Fixed Assets.

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. Asset account Vendor Assets Liabilities General Ledger 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 A L Balance sheet General ledger accounts Asset classes
master records A L Vehicles Fixtures and fittings Buildings Assets under construction The asset class is used to: sub-classify the General ledger accounts and group master records by specific criteria.

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

Functions of the Asset Class
Account allocation Screen layout Number assignment Special features Default values Selection Assets Liabilities Asset portfolio Real estate Machinery Finance. assets Fixtures+fit. . . . Bal. sheet items Acct. determination Asset class Lathe Create asset Drill press 1 Assets 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.

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 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.

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 Master data section Asset classes Asset classes are made up of a master data section and a section for valuation data. You define the master data section of an asset class once on the client level. The valuation data section is dependent on the assigned chart of depreciation, which in turn is directly linked to the company code.

Asset Classes in the Chart of Depreciation
Areas Depreciation key Proposed useful life Minimum Maximum Book dep. 10/00 _ DG30 decl-bal. 3 X Tax dep. SNFG invest. support Group 8/00 LINR str.-line 12/00 LINB ACRS . . . Class Chart of depreciation Machines USA Germany 1 You can define any number of asset classes in Customizing. You use the asset classes to categorize assets according to the needs of your enterprise. 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.

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.

Special Asset Class: AuC
Class: Assets u. const. Transaction type groups 15 Down payment Extras 16 Down payment carried forward from previous years AuC managed as total line item settlement capital investment measure AuC status depreciation areas deprec. key depreciation is not calculated in depreciation areas intended for the balance sheet Book dep. 0000 Tax dep. 0000 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 (in accordance with the legal requirements in most countries). However, special tax depreciation and investment support are possible even on uncompleted assets. Assets under construction have to be shown separately in the balance sheet. It is possible to post down payments on assets under construction if you enter transaction type group 15. You can enter credit memos on the asset under construction after its complete capitalization, if you allow negative acquisition and production costs (APC). The component IM (Investment Management) is available for managing more extensive asset investments from a controlling-oriented perspective. Cost-acc. LINA 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. 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 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 (in accordance with the legal requirements in most countries). However, special tax depreciation and investment support are possible even on uncompleted assets. Assets under construction have to be shown separately in the balance sheet. It is possible to post down payments on assets under construction if you enter transaction type group 15. You can enter credit memos on the asset under construction after its complete capitalization, if you allow negative acquisition and production costs (APC). The component IM (Investment Management) is available for managing more extensive asset investments from a controlling-oriented perspective.

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
area 01 Book deprec. Depreciation area 02 Tax deprec. Depreciation area 03 Special reserves Depreciation area 20 Cost-acc. deprec. Depreciation area 30 Group deprec. 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 is therefore best described as a catalog of depreciation areas structured according to various business aspects. You can specify the characteristics and thereby the significance of the individual depreciation areas in each chart of depreciation. The country-specific charts of depreciation, which are supplied as standard, are for reference purposes only. You can only open a new chart of depreciation by using an existing chart of depreciation as a reference.

Depreciation Charts/Areas in A Ltd.
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 = You have to set up company codes in Financial Accounting first. Then assign them to a chart of depreciation, and add the data necessary for Asset Accounting. You can use the company code for Asset Accounting only after making these modifications.

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 When you create the asset master record, you have two options: You can 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. Or you can use an existing asset as a reference for creating the new asset master record. (Possibly the reference asset has default values that are more suitable than those in the asset class.) Enter additional information, such as an asset text. When you save, you receive an asset number (if the asset class is assigned to a number range that uses internal number assignment). This asset number is also the account number of the individual asset account.

Time-Dependent Data 01 Calendar Month ASSET MASTER RECORD
New Interval 01 Month Calendar 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 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). Shift operation and asset shutdown, both of which can have a direct effect on depreciation, should also be recorded on a monthly basis as part of this time-dependent data. The history of time-dependent assignments is stored in the system over the entire life of an asset.

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). 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). Shift operation and asset shutdown, both of which can have a direct effect on depreciation, should also be recorded on a monthly basis as part of this time-dependent data. The history of time-dependent assignments is stored in the system over the entire life of an asset.

Acquisitions

Asset Acquisition - Integration
100 Acquisition purchase 110 in - house production Accounts Payable Assets Fixed Asset Vendor 100 Aqcuisition with Vendor Asset transaction integrated with Accounts Receivable or Accounts Payable General Ledger Assets Fixed Asset Clg Acct 100 (Only for direct Asset purchases) No PO Aqcuisition with Auto-offsetting Entry Asset transaction posted using clearing account (not integrated) The acquisition posting can be created in the department that is primarily responsible for this business transaction. Acquisition of an asset from a business partner => External acquisition: In Asset Accounting (FI-AA) integrated with Accounts Payable (incoming invoice), but without reference to a purchase order. In FI-AA with automatic offsetting entry, but without link to a purchase order and without integration with Accounts Payable. This posting is normally used when the invoice has not yet been received, or when the invoice was posted by the Accounts Payable department beforehand in a separate step. The offsetting account also has to be cleared. In FI-AA with automatic clearing of the offsetting entry: The first posting usually is made in FI-AP. The clearing account is cleared at the same time as the asset posting is made. It is also possible, however, for both departments to make postings in the opposite order: An asset is entered with automatic offsetting entry, and the clearing account is cleared with the credit posting of the incoming invoice. In Materials Management (MM): The asset is posted in MM. Acquisition from in-house production is the capitalization of goods or services that are partially or completely produced in your own enterprise. The costs for these in-house produced goods or services (such as maintenance) have to be capitalized to assets. Generally, you capitalize production costs by creating an order or project in Investment Management (IM) and settling to an asset under construction and then to the final asset. Accounts Payable Assets Fixed Asset Vendor 100 (Only for direct Asset purchases) Aqcuisition with MM-PO Asset transaction posted MM from Materials Management (MM)

Asset Acquisition – MM Integration
Create Master Record With assignment to WBS Purchase Requisition optional Building Purchase Order required Goods Receipt Valuated Non-Valuated Capitalization Capitalization or Goods Receipt Assignment of Internal Orders To manage budget expenditure The example shows an asset acquisition with MM integration. It shows the following activities: purchase requisition, purchase order, goods receipt, invoice receipt, and creation of an asset. The steps are: creation of a purchase requisition, creation of an asset master record, creation of the purchase order: Using account assignment type A (A=asset) you can enter an asset master record when creating the purchase order. It is not possible yet to create an asset master record directly when you use purchase order transaction ME21N. However, it is still possible using the "old" purchase order transaction ME21. Goods receipt: When you enter the purchase order, you determine whether the asset is posted directly to Asset Accounting, and thereby capitalized, when the goods receipt is posted (valuated good receipt), or whether capitalization does not take place until the invoice receipt is posted (non-valuated goods receipt). The first option would be used when the goods receipt takes place before the invoice receipt. When the invoice is received later, there may be differences between the invoice amount and the amount posted at the time of the goods receipt. In this case, adjustment postings are made to the asset. No corrections are necessary for an non-valuated good receipt, since the asset was not yet capitalized. However, the system uses the date of the goods receipt as the capitalization date. Invoice receipt: If the goods receipt was non-valuated, the asset is capitalized, line items are created and the value fields are updated. WBS Invoice Receipt

Retirement

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

Asset Retirement: Types
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
210 Retirement sale 200 scrapping Retirement : - Acquis . date 01/01/20xx - 1, APC = 6000 - Complete retirement of APC on 03/15/20xx - Revenue sales tax A/R posting P+L or FinStmt Notes Revenue Revenue Customer Customer Asset Retirmt Asset Retirmt 4000 4400 4000 4000 Assets posting P+L Clearing of Asset Asset Retirmt Loss 1 2 4 6000 6000 4000 1300 3 700 1 APC APC APC 3 Proportional Proportional Proportional value adjustment value adjustment value adjustment Amount retired Amount retired 2 Amount retired 4 Clearing Clearing Clearing of retirement of retirement 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 Asset transfers can be one of the following scenarios:
2 1 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 Transfer within Company Code (ABUMN) Asset Accounting distinguishes between different types of transfers, depending on the circumstances: - Transactions within a company code (intracompany transfer) or - Transactions between different company codes (intercompany transfer). Possible reasons for intracompany transfers: 1) A master record has been created and posted in the wrong asset class. 2) The asset has changed location. As a result, you have to change organizational allocations (such as asset class, business area) in the master record that cannot otherwise be changed. 3) The asset needs to be split, or a portion of the asset rebuilt. Therefore, a portion of the original asset will be transferred to a new asset. 4) The standard system uses transfer variant 4 for intracompany transfers. The transaction types for transfer postings to source and target assets are determined by the transfer variant. When you create a new master record within the transfer transaction, you can use "copy rules" to define which entry fields should be copied from the source asset to the target asset. Intercompnay Transfer (ABT1N)

Period End Closing

Fiscal Year Change/Year-End Closing
Calendar Calendar Dec Dec 31 31 Fiscal Year Change Year-end closing Fiscal Year Change Fiscal Year Change Year-end closing Asset values at fiscal year start Year 1 Transaction APC Ordinary dep Net book value 1. Depreciation posting run 2. 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 Periodic processing Fiscal year change 3. 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. In addition, if the program finds no errors, it updates the last closed fiscal year for each depreciation area. Asset values at fiscal year start Year 2 Transaction APC Ordinary dep Net book value

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_ : Asset Balances A series of query programs based on different selection criteria. S_ALR_ : Physical Inventory Lists S_ALR_ : Depreciation on Capitalized Assets (Depn Simulation) Simulated depreciation on assets/asset classes and Projects (can be restricted to specific WBS elements). S_ALR_ : Depreciation Current Year Depreciation analysis by asset. S_ALR_ : Asset history Complete detailed history of each asset.

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Fixed Assets.

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