The IM System (Accounting Capital Investmt Mgt) supports the planning, investment, and financing process involved in capital

l investment measures within your enterprise.. The term "capital investment" does not simply refer to capitalization for bookkeeping or tax purpose. A capital investment can consist of any number of measures which initially result in costs and may only generate revenue or provide other benefits after a certain period has elapsed (for example research and development or plant maintenance projects). The IM System consists of the following sub-components: Appropriation request, for the management of capital investments in the planning phase and decision-making phases. Capital investment programs, for the management of investment budgets for a number of measures. Capital investment measures, for the parallel handling of cost accounting and financial accounting needs for individual capital investments. Capital investment measures are handled in the form of internal orders or projects. Information system The IM system contains functions for managing capital investments. The TR (Treasury) System is available for the management of financial assets. The advantage of the investment programs in the R/3 System is that they offer a direct link to the individual capital investment measures (orders and projects), unlike other nonintegrated planning systems. This functionality ensures that if the budget is exceeded, this fact is recognized at an early stage. The capital investment program enables you to monitor both internal costs (activity allocations, overhead surcharges) and external acquisitions. Management and monitoring of comprehensive planning and budgeting, using the capital investment program, can complement planning and budgeting on an individual basis. The functions of capital investment programs are particularly suited for enterprises which formulate an annual capital spending plan and annual capital investment budget, when both of these should be managed on an enterprise-wide basis rather than on an individual basis. In the R/3 System, a capital investment measure is a project or internal order for: Measures which are meant to serve the long-term needs of the enterprise (expenditure for fixed assets) Other measures, whose costs need to be planned, collected and monitored The primary purpose of capital investment measures, besides the handling of other measures, is to manage information on a capital investment that cannot be directly posted to assets because of its scope and the large percentage produced in-house. These

capital investments are also relevant to Asset Accounting, at the latest, at the time of the period closing or year-end closing. Therefore, along with the master data for controlling purposes, the order or project also provides: The data of an asset under construction for identifying those portions that require capitalization in the balance sheet. The parameters for calculating special depreciation and investment support during the under-construction phase For the periodic settlement of a capital investment measure, you can separate costs requiring capitalization from those not requiring capitalization. For controlling purposes, you can therefore post debits, which do not require capitalization from an asset accounting point of view, to capital investment measures. The posting of debits to an asset under construction can also be specifically controlled for each Asset Accounting depreciation area (for example book depreciation, tax depreciation and group depreciation). This enables you to account for different regulations governing capitalization. When a capital investment measure is completed it can be settled to various final receivers (assets). Smaller capital investments can also be represented within the FI-AA Asset Accounting System as normal assets with an accompanying statistical project/order. Unlike the situation described above, the asset under construction is the primary posting object in this case, and not the order/project.