Narayan Jyotiraditya Banik Bala,

©8712817833/9775788328
FIXED ASSET

Basic Configuration settings for implementing Asset

Accounting in SAP 6.0
INTRODUCTION:
The asset accounting module in SAP is one where the accounting
pertaining to fixed assets is done. These include transactions like
acquisition of fixed assets, sale of fixed assets, in-house development of
assets, settlement of WIP, and accounting for depreciation on fixed assets
and so on.

A separate Asset Accounting Module is required for these transactions

because there are some distinguishing characteristics of fixed assets as
compared to normal General Ledger accounts.
Some of these characteristics of fixed assets which necessitate a separate
Asset accounting module, are given below :
-          Fixed assets have a life span exceeding one year. But they are subject to wear
and tear, and to provide for this we need to depreciate them. The Asset Accounting
Module enables such calculation of depreciation (we can create depreciation keys
where we give the rate of depreciation). Such feature is not there in the normal GL
Accounting.
-          Fixed assets must be shown as a separate head in the balance sheet of
companies, and that too under broad categories. Example : Land, Plant and Machinery
etc. In the Asset Accounting Module, we can categorize individual fixed assets into
asset classes, and thus we can meet this requirement. In other words, classification of
fixed assets for balance sheet disclosure purposes becomes easy.
-          Sometimes we may have self-constructed fixed assets which are categorized as
WIP in construction stage. These must be settled from WIP to normal GL accounts
after construction. This facility of settlement is provided by the Asset accounting
module.
-          The management may require different reports pertaining to fixed assets like
asset history report, report of fixed assets cost center wise etc, which are readily
available in the Asset Accounting Module.
-          Apart from this some other features like assets planned values, calculation of
insurance value, physical inventory data etc. are possible in asset accounting.
In order to set up the asset accounting module in SAP, some configuration needs to be
done in IMG. This includes setting up the organization structure, defining the
depreciation areas, creating the different asset classes, account assignment, defining
depreciation keys and so on. All these configuration settings has been discussed
below:
1)          Chart of Depreciation:  A chart of depreciation is a
directory of depreciation areas arranged according to business
requirements. Each chart of depreciation contains the rules for
the evaluation of assets that are valid in a specific country or
economic area.
Each company code defined in Asset Accounting must refer to a
chart of depreciation.
Copy reference Chart of Depreciation: SAP provides country-
specific charts of depreciation with predefined depreciation areas.
These charts of depreciation are only references for customer
charts of depreciation and therefore, cannot be used directly.
When you create your own chart of depreciation, you must copy
a reference chart of depreciation. Once the 
                            same is copied, give the required description to the
newly created Chart of Depreciation.
Transaction Code:  EC08
IMG Menu Path:      Financial Accounting  (New)  à  Asset Accounting  à  Organizational
Structures  à  Copy Reference Chart of Depreciation/Depreciation Areas  à  Copy
Reference Chart of Depreciation
2)          Define Chart of Depreciation and depreciation areas:  You can change the
definition of the depreciation areas that were copied from the standard depreciation
plan, and add additional depreciation areas if required:
Transaction Code:  OADB
IMG Menu Path:  Financial Accounting  (New)  à  Asset Accounting  à  Organizational
Structures  à  Copy Reference Chart of Depreciation/Depreciation
Areas  à  Copy/Delete Depreciation Areas
3)          Assign Chart of Depreciation to Company code:  When you assign a Chart of
Depreciation, you assign a Company code for asset accounting.
Transaction Code:  OAOB
IMG Menu Path:  Financial Accounting  (New)  à  Asset Accounting  à  Organizational
Structures  à  Assign Chart of Depreciation to Company Code
4)              Asset Classes:    Asset classes are the most important structuring elements for
fixed assets. You can define any number of asset classes in the system. You can use
them to structure your fixed assets according to different criteria. Asset class controls
asset master data. Many values are derived from asset class while creating the master
data. Example : Asset number, GL accounts, screen layouts are derived from asset class.
Further it provides default depreciation keys while creating the master data.
  Individual assets must compulsorily be assigned to an asset class at time of creating
them, e.g. A Table purchased may be booked as a individual asset linked to an asset
class "Furniture". As given earlier, companies are required to classify their assets in the
balance sheet into different broad heads, and asset classes may be created to suit
these. Based on asset classes, we also assign the account assignment for various
transactions pertaining to that asset class.
  Transaction Code:  OAOA
IMG Menu Path:  Financial Accounting  (New)  à  Asset Accounting  à  Organizational
Structures  à Asset Classes à  Define Asset Classes
  5)          Specify Account Determination:  The most important function of an asset class
is to link asset master records to their respective general ledger accounts in Financial
Accounting. This link is created by the account determination key in each asset class.
You can assign several asset classes to the same account determination key.
Transaction Code:  SPRO
IMG Menu Path:  Financial Accounting  (New)  à  Asset Accounting  à  Organizational
Structures  à  Asset Classes  à  Specify Account Determination
  6)          Create Screen Layout Rules: Screen Layout rules are created to make it easier to
maintain the asset master data as the asset master contains a large number of fields
which are used for different purposes.
Transaction Code:  SPRO
IMG Menu Path:  Financial Accounting  (New)  à  Asset Accounting  à  Master
Data  à  Screen Layout  à  Define Screen Layout for Asset Master Data  à  Create Screen
Layout Rules for Asset Master Record
7)          Number Assignment Across Company Codes:  In Asset Accounting you can
assign the main asset number on the basis of cross-company codes.
Transaction Code:  AO11
IMG Menu Path:  Financial Accounting  (New)  à  Asset Accounting  à  Organizational
Structures  à  Specify Number Assignment Across Company Codes
8)          Define how depreciation areas post to General Ledger:  This setting will
determine how the depreciation areas post their APC transactions and/or depreciation
to the GL. SAP can post the APC transactions of one depreciation area to the general
ledger online automatically. Usually this is the book depreciation area 01. For the rest,
transactions to the general ledger can be posted automatically using periodic
processing.
Transaction Code:  OADX
9)      Assign the General Ledger Accounts: Account determination is a set where GL
accounts are assigned to post asset acquisition, retirement & depreciation based on
various business process scenario. These account determinations are then assigned to
asset classes to derive & control GL postings pertain to the asset class. Here we give the
Chart of account wise General Ledger Account determination for various asset
accounting transactions, like acquisition, gain/loss on sale, ordinary depreciation etc.
Transaction Code:  AO90
10)                                Specify the Financial Statement Version for Asset Reports: This
defines which financial statement version should SAP use for each depreciation area as
a default. This default applies when the financial statement version is contained in the
sort version used for a given report.
Transaction Code:  OAYN
Specify Account Assignment Types for Account Assignment Objects:          Here we can
define how the controlling area posting of cost required for each asset transaction type.
We configure the account assignment objects that can be posted based on :
-                 The transaction type, and
-                 Account assignment type
IMG Menu Path:  Financial Accounting  à  Asset Accounting  à  Integration with the
General Ledger  à  Additional Account Assignment objects -> Specify account
assignment types for account assignment objects
11)                                Assign Tax code for non-taxable transactions: Here we give the
input/output tax code which is used when posting non-taxable transactions to tax-
relevant accounts from the Accounting interface. As an alternative, it is possible to set
an indicator in the G/L account master record which permits transactions "not relevant
to tax" to be posted even without a tax code.
Transaction Code:  OBCL
12)    Assign settlement profile: The settlement profile includes settings on the allowed
receivers of the settlement. We can give settlement profile 10 to enable settlement to
all receivers. The settlement profile is applicable to assets under construction.
  Transaction Code:  OAAZ
13)    Maintain Depreciation keys & activate them: Depreciation keys contain the
calculation methods for depreciation calculation and parameters that control :
-                 Ordinary depreciation
-                 Special depreciation
-                 Scrap value (cutoff value)
  Transaction Code:  AFAMA
14)    Specify document type for posting depreciation: Here we give the accounting
document type to be used in depreciation postings, for the company code.
Transaction Code:  AO71
  15)    Specify Intervals & Posting Rules:  Here we specify the depreciation areas for
which the depreciation is posted to the general ledger during the depreciation run. We
specify if the period for depreciation posting in the run is monthly, bi-monthly,
quarterly etc.
Transaction Code:  OAYR
16)    Determine Depreciation Areas in the Asset Class: Here, asset classes are assigned
default values for the depreciation key and useful life. These values are defaulted
whenever postings to assets of these classes is done.
Transaction Code:  OAYZ
I hope this will help the readers with the basic settings required for configuring Asset
Accounting in SAP 6.0.