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This Document relates to SAP FI-AA Features and its components.

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  1. 1. SAP FINANCIALSASSET ACCOUNTING FEATURES & ITS COMPONENTSPrepared By:Ms. Pramila NagarajFirst Class MBA Finance Graduate (2010) - FRESHERGlobal Academy of Technology, Bangalore (VTU- Belgaum)SAP Financials Associate Certified Consultant – Trainee/Fresher@ Source One Management Services Pvt. Ltd BangaloreCopy Rights © SOURCE ONE Bangalore
  2. 2. Copy Rights © SOURCE ONE BangaloreAsset Accounting (FI-AA) SAP allows to categorize assets and to set values fordepreciation calculations in each asset class“Utilized for managing company’s Fixed Assets” SAP allows to categorize assets and to setvalues for depreciation calculations in each asset class.Features: The Asset Accounting component consists of the following parts: Traditional asset accounting: encompasses the entire lifetime of the asset frompurchase order or the initial acquisition (possibly managed as an asset underconstruction) through its retirement. The system calculates, to a large extentautomatically, the values for depreciation, interest, insurance and other purposesbetween these two points in time, and places this information at your disposal in variedform using the Information System. There is a report for depreciation forecasting andsimulation of the development of asset values. Processing leased assets Preparation for consolidation Information SystemBasic Functions for Asset Valuation:“Determine the values of all fixed assets at a given point in time” You use depreciation areas tocalculate different values in parallel for each fixed asset for different purposes.Depreciation Area Features: are grouped together, according to the requirements of a specificcountry or economic area, into a chart of depreciation. It identified by two-digit numeric keys,enter the depreciation terms in the asset class or directly in the asset master record of theparticular asset.Standard Depreciation Areas:- Book depreciation area: only for depreciation allowed by commercial law- Special Tax Depreciation area for Acquisition and Production Costs in the Individual BalanceSheet- Special Reserves area due to Special Tax Depreciation: for example, Special tax depreciation (such as, transfer of reserves i.e. Deferred Gain) Differing depreciation methods (book depreciation/tax depreciation) Differing useful life (book depreciation/tax depreciation)- Valuation of Net Assets area: specify valuation rules for net worth tax.
  3. 3. Copy Rights © SOURCE ONE Bangalore- Balance Sheet area for Tax Purposes: used for the management of values for an alternativebalance sheet for tax purposes.- Cost-Accounting Depreciation Area: depreciates the replacement values andsimultaneously appreciates accumulated past depreciation. Depreciation is carried out belownet book value zero and cost-accounting interest is calculated.- Consolidated Balance Sheet in Local Currency Area: for gross transfers are carriedbetween affiliated companies- Consolidated Balance Sheet in Group Currency Area: When a company belongs to acorporate group that reports in another currency. It is managed in the group currency.- Balance Sheet in Foreign Currency Area: In order to correctly determine the intercompanyprofit and loss from intercompany asset transfers.- Investment Support Managed Area on the Assets Side: Where it reduces the acquisitionand production costs.- Investment Support Managed Area on the Liabilities Side: Where it posted as anadjustment item for the acquisition and production costs on the liabilities side during the periodicposting run.Depreciation Methods:The standard calculation methods are an integral part of the system defined in the depreciationkey.Calculation Method Control ParametersBase Method Depreciation type (ordinary or special depreciation, interest)Declining-BalanceMethodDepreciation calculation method (for example, Stated percentage)Maximum AmountMethodTreatment of the end of depreciationMulti-Level Method Declining-balance multiplication factor, maximum and minimumpercentage ratePeriod Control Method Maximum amount, currency, validity dateassign a scrap value key to each depreciation key in its definition.Special Valuation: to calculate asset values for specialized purposes, such as;- Insurance Values: certain values and information relevant to the insurance policies.- Leased Assets: There are two different options:-Capital Lease: to capitalize and depreciate certain leased assets.
  4. 4. Copy Rights © SOURCE ONE Bangalore-Operating Lease: Periodic rent expense, flows into the profit and loss statement,not relevant to the fixed assets of the lessee. It is therefore sufficient to do one of the following:- Manage as statistical assets in the Asset Accounting component (with noactive depreciation areas)- Manage only as cost-accounting values (or for group accounting) in thecorresponding dep. areasCapital lease method: The system calculates the acquisition value from the present value ofthe future lease payments in the leasing agreement. i.e. maintain the following leasingconditions in the asset master records: Amount of lease payment Number of payments Payment cycleIn order to calculate present value, also enter an interest rate. The system requires that youpost a leasing partner as a vendor in the asset master record at the time of the acquisitionposting (opening posting).Include the net amount (that is, the amount without input tax) of the liabilities for a leased assetDebit input tax and credit vendor at the time of payment.- Calculation of Interest: The system enables you to calculate this interest per depreciationarea.Master Data Maintenance:It consists of two main parts:-General Master Data: The following field groups exist: General information (description, quantity, etc.) Account assignment Posting information (for example, capitalization date) Time-dependent assignments (for example, cost center) Information for plant maintenance Entries for net worth tax Information on real estate Leasing conditions Investment support measures Information on the origins of the asset Physical inventory data
  5. 5. Copy Rights © SOURCE ONE Bangalore Insurance data User fields/evaluation groupsData for Calculating Asset Values: You can specify depreciation terms in the asset masterrecord for each depreciation area in the chart of depreciation. In order for you to make thesespecifications, the master record contains an overview of the depreciation areas. In addition,there is a detailed display available for each depreciation area. If there are depreciation areasthat are not needed for a specific asset, it is possible to deactivate these depreciation areas atthe asset level.Basic Functions of Transactions“All business transactions that affect fixed assets”, group into: Transactions that influence the acquisition and production costs of fixed assets Theseinclude: Acquisitions, retirements, transfer postings, post-capitalization Down payments Investment support measures Manual depreciation Write-ups