SAP Implementation Business Blueprint S2-040 – Asset Accounting

SAP Implementation

Business Blueprint

S2-040 – Asset Accounting

© SAP 2007 / Page 2

Asset Accounting is used for managing and supervising all existing fixed assets. Like A/R and A/P, it is also a subsidiary ledger to the General Ledger, and providing detailed information on transactions involving fixed assets.

Using the Fixed Asset Module, you can automatically update all relevant transactions to the general ledger. These include all accounting transactions that are posted to assets, and all changes to asset values that are automatically calculated by the system (particularly depreciation).

Sections: -

Fixed Asset Master Asset Transactions Period End Closing

Introduction

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Table of contents

Fixed Asset Master Chart of Depreciation Depreciation Area Asset Class Depreciation key Asset Depreciation Method General Fields in Asset Master Account determination

Fixed Asset Processing Asset acquisition Asset transfer Asset retirement

Period End Closing Depreciation Posting Year-end closing

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Fixed Asset Master

Chart of Depreciation

A Charts of Depreciation is the highest level organization structure in SAP Asset Accounting which holds all asset accountings relevant settings such as Depreciation Areas and the depreciation methods that are specific to a country. Since different companies in the same country are subject to the same legal regulation of fixed asset depreciation, Chart of Depreciation is usually country specific and more that one company codes could be assigned to a single Chart of Depreciation.

Chart of Depreciation is a 3-character code that supports alpha-numeric format. As it is generally country specific, normally the coding of the Chart of Depreciation will include the country codes.

Chart of Depreciation Description

DHK Chart of Depreciation – Hong Kong

DCN Chart of Depreciation - China

DMY Chart of Depreciation - Malaysia

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Fixed Asset Master

Depreciation Area (each station may have it own local government / authority requested Dept. rate which is different with the Group)

A Depreciation Area represents an independent depreciation book in which different values can be calculated in parallel for each fixed asset for different purpose. The depreciation terms and value of expected useful life necessary for calculating a fixed asset book value and depreciation are all managed in depreciation area level. One single Chart of depreciation could have more that one Depreciation Area. In each Chart of Depreciation in OTEL, only the Depreciation Area “01” – Book Deprecation will be integrated to the General Ledger in FI for postings. Other than the book depreciation, such as “10” Group Depreciation that is the depreciation calculation according to the OTEL group accounting policy for consolidation purpose.

(Sample)Chart of Depreciation

Depreciation Area

Description Post to G/L Purpose

DHK 01 Book Depreciation – Hong Kong Yes For Local Statutory Reporting

DCN 01 Book Depreciation - China Yes For Local Statutory Reporting

10 Group Depreciation No For Consolidation Purpose

DMY 01 Book Depreciation - Malaysia Yes For Local Statutory Reporting

10 Group Depreciation No For Consolidation Purpose

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Fixed Asset Master

Asset Class

Asset class is the main criterion for classifying assets. Asset classes are created in client level, then assigned to chart of depreciation. Each asset is assigned to only one asset class. In OTEL, the fixed asset number will be assigned by system automatically according to the predefined number range per asset class and per company.

Asset Class Description Number Range

(From)Number Range

(To)Internal/External Number

assignment *

FA000 Clearance Temporary Acct. A10000 A89999 External Assign

FA010 Leasehold land use right 10000 14999 Internal Assign

FA015 Building 15000 19999 Internal Assign

FA020 Furniture & Fixtures 20000 29999 Internal Assign

FA030 Office Equipments 30000 39999 Internal Assign

FA040 Motor Vehicles 40000 49999 Internal Assign

FA050 Computer Equipments 50000 59999 Internal Assign

FA060 Leasehold improvement 60000 69999 Internal Assign

FA070 Construction in progress 70000 79999 Internal Assign

FA080 Investment Property 80000 89999 Internal Assign

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Fixed Asset Master

Depreciation Key (each station may have it own local government / authority requested Dept. rate which is different with the Group)

The depreciation key contains the value settings which are necessary for determining depreciation amounts. It represents a combination of calculation rules, which are used for the automatically calculated depreciation types.

(Sample) Chart of

Depreciation

Depreciation Area

DescriptionDepreciation

KeyDescription (Depreciation Method)

DHK 01 Book Depreciation - HK LINSStraight Line method/Useful Life/To zero value/ Current mth start

DCN

01 Book Depreciation – China ZLINStraight Line method/Useful Life/To zero value/Next mth start

10 Group Depreciation LINSStraight Line method/Useful Life/To zero value/ Current mth start

DMY

01 Book Depreciation – Malaysia LINSStraight Line method/Useful Life/To zero value/ Current mth start

10 Group Depreciation LINSStraight Line method/Useful Life/To zero value/ Current mth start

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Fixed Asset Master

Asset Depreciation Method

In General, the assets in an asset class use the same depreciation terms (depreciation key, useful life). The default values of the asset classes for Hong Kong are as follow: -

Depreciation Key for book depreciation:

LINS – Straight Line Method

Depreciation start immediately from asset acquisition period

. Chart of Depreciation Asset Class Description

Planned Useful Life (Years)

DHK FA010 Leasehold land use right NADHK FA015 Building NADHK FA020 Furniture & Fixtures 5DHK FA030 Office Equipments 5DHK FA040 Motor Vehicles 5DHK FA050 Computer Equipments 5DHK FA060 Leasehold improvement 5DHK FA070 Construction in progress NADHK FA080 Investment Property NA

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Fixed Asset Master


In General, the assets in an asset class use the same depreciation terms (depreciation key, useful life). The default values of the asset classes for China are as follow: -


ZLIN – Straight Line Method

Depreciation start from the next period of asset acquisition



DCN FA000 Clearance Temporary Account NADCN FA010 Leasehold land use right NADCN FA015 Building NADCN FA020 Furniture & Fixtures 5DCN FA030 Office Equipments 5DCN FA040 Motor Vehicles 5DCN FA050 Computer Equipments 5DCN FA060 Leasehold improvement 5DCN FA070 Construction in progress NADCN FA080 Investment Property NA

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Fixed Asset Master


In General, the assets in an asset class use the same depreciation terms (depreciation key, useful life). The default values of the asset classes for Malaysia are as follow: -


LINS – Straight Line Method

Depreciation start immediately from asset acquisition period



DMY FA010 Leasehold land use right NADMY FA015 Building NADMY FA020 Furniture & Fixtures 10DMY FA030 Office Equipments 10DMY FA040 Motor Vehicles 10DMY FA050 Computer Equipments 5DMY FA060 Leasehold improvement 5DMY FA070 Construction in progress NADMY FA080 Investment Property NA

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Fixed Asset Master

Highlight of the general data fields in asset master: -

Inventory Number (Previous Asset number) Store the asset record number in legacy system.

Serial Number The serial number enables the manufacturer to uniquely identify the asset

Cost Center The cost center assignment in the asset master record to determine the cost

center affected when the depreciation posting are made. The cost center can be different for different time interval, and the cost center

only records the depreciation posting in the corresponding time, no accumulated depreciation records transferred.

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Fixed Asset Master

Highlight of the general data fields in asset master: -

Inventory Number (Previous Asset number) Store the asset record number in legacy system.

Serial Number The serial number enables the manufacturer to uniquely identify the asset

Cost Center The cost center assignment in the asset master record to determine the cost

center affected when the depreciation posting are made. The cost center can be different for different time interval, and the cost center

only records the depreciation posting in the corresponding time, no accumulated depreciation records transferred.

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General ledger account for acquisition and retirement (DHK & DMY): -

Account Determination

DescriptionAsset

Acquisition

Revenues from asset

salesGain from

asset salesLoss from

asset sales Scrap loss Leasehold land use right 10101101 62010003 62010003 80510001 84081001 Building 10101201 62010003 62010003 80510001 84081001 Furniture & Fixtures 10102100 62010003 62010003 80510001 84081001 Office Equipments 10102110 62010003 62010003 80510001 84081001 Motor Vehicles 10102120 62010003 62010003 80510001 84081001 Computer Equipments 10102130 62010003 62010003 80510001 84081001 Leasehold improvement 10102140 62010003 62010003 80510001 84081001 Construction in progress 10102800 62010003 62010003 80510001 84081001 Investment Property 10103100 62010003 62010003 80510001 84081001

DescriptionRevaluation

Acquisition CostOffsetting Account:

Revaluation

Investment Property 10103900 Other income

General ledger account for revaluation (DHK & DMY): -General ledger account for revaluation (DHK & DMY): -

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General ledger account for acquisition and retirement (DCN): -


DescriptionAsset

Acquisition

Revenues from asset

salesGain from

asset salesLoss from

asset sales Scrap loss Clearance Temporary 10102700 62010003 62010003 80510001 84081001 Leasehold land use right 10101101 NA NA NA NA Building 10101201 NA NA NA NA Furniture & Fixtures 10102100 NA NA NA NA Office Equipments 10102110 NA NA NA NA Motor Vehicles 10102120 NA NA NA NA Computer Equipments 10102130 NA NA NA NA Leasehold improvement 10102140 NA NA NA NA Construction in progress 10102800 NA NA NA NA Investment Property 10103100 NA NA NA NA

DescriptionRevaluation

Acquisition CostOffsetting Account:

Revaluation

Investment Property 10103900 Other income

General ledger account for revaluation (DCN): -General ledger account for revaluation (DCN): -

* Clearance temporary applies to China only* Clearance temporary applies to China only

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General ledger account for posting of depreciation: -


Description

Accum Depr Acct for ordinary

depreciation

Expenses account for

ordinary depreciation

Accum Depr Acct for

unplanned depreciation

Expenses account for unplanned

depreciation Clearance Temporary NA NA NA NA Leasehold land use right 10101111 83001111 10101111 83001111 Building 10101211 83001001 10101211 83001001 Furniture & Fixtures 10102101 83001003 10102101 83001003 Office Equipments 10102111 83001004 10102111 83001004 Motor Vehicles 10102121 83001005 10102121 83001005 Computer Equipments 10102131 83001006 10102131 83001006 Leasehold improvement 10102141 83001002 10102141 83001002 Construction in progress NA NA NA NA Investment Property NA NA NA NA

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Asset Acquisition

An external asset acquisition is a business transaction resulting from the acquisition of an asset from a business partner (in contrast to an acquisition from in-house production).

In Asset Accounting (FI-AA) in integration with Accounts Payable (FI-AP).

Record the invoice through Fixed asset

module

T-code: F-90 (Fixed asset acquisition)

Record the invoice through Fixed asset

module

T-code: F-90 (Fixed asset acquisition)

Vendor Invoice

(Purchase of fixed asset)

Save the invoice with “save as

complete” status

Save the invoice with “save as

complete” status

Post the Account payable document

T-code: FBV0 (Post “Park” document)

Post the Account payable document

T-code: FBV0 (Post “Park” document)

1. Create asset master record by Accounting Department2. Post the asset acquisition cost through account payable

directly:Dr Fixed asset (with individual fixed asset code)Cr Vendor

1. Create asset master record by Accounting Department2. Post the asset acquisition cost through account payable

directly:Dr Fixed asset (with individual fixed asset code)Cr Vendor

Prepared ByPrepared By Posted ByPosted By

Create Asset Master Record

T-code: AS01

Create Asset Master Record

T-code: AS01

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Using intra-company asset transfer (transfer within a company), you transfer a fixed asset, or an asset component, to a different asset master record. The target asset has to be in the same company code as the sending asset. Intra-company transfer may be necessary for one of the following reasons:

An asset was created in the wrong asset class. Since you cannot change the asset class in the asset master data, you have to transfer the asset to a new master record.

You split up an asset or move part of an asset (transfer from asset to asset).

The asset cost and accumulated depreciation can be transferred to target asset (Gross method).

Asset Transfer

Company

Intra-company asset transfer(T-code: ABUMN)

Company

Intra-company asset transfer(T-code: ABUMN)

Asset Class 1000Asset# 100001

Useful life = 5 years







Fixed asset cost

Accum. Depreciation

Fixed asset cost

Accum. Depreciation

Fixed asset cost

Accum. Depreciation

Fixed asset cost

Accum. Depreciation

Remarks: System will adjust the accumulated depreciation of the target asset in the next depreciation runRemarks: System will adjust the accumulated depreciation of the target asset in the next depreciation run

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You use this function to carry out inter-company asset transfers (transfer between company codes). For the individual companies, an inter-company transfer represents a retirement for the one company and an acquisition for the other.

An inter-company asset transfer within a corporate group may be necessary for one of the following reasons:

The physical location of the asset has changed, making it necessary to assign the asset to a new company code.

The organizational structure of the corporate group has changed, requiring you to reassign the asset to a different company code.

Asset Transfer

Company ACompany A



Net book value

Dr: AR – Company B

Cr: Fixed Asset

Dr: Accum. Depreciation

Net book value

Dr: AR – Company B

Cr: Fixed Asset

Dr: Accum. Depreciation

Company BCompany B


Asset Class 1000Asset# 104321Inter-company Asset

Transfer (T-code: ABT1N)Inter-company Asset Transfer (T-code: ABT1N)

Fixed asset cost

Cr: AP – Company A

Dr: Fixed asset

Fixed asset cost

Cr: AP – Company A

Dr: Fixed asset

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Asset transfer method is maintained in transfer variants in SAP. Method within a transfer variant that determines how a transferred asset is capitalized in the receiving company code. The system controls the valuation of transferred assets using transfer variants that you define. You can enter one of the following transfer methods in the transfer variant:

Gross Method

• By using this method, the system transfers the original cost and accumulated depreciation from the sending asset. That is, the asset is capitalized with its historical cost.

• If inter-company transactions incurred in company codes belong to the same legal entity in OTEL, for example, BJS2 to SHA2, user should select and adapt “Gross method” in the posting of asset transfer transaction. Otherwise, “Net method” will be used instead.

Net Method

• When you use this transfer method, the system transfers the net book value of the sending asset. That is, the net book value of the asset is capitalized in the receiving company code. You specify during the transfer transaction which depreciation area should be used for determining the net book value.

Asset Transfer

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Asset retirement is the removal of an asset or part of an asset from the asset portfolio. This removal of an asset (or part of an asset) is posted from a bookkeeping perspective as an asset retirement. Depending on organizational considerations, or the business transaction which leads to the retirement, you can distinguish the following types of retirement:

An asset is sold, resulting in residual value being earned. The sale is posted with a customer. We can handle it in t-code F-92 (Asset retirement with customer).

An asset has to be scrapped, with no residual value earned. We can handle it in t-code ABAVN (Asset retirement by scrapping).

Asset Retirement

Remarks: Refer to the Account Determination section for the detail accounting entriesRemarks: Refer to the Account Determination section for the detail accounting entries

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Every asset transaction in the SAP Asset Accounting module immediately causes a change of the forecasted depreciation. However, it does not immediately cause an update of the depreciation and value adjustment accounts for the balance sheet and profit and loss statements. The planned depreciation (T-code: AFAB) is posted to the general ledger when you run the periodic depreciation posting run. This posting run post the planned depreciation per asset G/L account of individual asset as a lump sum amount using real-time update.

In addition to the test run, the report provides a list of depreciation. This list shows the planned depreciation for the year, the depreciation which has been posted up to this period, and the depreciation to be posted in this period, for each account group and depreciation area (and, if desired, for each asset). Correlation of the list and the posting documents is aided by the inclusion of the system assigned document numbers in the list.

In order to ensure that all assets are processed within a posting period, you can limit the report to certain assets only during a repeat run. A repeat run might be necessary, for example, if the depreciation terms were changed for individual assets in connection with the year-end closing. During a repeat posting run, the system only posts the differences that resulted between the first posting run and the repeat posting run. You can limit the run to particular assets.

Depreciation Posting

Remarks: Refer to the Account Determination section for the detail accounting entriesRemarks: Refer to the Account Determination section for the detail accounting entries

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The following tasks have to be completed during the year end: -

Fiscal Year Change (T-code: AJRW)

From the point of view of the system, a fiscal year change is the opening of a new fiscal year for a company code. At the fiscal year change, the asset values from the previous fiscal year are carried forward cumulatively into the new fiscal year. Once the fiscal year change takes place, you can post to assets using value dates in the new fiscal year. At the same time, you can continue to post in the previous fiscal year.

Year End Closing (T-code: AJAB)

The year-end closing is an annual balance sheet, an annual profit and loss statement, and an appendix with additional information (annual report), which has to be created to meet the particular legal obligations in each country. Before you can close a fiscal year in Financial Accounting from a bookkeeping perspective, you have to carry out preparatory measures in Asset Accounting.

Year End Closing

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© SAP 2007 / Page 23

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SAP Implementation Business Blueprint S2-040 – Asset Accounting