En Impairment Rev

7/22/2019 En Impairment Rev

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SAP Solution for Impairment of Fixed

Assets in JapanRevised Edition

SAP Japan Co., Ltd.March 31st, 2006





© SAP 2007 / Page 3

This material explains how to execute asset-impairment accounting in SAP R/3 FI- AA and what to bear in mind.

You have to add customizing settings and implement SAP notes. Refer to following

documentation for details. This document explains using the menu and screen

copies of R/3 Enterprise Version.

The contents of this document is based on generic way. Please make sure to test

and check in your environment.

Depending on your own specific requirements or particular settings of your system, the

content of this document may not fulfill your all requirements. Please be forewarned.

Information in this document is subject to change for future without notice.

For future correspondence or any other queries, please contact your accountexecutive.

Introduction



© SAP 2007 / Page 4

1. SAP Solution for Impairment of Fixed Assets in Japan

2. Related to SAP correction notes

3. Notes for SAP Solution for Impairment of Fixed Assets in Japan

4. Suitability for “Guidance for Accounting Standard for Impairment of Fixed Assets”

5. Examples of Customizing Settings

6. Change History

Agenda



© SAP 2007 / Page 5


1. Overview of Asset-Impairment Accounting Processes p.6

2. Scope of SAP Solution p.7

3. Supposed Business Scenario p.8

4. Post Impairment Loss Using Revaluations Functions p.10

5. Scrap Value of Asset after Impairment p.14

6. Depreciation Calculation after Asset Impairment p.15





6. Change History

Agenda



© SAP 2007 / Page 6

is it possible to figure

out the cash-slow or

profit and loss from

business activities in

whic asset or asset

goup is used by the

manegement unit?

How to estimate the

amount of future

cash-flow beforediscount.

How to figure out thebook value of asset

group.

How to calculate the

values of market sale

value and the usevalue( the amount of

future cash flow beforediscount).

What is themanagement unit to

figure out the Balanceof payment continually?

Which form will you

take the direct write-

off method or Indirect

write-off method?

Grouping Assets

Grasping

Indication of impairment

Posting impairmentloss and disclosure

Decision whether

to recognize

impairment loss

Measurement

of impairmentloss

Depreciation

calculation after asset impairment

Grasping indication of

impairment.

Indication are defined in

Accounting for the

Impairment of Fixed

Assets.

e.g. Profits or cash flows

from operating activities

are continuously minus.

Per asset group,

comparing

(1)estimated total cash

flows before discount

with

(2)total book value of

assets.

If (1)<(2), this asset

group should berecognized impairment

loss.

Issues

Discussion Point with Auditors before applying Accounting for Impairment of Fixed Assets

Whether estimation

of total cash flows

before discount is

reasonable or not

Is the business plan

rational?

How to grasp marketvalue of fixed assets

Whether a discount rate

is reasonably estimated

or not

is it nessesary to

change parametersfor depreciation.?

How to group assets

You can use an exsiting opelating profit and

loss report for grasping indication of impairment.

Does the depreciation continue

regularly based onh the original

remaining life, the original

scrap value and the book value

after impairment.

(How rigorously shall you

readjust the remainig life or thescrap value agter impairment.)

Asset-Impairment Accounting Processes

When many assets

work as a whole and

generate cash flows,

these assets are

grouped as a unit of

deciding whether to

recognize

impairment loss,

and a measurement

unit.

Measuring amount of

impairment loss of this asset

group, and distributing them

to each asset by Book value

method.

Impairment loss of this asset

group

= total book value – total fair

value.

Total fair value is either total

market value or estimated

total cash flows after discount.

Base on the result of

distribution of

impairment loss,

impairment loss is

recognized per each

asset.

Continuous and

constant depreciation

based on re-

estimated useful life,

re-estimated cut-off

value, and book

value right after

impairment posting.

1.1 Overview of Asset-Impairment Accounting

Processes



© SAP 2007 / Page 7

1.2 Scope of SAP Solution

is it possible to figure

out the cash-slow or

profit and loss from

business activities in

whic asset or asset

goup is used by the

manegement unit?

How to estimate

the amount of

future cash-flow

before discount.

How to figure out

the book value of

asset group.

How to calculate the

values of market

sale value and the

use value( the

amount of future

cash flow beforediscount).

What is the

management unit to

figure out the

Balance of paymentcontinually?

Which form will you

take the Direct

write-off method or

Indirect write-off

method?

Grouping Assets Grasping Indicationof impairment

Posting loss of

impairment anddisclosure

Decision whether

to recognize

impairment loss

Measurement of impairment loss

Depreciation

calculation after asset impairment

Grasping indication of

impairment.

Indication are defined in

Accounting for the

Impairment of Fixed

Assets.

e.g. Profits or cash flows

from operating activities

are continuously minus.

Per asset group,

comparing

(1)estimated total cash

flows before discount

with

(2)total book value of

assets.

If (1)<(2), this asset

group should berecognized impairment

loss.Issues

Discussion Point with Auditors before applying Accounting for Impairment of Fixed Assets

Whether estimation

of total cash flows

before discount is

reasonable or not

Is the business plan

rational?

How to grasp marketvalue of fixed assets

Whether a discount rate

is reasonably estimated

or not

is it nessesary to

change parametersfor depreciation.?

How to group assets

You can use an exsiting opelating profit and

loss report for grasping indication of impairment.

Does the depreciation continue

regularly based onh the original

remaining life, the original

scrap value and the book value

after impairment.

(How rigorously shall you

readjust the remainig life or thescrap value agter impairment.)

Asset-Impairment Accounting Processes

When many assets

work as a whole and

generate cash flows,

these assets are

grouped as a unit of

deciding whether to

recognize

impairment loss,

and a measurement

unit.

Measuring amount of

impairment loss of this asset

group, and distributing them

to each asset by Book value

method.

Impairment loss of this asset

group

= total book value – total fair

value.

Total fair value is either total

market value or estimated

total cash flows after discount.

Base on the result of

distribution of

impairment loss,

impairment loss is

recognized per each

asset.

Continuous and

constant depreciation

based on re-

estimated useful life,

re-estimated cut-off

value, and book

value right after

impairment posting.

Scope of SAP solution of

Asset-Impairment

accounting



© SAP 2007 / Page 8

Asset Balance

List by group

Figure out

recoverable value of

Asset group

Figure out scrap

value of asset

group

Allocation value to

each asset of

Assets group

Make a list of Asset

Balance by group

the unit in SAP

System.

Specify the higher

value of use value and

current net value as

recoverable value.

If there is no importance of

the scrap value of tax,

Calculate fair value after

the period of remaining

economic useful life, and

establish it as the scrap

value.Figure out scrap value

after impairment of asset

group, calculate ratio of

the scrap value and to

acquisition value after

impairment.

Allocate the value to

post impairment loss to

each fixed asset.

If you establish a

different value from

scrap value of tax,allocate the scrap value

with ratio of acquisition

value after impairment.

Supposed Business ProcessSupposed Business Process

The workflow after decided to conduct Fixed Asset Impairment is supposed as follows.

This page describes the preparation for data entry.

Next Page

5,000,000

2,062,500

937,500

750,000

1,250,000

Allocated

impairment

loss

150,000

Scrap value

5,000,000

Impairment

loss

3,000,000

Recoverable

value

3%1,500,0002,000,00010003

3%3,300,0003,500,00010004

3%1,200,0001,500,00010002

8,000,000

2,000,000

Book Value

before

Impairment

3%10,000,000Group total

3%3,000,00010001

Scrap Value% Acquisition

Value

Asset Numbver

Scrap Value 150,000 / (Acq.Value 10,000,000

– Impairment loss 5,000,000) = 3%

1.3 Supposed Business Scenario



© SAP 2007 / Page 9

5,000,000

2,062,500

937,500

750,000

1,250,000

Allocated

impairment

loss

150,000

Scrap value

5,000,000

Impairment

loss

3,000,000

Recoverable

value

3%1,500,0002,000,00010003

3%3,300,0003,500,00010004

3%1,200,0001,500,00010002

8,000,000

2,000,000

Book Value

before

Impairment

3%10,000,000Group total

3%3,000,00010001

Scrap Value% Acquisition

Value

Asset Numbver

Setting of scrap

value %

Post Balance

Sheet

Revaluation

Transfer(Fix Dep.

Value before

impairment. )

Depreciation

Calculation after

impairment

The scrap value

calculated at step is not 5%. Then you

have to change

each assets of assetgroup.

refer to 1.5 Setting of

the scrap value after

impairment posting (p.14)

Post impairment loss to

each assets with the

values calculated at step

.

Refer to 1.4 Post impairment

loss using Balance Sheet

Revaluation Function. (p.1013)

In case Asset

master’s Dep. Key

would be changed

after impairment, you

have to transfer theassets to fixed Dep.

Value before

impairment.

Execute Dep.

Calculation with dep.

Key assigned to assets

master after transfer.

Refer to:1.6 Depreciation

calculation after impairment.

(p.1517)

Previous

page

Only in case Dep. key would

be changed after impairment.

Supposed Business ProcessSupposed Business Process

1.3 Supposed Business Scenario

In the workflow in previous page, impairment loss and scrap value % for each assets are calculated.

This page describes how to post impairment loss as revaluation value of acquisition value and start of depreciation calculation

after impairment.



© SAP 2007 / Page 10

Posting Impairment loss using revaluation function (T-code: ABAW)

Post Impairment loss to each assets using Balance Sheet Revaluation transaction. Althogh other transactions are useful for posting impairment, SAP recommended using revaluation

transaction.

Implement of the SAP note 794903

Make sure to implement the SAP note 794903 in your system, before you excute Impairment Accounting processes.

SAP note 794903 contains following.

1. Correction of incorrect value at depreciation calculation after you postadditional acquisition in the last year of depreciation calculation.

2. How to customizing revaluation transaction type for depreciation calcukationof revaluation starts next month. (*)

Depending on your requierment , there are some ohter SAP notes.

Refer to 2. Related SAP correction notes.

(*) If you start depreciation calculation of revaluation in current month, you don‘t need to add customizing settings. Please implement the note92925 and use period control 01 for additional acquisition.

1.4 Posting Impairment Using Bal. sheet

Revaluation Function



© SAP 2007 / Page 11

SAP menuSAP menu

T-code: ABAW (Bal. Sheet Revaluation)

Posting impairment each assets.

* If you want to posting impairment loss to

mass assets promptly, you have to

develop a batch input program





© SAP 2007 / Page 12

Posting of ImpairmentPosting of Impairment

Posting of Impairment Loss on Tr-cd : ABAW as follows.

Refer to 5. Example of the customizing settings about customizing settings for impairment of fixed assets.

Input Asset val. Date and

Amount posted, and post

the document.

Use created trans. Type for

impairment.





© SAP 2007 / Page 13

Display Asset ValuesDisplay Asset Values

After impairment , planned values are shown with Asset Explorer as below.





© SAP 2007 / Page 14

Using Item : scrap value or scrap value %

you can use items “Scrap Value” or “Scrap value %” in the depreciationarea of asset master to input the scrapvalue after impairment.

SAP recommend using Scrap value %.Refer to screen copy on right when youchange asset.

Scrap value % is available for theRelease 470 or above. With note864029, Scrap value % is alsoavailable for 46B and 46C.

In case the scrap value after impairment is0.

Input minimum value in scrap value %then result of calculation of scrap valuemust be zero for most assets.

In this case, you can

set scrap value 1-

on asset which

acquisition Value is500,000,000 or

higher.

1.5 Setting of Scrap Value after Impairment

posting



© SAP 2007 / Page 15

In SAP solution for Impairment of Fixed Asset, we define the depreciation calculation after

asset impairment in approach depreciation calculation of SAP standard features.()

Calculating formula

In SAP FI-AA, the depreciation calculation works by every transaction posted during

fiscal year to grasp the balance on a fiscal year.

Impairment (revaluation) is also seen as a transaction item posted during fiscal year,

therefore the depreciation calculation after impairment works as following.

Base value * Dep. Rate * Months / 12 Carried forward and usual

transactions such as acquisition, retirement or transfer.

Impairment value * Dep. rate * Months / 12 Revaluation

Due to the design of depreciation as above, the system doesn’t calculate based on the

book value after impairment in case you post impairment during fiscal year.

The depreciation ratio is supposed to be taken the depreciation ratio of useful life

designated by Japanese law.

The scarp value is taken whichever following.

the % configured in the Cutoff value key ()

“Scarp value” or “Scrap value %” in the Asset master.

Base value and

Depreciation ratio

Scrap value

()The depreciation calculation of SAP is different from the principle way in the Guideline. Please be forewarned.

Refer to “4. Suitability for Guideline for Accounting standard of Impairment of Fixed Asset” for information

on how to apply the Guideline.()In case you set 5% for tax practice , the scrap value after impairment is 5% of the acquisition value after impairment.

1.6 Depreciation Calculation after Impairment



© SAP 2007 / Page 16

Cal. Formula: Book value FY start * Dep. Rate * Months / 12

For carried forward and usual transactions such as acquisition, retirement or transfer.

Impairment value * Dep. Rate * Months / 12

For revaluation transaction.

Base value: Book value FY start or Revaluated value

Dep. Rate: Depreciation rate of asset’s useful life designated by Japanese law

Declining-balance methodDeclining-balance method

For example Asset No.10001 in supposed business scenario, following is an example of thefull-year depreciation calculation in case posting impairment for semi-annual closing (period

X) and reflect impairment value in the second half (period X+1). Supposing that useful life of

this asset is 8 year and it is not changed after impairment.

Acquisition value at the fiscal year start: 3,000,000

Book value at the FY start: 2,285,715Dep. Value 2,28 5,715 * 0.25 * 12/12 = 571,429

Impairment posting: -1,250,000

Dep. Value -1,250,000 * 0.25 * 6/12 = -156,250

Planned Dep. value after Impairment 415,179

ExampleExample


<Declining-Balance Method>



© SAP 2007 / Page 17

Cal. Formula: Acquisition value * 0.9 * Dep. Rate * months / 12For carried forward and usual transactions such as Acquisition , Retirement or Transfer.

Impairment value * 0.9 * Dep. Rate * months / 12

For revaluation transaction

Base value: Acquisition value or Revaluated value (Note)

Dep. Rate: Depreciation rate of asset’s useful life designated by Japanese law

Straight-line methodStraight-line method

For example Asset No.10001 in supposed business scenario, following is an example of the full-year depreciation calculation in case posting impairment for semi-annual closing (period X) and reflect

impairment value in the second half (period X+1) .Supposing that useful life of this asset is 8 year and it is

not changed after impairment.

Acquisition value at the fiscal year start: 3,000,000

Dep. Value 3,000,000 * 0.9 * 0.125 *12/12 = 337,500

Impairment posting: -1,250,000

Dep. Value -1,250,000 * 0.9 * 0.125 * 6/12 = -70,313

Planned Dep. value after Impairment 267,187

ExampleExample

(Note) Dep. key ”JLXX” for straight-line method for Japanese tax law has base value 01 which does not regard

impairment posting. You need to maintain depreciation keys with base value 03 which regards revaluation value on base

value for depreciation calculation.

Refre to 5. Example for the Customizing settings for how to define the depreciation keys for impairment.


<Straight-Line Method>



© SAP 2007 / Page 18






6. Change History

Agenda



© SAP 2007 / Page 19

Following is a list of primary correction notes for Asset Impairment Accounting in Japan. Contact to SAP Japan when your version is out of list.

500,470,46C,46B45B,40B,

31I

Correction for : The combination of an impairment posting and base

value 28 produce undesired results.

In case you use base value 28 to change depreciation method from fixed

rate to straight-line.

You changed depreciation

method in past. DBM -> SLM814785

46B46CThe scrap value % is available for Release 4.70 and above.

With this note this function is also made available for 46B and 46C.Your version is 46B or 46C.864029

46B46C470

Correction of over depreciation.

Unnecessary correction in case you post both APC and investment

support in Dep. Area 01.

You have an investment support

area which manages both APC

and investment support.

588836

591017

600,500,470,46C

46B,46A,45B,45A

40B,40A,31I

Correction of the RAFABNEW program which does not generate any

new depreciation area for assets under construction for investment

measure.

Generate a new dep. area for

assets under construction for

investment support.

317806

500,470,46CCorrection for : When you capitalize an asset under construction, error message AW609 is issued , i ndicating that revaluation or devaluation

posting have been made in the current year.

You need to post impairment to

an asset under construction.802828

470, 46C,

46A 46B,

45A 45B,

40A 40B,

300 31I

Start Dep. Cal. From posting date of revaluation when you post

impairment on asset acquired in current year.

Dep. Cal. Starts from first date of acquisition without this note.

You want to define the period

control for impairment posting as

current month.92925

500,470,46C,46B

45B,40B,31I

Correction of incorrect value at depreciation calculation after you post

additional acquisition in the last year of depreciation calculation .

How to define a new transaction type for impairment posting. The period

control for impairment posting must be the following month.

All customer 794903

Applicable versionIncluding correctionConditionNote No.

2. Related to SAP Correction Notes



© SAP 2007 / Page 20






6. Change History

Agenda



© SAP 2007 / Page 21

Depreciation Areas

If there are not separated depreciation areas for commercial law and for tax law, you need toadd new depreciation.

SAP note 317806 is necessary to generate a new depreciation area for asset under

construction.

Derived depreciation area If there is a derived depreciation area which is derived from area you post impairment , the

indicator of “Rev.APC” of the derived Dep. area must be set effective to allow posting

revaluation as of the real dep. area.

Impairment posting for straight-line method asset The multi-level key must be changed to “03: Revaluated value”.

Assignment of Scrap value %

There is a requirement of assignment a rate for the original acquisition value. When you post

impairment loss with revaluation of acquisition value function , it is calculated based on theacquisition value and revaluated value. As the solution of this problem , please set the Scrap

value % accordingly the design explained above.

3. Notes for SAP Solution for Impairment of

Fixed Asset in Japan



© SAP 2007 / Page 22






6. Change History

Agenda



© SAP 2007 / Page 23

135

55

No

Ditto

the book value in case the asset was depreciated

with the legal dep. rate of remaining life * Legaldep. rate *10/9

the underlined amount is not equal to the book

value of the previous year.

n as remaining life

Straight-line method

(Book value after impairment Scrapvalue)*Depreciation rate

Depreciation rate 1/n

Declining method

Book value after impairment * Depreciation rate

Depreciation rate 1 - n remaining rate( Remaining rate = Scrap value / Book value after

impairment)

Required calculation formula

5The base value is determined by multiplying the

book value -which was calculated with the dep. ratein case the scrap value is 10%-, by nine tenths.Cording the user exit of base value

An add-on table also needed.

“ Asset after impairment is depreciated basedon the book value deducted impairment, thededucted scrap value and the remaining life ,

as ordinary asset already is , in accordance

with the depreciation calculation method taken

by the company.”

“The scrap value of a asset is a projected net

sales value at the end of its useful life”

“Incase the scrap value is rated zero-yen, theamount multiplied the scrap value as 10% by

nine tenths, is recorded as depreciation value

of each period.

1.Change depreciation parameters of asset after impairmentPost a transfer transaction and fixed the

depreciation value before impairment.

Change the dep. key of the acquired asset.

2.Calcuration based on the book value after

impairment.

Cording the user exit of base value to calculate the

book value after impairment.

3.Depreciation rate of the straight-line method

Customizing settings for the even-depreciation

4. Depreciation rate of the declining method.

Cording the user exit of depreciation calculation

“ The amount after you deduct the scrap valuefrom the book value after impairment isdistributed steady and reasonably in

accordance with the depreciation calculation

method taken by the company.”

Requirement and corresponding methodRelevant abstract of guidance

You have to consider to use user exits when you follow the guidance strictly.

4. Suitability for “Guidance for Accounting

standard for Impairment of Fixed Assets"



© SAP 2007 / Page 24






1. Configuration of Depreciation Areas p.25

2. Transaction Type for Impairment p.27

3. Account Assignment p.30

4. Specify Intervals and Posting Rules p.32

5. Configuration of Depreciation Keys (Straight-Line Method) p.33

6. Define Asset History Sheet Version (Example) p.34

6. Change History

Agenda



© SAP 2007 / Page 25

Configuration of the depresiation area For Direct write-off form and Indirect credit form

Set indicator of “Revaluate APC” effective on each depreciation area you post impairment

to allow revaluation posting. (Ordinary Dep. Area 01)

IMG: Financial Accounting Asset Accounting Special Valuation Revaluation of Fixed Asset Revaluation for the Balance Sheet Determine Depreciation Area

(T-cd:OABW)

Configuration of the Depreciation Areas

Set the indicator of RevlAPC

effective on each Dep. Area you

post Impairment to allow posting

revaluation.

5.1 Configuration of Depreciation Areas



© SAP 2007 / Page 26

If you have derived depreciation area , please note following.

the case you have to bear in mind

There is a derived depreciation area which derived by the area posting impairment.

what you have to do

Call transaction OABW (Determine Depreciation Areas) and set X the flag RevlAPC as same asprevious page.

Note that if you don’t set X the flag Revl.APC, depreciation calculation on derived Dep. area would be incorrect.

In case of both direct write-off method and indirect write-off

method, “RevlAPC” of

depreciation area where asset

impairment is posted and

derived area is active.

Note for derived depreciation area

5.1 Configuration of Depreciation Areas



© SAP 2007 / Page 27

You need to create a new transaction type group for period control for impairment.

Run transaction se11,select domain PERGRP,

and click change button.

Call transaction se11 for change the domain PERGRP. , and create entry 6 ‘Next month’.

Under “Value range” single

values,

Enter the value 6 with

description Next month.

Activate the domain.

SAP Easy Access :Tools ABAP Workbench Development ABAP Dictionary(SE11)

Transaction type groups for period control

5.2 Transaction type for Impairment



© SAP 2007 / Page 28

You need to create two new transaction

type group for impairment, 84 for

impairment and 85 for impairment of curr-yr acquisition .

Call transaction SM30, enter the view

V_TABWG and create the new

transaction type group.

1. Enter the viewV_TABWG and click

Maintain button.

You can copy transaction type group

83. Change the group to 84 and the

period control group to 6.

Now copy the transaction type group

84, change the group to 85 and set

the ‘Current-year acquisition’ indicator.

Create new transaction type groups for impairment




© SAP 2007 / Page 29

Click New entries and create

two transaction types for

revaluation.

You need to create two transaction type for impairment, one for assets acquired current year and one for assets acquired previous year.

For Assets acquired previous

year or before.

Transaction type group :84 Account assignment :Credit

transaction

For asset acquired current year

Transaction type group :85

account assignment :Credit

transaction

IMG: Financial Accounting Asset Accounting Special Valuation Revaluation of Fixed Asset

Revaluation for the Balance Sheet Define Transaction Type for Revaluation(T-cd:AO84)

Create Transaction Type for Impairment




© SAP 2007 / Page 30

Indication method on Financial statement (Accounting Practice)

When you post Asset impairment, you have to indicate it on Financial statement as following way.

P/L StatementIn principle, indicate as Extraordinary Loss.(Accounting standard for Impairment of Fixed Assets 4-2 , Guidance 58)

B/SThere are 3 means as following.(Accounting standard for Impairment of Fixed Assets 4-1 , Guideline 57)

R/3 Customizing Accounting Practice

If you take Independent indirect write-off form , you can

add up accumulated impairment to accumulated

depreciation.

(depreciable assets only)

about tangible depreciable assets the from that deduct

accumulated impairment indirectly from acquisition cost

is also acceptable.

(depreciable assets only )

Deduct the impairment loss directly from the acquisition

value before impairment and indicate the value less

impairment as acquisition cost.

Indirect write-off form

Indirect write-off form

Direct write-off form

CombinationIndirect write-off

form

Independent Indirect

write-off form

Allowance

Direct Write-off formGeneralprincipal

Indication On Financial statement

5.3 Account Assignment



© SAP 2007 / Page 31

Maintain accounts assignment for revaluation.IMG : Financial Accounting Asset Accounting Special Valuation Revaluation of Fixed Asset

Maintain Accounts for Revaluation

The configuration of Direct write-off form

Example for journal entry )

Debit : Impairment loss /Credit : Machinery and equipment

The configuration of Indirect write-off form

Example for journal entry )

Independent Indirect write-off formD : Impairment loss / C : Accumulated impairment

Combination Indirect write-off form

D : Impairment loss /

C : Accumulated depreciation and Accumulated

impairment loss

Direct write-off method and Indirect write-off form

Refer precious page : Indication on financial statement

Account assignment

5.3 Account Assignment



© SAP 2007 / Page 32

You need to specify to allow posting revaluation on each company code and eachdepreciation area. (Only for the depreciation areas you post revaluation.)

Set X to allow posting

revaluation.

IMG : Financial Accounting Asset Accounting Integration with the General Ledger

Post Depreciation to the General Ledger Specify Intervals and Posting Rules (Tr-cd:OAYR)

Specify Intervals and Posting Rules

5.4 Specify Intervals and Posting Rules



© SAP 2007 / Page 33

When you amortize in straight-line method, you need to change base value to 03.

IMG : Financial Accounting Asset Accounting Depreciation Valuation method

Depreciation Key Maintain Depreciation Key (Tr-cd : AFAMA)

Change Base Value of Multi-level

method from 01:Acquisition valueto 03:Replacement value.

Tr-cd:AFAMS

Note : You have to configure the depreciation keys before you post the asset-Impairment.

The Configuration of Depreciation Keys (Just for Straight-line method)

5.5 Configuration of Depreciation Keys

(Straight-Line Method)



© SAP 2007 / Page 34

Create a new Asset History Sheet Version

Note : You have to define transaction types for impairment and their asset history

sheet group before this customizing setting.

IMG : Financial Accounting Asset Accounting Information System Asset History Sheet Define History Sheet Version

5.6 Define Asset History Sheet Version

(Example)



© SAP 2007 / Page 35

Create a column for displaying Impairment Loss

Add a column for displaying the Impairment

loss and maintain the column to reflect the

impairment values.


(Example)



© SAP 2007 / Page 36

Configuration example of the APC FY start columnMaintain the APC fiscal year start

column to reflect the impairmentvalues from previous year.


(Example)



© SAP 2007 / Page 37

Configuration example of the Book value FY start column

Maintain the Book Value Fiscal

Year start column to reflect the

impairment values from previous

years.


(Example)



© SAP 2007 / Page 38

Configuration example of the Current APC column.

Maintain Current APC column

to reflect the impairment value.


(Example)



© SAP 2007 / Page 39

Configuration example of the Current Book value column

Maintain Current Book value

column to reflect the impairment

value.


(Example)



© SAP 2007 / Page 40

Configuration example of Retirement and Transfer column

Maintain each column to reflect theimpairment value When you post

retirement after impairment.

maintain transfer column as same.


(Example)



© SAP 2007 / Page 41

Example for Displaying the Asset History Sheet


(Example)



© SAP 2007 / Page 42






6. Change History

Agenda



© SAP 2007 / Page 43

Changes from first edition released on 7th Mar. 2005. (1/3)

Ditto(deleted)(all pages)Remaining

symptom with Note

794903.

15

The latest correction notes are shown in

revised edition of 2. related sapcorrection notes(p.19). Therefore the

page was bdeleted.

(deleted)(all pages)The symptom that

correct with Note794903.

14

Chapter

2

It was updated with information for

overview of note 794903 and remarks for

a case you start the dep.cal. after

impairment in current month.

(Changed as below )

revised edition1.4 Post impairment loss using

revaluations function(p.10)

Implement of the SAP note 794903

Make sure to implement the SAP note 794903 inyour system, befor excute Impairment Accountingprocesse.

The sap note 794903 contains following.

Correction of incorrect value at depreciationcalculation after you post additional acquisition inthe last year of depreciation calculation.

How to customizing revaluation transaction typefor depreciation calcukation of revaluation startsnext month. (*)

(*) If you start depreciation calculation of revaluation in current month, you don‘t need toadd customizing settings. Please implement thenote 92925 and use period control 01 for additionalacquisition.

Please be sure to implement the

correction note before posting

impairment loss on asset.

In revised edition of 1.5 The scrapvalue of the asset after impairment

(p.14), how to use the item “Scrap

value %”is explained. Therefore thosepages are deleted.

(Deleted)You have to post impairment loss tocertain assets separately. Ex. In case

you post impairment to an Asset with

memorandum value ¥1 or ¥0.

SAPsuggested :Posting

impairment loss with

revaluation function.

7

Chapter

1

“The SAP

solution

for

Impairme

nt fixedasset”

released

on 7th Mar.

2005.

Reason After changingBefore changingTitlePageEdition

6. Change History



© SAP 2007 / Page 44

Changes from first edition released on 7th Mar. 2005. (2/3)Reason After changingBefore changingTitlePageEdition

The addition of a new depreciation area

does not have to be done at the beginning

of the fiscal year. Therefore it was

changed.

Information for a sap note 317806 wasadded.

(Changes as the following)

In revised edition3. Notes for the SAP solution

for Impairment of fixed assets in Japan (p.21)

Depreciation Areas

If there are not separated depreciation

areas for commercial law and for tax law,

you need to add new depreciation.

SAP note 317806 is needed to

generate a new depreciation area for

asset under construction.

depreciation area

If there are not separated depreciation

areas for commercial law and for tax law,

you need to add new depreciation. Be

sure to generate a new dep. area at thebeginning of the fiscal year.

Notes for “the

solution for

impairment

accounting”

based onRevaluation

function 2/2

18

In revised edition of 1.5 The scrap value

of the asset after impairment(p.14), how

to use the item “Scrap value %”is

explained. Therefore those pages are

deleted.

(deleted)impairment posting down to the scrap

value zero-yen

You have to change the customizing

settings.For example ,

1)Create a dep. key which ignores cut-off

value. Assign the key to the asset master.

Then post impairment loss.2)Change dep. key to one without cut-off

value key. And then post impairment loss.

Notes for “the

solution for

impairment

accounting”

based onRevaluation

function 2/2

18

It is updated and explained in revisededition4 Suitability for “Guidance for

Accounting standard for Impairment of

Fixed Assets". Therefore the old page

was deleted.

(deleted)(all pages)Notes for “thesolution for

impairment

accounting”

based on

Revaluation

function 1/2

17

Chapter

3

“The SAP

solutionfor

Impairme

nt fixed

asset”

released

on 7th Mar.2005.

6. Change History



© SAP 2007 / Page 45

Changes from first edition released on 7th Mar. 2005. (3/3)

Reason After changingBefore changingTitlePageEdition

(deleted)(all pages)3-1 Example of

configuration to post

impairment loss

down to the scrap

value 1 yen.

39

In revised edition of 1.5 The scrap

value of the asset after impairment

(p.14), how to use the item “Scrap

value %”is explained. Therefore those

pages are deleted.

(deleted)(all pages)2-1 example of

configuration to post

impairment loss

down to the scrap

value zero-yen.

38

appe

ndix

“The SAPsolution for

Impairment

fixed asset”

released on

7th Mar. 2005.

6. Change History



© SAP 2007 / Page 46

Additional information on revised edition

Pages for showing how to apply for Guideline was added.Suitability for “Guidance for Accounting

standard for Impairment of Fixed Assets"

423

Reminder for the scrap value a fter impairment was added.Notes for the SAP solution for Impairment of

fixed assets in Japan

321

A list of latest SAP correction notes for asset impairment was added.Related SAP correction notes219

Information for The logic of depreciation calculation with Sap standard feature was added.The depreciation calculation after asset

impairment

1.61517

Information for the customizing setting of scrap value of the asset after impairment was added.The scrap value of the asset after impairment1.514

A supposed business scenario for executing accounting process of asset impairment wasadded.

Supposed business scenario1.38

“The SAP

solution for

Impairment

fixed asset – revised edition-

CommentTitleSectionPageEdition

6. Change history



© SAP 2007 / P 47

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