Asset accounting

2. Maximum LVA amount for posting: Here we define the maximum amount for checking posting to
low value assets.
Net book value for changeover of depreciation method: If you enter an amount in this field, the
system changes over the calculation of depreciation to the changeover key defined in the
depreciation key, as soon as the net book value is less than the amount entered here.
You must be using a depreciation key with an internal calculation key defined with changeover
method 3 (changeover as soon as the net book value is smaller than the changeover
amount). If you use any other changeover methods, this amount is ignored.
Indicator transfer down payments from previous years: When you set this indicator, the system
ignores downpayments during the line item settlement of assets under construction. The total
amount of the closing invoice is then always transferred to the capitalized asset using the
transaction type based on the year of the closing invoice.
Copy Reference Chart of Depreciation/ Depreciation Areas

6. In this step, you define your charts of depreciation . The chart of depreciation is a list of
depreciation areas arranged according to business and legal requirements.
You must assign a chart of depreciation to each company code that is defined in Asset
Accounting. SAP provides country-specific charts of depreciation with predefined depreciation
areas. These charts of depreciation serve only as a reference for creating your own charts of
depreciation, and are therefore not directly accessible in the SAP system. When creating a chart
of depreciation, you have to copy the reference chart of depreciation.
You can define depreciation areas for the parallel valuation of fixed assets for a particular
purpose. This is done using "real" depreciation areas and derived depreciation areas . The
values in the derived depreciation area are calculated from the values of two or more real areas,
using a formula you define. The system does not permanently store the values from the derived
depreciation area. They are determined dynamically at the time of the request. Otherwise,
derived depreciation areas have the same system functions as real areas. Most important, they
can be evaluated in the same way, and posted to the general ledger (for example, for showing
special reserves).

7. The country-specific charts of depreciation (for example, 0US for the USA) contain fully defined
standard depreciation areas, for example, for
 book depreciation
 tax depreciation
 cost-accounting depreciation
 special reserves
 investment support
These standard depreciation areas provide a reference. From the point of view of SAP, this
reference meets all requirements for accounting and legal considerations. You always have to
copy one of the standard depreciation areas in order to create a new depreciation area.
Therefore, you should delete standard depreciation areas only after careful consideration. It is
usually better to avoid deleting them, and instead set them to inactive in the asset class.
1. Check the definition of the depreciation areas that were created by reference to a standard
chart of depreciation (in the detail screen).
2. If necessary, define new depreciation areas, by copying an already existing depreciation
area.
3. Specify the characteristics of your depreciation area in the detail screen:
a) Specify the type of value management that is allowed.
You must allow APC and positive remaining book value in all areas in which you want to
depreciate capitalized asset balances (the usual procedure). Allow negative net book values in
depreciation areas that depreciate below zero, and in areas for managing value adjustments
posted on the liabilities side (special reserves). The second of these also are not allowed to
manage APC or net book values.
Specify if the asset values/depreciation of the area should be posted automatically to the
general ledger or to cost elements (asset balance sheet values: online/periodic).
The system can only post asset balance sheet values from one depreciation area in
online. Generally, this area is the book depreciation area. Other areas (for special reserves or
cost accounting depreciation) can be posted automatically to the general ledger using
background processing (application menu: Periodic processing), when the automatic posting
indicator is set. Depreciation can be posted only periodically.
You specify the reconciliation accounts and offsetting accounts for automatic posting in other
steps in the implementation process.
o If you need depreciation areas that derive their values from other depreciation
areas, you can define derived depreciation areas. For this purpose, enter the
depreciation areas that are to form the basis for its values. Enter whether the
values from these areas should be included as positive or negative values in the
formula. Make sure that the indicator "real area" is not set.

8. The derived depreciation area can be for reporting only (that is, its values are not posted to
reconciliation accounts). In this case, you can specify that the system does not perform a value
check for this derived area (indicator: "for reporting purposes only").
4. Check the standard type of the depreciation area.
The depreciation areas in the standard chart of depreciation all have a type. When you create a
chart of depreciation, the system takes over these types from the referenced standard chart of
depreciation. For example, the type of depreciation area 01 is "book depreciation."
If you are also using the IM (Investment Management) component, the depreciation area with
type 07 (cost accounting valuation) has special importance. At the present time, you cannot
transfer capitalization differences as nonoperating expense to this depreciation area. This
limitation is required in order to make sure that all non-capitalized debits on a capital investment
measure are accounted for in controlling.
It is also possible to delete a depreciation area. The depreciation area to be deleted must meet
the following requirements:
 It cannot be the master depreciation area (01).
 The depreciation area cannot be a reference for another area (for acquisition values,
depreciation terms).
 The depreciation area cannot be part of the calculation rule for a derived depreciation
area. In this case, you have to change the calculation rule for the derived depreciation
area in question.
 The depreciation area cannot be defined for automatic posting of its values to the
general ledger.
The system then deletes the selected depreciation area in the chart of depreciation and in the
valuation specifications for all affected assets and asset classes.
Depreciation areas that are not used can still be activated at a later point in time (after the
production startup). A newly activated depreciation area can take over values from another
depreciation area.
It also contains the rules for the evaluation of assets that are valid in a specific country or
economic area.
Each company code is allocated to one chart of depreciation. Several company codes can work
with the same chart of depreciation.
The chart of depreciation and the chart of accounts are completely independent of one another
Depreciation Area: which is managed in the system as a real depreciation area (not a derived
depreciation area).

9. Each depreciation area is set up to handle depreciation for a particular purpose (e.g. book
depreciation, tax depreciation, group depreciation, cost-accounting depreciation, etc.)
Every depreciation area belongs to at least one chart of depreciation , and is managed
independently from other depreciation areas. However, you can define depreciation areas so
that it is possible to use one area to check the values of another area, or so that one area can
take over values from another area.
You can also define derived depreciation areas . The values in a derived depreciation area are
determined from the values of real depreciaton areas, using a mathematical relationship, which
you define (for example, reserve for special depreciation).
The Depreciaiton Area 1 and 30 cannot be deleted as this is required by the system for posting
the depreciation in the G/L account and for the purpose of consolidation.
Real Dep. Area: Set this indicator if you want the system to store the values of this depreciation
area in the database (meaning that the area is not a derived depreciation area). The values in
this area are then updated each time a posting is made, and can be immediately evaluated
Post to G/L account: Specifies if changes to balance sheet values and/or depreciation from this
depreciation area are to be posted to the general ledger, and how they are to be posted.
Acquisition Value: In this field, you specify whether the real acquisition value (without taking
investment support into account) in this depreciation area should have a positive or negative
balance.
Net book Value: You can specify here that the net book value balance in this depreciation area
is always either positive or negative
Assign Chart of Depreciation to Company Code

10. Specify Number Assignment across Company Codes

11. Asset Classes
Specify Account Determination

12. Create Screen Layout Rules

13. Define Number Range Interval

14. Define Asset Classes

17. Inventory indicator: Set this indicator if you want the asset to be counted in a physical inventory.
This indicator ensures that the asset is included in the standard inventory list of Asset
Accounting. Assets without this indicator are not output by the report.
Asset under construction without line item settlement: Specifies that assets under construction
in this asset class are managed without the option of line-item final settlement to receiver assets
or cost centers.
The summary management of the asset under construction has the following affects:
 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

18. Asset class is blocked: Set this indicator to prevent new assets from being created in this asset
class.
Asset is managed historically: Set this indicator if you want the system to manage the asset with
a history. Active history management has the following effects:
 The asset is displayed in an asset chart.
 The asset and the values/transactions belonging to it cannot be reorganized until the
asset is deactivated.
Specify Chart – of –Dep Dependent Screen Layout/ Acct Assignment
Define How Depreciation Areas post to General Ledger

20. This step is already completed while defining the depreciation area and therefore no
need to define it once again here.
Assign G/L Accounts

25. Change the Field Status Variant of the Asset G/L Accounts

30. Assign Input Tax Indicator for Non- Taxable Acquisitions

31. Specify Financial Statement Version for Asset Reports

33. Here we assign the Financial Statement Version to a depreciation area. That means a
company can have different financial statement version for reporting purpose and can
select appropriate financial version for each depreciation area. The financial statement
version is to be created using the END use menu and the step will be explained in the
subsequent document for Financial Statement Version.
Post Depreciation to the General Ledger
Specify Document type for Posting of Depreciation

36. In this processing step you determine the document type for each company code for
posting depreciation.
SAP supplies document type AF for depreciation posting.
o It must be a document type for batch input.
o It must be defined with external document number assignment.
Specify Intervals and posting Rules

40. In this step, you define the posting rules for the depreciation areas that post
depreciation values to Financial Accounting. You define the posting cycle (how often
depreciation is posted) and the account assignment rules for the depreciation posting
run.
You must have specified which depreciation areas should post automatically to the
general ledger.
Period Interval: You specify the interval between two depreciation posting runs in this
field. Define this interval by entering the number of posting periods that should be in the
interval.
Valuation
Set Chart of Depreciation

41. You only need to carry out the following step if you have created more than one chart of
depreciation. Some of the definitions in the following Customizing steps depend on the chart of
depreciation you want to work with. If you have recently created several charts of depreciation
(NOT standard charts of depreciation), you therefore need to specify the chart of depreciation
you want to configure. The work you do in the system after this point will affect that chart of
depreciation. The system therefore determines the chart of depreciation that you are working on
according to the following logic:
• If you have created only one chart of depreciation, the system automatically uses this chart.
• If you have created more than one chart of depreciation, the system asks you to identify the
chart of depreciation affected the first time you call up a function that affects the chart of
depreciation. The chart of depreciation you select at this point remains active during your log-on,
unless you specifically enter a new chart of depreciation. If you had set one chart of depreciation,
and now want to work with a new one, you set the new chart of depreciation in this processing
step.
Depreciation Areas
Define Depreciation Areas

47. Specify Transfer of Depreciation Terms

48. Determine Depreciation Areas in the Asset Class

51. Generally, the assets in an asset class use the same depreciation terms (depreciation key, useful
life). Therefore, you do not have to maintain the depreciation terms in the asset master
record. Instead, they can be default values from the asset class.
In this step, you determine the depreciation terms that are to be used in your asset classes.
Depending on the definition in the screen layout control used, these depreciation terms are
offered either as optional or mandatory defaults when you create an asset.
Deactivate Asset Class for Chart of Depreciation

52. In this step, you can lock asset classes for entire charts of depreciation. In this way, you can
prevent an asset class from being used inadvertently in a chart of depreciation for which it is not
intended.
Valuation Methods
Depreciation Key
Calculation Methods
Define Base Methods

54. In this step, you maintain base methods. Base methods are valid in all charts of depreciation
Base method of the depreciation key for calculating depreciation or imputed interest.
Depreciation calculation method: With this indicator you specify which depreciation
calculation method the base method should use.
Reduce useful life to the end of fiscal year: If you set this indicator, the system reduces the
planned useful life so that the end of depreciation always coincides with the end of the fiscal
year.
Depreciation after end of planned life: Set this indicator, if you want the system to continue
depreciation after the end of the planned useful life.
Define Declining-Balance Methods

55. In this step, you define declining-balance methods. You then assign them to
depreciation keys.
SAP supplies commonly-used calculation methods.
1. Maintain declining-balance methods and their descriptions.
2. For each declining-balance method, specify:
o A multiplication factor for determining the depreciation percentage rate
o An upper limit for the depreciation percentage rate
o A lower limit for the depreciation percentage rate
Define Multi-Level Methods

58. Maintain Period Control Methods

59. Maintain Depreciation Key

62. Define Screen Layout for asset master Data

66. Define Screen Layout Rules for Asset Depreciation Area

68. Create Asset Master Data Category-Leasing/Insurance Depreciation- AS01
1. Click on the tab name required and enter Business information required, this will be
decided by the asset class for leasing or insurance information for which tab display.
Enter location of asset-Use drill down to select the required option-This option is for
reporting purposes.

69. 2. Click on the final tab- Depreciation- the account assignment category for
depreciation.
3. Click into the use-life field and enter the required life of the asset being created.
4. Click into the depreciation start date field. Enter the date manually or use the icon
button to display the calendar and select from the date range available.
5. Note: Must be a date starting with the 01 date can not be any other date with in the
month being selected or error will be created when trying to save the asset.
6. Click on the Button- if the asset is fully completed and all fields updated
correctly the asset will be saved and SAP will general an individual system asset
number.
7. To view asset you can use AS03 or to view and change use AS02.
8. Quick note, you can save asset after the General and Time-Dependant information
has be filled and then click on the for asset number as well.