Asset accounting FI-AA

 

Table of Contents

  1. Organizational structurePage 2
    1. Subtitle 1 Page 1
    2. Subtitle 2 Page 1
  2. Conclusion Page 4
  3. Discussion Page 5


Organizational structure

The client is the highest level in the SAP system hierarchy. Each client is an independent unit with separate master records and a complete set of tables and data.From a business of point of view, the client represents corporate group.

A company code represents an independent balancing/legal accounting entity. An example would be a company with independent accounts within a corporate group. Financial statements required by law can be created at company code level.

One company code will be assigned to only one chart of depreciation. It is possible to assign multiple company codes to the same chart of depreciation. Basically, one chart of depreciation is created for each country. Company codes within the same country are assigned to the same chart of depreciation.

Chart of depreciation contain depreciation areas. Each depreciation area represents a specific type of valuation (for example, book depreciation or tax depreciation). You can also define your own depreciation areas in the chart of depreciation.

Each company code uses one chart of accounts and one chart of depreciation. All or several company codes can work with the same chart of accounts and the same chart of depreciation.

Depreciation areas

The depreciation areas are defined with a two-digit numeric key. Depreciation area 01 is the leading depreciation area. Values and depreciation are posted to the general ledger.
Assets are often valued differently for different purposes, for example, different valuation approaches may be used for:

• Financial statements according to local requirements
• Balance sheets for tax purposes
• Internal accounting (cost accounting)
• Parallel financial reporting, for example, for creating a consolidated balance
sheet (according to IFRS, US GAAP...)

Depreciation areas are created in SAP R/3 to manage these different valuation
approaches. There are separate transaction figures for:

• Each asset and depreciation area
• Individual value components, such as asset values, depreciation, and net
book values

Depreciation areas commonly used are, for example:

• Country-specific valuation (for example tax depreciation),
• Cost -accounting depreciation area
• Consolidated versions in company code or group currency
• Book depreciation in group currency
• Difference between book and country-specific tax-based depreciation

Different depreciation areas can have the same values and depreciation terms, but
can be displayed in different currencies.

 

Asset class

Fixed assets are classified into asset classes. Some examples of asset classes could be vehicles, furniture, or machines.The asset class consists of a master data section and a depreciation area section. Asset classes are created at client level. They are then assigned to at least one chart of depreciation, so you can complete the asset class with default values for your depreciation areas.

Several charts of depreciation can also be assigned to an asset class. This ensures
that the asset class catalog is uniform, despite using different depreciation areas.

The asset class is the main criterion for classifying assets. Each asset is assigned to only one asset class. You can specify certain control parameters and default values for depreciation calculation and other master data in each asset class. Assets that are to appear in different places/balance sheet items (for example, buildings and machines) have to be assigned to different asset classes. There is also at least one special asset class each for assets under construction and low value assets. You can also create separate asset classes for intangible assets and leased assets. There are separate functions available for leasing.

An asset class consists of two main sections:

• A master data section with control data and default values for the administrative data in the asset master record
• A valuation section with control parameters and default values for valuation and depreciation terms

When you create asset master records, this data is automatically adopted from the asset class you specify. By entering useful default values, you can reduce the time and effort needed to create new asset master records. This will also ensure that the records in a given class are handled uniformly. It is recommended that you define as many asset classes as you have assets with different types of valuation. The asset class is a selection criterion in all standard reports in FI-AA.

An essential function of the asset class is to establish a link between the asset master records and the accounts to which the related values and depreciation are posted in the general ledger. You use account determination to control this. The account determination key can be identical to the account number of the asset balance sheet account in the general ledger (for a small asset class catalog). If you have several similar asset classes, you can use different account determination keys for them, although their values are all updated to a single balance sheet account.

For those depreciation areas that post depreciation to the general ledger, you can assign the following G/L accounts:
• Ordinary depreciation:
– Accumulated depreciation account
– Expense account
– Revenue from write-up
• Unplanned depreciation:
– Accumulated depreciation account
– Expense account
– Revenue from write-up
• Revaluation of depreciation, interest (in cost-accounting area) if needed.

Screen layout

In each asset class, you enter a screen layout rule for each depreciation area. This rule applies to the valuation fields in the depreciation area. SAP supplies screen layout rules 1000 and 2000 in the standard system.

The screen layout specifies which input fields are displayed in the asset master record, and if they are required entry or optional fields.This allows you to reduce the number of master data fields to those that are specifically needed for the given asset class, and to ensure that certain important control information is entered.

In addition to the information on the fields (required entry, optional entry, display,suppress), the screen layout specifies the maintenance level of master data fields. It also determines whether they are allowed to be used as a reference (for copying).

The maintenance level specifies the master data level at which each field can be maintained. The maintenance level
guarantees that depreciation is controlled uniformly. There are three options:

  1. Asset class: this maintenance level ensures uniform control of valuation at asset class level. The entries made in the asset class are passed on to the asset master record. They cannot be overwritten.
  2. Main asset number: the control of valuation is uniform at the level of the asset master record. The entries made in the asset class are adopted in the asset master record, and can be changed there. All asset subnumbers that belong to this asset
    master record adopt these values from the main number. These subnumber values cannot be changed.
  3. Subnumber :Valuation can be controlled more flexibly. Asset subnumbers can have their own individual depreciation terms.
The reference indicator controls which field contents of an asset area can be copied when that asset is used as a reference for creating a new asset master record.

In order to account assignment objects to appear in the asset master record you have to activate them in Customizing.
In Customizing for Asset Accounting, choose Integration with the General Ledger → Additional Account Assignment Objects → Activate Account Assignment Objects.
You can post (cost-accounting) depreciation to the following objects:

Tab pages are used to represent asset master data in the system.You can specify a layout for the master data of each asset class. The layout defines:

Using this layout, you can define the layout of the asset master record that best suits your needs.

Special Asset Class :"Assets under Construction" (AuC)

Assets under construction (AuC) require a separate asset class and corresponding G/L account, because they have to be shown separately in the balance sheet. Choose depreciation key 0000 to ensure that depreciation is not calculated for assets under construction in depreciation areas for the balance sheet. However, special tax depreciation and investment support are possible even on assets under construction. It is also possible to post down payments on assets under construction. Even after an asset under construction has been fully capitalized, you can still post credit memos to it. However, you have to allow negative APC.

Special Asset Class: "Low value asset" (LVA)

You can choose whether to manage low value assets (LVAs) using individual management or collective management. For each type of management, you have to set up a separate asset class. If you choose collective management of LVAs, you have to enter a base unit of quantity in the asset class. You also have to set up a check of the maximum amount in the depreciation areas of the asset class for LVAs.

You can enter the maximum allowed amount for each company code in Customizing for Asset Accounting by choosing Valuation → Amount Specifications.

Asset master record

When you create an asset master record, you have two options:

  1. Enter the company code and the asset class to which the new master record is to belong. The class then provides the most important control parameters for the master record.
  2. Use an existing asset master record as a reference (the reference asset might offer better default values than an asset class alone). Make sure that you do not copy unwanted data from the reference asset (for example, the capitalization date).

When you save your entries, 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.

Multiple similar assets

When creating asset master records, you can create multiple similar assets. This function is useful, for example, if you purchase 20 PCs at once or 12 desks for a new suite of offices.You can still make separate entries for each individual asset in the following fields:

Time-dependent data

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 can have a direct effect on depreciation. Therefore you should enter them in the time-dependent data, where they can be changed on a monthly basis. Depreciation posting takes place on a monthly basis. As a result, the currently valid cost center is always used for the depreciation posting run.The various time-dependent assignments/intervals can be called in the master record by choosing the Further Intervals button.

Posting to depreciation areas

You have to determine whether and how the values from the depreciation areas are posted in the general ledger. You have the following options:

• Do not post any values
• Post asset values online, depreciations periodically
• Post asset values and depreciations periodically
• Only post depreciations periodically

The system dictates that depreciation area 01 posts APC values to the general ledger online in real time. Normally, you use depreciation area 01 to manage book depreciation.

Using the option for periodic posting of APC values to the general ledger, you can post values from other depreciation areas to FI.

Depreciation is always posted on a periodic basis.

You can also define depreciation areas for reporting purposes only, which do not post any values to the general ledger (for example a depreciation area for a tax balance sheet).

You can post both the asset balance sheet values and the depreciation values from
the individual depreciation areas to separate balance sheet accounts or income
statement accounts in the general ledger. You can define any number of financial statement versions per chart of accounts in FI (general ledger). For each balance sheet account and income statement account, you specify in the financial statement version the balance sheet item or income statement item in which the account values should appear. In Customizing for Asset Accounting, you enter the financial statement versions to be used for those depreciation areas for which financial statements are to be created.

 

Tutorials