A depreciation area shows the valuation of a fixed asset for a particular

purpose, it stores any information concerning the valuation of a complex fixed

asset, the FI-AA component provides the following

Up to 99 depreciation areas can be used, in parallel for each asset

If required the values of depreciation can be posted automatically in FI
Depreciation areas can be used without restriction, there are no
technical specifications

Each depreciation area permits the use of all forms of depreciation, interest
and revaluation calculation, for example different deprecation areas can
manage the same values and depreciation parameters but show them in
different currencies, here are some more different business requirements

local balancing of accounts in accordance with regional requirements

the balance sheet for tax purposes (if another valuation is permitted)
the balance sheet in accordance with IAS (if the valuation is necessary)
managerial accounting
parallel financial reporting ( for example, as part of a group's balancing
of accounts)

Separate transaction figures are managed for each asset and depreciation area
(asset balance sheet values, depreciation, net book book values, etc).
Depreciation area 01 implements online postings to the general ledger and
documents are transferred on a one-to-one basis, this means that during online
posting each original document assigned to an asset is posted to exactly one
asset without summarization. Only depreciation area 01 which is the master
depreciation area has integration into general ledger, accounts payable and
accounts receivable accounting. You can deactivate any depreciation areas
that you are not using and you can re-activate them at a later date, or add
additional depreciation areas.
Asset xy in Year 2013
Balance Sheet value

Depreciation

Net Book value

Book Depreciation

100,000

40,000

60,000

Tax Depreciation

100,000

40,000

60,000

Cost Accounting Depreciation

100,000

10,000

90,000

Parallel Depreciation

100,000

10,000

90,000

SAP has a large number of valuation parameters which you define various
factors that influence the calculation of depreciation, see the below diagram

When configuring the system you need to specify if and how values are
posted from the depreciation areas to the general ledger, you need to answer
the below questions

will any values be posted

will the asset balances be posted in real time and the depreciation
values be posted periodically
will the asset balances and depreciation values be posted periodically
will only the depreciation values be posted periodically

Depreciation area 01 asset balances must be posted in real time to the general
ledger, the system uses two types of depreciation area

this is regarded as the master depreciation area that supplies values to your balance sheet, also know as t
Real depreciation
normally designate this as 01, this area is characterized by automatic posting to FI with currency the same
area
not be able to adopt values/deprecation terms from other depreciation areas and you will not be able to d

this determines new assets values from values that have already been determined in other depreciation ar
Derived
mathematical formula (addition or subtraction), you can setup the formula to derive the values from a ma
depreciation area
areas, you can also post the values from a derived area to FI.

An asset is assigned to a cost accounting object, it is therefore possible to use

the following cost accounting objects

Cost center
(Internal) order (real or statistical)
Activity type

You can post from any of the depreciation areas into controlling, for costaccounting depreciation of an asset you can use one of the following three
options

Debiting a cost center

in the FI-AA component, also depreciation and interest can be transferred

directly to financial accounting (FI) and cost accounting (CO). Like accounts
payable and receivable asset accounting is also treated as a subledger of
financial accounting, however to cover all legal and accounting requirements
it is necessary to define some organizational elements.