Fixed Assets Asset Accounting AA Overview Asset

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: nsub-classify the General ledger accounts and ngroup master records by specific criteria.

Asset Class A Balance sheet L General ledger accounts Buildings Vehicles Assets under construction Fixtures and fittings Asset classes Asset master records

Asset Classes u. Asset Classes Configured § 910000 Land § 910001 Building § 910002 Plant and Machinery § 910003 Vehicles § 910004 Asset under construction

Functions of the 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 Assets 02200000 Real estate 1 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 1 Class Machines Chart of depreciation Areas Germany Group Book dep. SNFG LINR LINB LINR decl-bal. 3 X invest. support str. -line . . . Proposed useful life 10/00 8/00 _ 8/00 . . Minimum useful life _ _ _ 8/00 _ _ Maximum useful life _ _ _ 12/00 _ _ Depreciation key Book dep. Tax dep. DG 30 USA . . . Group. . . ACRS

Points from the Asset Class / Dep’n 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: Au. C Class: Assets u. const. Transaction type groups Au. C status depreciation areas Book dep. Tax dep. Cost-acc. 15 Down payment 16 Extras Down payment carried forward from previous years n Au. C managed as total n line item settlement n capital investment measure deprec. key 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. §AUC’s 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 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 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.

Depreciation Charts/Areas in A Ltd. u. Depreciation Charts: §Z 910: Chart of Depreciation: A Ltd u. Depreciation Areas: § 01: Local reporting Y 1 § 02: Parent reporting Y 2 § 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 MMDDYYYY Valid to MMDDYYYY Cost center A Cost center B Cost center C. . . 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 timedependent data. This is of particular significance for cost accounting assignments (for example, cost center, order, project).

Acquisitions

Asset Acquisition - Integration Assets Fixed Asset 100 Accounts Payable Vendor 100 General Ledger Clg Acct 100 Accounts Payable Vendor 100 Acquisition purchase 110 Acquisition inhouse production Aqcuisition with Vendor þ Asset transaction integrated with Accounts Receivable or Accounts Payable (Only for direct Asset purchases) No PO Aqcuisition with Auto-offsetting Entry þ Asset transaction posted using clearing account (not integrated) (Only for direct Asset purchases) Aqcuisition with MM-PO þ Asset transaction posted MM from Materials Management (MM)

Asset Acquisition – MM Integration Create Master Record Purchase Requisition op With assignment to tio Purchase Order Goods Receipt Valuated Non-Valuated Goods Receipt na l WBS Building required on ati iz tal pi Ca or Assignment of WBS Invoice Receipt Internal Orders To manage budget expenditure

Retirement

Retirement Assets can be retired: With Revenue Without Revenue (scrapped)

Asset Retirement: 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 01/01/20 xx - 1, APC = 6000 - Complete retirement of APC on 03/15/20 xx - Revenue 4000 + 400 sales tax A/R posting P+L or Fin. Stmt Notes Revenue Asset Retirmt Customer 4000 4400 4000 Assets posting P+L Clearing of Asset Retirmt Asset 1 3 6000 700 6000 2 1 APC 2 Amount retired 4 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 1 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 (ABT 1 N) 2. Inter-company transfers between companies in SAP Eg. From one company to another

Period End Closing

Fiscal Year Change/Year-End Closing Calendar Dec 31 Year-end closing Fiscal Year Change Year-end closing Asset values Transaction APC Ordinary dep. Net book value at fiscal year start 0 0 1. Year 1 10000 3000 7000 - Check: Can the year-end closing be carried out? - Maintenance of the last closed fiscal year company code 3. Asset values Year 2 10000 3000 7000 Depreciation posting run 2. Year-end closing program Periodic processing Fiscal year change at fiscal year start Transaction APC 10000 Ordinary dep. 2100 Net book value 4900 Fiscal Year Change 0 Closing reports - Asset history sheet - Asset list -. . . per

Points from Fiscal Year Change/Year-End Closing Ø The fiscal year change program opens new annual value fields for each asset. Ø The earliest you can start this program is in the last posting period of the old year. Ø You have to run the fiscal year change program for your whole company code. Ø 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. Ø 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 u. 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.

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