1. Assets Management EGN 5622 Enterprise Systems Integration (MSEM, Professional) Fall, 2013

2. Assets Management Concepts & Theories

3. Asset Accounting
Concerned with tracking the financial consequences associated with the entire lifecycle of an asset, from acquisition to disposal (retirement).
Assets can be categorized as tangible, intangible, and financial

4. Asset Accounting Classification
Tangible assets
Fixed assets
Leased assets
Assets under construction
Intangible assets
Intellectual property
Patents
Trademarks
Financial assets
Securities
Long term notes (debts)
Mortgages
Note: Current assets (cash, inventory, accounts receivable) are not included in asset accounting.

5. Asset Accounting Components
Intangible assets
Tangible assets
Financial assets
- Fixed assets
Leased assets
Assets under construction
Intellectual property
Patents
Trademarks
Securities
Long term
notes (debts)
- Mortgages

6. Asset Accounting in corporate financial structure
Chart of Accounts
General Ledger Accounts
Balance sheet accounts
Income statement accounts
Reconciliation accounts
Subsidiary ledgers (sub ledgers)
Accounts Receivable (customers)
Accounts Payable (vendors)
Assets

7. Asset Accounting Assets are assigned to
company code
Business area
Accounting data of assets are maintained in asset sub-ledger accounts.
E.g. Acquisition costs and depreciation
Asset sub-ledger accounts are created when asset master record is created and associated with a reconciliation account in the general ledger
Sub-ledger account and the master record share the same account number
Companies maintain separate reconciliation accounts for different types of assets

8. Example of Asset Accounts in GL

9. Asset Accounts (AA) Structure Example

10. Asset Management (Lifecycle)
Cost center
Asset master creation (AA)
Asset
Report
(AA)
Business Area
Vendor master
Asset Acquisition
(AA)
External
Plant/location
Vendor invoice
Asset Addition
(AA)
Depreciation Charge
Outgoing payment
Asset
Retirement
(AA)
AA: asset accounts
Asset Transfer (AA)
Customer/Scraping
Customer Master
Customer Invoice
Customer Payment
Within/outside
Company code

11. Major Activities in Asset Management (Lifecycle)
Asset Acquisition
Asset Depreciation
Asset Retirement

12. Asset Acquisition
Asset acquisition is concerned with acquiring assets via internal or external processes
Internal:
production process or project systems
External: 3 external options for purchasing assets,
Purchase from an established vendor using the purchasing process (different GL accounts)
Purchase from an established vendor without using the purchasing process (manual entry in GL and sub-ledger; similar to AP accounting)
Purchase from a one-time vendor or a vendor for whom master data are not maintained (via clearing account).

13. Asset Acquisition With a Clearing Account
5,000 3
Clearing: inventory (GR/IR).
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14. Asset Depreciation
Asset depreciation is concerned with the decrease in the value of an asset over time
Depreciation can be planned or unplanned
Depreciation methods are used
Straight line
Double declining balance
Useful life
Residual value
Book value
Depreciation areas: parallel valuation
Depreciation areas:?
Magal and Word | Integrated Business Processes with ERP Systems | © 2011

15. Straight Line Depreciation
Magal and Word | Integrated Business Processes with ERP Systems | © 2011

16. Double Declining Balance Depreciation
What is ( )?
Magal and Word | Integrated Business Processes with ERP Systems | © 2011

17. Financial Statements Based on Depreciation Areas (parallel valuation)
Magal and Word | Integrated Business Processes with ERP Systems | © 2011

18. Asset Retirement
Concerned with the disposal or retirement of an asset after its useful life
Retirement may be:
Revenue generating (sold)
Non-revenue generating (scrapped)
Magal and Word | Integrated Business Processes with ERP Systems | © 2011

19. Asset Explorer
Asset explorer provides an overview of all activities related to the asset, including:
Acquisition data
Planned and posted depreciation
Drill-down details for:
Master data
Transactions
Documents
Depreciation posting run (for an assumed useful life)
Asset explorer?

20. Asset Explorer The asset explorer can:
show all the values of a fixed asset
display various forms of summarized information for decision making
display connections from the Asset Explorer to the G/L accounts, vendor accounts, the cost center, and the Purchase Order of the Asset
display planned values are, as well as values already posted for analyzing asset values

21. Asset Explorer Interface
APC – Acquisition & Production Costs.
Magal and Word | Integrated Business Processes with ERP Systems | © 2011

22. Asset management linked to financial accounting
Magal and Word | Integrated Business Processes with ERP Systems | © 2011

23. Assets Management SAP Implementation

24. R/3 SAP Module View Integrated Solution Client / Server Open Systems
Financial
Accounting
Sales &
Distribution
Materials
Mgmt.
Controlling
Production
Planning
R/3
Fixed Assets
Mgmt.
Integrated Solution
Quality
Mgmt.
Project
System
Client / Server
Plant
Maintenance
Open Systems
Workflow
R: real time. 3: 3-tier client-server architecture (database, application, and presentation layers)
Human
Resources
Industry
Solutions

25. Create Asset Master

26. Create Asset Master

27. Purchasing an Asset

28. Purchasing an Asset
Similar to purchase order process, except for the master data (sub ledger account) has been for each individual asset before placing an order.
One way to skip the step of creating an Asset in the books is to directly go to the Purchase Order, and click the button pointed to.

29. Receiving an Asset

30. Invoicing an Asset

31. Asset Explorer (Comparison)

32. Asset Explorer (Parameters)
Parameters include: (1) # of years of depreciation, (2) depreciation rule, and (3) country code.

33. Asset Explorer (Simulation)

34. Asset Explorer (Simulation)

35. Features of the Asset Explorer
Header: where you enter the company code and asset number (Structure)
Overview tree: allows you to navigate between the different depreciation options
The features include: (1) company code, (2) business area, (3) asset type, (4) fiscal year, and (5) useful asset life

36. More Features of Asset Explorer
Overview tree: displays objects that are related to the asset
Tabs: allows you to analyze the planned values and posted values using different parameters, as well as compare fiscal years and depreciation areas
It displays details of: (1) cost center, (2) purchase order, (3) G/L account, (4) book value, (5) comparing different options display with useful life and depreciation areas (tax vs. book value).

37. SAP IDES Client, Userid, Password
Exercises for Assets Management:
Client: 145
Application server: riga.cob.csuchico.edu
System number:
System ID: RGA
Userid: ides-025 to ides-047
Initial Password: SAP4US

38. HW Assignment (Due date 9/21/2013)
Create appropriation request
Create asset
Create a vendor
Create an information record to link the vendor and the asset
Create a purchase order for the asset
Check the asset and accounting records
Make assets receipt against purchase order
Enter incoming invoice
Post outgoing payment
Use asset explorer