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 account

Vendor


Assets Liabilities
General Ledger
1000 1000
1000
1000




The asset class is used to:

!
sub-classify the General ledger accounts and
!
group master records by specific criteria.

Overview: Asset Classes
Asset Class
General
ledger
accounts
Balance
sheet
Asset
classes
Asset
master
records
A L
Vehicles Fixtures and
fittings
Buildings Assets under
construction
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
Screen
layout
Number
assignment
Special
features
Default
values
Selection
features
Assets Liabilities
Asset portfolio
Real estate
Machinery
Finance. assets
Fixtures+fit.
. . .
. . .
. . .
Bal. sheet items
Acct. determination Asset class
Lathe
02200000
Create
asset
Drill
press
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 level
Account allocation
Screen layout rule
Number range
Default values
Chart of depreciation
level
Section for
valuation data
Selection of
depreciation areas

Default values
Master data section
Asset classes
Asset Classes in the Chart of Depreciation
Areas
Depreciation
key
Proposed
useful life
Minimum
useful life
Maximum
useful life
Book dep.
10/00
_
_
DG30
decl-bal.
3 X
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
ACRS
. . . .
_
_
. . . .
. . . .
. . . .
8/00
. . . . . .
Class
Chart of
depreciation
Machines
USA Germany
1
Points from the Asset Class / Depn 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
depreciation
areas
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.
!
AUCs 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 of
depreciation
Depreciation
area 01
Depreciation
area 02
Depreciation
area 03
Depreciation
area 20
Book
deprec.
Tax
deprec.
Special
reserves
Cost-acc.
deprec.
Depreciation
area 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 reference using asset class
taking over the default
values from the asset class
'copying' an
existing 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/YY
Cost center B from 08/28/YY to 11/30/YY
Cost center C from 12/01/YY to 03/14/YY
. . . . .
. . . . .
. . . . .
New Interval
01
Month
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 Payable Assets
Fixed Asset
Vendor
100
100
General Ledger Assets
Fixed Asset
Clg Acct
100
100
Accounts Payable Assets
Fixed Asset
Vendor
100
100
!
Asset transaction integrated
with Accounts Receivable or
Accounts Payable
100
Acquisition
purchase
110
Acquisition 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
C
a
p
i
t
a
l
i
z
a
t
i
o
n
C
a
p
i
t
a
l
i
z
a
t
i
o
n
Valuated Non-Valuated
Create Master Record
With assignment to
WBS
o
p
t
i
o
n
a
l
Asset Acquisition MM Integration
WBS
Assignment of
Internal Orders
To manage
budget
expenditure
Retirement
Assets can be retired:
With Revenue
Without Revenue (scrapped)

Retirement
Please retire me, I am
no longer productive
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
APC
Amount retired
APC APC
Amount retired Amount retired
A/R posting
Customer Customer
4400 4000
Revenue Revenue
Asset Retirmt Asset Retirmt
4000 4000
Assets posting
Asset
6000
700
Clearing of
Asset Retirmt
4000
Loss
1300 6000
Proportional value adjustment
Clearing of retirement
Proportional Proportional value adjustment value adjustment
Clearing Clearing of retirement of retirement 4
P+L or FinStmt Notes
P+L
2 1 4
3
210
Retirement
sale
200
Retirement
scrapping
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 values
at fiscal year start Year 2
Transaction 10000 0
APC 10000 10000
Ordinary dep. 3000 - 2100 -
Net book value 7000 4900
Asset values
at fiscal year start Year 1
Transaction 0 10000
APC 0 10000
Ordinary dep. 0 3000 -
Net book value 0 7000
31
Dec
Calendar
Fiscal Year Change
31
Dec
Calendar
Fiscal Year Change
Year-end closing
Year-end closing program
- Check:
Can the year-end closing be carried out?
- Maintenance of the last closed fiscal year per
company code
Closing reports
- Asset history sheet
- Asset list
- . . .
Depreciation posting run
1.
2.
3.
Year-end closing
Periodic processing
Fiscal 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.