Explain the assets organization structure from company code to sub assets.

The assets organization structure consists of the FI organization structure plus asset management configuration steps. Assigning a COA to company code is the first step toward creating an assets organization structure. In asset management, you define account determination, which in turn is assigned to the G/L account. Sub-assets are created under assets, which in turn are sub-units of the asset class. The asset class is assigned to the account determination. Figure 1.37 depicts the assets organization structure.

COMPANY CODE

ACCOUNT DETERMINATION

ACCOUNT DETERMINATION

ACCOUNT DETERMINATION

Asset class

Asset class

Asset

Asset

SUB Asset

How do you reverse depreciation posting?

You cant reverse a depreciation posting run. Reversing posted depreciation occurs when there is a change in the depreciation parameters. SAP solutions provide the functionality to take care of this situation. For instance, after depreciation posting you will know that there is change in the useful lives of your assets or change in the depreciation keys assigned to your assets. Asset transactions such as retirements and transfers also affect the plan. After necessary changes in configuration, you need to perform the recalculation procedure. Once you perform the recalculation procedure, the SAP solution will take care of changed parameters and recalculate depreciation from the start of the assets life. The difference will be posted, thereby bringing the assets in line with the plan. The only exception to this is if you change the cost center assigned to an asset. The depreciation expense is never reposted, so if you need to correct that, you have to do it with a manual adjustment in the depreciation expense accounts.

Which activities should be done before the production startup? Give a brief description of each of them.
1. Check consistencyMajor components configured, e.g., COD, company codes, depreciation areas, asset classes, asset G/L accounts, and AA customizing.

2. Reset company codeTest application data can be deleted (asset master records and transactions of AA) but only if the company code has a test status. Customized settings are not deleted. 3. Reset posted depreciationThis function is performed when errors occurred while testing the depreciation posting run and it is necessary to return to the original status (includes depreciation data of an old assets data transfer). Manual adjustments in the relevant G/L expense and depreciation accounts need to be performed. The reset is possible only for a company code in a test status. 4. Set/reset reconciliation accountsThe G/L accounts relevant for AA are defined as reconciliation accounts by a report changing their master records. After the data transfer, these accounts can no longer be directly posted to. 5. Transfer balancesBalances to the G/L accounts, which have been defined as reconciliation accounts, are transferred (old data at fiscal yearend). 6. Activate company codeThis function terminates the production startup.

Describe the asset history sheet.

The asset history sheet is the most important and most comprehensive year-end report or intermediate report. It displays the various stages of a fixed assets historyfrom the opening balance through the closing balance including any acquisitions, retirements, or accumulated depreciation. SAP solutions supply country-specific versions of the sheet. It is often a required appendix to the balance sheet.

What is periodic processing, and what is it used for in AA?

Periodic processing comprises the tasks that must be performed at periodic intervals. Since only the values from one depreciation area can be automatically posted online in FI, the changes to asset values (transactions) from other areas with automatic postings have to be posted periodically to the appropriate reconciliation accounts. Period processing includes posting acquisition production cost (APC) to depreciation areas other than book depreciation areas and depreciation posting/ interest posting for all other depreciation areas.

What are the three direct types of depreciation that are supported by the system?
Ordinary depreciation is the planned reduction in asset value due to normal wear and tear. Therefore, the calculation of depreciation should be based on the normal expected useful life. Special depreciation represents depreciation that is solely based on tax regulations. In general, this form of depreciation allows depreciation by percentage within a tax concession period without taking into account the actual wear and tear of the asset. Unplanned depreciation is concerned with unusual circumstances, such as damage to the asset that leads to a permanent reduction in its value. Explain the difference between the methods for distributing forecast depreciation to the posting periods. The smoothing method distributes depreciation evenly to the periods from the current depreciation period to the end of the fiscal year (regardless of the value date of the transaction). Catch-up method, the depreciation on the transaction (from the start of capitalization up to the current period) is posted as a lump sum. The depreciation posting program posts this amount in the posting period in which the value date of the transaction lies.

How many ways can you create the asset master record?
There are three ways to create your asset master record: (1) through an asset class, (2) with reference to an asset, and (3) using the number functionality for similar assets. 1. Through transaction code AS01, you can create a new asset master by using an asset class. In this case, you will provide all information with respect to the asset master.

2. Use an existing asset as a reference for creating the new asset master record. 3. You can use number functionality to create more than one similar master. For example, if you purchased 100 laptops, you can create 100 asset masters at a time instead of creating asset masters one by one using this functionality.

What significance does depreciation key 0000 have?

Depreciation key 0000 is an SAP-delivered key that ensures depreciation and interest are not calculated and posted. This key can be used for the assets under construction, such as land.

What are the special steps and care to be taken in Fixed asset data migration into SAP system especially when Profit center accounting is active?
Data migration is slightly different from a normal transaction which happens in Asset accounting module. Normally, in asset accounting the day to day transactions is posted with values through FI bookings and at the same time the asset reconciliation is updated online in real time. Where as in data Migration the asset master is updated with values through a transaction code called as AS91. The values updated on the master are Opening Gross value and the accumulated depreciation. The reconciliation GL account is not automatically updated at this point of time. The reconciliation accounts (GL codes) are updated manually through another transaction code called as OASV. If profit center is active, then after uploading assets through AS91 you should transfer the asset balances to profit center accounting through a program. There after you remove the Asset GL code (reconciliation accounts) from the 3KEH table for PCA and update the Asset reconciliation account (GL code) through OASV. After this step you again update the Asset reconciliation account in the 3KEH table. The reason you remove the Asset reconciliation code from 3KEH table is that double posting will happen to PCA when you update the Asset reconciliation manually. What are the steps to be taken into account during a depreciation run to ensure that the integration with the general ledger works smoothly? For each depreciation area and company code, specify the following: 1 The frequency of posting depreciation (monthly, quarterly etc) 2 CO account assignment (cost center) 3 For each company code you must define a document type for automatic depreciation posting: This document type requires its own external number range. 4 You also need to specify the accounts for posting. (Account determination)

Finally to ensure consistency between Asset Accounting and Financial Accounting, you must process the batch input session created by the posting report. If you fail to process the batch input session, an error message will appear at the next posting run. The depreciation calculation is a month end process which is run in batches and then once the batch input is run the system posts the accounting entries into Finance.

How are Capital Work in Progress and Assets accounted for in SAP? Capitals WIP is referred to as Assets under Construction in SAP and are represented by a specific Asset class. Usually depreciation is not charged on Capital WIP. All costs incurred on building a capital asset can be booked to an Internal Order and through the settlement procedure can be posted on to an Asset under Construction. Subsequently on the actual readiness of the asset for commercial production, the Asset under Construction gets capitalized to an actual asset.