetPeriod control Method Period control for

AcquisitionSubsequent acquisitionRetirementTransfers

Depreciation Calculation Methods:1. Percentage from useful life/percentage from remaining useful life.

a.= Constant rate for every year

b.= New % Rate every year

2. Total percentage rate in the tax concession period.

This method allows you to depreciate a certain percentage rate from the depreciation basewithin a tax concession period. In order to calculate the current periodic depreciation thesystem first determines the accumulated depreciation up to the period under examination.The period depreciation is the difference between the already existing depreciation and thetotal depreciation allowed with subsequent acquisitions, the system automatically catches updepreciation from previous years in a lump sum.

3. Standard Rate: Fixed percentage rate for each fiscal year.

4. Percentage rate from remaining life + Change over date depreciation depreciation startdate.5. Mean value from several areas.6. Unit of production depreciation.7. Depreciation over remaining units of production.8. Sum of the years digits method APC 1000 VL 4, S of VL = 10 ( 4+3+2+1), Dep= 1000*

4/10 lst , 2nd 1000 * 3/109. Depreciation according to the present value of lease installments.

Cost of

acquisition

X 100

Cost of acquisition of

asset

X 100


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10. Declining balance method of depreciation.

Ending Depreciation:

The depreciation of a fixed asset is usually finished when a net book value of Zero or the endof the planned useful life has been reached. Some times the book value was not yet reachedzero when the useful life is expired, due to depreciation method use. By adjusting the way thesystem handles the end of depreciation, you can continue to depreciate beyond the end of theuseful life.

Define base methodSPRO FA AA Depreciation Valuation methods Depreciation key Calculationmethods Define base methods

Base method 0014 (Ordinary: explicit percentage) (After end of life)

Type of depreciation : ordinary depreciationDepreciation method : stated percentageDep. after planned life : yes

Base method 0028 for interest leasing

Decaling balance method. Transaction Code: AFAMD.SPRO FA AA Depreciation Valuation methods Depreciation key

Calculation method Define declining balance methods

a. Choose your chart of depreciationb. Choose 001

Multilevel methods Transaction Code: AFAMSSPRO FA AA Depreciation Valuation methods Depreciation keys

Calculation methods Define multilevel method

a. Select chart of depreciationb. Select new entriesMultilevelmethod

Validitystart date

Selectlevel

Acquisitionyear

Years Period Basevalue

Percentage


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Save & Back

Select Define period control methods: Transaction code AFAMP.Select New entriesPeriod control method : 006Description : 01/06/06/06/006Acquisition : 01 (at period start date)

Additions : 06 (At the start of the year)Retirement : 06Transfer : 06Save & Back

Period control : Function that determines the start date at the time of acquisition andretirement, transfer, subsequent acquisition.

Select Maintain Depreciation key Transaction code: AFAMASPRO FA AA Depreciation Valuation methods Depreciation Key Maintain keySelect new entriesEnter dep key and description

Dep.

key

Description PeriodControlAcc toFiscalYear

Dep.Totheday

SelectAssign.CalMethod

Type Phase BaseMethod

DecBALACE

PERIOD

CON

TROL

MULTILEVEL

Class


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SAVE & back 5 timesSelect All depreciation keysSelect Active button

Save & Back

Define screen layout for asset depreciation area.Transaction code A021SPRO Financial Accounting Asset Accounting Master data

Screen layout Define screen layout for asset depreciation areas

a. Select 2000 (depreciation on asset, sub number level)


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b. Double click on field group rulesc. Make depreciation key required entry.d. Select check box for main number and sub number.e. Savef. Back

Specify rounding off net book valueSPRO Financial Accounting Asset accounting Valuation Amount Specification

(Company code/Depreciation Area) Specify rounding net book value and/or depreciation.

b. Select the company code. Double click on rounding specifications

d. Select 01 book depreciation. Select the details button. Automatically calculated depreciation : Select rounding to nearest whole : select

g. Save

h. Back

Asset master creation : Transaction. Code: AS01

The asset master recordThe asset master record consists of two main parts.

1. General master data

a. General information ( Description, quantity)b. Account assignment.c. Posting information. ( Capitalization date)d. Time dependent assignment. (Cost Center)e. Information for plant maintenance.f. Entries for net worth tax.g. Information on real estate.h. Leasing conditions.i. Investment support measures.j. Information on the origin of asset.k. Physical inventory date.

l. Insurance data.m.User fields/evaluation groups

2. Data for calculating asset valuesa. Depreciation terms.b. Depreciation key.c. Useful life.d. Ordinary dep. Start.


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e. Change over year.f. Indexg. Proportionate depreciation variable.h. Scrap value.

Rules1. Sub asset master is to be created with reference to asset master.2. Main asset master is to be created with reference to asset class.3. In asset class we assign account determination.4. For account determination we assign accounts based on transaction like

Purchases, sales, losses, scrapping, depreciation and accumulated depreciationAccounting financial accounting fixed assets Assets Create.Asset ClassCompany codeNumber of similar assetsPress Enter key

DescriptionCapitalized dateSelect Time dependent dateBusiness areaCost centerSelect Depreciation tabSave and Back Depreciation Depreciation

KeyUsefullife

StartDate

Asset ClassCompany codeNumber of similar assetsPress Enter keyDescriptionCapitalized dateSelect Time dependent dateBusiness areaCost centerSelect Depreciation tabSave and Back Depreciation Depreciation

KeyUsefullife

StartDate


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Asset Class

Company codeNumber of similar assetsPress Enter keyDescriptionCapitalized dateSelect Time dependent dateBusiness areaCost centerSelect Depreciation tabSave and Back Depreciation Depreciation

KeyUsefullife

StartDate

Asset ClassCompany codeNumber of similar assetsPress Enter key

DescriptionCapitalized dateSelect Time dependent dateBusiness areaCost centerSelect Depreciation tabSave and Back Depreciation Depreciation

KeyUsefullife

StartDate

Asset ClassCompany codeNumber of similar assetsPress Enter key


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DescriptionCapitalized dateSelect Time dependent dateBusiness areaCost center

Select Depreciation tabSave and Back Depreciation Depreciation

KeyUsefullife

StartDate

Select Leasing tab buttonLeasing companyAgreement number

Agreement dateNotice dateLease state dateLease lengthTypeBase value as newPurchase priceNo of lease paymentsPayment cycleLease paymentAnnual interest rateSave & back to menuSelect DisplayAssetSelect LeasingSelect Opening posting buttonPress Enter key

BackGo to display a document Fb03Document numberCompany code

Fiscal yearPress Enter key

Creation of sub asset master: Transaction: Code AS11Accounting financial accounting fixed assets assets (create) sub number

AssetsAsset


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Company codeNumber of similar assets

Asset Acquisition Transaction Code:

F.90Accounting financial accounting fixed assets posting acquisition

External acquisition with vendor

Document date

Document type

Company code

Posting date

Posting periods

Currency

line item 1 : Posting key

Vendor

Amount

Line item 2 : Posting key

Asset Number

Transaction type

Amount


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Simulate & Save

Display asset information Transaction Code AW01NAccounting financial accounting Fixed assets Asset Assets explorer.

Go to menu Go toSelect additional functionsSelect planned valuesTo see depreciation calculations

Go to edit menuSelect display depreciation calculations

To see period wise all asset values:Accounting Financial Accounting Fixed assets Information assets Report on asset

accounting Asset balances Balance list Asset balances.

By business area : S_A_LR_87011965By asset number : S_ALR_87011963Asset class : S_ALR_87011964Cost center : S_ALR_87011966

Plant : S_ALR_87011967Location : S_ALR_87011968Asset super number : S_ALR_87011969

Retirement of asset Transaction Code F-92Accounting financial accounting Fixed assets postingRetirement with revenue Customer

Document date

Document type

Company code

Posting date

Posting periods


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Currency

line item 1 : Posting key

Customer

Amount

Line item 2 : Posting key

General Account

Transaction type

Amount

Asset retirement & Press Enter keyAsset numberAsset value dateComplete retirement button

Select continue buttonSimulate and save the transactionThe system generate six line items

TRANSFER OF ASSET: Transaction. Code: ABUMN

Master Data Maintenance

If the asset was assigned to the wrong asset class or to the wrong business area, you(currently) have to create a new master record for the asset to correct this. You cannotchange the asset class, the general ledger account or the business area directly in the assetmaster record. Since you want to transfer all other data for the asset, the most efficientmethod is to create the new master record by copying the old one.

1. Select in the SAP R/3 System screen accounting financial accounting fixedassets.

2. On the Asset Accounting screen, selectAsset Create Asset.3. On the Create Asset: Initial Screen enter the following data:

Asset class Enter your asset class

Company code Enter your company code


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4. SelectEnter.5. Enter the description of asset6. Enter capitalized date7. Select the tap page Time-dependent and enterthe following data:

Business area Enter business area

8. Select depreciation area tab9. Enter the depreciation key details10. SelectSave.11. Make a note of the asset number.12. Return to the main SAP R/3 screen.

2. Accounting Financial Accounting Fixed assets posting transfer transferWith in the company code Transaction Code: ABUMN

DEPRECIATION RUN:Transaction Code: AFABAccounting Financial Accounting Fixed assets Periodic processing

Depreciation Run Executive

NOTE: we have to run depreciation from first period onwards.

Asset depreciation is to run in the background processing.Enter Company code, fiscal year and posting periodSelect the planned posting runDeselect the test run button

In the menu bar Program, select the Background processingEnter output device LP01 and select continue buttonSelect Immediate buttonSelect Save Button. A message appear like thisBackground job was scheduled for program RAPOST2000

RECALUATE DEPRECIATION: Transaction. Code: AFAR

SCRAPPING OF ASSET: Transaction Code: ABAVINAccounting Financial accounting Fixed Assets Posting Retirement Asset

Retirement by scrappingGive document dateAsset value dateText (description) reason for scrapping of an asset

SAVE


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