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

Overview: Asset Accounting as a Sub-Ledger

Asset Accounting is a subsidiary ledger of Financial Accounting. The appropriate General Ledger accounts are updated each time you post. General Ledger
Assets 1000 Liabilities 1000

Asset account 1000

Vendor 1000

Overview: Asset Classes

The asset class is used to:
sub-classify

the General ledger accounts and group master records by specific criteria.

Asset Class
Balance sheet

General ledger accounts

Buildings Vehicles Assets under construction Fixtures and fittings

Asset classes

Asset master records

Asset Classes
Asset Classes Configured
910000 910001 910002 910003 910004 Land Building Plant and Machinery Vehicles Asset under construction

Functions of the Asset Class

Asset Class
Account allocation Screen layout Number assignment Special features Default values Selection features

Asset class

Acct. determination Bal. sheet items

Assets
Create asset
Asset portfolio

Liabilities
02200000

Assets

Real estate

Machinery ... Fixtures+fit. ... Finance. assets

...

Lathe 02115000 Drill press

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

Asset classes

Client level

Master data section

Account allocation Screen layout rule Number range Default values

Chart of depreciation level

Section for valuation data

Selection of depreciation areas Default values

Asset Classes in the Chart of Depreciation

Class Chart of depreciation Areas Depreciation key Proposed useful life Minimum useful life Maximum useful life
Book dep. DG30 decl-bal. 3X 10/00 _ _

Machines

Germany

USA

Tax dep. SNFG invest. support 10/00 _ _

...

Group LINR str.-line

Book dep. LINB str.-line _ 8/00 12/00

Group ... LINR str.-line

ACRS .... .... .... .... _ _

8/00 _ _

8/00 _ _

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.

Special Asset Class: AuC

Class: Assets u. const.
Extras Transaction type groups 15 16 Down payment Down payment carried forward from previous years

AuC status

AuC managed as total line item settlement capital investment measure

depreciation areas Book dep. Tax dep. Cost-acc.

deprec. key 0000 0000 LINA depreciation is not calculated in depreciation areas intended for the balance sheet

negative values allowed

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 Book deprec. Tax deprec.

Depreciation area 03
Depreciation area 20 Depreciation area 30

Special reserves
Cost-acc. deprec. Group deprec.

Depreciation Charts/Areas in A Ltd.

Depreciation Charts:
Z910: 01: 02: 31 Chart of Depreciation: A Ltd

Depreciation Areas:
Local reporting Y1 Parent reporting Y2 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

Create asset

using asset class

using a reference

taking over the default values from the asset class

'copying' an existing asset

Time-Dependent Data
ASSET MASTER RECORD - Time-dependent data New Interval

Enter period under consideration

01
Cost center A Cost center B Cost center C . . . from from from . . . 01/12/YY 08/28/YY 12/01/YY . . .

Valid from

MMDDYYYY

Valid to MMDDYYYY

to to to . . .

08/27/YY 11/30/YY 03/14/YY . . .

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 Acquisition - Integration

Assets
Fixed Asset 100

Accounts Payable
Vendor
100

100 Acquisition purchase

110 Acquisition inhouse production

Aqcuisition with Vendor Asset transaction integrated with Accounts Receivable or Accounts Payable (Only for direct Asset purchases) No PO

Assets
Fixed Asset 100

General Ledger
Clg Acct 100

Aqcuisition with Auto-offsetting Entry

Asset transaction posted using clearing account (not integrated) (Only for direct Asset purchases) Aqcuisition with MM-PO Asset transaction posted MM from Materials Management (MM)

Assets
Fixed Asset 100

Accounts Payable
Vendor 100

Asset Acquisition MM Integration

Purchase Requisition
Create Master Record With assignment to WBS

Purchase Order
Goods Receipt
Valuated Non-Valuated

Building
required

Goods Receipt

or
Assignment of

WBS

Internal Orders To manage budget expenditure

Invoice Receipt

Retirement

Retirement
Assets can be retired: With Revenue Without Revenue (scrapped)

Asset Retirement: Types

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 w/ Customer : Accounts

Retirement: - Acquis . date 01/01/20xx - 1, APC = 6000 - Complete retirement of APC on 03/15/20xx - Revenue 4000 + 400 sales tax
210 Retirement sale 200 Retirement scrapping

A/R posting
Customer 4000 4400

P+L or FinStmt Notes

Revenue Asset Retirmt 4000

Assets posting
Asset Clearing of Asset Retirmt

P+L
Loss 1300

1 3

6000 700

6000

4000

1 APC 2 Amount retired

3 Proportional value adjustment 4 Clearing of retirement

Depreciation

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 Key
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.

Elements of the Depreciation Calculation

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.

Transfers

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

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

Asset Transfers
2

Asset transfers can be one of the following scenarios:

Transfer within Company Code (ABUMN)

1. Transfer within same Company Code

Eg. From one asset class to another

Intercompnay Transfer (ABT1N) 2. Inter-company transfers between companies in SAP Eg. From one company to another

Period End Closing

Fiscal Year Change/Year-End Closing

31 Fiscal Year Change

Year-end closing

31 Fiscal Year Change

Fiscal Year Change

Asset values Transaction APC Ordinary dep. Net book value

Year-end closing
1.
Depreciation posting run - Check: Can the year-end closing be carried out? - Maintenance of the last closed fiscal year company code

at fiscal year start 0 0 0 0

Year 1 10000 10000 3000 7000

2. Year-end closing program

per

Periodic processing Fiscal year change

3.

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

Asset values
at fiscal year start Transaction 10000 APC 10000 Ordinary dep. 3000 Net book value 7000 Year 2 0 10000 2100 4900

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.