Asset Accounting

The asset accounting component consists of the following parts. 1. 2. 3. 4. Traditional asset accounting Processing leased assets Preparation for consolidation Information system

Organizational elements and structures Chart of depreciation Chart of depreciation is used in order to manage various legal requirements for the depreciation and valuation of assets. They are usually country specific and are defined independently of the other organizational units. The chart of depreciation consists of the following parts. The chart of depreciation is a directory of depreciation areas organized according to business management requirements. Asset accounting component enables you to manage values for assets in parallel in up to 99 depreciation areas. >Keys for the automatic depreciation of assets in each chart of depreciation >There are special objects in the chart of depreciation for special calculation of asset values. >Chart of accounts are used for account assignments with asset accounting. Assignment to Organizational units a. Company code: Asset accounting uses the company codes as general ledger. However, you need to define these company codes further with the specifications needed for asset accounting. An FI company code is not usable in asset accounting until it has been defined in this way. Assign chart of depreciation to company code and the following system settings at the company code level. Number assignment. Fiscal year variant: periods & fiscal year in asset accounting. Depreciation area for net worth tax. Depreciation type for posting depreciation. Settlement profile for the settlement of assets under construction. a. Business area. b. Plant/Location/Address c. Cost center and profit center.

Structuring Fixed Assets It is possible to structure fixed assets at several different levels in the system. Balance sheet level Classification level Asset related level.

Structure

Asset Related

Classification

Balance sheet Financial Statemet Version Balance sheet item G.L A/C

1. Group Asset Num 2. Main Asset Num 3. Asset Sub-number 4. Line items Group Asset Asset Asset Component Transaction Balance Sheet level: Three level hierarchy Balance sheet version Balance sheet item General Ledger item Asset Class

Classification level: At this level fixed assets can be structured using asset classes in the asset accounting component. You use asset classes to structure assets according to legal requirements or the demands of accounting. Every asset belongs to an asset class. You can use account determination in the asset class to assign each asset to an item in the balance sheet. Asset-Related level: In this, four-level hierarchy has been set up in the asset accounting.

Group assets make it possible to group a number of assets together for the purpose of uniform evaluation and depreciation. The asset main number represents an asset that is to be evaluated independently. It contains information for the valuation of an asset as well as organizational information. Below the asset main number, the asset can be further divided into its components parts by the use of asset sub-numbers. You can use sub numbers to depreciate subsequent acquisitions to an asset separately from the original asset. The lowest level consists of the transaction data per depreciation (Such as acquisition or retirement) that belongs to asset master record. (Line items) Intangible Assets Fixed Assets Financial Assets

Asset Types 1. 2. 3.

Asset under construction are special form of tangible assets. Depreciation is not allowed for assets under construction in most countries. For posting down payments, allow the posting of the transaction type group. Down payments in these asset classes. Low value assets are depreciated in the year in which they acquired. You set the maximum amount for low value fixed assets when defining depreciation area at company code level. 1. Asset class Functions of Asset Class: Asset classes are used to structure fixed assets. Asset classes apply to all company codes. The asset class provides default values for all asset master records. Account determination One of the most important functions of the asset class is to establish the connection between the asset master records and the corresponding accounts in the general ledger in Financial Accounting. This connection is created by the account determination 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 default depreciation terms for each depreciation area. You can assign any number of charts of depreciation to each asset class. The control parameters and the master data section of the asset class are always valid for all company code within a client. Special Asset classes: Assets under construction

Low value assets Leased assets Financial assets Technical assets Specify account determination SPRO Financial Accounting Asset Classes Specify account determination. Select new entries Account determination Number 200000 201000 202000 203000 204000 Accounting Organization structure Asset

Description Plant and machinery Leased assets Low value assets Asset under construction Asset under construction-Investment profile structure Asset

Create Screen layout rules SPRO Financial Accounting Asset Accounting Organization classes Create screen layout rules. Screen layout Description 2000 General machines 3300 Low value assets 4000 Asset under construction 6000 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 Asset classes Define number range interval. Company code Change Interval button Select Insert interval button Select Number 01 02 03 04 From Number 1000 2000 3000 4000 To Number 1999 2999 3999 4999

Note

Select External Check box for external number range

Creation of asset classes Transaction code OAOA. SPRO Financial Accounting Asset Accounting Organization structure Asset classes Define asset classes. Asset class 200000 201000 202000 Description Account determination Plant & 200000 machinery Leased 201000 assets Asset 202000 under constructio n Asset 203000 under constructio n investment profile Low value 204000 assets Screen Layout 2000 6000 4000 Number range 01 02 03 Line item settlement Investment profile Include asset Status

203000

4000

03

204000

3300

04

SAVE

Create General Ledger Account for Each asset. Transaction code : FS00 Asset Descripti Group Statemen Reconciliati on t on

Lin e ite m

Sort key

FSG

200000 200100

201000 201100

202000

204000 350000 351000 450000 451000 452000 453000

185000

Plant & machiner y Accumul ated depreciat ion-Plant & machiner y Leased assets Accumul ated Deprecia tion on Leased assets Asset under construct ion Low value assets Sales revenues of assets Profit on Sales of assets Deprecia tion Tax Deprecia tion Loss on sale of assets Scraping of asset Interest paid Special reserve

Assets Assets

BS BS

Asset Asset

018 018

G007 G007

Assets Assets

BS BS

Assets Assets

018 018

G007 G007

Assets

BS

Assets

018

G007

Assets Income Income Expense s Expense s Expense s

BS PL PL PL PL PL

Assets

018 018 018 001 001 001 001 001 000 1

G007 G007 G007 G001 G001 G001 G001 G001 G001 Op en ite

Expense PL s Expense PL s Liability BS

186000

Interest clearing

Liability BS

000 1

G001

m Op en ite m

SAVE

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

Integration with General Ledger Accounts Transaction code AO90. SPRO Financial Accounting Asset Accounting Integration with GL Assign Ledger Accounts. Select company code chart of depreciation. Select Chart of account Double click on choose account allocation. Select Account Determination from the list to which you want to assign accounts Transaction Account determination 200000 P&M 200000 201000 L&A 201000 202000 AUC 202000 203000 AUC-IP 202000 204000 LVA 204000

General

Balance sheet Acquisition account APC Retirement Clearing A/C revenue from asset sale Gain from asset sale Loss from asset sale Loss made on asset

350000 351000 452000 453000

350000 351000 452000 453000

350000 351000 452000 453000

retirement Depreciation Select 01 book depreciation Accumulated 200100 201100 depreciation Expenses account for 450000 450000 ordinary depreciation Interest 441000 Interest clearing 186000 Special depreciation Tax depreciation 451000 Special reserve 185000 Post depreciation to General ledger 202000 450000 202000 450000 204000 450000

SPRO Financial Accounting Asset Accounting Integration with General Ledger Post depreciation to general ledger Specify document type for posting of depreciation Double click on define document types Select position button. In the dialog box enter document type AF Choose green tick button continue Double click AF document type Select number range information Button Enter company code Select Change interval button Select Insert interval button Enter Number range 04 Specify Number interval Save

Specify intervals and posting rules. Transaction. code OAYR. SPRO Financial Accounting Asset accounting Integration with depreciation to General Ledger Specify intervals and posting rules Select Company code Double click Posting rule Select 01 Depreciation area Select Details button Select Posting option Option Monthly posting BI monthly posing Quarterly posting

general ledger Post

X X

Semi annual posting Post interest Post revaluation Save Determine Depreciation area in the asset class Transaction code OAYZ. SPRO Financial Accounting Asset Accounting Valuation Determine depreciation area in asset classes Select Asset class

X Back

Asset class

01 Book depreciation

02 Special tax depreciation

03 special reserve

20 Cost accounting

30 Grou p

31 Grou p

Screen Layout 2000

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

Double click Select

Specify low value amount Low value asset class Asset class Low value amount 01 1 02 1 03 1 20 1 30 1 31 1 Specify amount for low value assets Company code

Double click Asset class 01 02 20 30 31

LVA 5000 5000 5000 5000 5000

PO 5000 5000 5000 5000 5000

Amount for low value asset SAVE back

Determine depreciation area for interest calculation SPRO Financial accounting Asset Accounting Special valuation Interest Determine depreciation areas Asset class Interest indication 01 Save & back Depreciation The depreciation component makes it possible to manage the following types of depreciation in the system. Automatically calculated depreciation types Ordinary Depreciation Special Depreciation Depreciation types that are planned manually Unplanned depreciation Transfer of reserves/reduction of APC

Ordinary depreciation is the planned depreciation for wear & tear during normal use of an asset. Special depreciation represents deduction for wear & tear on an asset for a purely tax based point of view. Ordinary depreciation reflects the deduction for wear & tear during the normal use of the asset. Unusual influences, such as damage, which leads to a permanent decrease in the value of the asset, are covered by unplanned depreciation. Transfer of Reserve/Reduction of APC allows you to reduce the depreciation base of an asset by a given amount. This type of depreciation has to be posted manually. It cannot be posted automatically using depreciation keys like other depreciation types. Depreciation calculation is based on the control parameters as well as planned useful life of the asset that is entered in the asset master record.

 Depreciation key contains all control data for the calculation of planned annual depreciation. 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 for mathematical 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 a change over method. The change over specifies when the system should change over to different method. You can set up the following change over methods. 1. 2. 3. 4. 5. 6. 7. 8. Change over when depreciation amount of change over method higher. Change over when net book value percentage reached. Change over when net book value percent less or same as X%. Change over when net book value is less than change over amount. Change over when net book value is less than straight-line rate. Change over after the end of planned useful life. Change over in next year as soon as straight-line higher. User-defined change over using a customer enhancement.

At the time of carry forward of annual values the system checks if the change over necessitates a change in the calculation of depreciation. Calculation Method Maintain calculation method separately and assign it to a depreciation key. Calculation methods 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 other calculation methods during the duration of depreciation are defined in the depreciation key. Methods Base Method: Control parameters Depreciation type Ordinary depreciation Special depreciation Interest Calculation methods Treatment of the end of depreciation Multiplication factor Minimum percentage Maximum percentage Maximum amount of depreciation

Declining balance method

Maximum amount method

Multi level method

Period control Method

Validity date or period Base value for each method Percentage Reduction of base value Control indicator for calculation depreciation With remaining useful life of the asset Period control for Acquisition Subsequent acquisition Retirement Transfers

of

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

Cost of acquisition

= Constant rate for every year

X 100
b.

Cost of acquisition of asset

= New % Rate every year

X 100
2. Total percentage rate in the tax concession period.

This method allows you to depreciate a certain percentage rate from the depreciation base within a tax concession period. In order to calculate the current periodic depreciation the system first determines the accumulated depreciation up to the period under examination. The period depreciation is the difference between the already existing depreciation and the total depreciation allowed with subsequent acquisitions, the system automatically catches up depreciation 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 start date. 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 * 3/10 9. Depreciation according to the present value of lease installments.

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 end of the planned useful life has been reached. Some times the book value was not yet reached zero when the useful life is expired, due to depreciation method use. By adjusting the way the system handles the end of depreciation, you can continue to depreciate beyond the end of the useful life. Define base method SPRO FA AA Depreciation Valuation methods Depreciation key Calculation methods Define base methods Base method 0014 (Ordinary: explicit percentage) (After end of life) Type of depreciation Depreciation method Dep. after planned life : ordinary depreciation : stated percentage : 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 depreciation b. Choose 001

Multilevel methods Transaction Code: AFAMS SPRO FA AA Depreciation Valuation methods Depreciation keys Calculation methods Define multilevel method a. Select chart of depreciation b. Select new entries Multi Validity Select level start date level method

Acquisition Years year

Period

Base value

Percentage

Save & Back

Select Define period control methods: Transaction code AFAMP. Select New entries Period control method : 006 Description : 01/06/06/06/006 Acquisition : 01 (at period start date) Additions : 06 (At the start of the year) Retirement : 06 Transfer : 06 Save & Back Period control : Function that determines the start date at the time of acquisition and retirement, transfer, subsequent acquisition. Select Maintain Depreciation key Transaction code: AFAMA SPRO FA AA Depreciation Valuation methods Depreciation Key Maintain key Select new entries Enter dep key and description Description Period Dep. Select Type Phase Base Dec P M Control To Assign. Method B E U Acc to the Cal A R L Fiscal day M L I T Year e A O I t C D L h E E o C V d O E N L T R O L keyDep.

Class

SAVE & back 5 times Select Select Save & Back

All depreciation keys Active button

Define screen layout for asset depreciation area. Transaction code A021 SPRO Financial Accounting Asset Accounting Master data Screen layout Define screen layout for asset depreciation areas a. Select 2000 (depreciation on asset, sub number level)

b. c. d. e. f.

Double click on field group rules Make depreciation key required entry. Select check box for main number and sub number. Save Back

Specify rounding off net book value SPRO Financial Accounting Asset accounting Valuation Amount Specification (Company code/Depreciation Area) Specify rounding net book value and/or depreciation. b. c. d. e. f. g. h. Select the company code Double click on rounding specifications Select 01 book depreciation Select the details button Automatically calculated depreciation : Select rounding to nearest whole : select Save Back

Asset master creation : Transaction. Code: AS01 The asset master record The 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 a. b. c. d. 2. Data for calculating asset values Depreciation terms. Depreciation key. Useful life. Ordinary dep. Start.

e. f. g. h.

Change over year. Index Proportionate depreciation variable. Scrap value. Rules 1. 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 depreciation Accounting financial accounting fixed assets Assets Create. Asset Class Company code Number of similar assets Press Enter key Description Capitalized date Select Time dependent date Business area Cost center Select Depreciation tab Depreciation Depreciation Useful Save and Back Key life

Start Date

Asset Class Company code Number of similar assets Press Description Capitalized date Select Business area Cost center Select Save and Back

Enter key Time dependent date Depreciation tab Depreciation Depreciation Key

Useful life

Start Date

Asset Class Company code Number of similar assets Press Description Capitalized date Select Business area Cost center Select Save and Back

Enter key Time dependent date Depreciation tab Depreciation Depreciation Key

Useful life

Start Date

Asset Class Company code Number of similar assets Press Description Capitalized date Select Business area Cost center Select Save and Back

Enter key Time dependent date Depreciation tab Depreciation Depreciation Key

Useful life

Start Date

Asset Class Company code Number of similar assets Press

Enter key

Description Capitalized date Select Business area Cost center Select Save and Back

Time dependent date Depreciation tab Depreciation Depreciation Key

Useful life

Start Date

Select Leasing company Agreement number Agreement date Notice date Lease state date Lease length Type Base value as new Purchase price No of lease payments Payment cycle Lease payment Annual interest rate Save & back to menu Select Asset Select Select Press Back Go to display a document Document number Company code Fiscal year Press

Leasing tab button

Display Leasing Opening posting button Enter key Fb03

Enter key

Creation of sub asset master: Transaction: Code AS11 Accounting financial accounting fixed assets assets (create) sub number Assets Asset

Company code Number of similar assets

Asset Acquisition Transaction Code: F.90 Accounting 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

Simulate & Save

Display asset information Transaction Code AW01N Accounting financial accounting Fixed assets Asset Assets explorer. Go to menu Go to Select additional functions Select planned values To see depreciation calculations Go to edit menu Select 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 By asset number Asset class Cost center Plant Location Asset super number : : : : : : : S_A_LR_87011965 S_ALR_87011963 S_ALR_87011964 S_ALR_87011966 S_ALR_87011967 S_ALR_87011968 S_ALR_87011969

Retirement of asset Transaction Code F-92 Accounting financial accounting Fixed assets posting Retirement with revenue Customer Document date Document type Company code Posting date Posting periods

Currency line item 1 : Posting key Customer Amount Line item 2 : Posting key General Account Transaction type Amount Asset retirement Asset number Asset value date Complete retirement button & Press Enter key Select continue button Simulate and save the transaction The 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 cannot change the asset class, the general ledger account or the business area directly in the asset master record. Since you want to transfer all other data for the asset, the most efficient method is to create the new master record by copying the old one. 1. Select in the SAP R/3 System screen accounting financial accounting fixed assets. 2. On the Asset Accounting screen, select Asset Create Asset. 3. On the Create Asset: Initial Screen enter the following data: Asset class Company code Enter your asset class Enter your company code

4. 5. 6. 7.

Select Enter. Enter the description of asset Enter capitalized date Select the tap page Time-dependent and enter the following data: Business area Enter business area

8. Select depreciation area tab 9. Enter the depreciation key details 10. Select Save. 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 transfer With in the company code Transaction Code: ABUMN DEPRECIATION RUN: Transaction Code: AFAB Accounting 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 period Select the planned posting run Deselect the test run button In the menu bar Program, select the Background processing Enter output device LP01 and select continue button Select Immediate button Select Save Button. A message appear like this Background job was scheduled for program RAPOST2000 RECALUATE DEPRECIATION: Transaction. Code: AFAR SCRAPPING OF ASSET: Transaction Code: ABAVIN Accounting Financial accounting Fixed Assets Posting Retirement Asset Retirement by scrapping Give document date Asset value date Text (description) reason for scrapping of an asset SAVE