Fixed Assets

Asset Accounting

AA Overview

Asset Accounting as a Sub-ledger

Asset Class

Chart of Depreciation

Master Data

Create/Change Asset Master Record

Acquisitions

Settlement of an Asset Under Construction (AUC)

Retirement

Depreciation

Asset Accounting

Transfers

Period / Year End Closing

Reporting

Asset Accounting is a subsidiary ledger of Financial Accounting. The appropriate General Ledger accounts are updated each time you post.

Overview: Asset Accounting as a Sub-Ledger

Asset accountAsset account VendorVendor

Assets LiabilitiesAssets Liabilities

General LedgerGeneral Ledger

1000 1000

1000 1000

The asset class is used to:

sub-classify the General ledger accounts andgroup master records by specific criteria.

Overview: Asset Classes

Asset Class

Generalledger

accounts

Balancesheet

Assetclasses

Assetmaster

records

A L

Vehicles Fixtures andfittings

Buildings Assets underconstruction

Asset Classes

Asset Classes Configured 910000 Land

910001 Building

910002 Plant and Machinery

910003 Vehicles

910004 Asset under construction

Functions of the Asset Class

Assets

Asset Class

Account allocation

Screenlayout

Number assignment

Special features

Default values

Selectionfeatures

Assets Liabilities

Asset portfolio

Real estate

Machinery

Finance. assets

Fixtures+fit.. . .

. . .

. . .

Bal. sheet items

Acct. determinationAsset class

Lathe

02200000

Create asset

Drillpress

02115000

1

Functions of the Asset Class

The asset class contains default values and control elements which are passed on to the individual assets when you open a new asset master record.

By entering useful default values, you reduce time and effort needed for creating new asset master records. You also ensure that the records in a given class are handled uniformly.

The asset class is the most important criteria for structuring fixed assets from an accounting point of view. Every asset has to be assigned to exactly one asset class. The asset class is used to assign the assets (and their business transactions) to the correct general ledger accounts. The most important tasks of the asset classes are:

The assignment of default values when creating assets (particularly depreciation terms)

The grouping of assets for reporting purposes

Definition of the Asset Classes

Client levelClient level

Account allocationScreen layout ruleNumber rangeDefault values

Chart of depreciation Chart of depreciation levellevel

Section for valuation data

Selection of depreciation areas

Default values

Master data section

Asset classes

Asset Classes in the Chart of Depreciation

Areas

Depreciationkey

Proposeduseful life

Minimumuseful life

Maximumuseful life

Book dep.

10/00

__

__

DG30

decl-bal.3 X3 X

Tax dep.Tax dep.

10/00

__

__

SNFG

invest. support

Group

8/00

__

__

LINR

str.-line

Book dep.

12/00

__

LINB

str.-line

Group

8/00

__

__

LINR

str.-line

ACRSACRS

. . . .. . . .

__

__

. . . .. . . .

. . . .. . . .

. . . .. . . .

8/00

. . . . . .

Class

Chart of depreciation

Machines

USAGermany

1

Points from the Asset Class / Dep’n Slide

The Chart of Depreciation is assigned to company code, therefore a class may have multiple Charts of Depreciation relevant to it.

The asset classes are valid across company codes. The catalog of asset classes, therefore, applies uniformly to all company codes. This is true, even if the company codes use different charts of depreciation, and therefore different depreciation areas

You can assign different charts of depreciation to an asset class, so that all assets in this class will be treated differently in each country.

15

Transaction type groups

Special Asset Class: AuC

Class: Assets u. const.

Extras

AuC status

Down payment

16 Down payment carried forward from previous years

AuC managed as total line item settlement capital investment measure

depreciationareas

deprec.key

Book dep. 0000

Tax dep. 0000

Cost-acc. LINA

negative values allowed

depreciation is not calculated in depreciation areas intended for the

balance sheet

AUC without line item settlement

Assets under construction in this asset class are managed without the option of line-item final settlement to receiver assets or cost centers. As a result:

Only complete transfers or simple partial transfers are possible (in other words, you can only transfer either prior-year acquisitions or current-year acquisitions in one given posting transaction).

You can only transfer to one target asset per posting transaction. You have to enter the amount of the transfer manually.

There is no connection to the original asset under construction in the capitalized asset. Therefore, there is no exact proof of origin for the original postings.

Assets under Construction with Line item settlement

Assets under construction in this asset class are managed with the option for final line item settlement to receiving assets or cost centers. As a result:

On the capitalized asset, you can then see the relationship between the capitalized asset and original postings to the asset under construction - you can accurately identify the origin of the postings.

AUC’s can be settled to multiple final assets / asset classes

Assets under Construction from Investment measure

Assets under construction in this asset class to be created solely for capital investment measures (internal orders or projects).

The assets in this class can not then be directly created and posted in Asset Accounting. The assets can only be processed by means of an order or WBS element, to which they are assigned.

AUC Asset Class: Points from previous slide

Assets under construction require their own asset class.

Choosing the depreciation key ‘0000’ ensures that depreciation is not calculated for the asset under construction in depreciation areas that are posted to the balance sheet.

Assets under construction have to be shown separately in the balance sheet.

The component IM (Investment Management) is available for managing more extensive asset investments from a controlling-oriented perspective.

There are three asset classes for Assets Under Construction configured. These are:

Asset under Construction

Asset under Construction with Line item settlement

Asset under Construction from Investment measure

AUC Asset Class: Points from previous slide

Assets under construction require their own asset class.

Choosing the depreciation key ‘0000’ ensures that depreciation is not calculated for the asset under construction in depreciation areas that are posted to the balance sheet.

Assets under construction have to be shown separately in the balance sheet.

The component IM (Investment Management) is available for managing more extensive asset investments from a controlling-oriented perspective.

There are three asset classes for Assets Under Construction configured. These are:

Asset under Construction

Asset under Construction with Line item settlement

Asset under Construction from Investment measure

Overview: Depreciation Areas

You will generally need values for fixed assets for various business and legal purposes (for example, for book depreciation, cost-accounting depreciation and so on). In the R/3 FI-AA system, it is therefore possible to manage values in parallel in as many depreciation areas as you want.

The Chart of Depreciation

Chart ofdepreciation

Depreciationarea 01

Depreciationarea 02

Depreciationarea 03

Depreciationarea 20

Bookdeprec.

Taxdeprec.

Specialreserves

Cost-acc.deprec.

Depreciationarea 30

Group deprec.

Depreciation Charts/Areas in A Ltd.

Depreciation Charts:

Z910: Chart of Depreciation: A Ltd

Depreciation Areas:

01: Local reporting Y1

02: Parent reporting Y2

31 Consolidated balance sheet in group currency

32 Book depreciation group currency (profit center)

There is no set relationship defined in the system between the chart of accounts and chart of depreciation.

Company codes in Financial Accounting are assigned to a chart of depreciation – refer following slide.

Asset Accounting Company Code

Chart of accounts Chart of depreciation

Financial Accounting Company Code

+

Data for Asset Accounting

Asset Accounting Company Code

==

Master Data

Creating the Asset Master Record

using a referenceusing asset class

taking over the defaultvalues from the asset class

'copying' anexisting asset

Create asset

Time-Dependent Data

ASSET MASTER RECORD

- Time-dependent data -

Enter period under consideration

Valid from MMDDYYYY

Valid to MMDDYYYY

Cost center A from 01/12/YY to 08/27/YYCost center B from 08/28/YY to 11/30/YYCost center C from 12/01/YY to 03/14/YY

. . . . .

. . . . .

. . . . .

New Interval

01Month

Calendar

Master Data Creation/Change: Key Points

When you create the asset master record, you have two options:

Use the asset class, to which the asset will belong, to provide default values. The asset class then supplies the most important control parameters in the asset master record.

Use an existing asset as a reference for creating the new asset master record.

Some information in the asset master record can be managed as time-dependent data. This is of particular significance for cost accounting assignments (for example, cost center, order, project).

Acquisitions

Asset transaction posted using clearing account (not integrated)

Accounts PayableAssets

Fixed Asset Vendor

100100

General LedgerAssets

Fixed Asset Clg Acct

100100

Accounts PayableAssets

Fixed Asset Vendor

100100

Asset transaction integrated with Accounts Receivable or Accounts Payable

100Acquisitionpurchase

110Acquisition in-

house production

Aqcuisition with Vendor

Aqcuisition with Auto-offsetting Entry

Asset Acquisition - Integration

(Only for direct Asset purchases)

(Only for direct Asset purchases )No PO

Asset transaction posted from Materials Management

(MM )MM

Aqcuisition with MM-PO

Purchase Requisition

Purchase Order

Goods Receipt

Goods Receipt

Invoice Receipt

Building

or

required

Capitalization

CapitalizationValuated Non-Valuated

Create Master Record

With assignment to

WBS optional

Asset Acquisition – MM Integration

WBS

Assignment of

Internal Orders

To manage

budget

expenditure

Retirement

Assets can be retired:With RevenueWithout Revenue (scrapped)

Retirement

Types of asset retirement

1. Retirement with revenue - selling of an asset either at a market price, net book value or other settlement price

2. Retirement without revenue - writing off an asset which is no longer productive or has no residual value

Types of asset retirement

1. Retirement with revenue - selling of an asset either at a market price, net book value or other settlement price

2. Retirement without revenue - writing off an asset which is no longer productive or has no residual value

Asset Retirement: Types

1

2

3

Retirement: - Acquis .date 01/01/20xx - 1 ,APC = 6000- Complete retirement of APC on 03/15/20xx- Revenue 4000 + 400 sales tax

APCAmount retiredAPCAPCAPCAPCAPCAmount retiredAmount retired

A/R posting

CustomerCustomer

44004000

RevenueRevenueAsset RetirmtAsset Retirmt

40004000

Assets posting

Asset

6000700

Clearing ofAsset Retirmt

4000

Loss

13006000

Proportional value adjustmentClearing of retirementProportionalProportionalProportionalProportionalProportional value adjustmentvalue adjustmentvalue adjustmentvalue adjustmentvalue adjustmentClearingClearingClearingClearingClearing of retirementof retirement4

P+L or FinStmt Notes

P+L

21 43

210Retirement

sale

200Retirementscrapping

Asset Retirement w/ Customer : Accounts

Depreciation

SAP supports the following direct types of depreciation:

Ordinary Depreciation: planned reduction in asset value due to normal wear and tear.

Special Depreciation: depreciation that is solely based on tax regulations.

Unplanned Depreciation: depreciation resulting from unusual circumstances, such as damage to the asset, that lead to a permanent reduction in its value.

Depreciation

The depreciation areas are identified in the system by a two-character numeric key. You make this specification in the asset classes, and can define it directly in the given asset master record.

The system allows you to define an almost indefinite number of depreciation areas. This feature enables you to handle a large number of different types of valuation in parallel.

You define the required depreciation keys per chart of depreciation.

Depreciation Key

Depreciation is calculated according to the depreciation key in the asset master. The most important influences on the calculation of depreciation are:

The value date of the document. It is used to set the depreciation start date in the asset.

The depreciation key.

The depreciation calculation method is the most important feature of the internal calculation key. It is used to carry out the different types of depreciation calculation.

Elements of the Depreciation Calculation

Transfers

Assets can be transferred within a company code or across companies within the Group

Transfers

Assets can be transferred in full or partially. Controlling object assignment can be changed as can asset class.

Asset transfers can be one of the following scenarios:

1. Transfer within same Company Code Eg. From one asset class to another

2. Inter-company transfers between companies in SAP Eg. From one company to another

1

2

Transfer within Company Code (ABUMN)

Intercompnay Transfer (ABT1N)

Asset Transfers

Period End Closing

Fiscal Year Change/Year-End Closing

Asset valuesat fiscal year start Year 2

Transaction 10000 0APC 10000 10000Ordinary dep. 3000 - 2100-Net book value 7000 4900

Asset valuesat fiscal year start Year 1

Transaction 0 10000APC 0 10000Ordinary dep. 0 3000 -Net book value 0 7000

Asset valuesat fiscal year start Year 1

Transaction 0 10000APC 0 10000Ordinary dep. 0 3000 -Net book value 0 7000

31Dec

Calendar

Fiscal Year Change

31

Dec

Calendar

Fiscal Year ChangeYear-end closing

Year-end closing program Year-end closing program - Check:- Check: Can the year-end closing be carried out? Can the year-end closing be carried out?- Maintenance of the last closed fiscal year - Maintenance of the last closed fiscal year per per company codecompany code

Closing reportsClosing reports- Asset history sheet- Asset history sheet- Asset list- Asset list- . . . - . . .

Depreciation posting runDepreciation posting run1.1.

2.2.

3.3.

Year-end closing

Periodic processingPeriodic processingFiscal year changeFiscal year change

Fiscal Year Change

Points from Fiscal Year Change/Year-End Closing

The fiscal year change program opens new annual value fields for each asset.

The earliest you can start this program is in the last posting period of the old year.

You have to run the fiscal year change program for your whole company code.

SAP provides you with a check report for year-end closing. It checks whether the fiscal year change was completed for all assets, whether depreciation was fully posted, whether errors exist for any assets.

If the program finds no errors, it updates the last closed fiscal year for each depreciation area.

Asset Reports …..

Summary of the main reports

Standard Fixed Asset Reports

Standard reports are available via the standard SAP menu: “Fixed Assets / Information System / Reports on Asset Accounting” Key reports:

S_ALR_87011963 - 70: Asset Balances

A series of query programs based on different selection criteria.

S_ALR_87011979 - 82: Physical Inventory Lists

A series of query programs based on different selection criteria.

S_ALR_87012936: Depreciation on Capitalized Assets (Depn Simulation)

Simulated depreciation on assets/asset classes and Projects (can be restricted to specific WBS elements).

S_ALR_87012026: Depreciation Current Year

Depreciation analysis by asset.

S_ALR_87012075: Asset history

Complete detailed history of each asset.

Thank You