Assets under construction process prepared by odaiah pelley

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Assets under construction process prepared by odaiah pelley

  1. 1. 1 Assets under Construction Process Prepared by Odaiah Pelley Assets under Construction Process Internal Order as Investment Measure: 1. Define the AuC Asset Class (with investment measure) – OAOA 2. Define the Asset Class – for Main Asset - OAOA 3. Define Investment Profile - OITA a. Assign the AuC Asset Class (Step-1) in the investment profile 4. Assign Investment Profile to Model Order - OITA 5. Define Order Type (Investment) - KOT2 a. Settlement Profile - OKO7 b. Maintain Allocation Structures - OKO6 c. Planning Profile - OKOS d. Budget Profile - OKOB 6. Create an Internal Order - KO01 a. With the Investment Profile (Step-2) b. AuC automatically created by the system using Asset Class given in the Investment Profile 7. Post the amounts to IO - FB01 8. Settle the amounts to AuC from IO (Prcg type: Automatic) - KO88 9. Create the Main Asset - AS01 10. Settle the amounts to Main Asset from AuC (Prcg type: Full) - KO88 AuC using Line Item Settlement: 1. Define the AuC Asset Class (with Line Item Settlement) - OAOA 2. Define the Asset Class – for Main Asset - OAOA 3. Define Order Type (Overhead) - KOT2 4. Create an AuC-Asset (using Step-1 Asset Class) - AS01 5. Create an Internal Order - KO01 a. Assign the AuC – Asset in Settlement Rule in IO 6. Post the amounts to IO - FB01 7. Settle the amounts to AuC from IO - KO88 8. Create Main Asset (using Step-2 Asset Class) - AS01 9. Assign the Main Asset in IO (Step-5) - KO02 10. Settlement AuC – Line Item List - AIAB 11. Settlement AuC - Receiver - AIBU Notes: Common Business Requirement When the AUC is ready to be used, asset master in non- AUC asset classes should be created. Thereafter, distribution rule should be maintained and settlement carried out where the system will debit the asset in non-AUC asset class and credit AUC. Upon settlement, system capitalizes the non-AUC class with asset value date of settlement. Upon final settlement of the AUC, it must be manually deactivated. Depreciation Key Conceptually, AUC is an asset which is not ready to be utilized yet. Hence, since economic benefits are not yet being derived from the AUC, depreciation should not be posted.
  2. 2. 2 Basically, in SAP depreciation areas 01 legal depreciation (depreciation areas post to the GL module), asset classes have the default depreciation key 000 No Depreciation. In addition, validation rule has been set in the system to ensure only depreciation key 000 No Depreciation is allowed for AUC asset classes. In this way, no depreciation is posted for the AuCs during depreciation run. Settlement of AUC Settlement of AUC is controlled by settlement profile. One company code will only be assigned to one settlement profile. Settlement profile dictates that:  Distribution rule will be defined by absolute amount, percentage or by proportion (e.g. 2/7, 1/8 etc.)  Settlement must always be in full on item level. At the point of saving the distribution rule, if the total percentage entered is not equal to 100%, the system will issue a warning message. Although the system allows distribution rule to be saved if the percentage is not equal to 100%, settlement cannot be successfully carried out unless the distribution rule has been amended (system issues error message during settlement execution).When distribution rule amended to 100% the settlement can be run for items. If there exists any items not distributed to any object, they remain on AUC.  Settlement will only be made to fixed asset (technically, it is possible to settle AUC to G/L accounts or other cost objects e.g. internal order, cost center etc.). There are 2 ways to configure AuC in Sap system, for more information can refer: http://help.sap.com/saphelp_erp60_sp/helpdata/en/4f/71daf9448011d189f00000e81ddfac/frames et.htm
  3. 3. 3 Assets under Construction Use Assets under construction are a special form of tangible assets. They are usually displayed as a separate balance sheet item and therefore need a separate account determination in their asset classes. Features You can manage assets under construction in the system as individual master records, just as you do completed assets. You can also use collective management of several assets under construction on one master record. You can distribute to the proper assets when the asset under construction is completed by using either  Line item settlement (see below) or  Simple transfer to other asset master records However, if you use collective management, without line item management, there is one limitation. You can only post asset retirements (transfers) with asset value dates that follow in sequential order. Due to the above restriction, it is not recommended that you manage a large number (or all) assets under construction on one master record. Instead, you should use a general ledger clearing account to temporarily collect acquisitions for assets under construction. Depreciation Ordinary depreciation is not allowed for assets under construction in most countries. You reflect this limitation by choosing a depreciation key that does not allow ordinary depreciation in the book depreciation area. To ensure that this depreciation key is protected during master data maintenance, select the asset class as the maintenance level for the book depreciation area (see Screen Layout and Maintenance Level).For certain assets under construction, special tax depreciation is allowed. In this case you also enter corresponding keys in the asset class, to be used as mandatory default values. Down Payments For posting down payments, allow the posting of the transaction type group "Down payments" (transaction type groups 15 and 16) in these asset classes. In addition, enter the necessary general ledger account in the account allocation. Also set the indicator for negative APC in the depreciation areas of the assets under construction. This allows subsequent credit memos on already capitalized assets.
  4. 4. 4 Control Information for Assets under Construction Line Item Management If you make large capital investments in your own in-house produced assets, you can manage assets under construction with open items, and settle the assets under construction per line item to different receivers. The system activates this line item management when you create the asset, if the indicator for it is set in the asset class to which the asset belongs. This indicator also determines that the transaction type for down payments is automatically allowed in these classes. Settlement Profile You can define profiles for the line item settlement of assets in FI-AA Customizing. The profiles determine the receivers to which you are allowed to settle. In order to settle an asset under construction, an appropriate settlement profile must be entered in FI-AA Customizing per asset company code (Specify settlement profile). List Versions The transaction for the line item settlement of assets under construction enables you to select line items for allocation to a distribution rule group for each asset. You define display variants for these transactions in FI-AA Customizing (List versions). Using these variants, you can control which information (document number, posting text, and so on) is displayed when you call up line items. There are also interfaces to additional functions of Asset Accounting (such as, master record display, asset values).

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