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

Asset account
1000

Liabilities
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

Land

910001

Building

910002

Plant and Machinery

910003

Vehicles

910004

Asset under construction

Functions of the Asset Class

Asset Class
Account
allocation

Screen
layout

Number
assignment

Default
values

Special
features

Selection
features

Acct. determination

Asset class

Bal. sheet items

Assets
Create
asset

Liabilities

Asset portfolio

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

Chart of depreciation
level

Master data
section

Section for
valuation data

Account allocation
Screen layout rule
Number range
Default values

Selection of
depreciation areas
Default values

Asset Classes in the Chart of Depreciation

Class

Machines

Chart of
depreciation
Areas

Germany

Group

Book dep.

SNFG

LINR

LINB

LINR

decl-bal.
3X

invest.
support

str.-line

str.-line

str.-line

....
....
....

Proposed
useful life

10/00

10/00

8/00

8/00

....

Minimum
useful life

8/00

Maximum
useful life

12/00

Depreciation
key

Book dep.

Tax dep.

DG30

USA

...

Group
...

ACRS

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

AuC status

Transaction type groups

15

Down payment

16

Down payment carried forward

from previous years

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

AuC managed as total

line item settlement
capital investment measure

deprec.
key
0000
0000
LINA

negative values allowed

depreciation is not calculated in

depreciation areas intended for the
balance sheet

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

Book
deprec.

Depreciation
area 02

Tax
deprec.

Depreciation
area 03

Special
reserves

Depreciation
area 20

Cost-acc.
deprec.

Depreciation
area 30

Group
deprec.

Depreciation Charts/Areas in A Ltd.

Depreciation Charts:
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

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

Valid from

01
Cost center A
Cost center B
Cost center C
.
.
.

MMDDYYYY

Valid to MMDDYYYY

from
from
from
.
.
.

01/12/YY
08/28/YY
12/01/YY
.
.
.

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

Assets
Fixed Asset
100

Assets
Fixed Asset
100

Accounts Payable
Vendor
100

General Ledger
Clg Acct

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

Aqcuisition with Auto-offsetting Entry

100

Accounts Payable
Vendor
100

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)

Asset Acquisition MM Integration

Create Master Record

Purchase Requisition

With assignment to
WBS

Purchase Order

Building
required

Goods Receipt
Valuated

Non-Valuated

Goods Receipt

or
Assignment of

WBS

Internal Orders
To manage

Invoice Receipt

budget
expenditure

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

210
Retirement
sale

Retirement: - Acquis . date 01/01/20xx - 1, APC = 6000

- Complete retirement of APC on 03/15/20xx
- Revenue 4000 + 400 sales tax

A/R posting

P+L or FinStmt Notes

Revenue
Asset Retirmt

Customer
4000
4400

4000

Assets posting

P+L
Clearing of
Asset Retirmt

Asset

1
3

6000
700

6000

1 APC
2 Amount retired

4000

Loss
1300

3 Proportional value adjustment

4 Clearing of retirement

200
Retirement
scrapping

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

31
Year-end closing

Fiscal Year Change

Fiscal Year Change

Asset values
Transaction
APC
Ordinary dep.
Net book value

at fiscal year start

0
0
0
0

Year 1
10000
10000
3000 7000

Periodic processing
Fiscal year change

at fiscal year start

Transaction
10000
APC
10000
Ordinary dep.
3000 Net book value
7000

Year-end closing
1.

Year 2
0
10000
2100 4900

Depreciation posting run

2. Year-end closing program

- Check:
Can the year-end closing be carried out?
- Maintenance of the last closed fiscal year
company code

3.

Asset values

Fiscal Year Change

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

per

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.