04/01/2018 ABNAN Revenue from post-capitalization concept

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ABNAN Revenue from post-

capitalization concept
This question is answered

Dear Gurus,

I would like some light on the ABNAN - Post capitalization, regarding its accounting posting.

https://archive.sap.com/discussions/thread/3495143 1/7
04/01/2018 ABNAN Revenue from post-capitalization concept

SAP posts like below.

70 / Asset / 1000,00 / CAP

75 / Ac. Dep / 50,00 / Accumulated Depreciation

50 / P&L / 950,00 / Revenue from Post Capitalization (or the contra account informed in ABNAN)

My question is regarding "Revenue from Post Capitalization". What is the use of it? Is there examples?

Ex. Lets say that after the anual Inventory, only one asset was found which was not entereded in the system.

Thus, via ABNAN is possible to post the accumulated depreciation since the assets inicial useful life + its
CAP value.

However what about the Revenue from Post Capitalization? I don't see a 'Revenue' in this scenario...

Thank you in advance!

(https://people.sap.com/adriano.mesadri2)

Adriano Mesadri (https://people.sap.com/adriano.mesadri2)

February 04, 2014 at 11:47 AM
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04/01/2018 ABNAN Revenue from post-capitalization concept

Correct Answer

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Sethuraman Ganesamurthy (https://people.sap.com/sethuraman.ganesamurthy2) replied

February 04, 2014 at 11:47 AM

Hi Adriano,

The post capitalisation means some expenditure you would have incurred
in the previous years but missed to capitalise. So the expenditure would
have been considered as a loss/expense in P&L account in that year. Now
you want to reverse the effect so thats why revenue head is operated in
current year.

Example: Some erection expenditure say 100000 is expensed in year 2012

but missed out to capitalise the exp and depreciation of 20000 would have
been booked had you been capitalised .So in effect Profit of 2012 had been
decreased by 80000. This year you want to capitalise means the
expenditure would be reversed and thereby profit of this year will be
increased by 80000 and 20000 is booked to Accumulated depreciation.

Hope it is clear.

Regards,

G.Sethuraman

1
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04/01/2018 ABNAN Revenue from post-capitalization concept

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Sethuraman Ganesamurthy (https://people.sap.com/sethuraman.ganesamurthy2)replied

February 04, 2014 at 05:36 AM

Hi Adriano,

If you do Post capitalisation, it will split the asset value into two
one accumulated depreciation(From the beginning of Ord dep
start date to previous closed fiscal year) and the balance to the
Revenue from post capitalisation GL configured.

E.g Asset ord dep start date-01.04.2008. Asset depreciation

rate 8%

If you do post capitalisation for 100000 now. The Acc dep

would be 40000(100000*8% dep for 5 yrs-2008-2012) and the
balance will be revenue from post capitalisation.

The entry is

Asset DR 100000

Acc dep CR 40000

Revenue from CR 60000.

post capitalisation

It will start depreciation for that 100000 also from the current
fiscal year. i.e 8000 depreciation will be added this year.

It is a standard process.

Hope it is clear.

Regards,

G.Sethuraman

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Adriano Mesadri (https://people.sap.com/adriano.mesadri2)replied February 04, 2014 at 10:43 AM

Dear Sethuraman,

https://archive.sap.com/discussions/thread/3495143 4/7
04/01/2018 ABNAN Revenue from post-capitalization concept

Thank you for your prompt answer!

I've understood the example given, however the "Revenue" concept is still unfamiliar to
me.

My question is: why the remaining value (60.000) is posted to a revenue account?

For instance, If there is a post capitalization in a asset which was just found during the
annual inventory (therefore, it was not posted to SAP) why the remaining value value of
this asset (APC - acum. dep.) should be posted to a Revenue account?

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 Helpful Answer

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pankaj pandey (https://people.sap.com/pankaj.pandey2)replied February 04, 2014 at 11:31 AM

Hi Adriano,

Whenever you run depreciation followin entry get posted,

Depreciaiton Exp Dr

Acc Dep A/c

Now as it is post capitalisation , the part of the same was not considered in PY P&L.

Let me give you an example from other aspect:

Suppose ser has booked an asset considering it as an expense in previour year lEt
suppose amount was 1000.

He posted below entry

Exp Dr

Vendor A/c

Now in next FY it has been found taht the same was an asset and to be capitalised from
PY. So the PY depreciation should also be posted.

Now at the time of Post capitlisation system will post following entry

asset a/c Dr 1000

Acc Dep Cr 10 (suppose)

Revenue acc Cr 990 (net of the same)

Now let suppose if the asset was booked in PY, system will ost dep of 10 rs

and will post dep exp in P&L of 10 rs.

https://archive.sap.com/discussions/thread/3495143 5/7
04/01/2018 ABNAN Revenue from post-capitalization concept

So in current yera the net value will be 1000-990 i.e. 10 rs.

That is how system works.

Hopw this would help you.

Regards

Pankaj

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Correct Answer

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Sethuraman Ganesamurthy (https://people.sap.com/sethuraman.ganesamurthy2)replied

February 04, 2014 at 11:56 AM

Hi Adriano,

The post capitalisation means some expenditure you would

have incurred in the previous years but missed to capitalise. So
the expenditure would have been considered as a loss/expense
in P&L account in that year. Now you want to reverse the effect
so thats why revenue head is operated in current year.

Example: Some erection expenditure say 100000 is expensed

in year 2012 but missed out to capitalise the exp and
depreciation of 20000 would have been booked had you been
capitalised .So in effect Profit of 2012 had been decreased by
80000. This year you want to capitalise means the expenditure
would be reversed and thereby profit of this year will be
increased by 80000 and 20000 is booked to Accumulated
depreciation.

Hope it is clear.

Regards,

G.Sethuraman

1
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