Asset Under Construction

(AUC) with
INTERNAL ORDER

INTRODUCTION

Asset under construction refers to assets that are yet to

be capitalized in the books of account.

Example could be a construction of building. All costs

are first allocated to AUC after which they are settled
to Building A/c.

BROAD OVERVIEW OF
PROCEDURE

Step1- Creation of Internal order as AUC.

Step2 - Creation of primary cost elements for expenses

to be transferred to AUC.

Step3 Post transaction in GL with internal order as

AUC.

Step4 Make settlement to AUC Asset.

Step5 Transfer AUC asset to FA such as Building A/c.

CREATION OF INTERNAL
ORDER
TRANSACTION

T code is AS01
Object class should be
overhead orders.
The status of the
order should be
Technically complete
for posting
transactions.
Settlement rule can
also be mentioned in
place of settlement
profile.

CONFIGURATIO

Order type is CAPX

(Capex order)
Status profile should
be Internal orders
Settlement profile
should be created and
assigned to Order
type (CAPX).
Object class should be
Overhead costs.

INTERNAL ORDER
CONFIGURATION

The path is
Financial
Accounting
Controlling
Internal orders
Define Order
types.

INTERNAL ORDER
CONFIGURATION

The screen on the

side appears.

Choose capx from

the drop down.

Then click the

check box.

INTERNAL ORDER
CONFIGURATION

In the order master

screen enter the
settlement profile as
10.
The status profile
should be internal
orders.
CO partner update
should not be active
since it will affect
system performance.
Object class should be
overhead costs.

CREATION OF COST ELEMENTS

Cost elements can be

created automatically
using batch input session.
The path for that is in
IMG-Financial
accounting-ControllingCost element accountingAutomatic creation.
The cost elements can be
created through batch
input session as given in
the 3 tabs.

SETTLEMENT CONFIGURATION

Settlement configuration
will have to be done for
the purpose of
settlement to AUC asset.

The path for

configuration is SPRO
Financial accountingControlling-Internal
orders-Actual PostingsSettlement.

Click on Allocation
structure.

SETTLEMENT CONFIGURATION
- CONTD
Create a new allocation
structure called AUC
settlement.

The purpose is to enable

the system to identify
what are the cost
elements that need to be
allocated to the
receiving internal order.

Select the AUC

settlement and click on
Assignments.

SETTLEMENT CONFIGURATION
- CONTD
The screen appears,

Click on Source

SETTLEMENT CONFIGURATION
- CONTD
The screen appears.

In the From cost

element and To cost
element, enter the cost
elements that have been
created.

The purpose of giving the

cost elements is to
enable the system to
ascertain the cost
elements that have to be
settled.

SETTLEMENT CONFIGURATION
- CONTD
Then click on settlement

cost element
Here the receiver category
and settlement by cost
element will have to be
defined since cost
elements have been
created for settlement
In the receiver category
enter FXA (Fixed asset)
In the By cost element
column, check the box
cost element.
The next step is to assign
the allocation structure to
settlement profile.

SETTLEMENT CONFIGURATION
- CONTD

Go back to the main

IMG screen.

Click on Maintain
settlement profile.

SETTLEMENT CONFIGURATION
- CONTD

Actual cost to be settled in

full needs to be selected.

The Allocation structure AU

is assigned to Settlement
profile.

The Document type is AAAsset posting.

In valid receivers, if
Settlement to FA is required,
this will be mandated at the
time of creation of internal
order.

Default object type is Order.

CREATE INTERNAL ORDER AS

AUC
Order type should be CAPX.

Give the description as Asset under construction

Object class should be Overhead.

INTERNAL ORDER STATUS

Order status should be technically complete.

INTERNAL ORDER SETTLEMENT RULE

Settlement rule is required to be defined for sender and receiver.

INTERNAL ORDER SETTLEMENT RULE

Settlement rule is required to be defined for sender and receiver.

Category is fxa and choose the settlement receiver.

INTERNAL ORDER SETTLEMENT RULE

CONTD.

The below screen appears. In the % column enter as 100%.

Save the data.

INTERNAL ORDER SETTLEMENT RULE

CONTD.

The Order 903704 has been created.

Press OK to continue.

POSTING TRANSACTION WITH

INTERNAL ORDER

Enter Vendor invoice (FB60)

transaction with cost
elements defined already.

Account assignment object

should be Internal order
903704 since system will not
allow to post without account
assignment object.

This is because GL accounts

have been defined as cost
elements.

Post the transaction. Now all

the costs have been posted to
internal order.

CREATION OF AUC ASSET

CONFIGURATION STEPS

Account determination.
Asset class for AUC.
Determine Depreciation areas for asset
class. Here Book depreciation key should
be 0000 since it is AUC and not
capitalized. All other keys should be
deactivated.
Assign GL accounts for AUC.
Asset master and linked to Asset class.
Example: Building under construction.

AUC ASSET - ACCOUNT

DETERMINATION

This step will have to be

done only after the
following:

Copying chart of
depreciation
Assigning chart of
depreciation to company
code.

Account determination is
a type of variant that can
be created for each asset
class.
Account determination is
required to be created for
AUC assets.
This is available in SPROFinancial accountingAsset Accounting-Asset
class-specify account
determination.

AUC ASSET - ACCOUNT

DETERMINATION

Name the Account

determination as
AUC account
determination and
save the data.

Assign a number
for the same.
Here the number
is 10003.

AUC ASSET NUMBER RANGE

INTERVALS
Define the number
range interval for
the company code.
This will be used for
each asset class.
The path is SPROFinancial
accounting-Asset
accounting- Asset
class-Define
number range
interval.

AUC ASSET NUMBER RANGE

INTERVALS - CONTD
Enter the number
range interval for
the company code
CA03.
The number range
can be internal as
well as external.
This will be used by
assets created for
all asset classes.
Save and return to
main IMG screen,

AUC ASSET ASSET CLASS

The next step is

to define the
asset class.

Click on Define
Asset class.

AUC ASSET ASSET CLASS

This is the screen

for Asset class.

Create a new asset

class for AUC asset.

In this case the new

asset class is 20001
Building under
construction.

Click on the Zoom

button for details.

AUC ASSET ASSET CLASS

The screen appears.

Enter the account
determination as
10003.This is the AUC
A/c determination
Enter the screen
layout as 10CA for
Capital WIP and base
unit as EA.
Enter the number
range defined as 04.
Enter status of AUC as
line item settlement.

AUC ASSET DEPRECIATION

AREA FOR ASSET CLASS

The next step is to

determine the
depreciation area
for asset class.
This is required in
order to determine
the depreciation
key for the
depreciation area.
Also we can block
those depreciation
areas that are not
required.

AUC ASSET DEPRECIATION

AREA FOR ASSET CLASS

In this screen the book

depreciation needs to be
activated and
depreciation key should
be 0000.

This is a mandatory
requirement for the AUC
asset to be created in the
Asset master.

Dep key is 0000 for dep

area Book depreciation
because this is not yet
capitalized.

Other depreciation areas

should be deactivated.

AUC ASSET ASSIGN GL

ACCOUNTS

The next step is to

assign GL accounts
for AUC asset
class.

The path is SPROFinancial

accounting-AAIntegration with
GL-Assign GL
accounts.

AUC ASSET ASSIGN GL

ACCOUNTS

Now select the

account
determination for
AUC for which the
accounts need to
be assigned.

Then click on
Balance sheet
accounts on the
left hand side.

AUC ASSET ASSIGN GL

ACCOUNTS

In the Acquisition
account assignment,
enter the GL account
for AUC asset.
A GL Account must be
created for this
purpose using FS00
transaction code. This
is required to account
for the settlement
made from internal
order to AUC.
Save and exit.

AUC ASSET CREATION OF AUC

ASSET IN ASSET MASTER

Navigate to Tcode
AS01 for creation of
Asset.

In the asset class,

press F4 and select
class 20001
Building under
construction.

Continue by
pressing the tick
mark.

SETTLEMENT OF INTERNAL
ORDER TO AUC AN OVERVIEW
FI POSTING

Cement exp

Glass fixing
exp

Painting exp

INTERNAL
ORDER

AUC
Settlement
Profile/Rule

SETTLEMENT OF INTERNAL
ORDER TO AUC

Now settlement
needs to be done
to AUC.

The transaction
code is KO88.

SETTLEMENT OF INTERNAL
ORDER TO AUC

The settlement period

should be the current
period.
The processing type
should be full
settlement.
This will be taken
based on the
settlement rule that
has been specified.
The fiscal year should
be 2008.
Click on execute
button.

SETTLEMENT OF INTERNAL
ORDER TO AUC

The following is the

journal entry
passed:

AUC Dr. 100000

To Cement exp
40000

To painting exp
30000

To False ceiling
20000

To Glass fixing
10000

IMPORTANT POINTS SETTLEMENT

TO AUC

In settlement rule, the receiver category should be

FXA Asset.
The settlement receiver will be the AUC Asset (such
as Building under construction A/c.)
The settlement can be 100% or partial also. It can
also be made in terms of amounts also.
Once the settlement is executed, the AUC account is
debited and the corresponding expense is credited.
In Asset class for AUC asset, status of AUC should
always be LINE ITEM SETTLEMENT.

Next step is to transfer AUC to MAIN ASSET

CREATION OF MAIN ASSET

CONFIGURATION STEPS

Account determination.
Asset class for Main Asset.
Asset master and linked to Asset class.
Example: Building A/c..
Determine Depreciation areas for asset
class. Here Book depreciation key should
be specified since it is capitalized. All
other keys should be deactivated.
Assign GL accounts for Main asset.

SETTLEMENT OF AUC TO MAIN

ASSET AN OVERVIEW
Painting exp

Glass fixing
Exp

Building
1
BUILDING
AUC
ACCOUNT

BUILDING
ASSET
CLASS

Cement Exp

Building
2
Building
3

CAPITALIZE AUC
T CODE AIAB and
T CODE AIBU SETTLE

SETTLEMENT OF AUC ASSET

TO MAIN ASSET
The next step is
settlement of AUC
asset to main asset.
The transaction
code from Easy
access screen is
AIAB.
This can be done
only when the main
asset configuration
has been
completed.

SETTLEMENT OF AUC ASSET

TO MAIN ASSET

In this screen,
select asset
21005 which is
the AUC asset.

Then click on
Execute.

SETTLEMENT OF AUC ASSET

TO MAIN ASSET

In this screen,
select the second
line 903704 and
amount 10000.

Click on Enter.

Here the
settlement rule to
main asset will be
specified.

SETTLEMENT OF AUC ASSET

TO MAIN ASSET

In the screen
choose the main
asset for which
the transfer has to
be made from AUC
to main asset.

Here choose Asset

class 20003.

SETTLEMENT OF AUC ASSET

TO MAIN ASSET

Enter the % as
100%.

The main asset is

21007-0.

SETTLEMENT OF AUC ASSET

TO MAIN ASSET

Select the second

line 903704 and
click on
Settlement.

SETTLEMENT OF AUC ASSET

TO MAIN ASSET

Come back to AIAB

transaction code.
The AUC has been
created on 31.10.2008.
This is the same as
asset value date.
The capitalization to
main asset will have to
be made subsequent to
31.10.2008 which can
be 31.12.2008.Posting
date is therefore
31.12.2008. The period
is also automatically
changed to 9. Now
click on Execute.

SETTLEMENT OF AUC ASSET

TO MAIN ASSET

Come back to AIAB

transaction code.
The AUC has been
created on 31.10.2008.
This is the same as
asset value date.
The capitalization to
main asset will have to
be made subsequent to
31.10.2008 which can
be 31.12.2008.Posting
date is therefore
31.12.2008. The
period is also
automatically changed
to 9. Now click on
Execute.

SETTLEMENT OF AUC ASSET

TO MAIN ASSET

This is a test run.

Now we can see

that Building
transferred from
AUC has been
created.

SETTLEMENT OF AUC ASSET

TO MAIN ASSET

Now when we
execute a dialog
box appears
showing that

ASSET
TRANSACTION
POSTED WITH
DOCUMENT NO
25002.

SETTLEMENT OF AUC ASSET

TO MAIN ASSET
Now it can be seen
that the AUC asset
has been settled to
the main asset
The journal entry is

Main asset Dr
100000
To AUC
100000
Now check the GL line
item display for
Main asset GL
300008.

SETTLEMENT OF AUC ASSET

TO MAIN ASSET
The Building main
account has been
debited with
100000.
Thus the main asset
has been
capitalized on
31.12.2008.
The asset master
for this asset 21007
can also be viewed
in T code AS03.

SETTLEMENT OF AUC ASSET

TO MAIN ASSET

It can be seen that

the acquisition
value is 100000.
The depreciation
has been charged
@2.5% for 4 months.
The capitalization
date is the asset
value date which is
31.12.2008.However
depreciation start
date is 01.12.2008.

IMPORTANT POINTS SETTLEMENT

OF AUC TO MAIN ASSET

Here the AUC asset is transferred to the main asset. In

other words the main asset is created and capitalized in
the books.
AUC can be settled to a number of assets within an asset
class.
A main asset class can have Building.
This asset class can have a number of buildings for which
the AUC can be allocated.
This makes it possible to allocate the AUC cost to various
assets within an asset class enabling proper tracking and
recording of costs.
As a process, the Building main asset is debited and the
Building AUC account is credited.

THANK YOU