SAP FI Asset Accounting Overview

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Copyright © 2007 Accenture All rights reserved. Accenture, its logo, and High Performance Delivered are trademarks of Accenture.
Day 4
SAP Financial Accounting (FI)
Boot camp

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• Review of Day 3
• Asset Accounting – Key Concepts & Organisation
Structure
• Asset Accounting – Master Data
• Asset Accounting – Business Transactions
• Asset Accounting – Period End Closing & Reporting
• New GL Online Document Splitting
Agenda – Day 4

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• We covered the following topics on Day 3:
– Accounts Payable – Overview
– Accounts Payable – Master Data
– Accounts Payable – Invoice Processing
– Accounts Payable – Payment Processing
– Accounts Payable – Reporting and Conversion Tips
– Accounts Payable – Withholding Tax
– Bank Accounting – Electronic Bank Statement
Review of Day 3

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• Review of Day 3
Structure
Agenda – Day 4

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FI Asset Accounting
• FI-AA provides for the accounting of fixed assets
• As a submodule of the FI Financials module, FI-AA provides a
subsidiary ledger containing detailed asset transactions to the
general ledger
• FI-AA is integrated with other SAP modules:
– From MM Purchasing, goods receipts and invoice verification
transactions post to assets
– From CO Overhead, orders collect costs and settle them to assets
– From PS Project System, WBS elements collect costs and settle them
to assets
– FI-AA in turn posts back to FI general ledger and CO Controlling via
depreciation postings, acquisitions, transfers, and retirements

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• Key Concepts
– Asset Accounting facilitates Parallel accounting
– This feature enables organisations to account and
report based on various accounting standards
– It also supports Segment Reporting, which is a key
requirement for various organisations.
FI Asset Accounting (cont.)

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Key Definition: Fixed Asset
• Fixed assets – Tangible property used in the operation of a
business
– Land, buildings, leased real property and improvements
– Equipment, including computers, plant, labs, office, and hardware
– Software purchases or development
– Construction in process (assets under construction)
• Contrast to other types of assets:
– Cash and equivalents (including receivables)
– Investments (handled in Treasury/Investment Management)
– Prepaid expenses, allowances
– Leases
– Raw materials, supplies, or inventory

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Key Definition: Transactions
• Financial transactions posted to assets (other than depreciation) fall into
three general categories:
– An asset acquisition (or capitalization) occurs when a company buys or
produces a fixed asset
• Goods receipt through purchasing
• Invoice receipt through purchasing
• Invoice receipt through accounts payable
• Settlement of an order or project
• Transfer from another asset
• Results in an acquisition posting to the balance sheet
– Transfers move costs between assets. An example is completing an
asset under construction and transferring the capitalized costs to a new,
depreciating asset.
– Retirements remove costs from and deactivate assets, such as disposing
or selling an asset

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Key Definition: Depreciation
• Depreciation is a specific accounting treatment
– Assets are depreciated to expense to recognize their reducing
value from year to year
– Depreciation is calculated by FI-AA and is controlled by a
number of organisational and configuration elements
– Depreciation is posted as an expense and posted to a contra-
account offsetting the acquisition value of assets
– Accounting rules allow different methods of depreciation:
Straight-line, accelerated, tax, double-declining, etc., allowing
companies different “books” for tax and financial reporting
purposes

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Asset Accounting – Organisation
Structure
• Organisation Structure
– Client
– Chart of Accounts
– Chart of Depreciation
– Company Code(s)
– Asset Class(es)
– Depreciation Area(s)
– Asset Masters
FI Asset Accounting Organizational Structures
Assets
Company Code
AERO
Asset Classes
(multiple)
Depreciation Areas
01 Book
Chart of Depreciation
AERO
Chart of Accounts
ACOA
Client 300

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• Chart of Depreciation (COD) is the highest level of
organisation in Asset Accounting.
• Chart of Depreciation is usually country specific; it
satisfies the various business and legal requirements for
valuation and depreciation of assets.
• Chart of Depreciation is a directory of depreciation
areas, with each depreciation area meant to calculate
values for assets for a specific need like book
depreciation, tax depreciation, etc.
• One Chart of Deprecation can be assigned to more than
one company code. One company code can, however,
be assigned to only one chart of depreciation.
Organisation Structure –

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• SAP provides a standard Chart of Depreciation per
country. It can be copied and customized, as
necessary
• Standard Charts of Depreciation for various
countries that are provided by SAP include
Germany (0DE), USA (0US), Australia (0AU) and
New Zealand (0NZ) among others
Organisation Structure – Chart of
Depreciation – Example

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• Depreciation areas are set up to accommodate
calculation of parallel values of depreciation for
different purposes:
– Separate depreciation areas can be set up for the
purpose of book depreciation, tax depreciation, cost
accounting depreciation, etc.
– For every asset, depreciation terms and values can be
managed at depreciation area level
– At least one depreciation area is required to record
book values
– We can manage asset valuation in parallel in up to 99
depreciation areas
Depreciation Areas (1 of 7)

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different purposes (cont.):
– Rules for posting to General Ledger is configured per
depreciation area. Some of the rules are:
• 0 – no values are posted to GL; e.g., internal costing
• 1 – post assets in GL real time; e.g., book depreciation
• 2 – post assets periodically in GL; e.g., revaluation
• 3 – only depreciation posted in GL; e.g., tax
depreciation

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– Rules for posting to General Ledger are configured per
depreciation area. List of rules are:

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– Depreciation areas can facilitate parallel valuation in asset
accounting, and they can be assigned to the ledger groups
to integrate parallel valuation in asset accounting with
parallel valuation in general ledger (Ledger approach)
– Leading depreciation area is assigned to ledger group
containing the leading ledger

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– Assignment of depreciation areas to Parallel Ledgers
Assignment of
depreciation area to
the ledger group
facilitates parallel
accounting

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• Each Depreciation area is set up as either a “Real”
depreciation area or as “Derived” depreciation areas:
• Derived Depreciation Area – Depreciation is calculated,
using a formula on values from 2 or more “Real”
depreciation areas; values are calculated dynamically
and made available for reporting.
• Real Depreciation Area – Values are updated in this
depreciation area when postings are made and are
available for evaluation. Depreciation terms are defined
for an asset class for “Real” depreciation areas.

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• Transfer rules for posting of APC values and depreciation
terms for each depreciation areas are specified.
• Transfer rules can ensure that certain depreciation areas
have identical values/basis.
• Most depreciation
areas will copy the
asset value (APC)
from Book
Depreciation

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• Standard Chart of Depreciation for Australia (0AU)
has five depreciation areas:
01 Book deprec. Book depreciation (uses Straight Line method)
15 Tax B/S Tax balance sheet (uses declining then straight line)
30 Group AUD Consolidated bal sheet in local currency
31 Group USD Consolidated bal sheet in group currency
32 BkDep(g.cur) Book depreciation in group currency
Depreciation Areas – Example

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• Determines how the depreciation is calculated through
calculation method configuration; e.g., straight line
method, 25% double declining method, etc.
• Assigned per depreciation area at asset master data
• Defaulted per asset class; i.e., classification of similar
asset
• There are four calculation methods:
– Base method
– Declining balance method
– Period control method
– Multi-level method
Depreciation Key
Calculation Method
Depreciation Key

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• Base method configuration includes determination of
depreciation calculation method
– E.g., 1 % from useful life - Depreciation % rate is
derived from the useful life of the asset, maintained in
the asset master.
– E.g., 2 explicit % - Depreciation % rate has to be
explicitly specified in the depreciation configuration.
(Multi-Level Method)
• System does not allow addition of depreciation
calculation method; we need to choose one from the
available list
Calculation Method: Base Method

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• Declining Balance Methods are an annual calculation
of depreciation amounts that are reduced by a
constant percentage
• The percentage is calculated from the useful life and
a multiplication factor and is subject to maximum and
minimum percentage limits. This percentage is then
multiplied with the base value (i.e., net book value of
the fixed asset at the beginning of the year) to
compute the depreciation amount
Calculation Method: Declining
Balance Method (1 of 3)

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• For each declining-balance method, specify:
– A multiplication factor for determining the depreciation
percentage rate
– An upper limit for the depreciation percentage rate
– A lower limit for the depreciation percentage rate
• Depreciation = net book value * percentage rate from
expected useful life and factor
• SAP will calculate the yearly amount first and then
divide the figure with number of periods to get
constant value per period

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Example:
Useful life: 10 years
Net book value: 700 USD
Multiplication factor: 1.5
Depreciation = 700 * (1/ 10 * 1.5)
= 105 USD for the year
If there are 12 periods,
depreciation = 105 / 12 = 8.75 USD/period

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• Should be configured according to the Base Method selected
– E.g., if a depreciation key uses a Base Method with explicit %,
then multi-level method for that depreciation key should contain
explicit % rates
• Define depreciation Base Value
– E.g., if Base Value = 01 (Acquisition Value) is selected, then
every time depreciation is calculated the acquisition value of the
asset will be the base on which the depreciation percentage will
be applied
• Example below is for explicit % with base value = acquisition
value Year Percentage Depreciation
1 2% year 1 – 9  2% x acquisition value
10 6% year 10  6% x acquisition value
11 5% year 11  5% x acquisition value
18 4% year 18 onwards  4% x acquisition value
Calculation Method – Multi-Level
Method

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Calculation Method – Period
Control
• Determine when depreciation is calculated in the system
relative to the transaction posting date
• Examples of period control:
• Can be set up differently per transaction:
– Period control for acquisition in the capitalization year
– Period control for acquisition in the following year
– Period control for retirement
– Period control for transfer
01 – Pro rata at period start date Depreciation is calculated at monthly basis
02 – Pro rata up to mid period at period
start date
if posting date < mid period, depreciation is
calculated for the period, else depreciation
is calculated for the next period
06 – At the start of the year Depreciation is calculated at yearly basis
08 – At the end of the year Any changes for the year will take effect in
the next year

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Depreciation Key – Period
Control (cont.)
• Depreciation to the day
– Specifies that the system calculates depreciation to the
day
– Period control parameters are ignored with this switched
ON
– This applies to all transactions (acquisitions, retirements,
and transfers)
– With this setting the system always uses the asset value
date as the depreciation start date
• Warning
– Once the asset has been capitalised, you cannot switch
to or from a depreciation key with this setting

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Depreciation Key – Change Over
Method
• Used to setup depreciation key by phases; i.e., system will
automatically change the combination of calculation methods
(depreciation terms) once the event specified in the
changeover method has occurred
• In this example,
depreciation is determined
by the calculation methods
in phase 1. This is
compared with the straight
line rate which is computed
based on the useful life.
Whenever the straight line
depreciation is higher,
change over to Phase 2
happens.

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• Asset class facilitates classification of similar asset; e.g., Land
& Building, Plant & Machinery, Office Equipments, etc.
• The catalogue of asset classes can be used by all the
company codes that use asset accounting component.
• The following configurations are set up at asset class level:
– Assignment of Asset number can be set up as internally
assigned or externally assigned. Number range is also defined
at the asset class level for each company code.
– Screen layout controls the asset master data screen and
specifies if a field is optional, required, suppressed for data
entry.
– Default depreciation key and useful life
– GL accounts through account determination assignment
Organisation Structure – Asset
Class (1 of 4)

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• Acquisition & Prod cost
• Accumulated Depreciation
• Factory 1
• Factory 2
• Office 1
• Machine 1
• Machine 2
Asset Class Reconciliation Account
• Acquisition & Prod cost
• Accumulated Depreciation
Building
Machinery
Asset
Class (2 of 4)

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• Asset Class is linked to any (or) all the depreciation areas in a
chart of depreciation. This is achieved by “activating” the
appropriate depreciation areas
• Asset Class needs to be activated for the required
depreciation areas in a chart of depreciation. This activation
has to be performed for each asset class for all the charts of
depreciation, which are actively used
• Default depreciation key and useful life is specified for an
asset class for each depreciation area in a chart of
depreciation
Class (3 of 4)

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• Determination of depreciation areas for asset class
Class (4 of 4)
• Depreciation
area is
activated for
an asset
class

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• Compilation of GL accounts used for asset posting
– Posting to asset, i.e., via asset number, will update
these GL accounts that are determined using
“account determination”.
– One account determination can be used for more
than one asset class
• For example, Building and Structure can be defined as
separate asset classes; however, depending on the chart of
account structure, they could be assigned to one account
determination
Question: Can we directly post to asset acq. accounts? If we post to an asset, when can we see the values in GL?
Organisation Structure – Account
Determination (1 of 3)

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• GL accounts are set up per depreciation area, i.e., not
all accounts need to be configured as posting to GL
varies per depreciation area
– Key GL accounts:
• Acquisition & Production Cost (reconciliation account, B/S
account)
• Clearing account revenue from asset sale
• Gain & Loss from asset sale
• Loss made on asset retirement without revenue; i.e.,
scrap/write off
• Accumulated depreciation (reconciliation account, B/S
account)
• Depreciation expense
Question: Can we directly post to asset acq. accounts? If we post to an asset, when can we see the values in GL?

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• Determination of GL accounts – Simple illustration
Company code
Asset Class
Account
Determination
Asset Master
Chart of
depreciation
(COD)
01 – Book depren.
-----
Chart of Account
GL 11000 - Acquisition
-----
-----
Transaction posting to an asset sub-ledger will
update the General Ledger:
COD + COA + Account Determination + depreciation
Area + Transaction => GL account

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(copied from country ABC)
Company Code 1 Company Code 2
01 Book Depreciation
02 Tax Depreciation
03 Cost Accounting Depreciation
Asset Class – 100 Building
100003 Acquisition – Office Equip.
130003 Accum. Depr. – Office Equip.
400003 Depr. Expense – Office Equip.
etc
100002 Acquisition - Machinery
130002 Accum. Depr. - Machinery
400002 Depr. Expense - Machinery
etc
100001 Acquisition - Building
130001 Accum. Depr. - Building
400001 Depr. Expense - Building
etc
Acct Determination 1000
(GL accounts)
Asset Class – 200 Machinery Asset Class – 300 Office Equip.
(GL accounts)
(GL accounts)
Depreciation Area
1000001 Building A
1000002 Building B
Company Code 3
2000001 Machine 123
2000002 Machine 234
3000001 Printer 222
3000002 Computer XYZ
Asset Organisational Hierarchy –
Example

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• Fully depreciated in the year of purchase or in the
period of acquisition
– Even though LVA value is not significant, it is
considered necessary to keep track of the asset
– Since individual value is little, can be managed
collectively in single asset master
• Separate asset class is created for LVA
Low Value Asset (LVA)

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• Maximum allowable is specified in the configuration
– Individual check (individual management)
• When the acquisition is posted, the entire acquisition and
production costs of the asset are compared with the LVA
maximum amount
– Quantity check (collective management)
• When the acquisition is posted, the entire acquisition and
production costs of the asset, divided by the total quantity,
are checked against the LVA maximum amount
Low Value Asset (cont.)

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• Refer to System Walkthrough 4.1 – Chart of
Depreciation in your Faculty Guide.
– Chart of Depreciation
– Tax Indicator
– Assign Chart of Depreciation to Company code
(Ensure the prerequisites are met before the
assignment is made).
System Walkthrough 4.1 – Chart
of Depreciation

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• Refer to System Walkthrough 4.2 – Depreciation Area
in your Faculty Guide.
– Depreciation Area
– Asset Class
System Walkthrough 4.2 –
Depreciation Area

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• Refer to System Walkthrough 4.3 – Depreciation Key
Configuration in your Faculty Guide.
– Depreciation Key
– Determine depreciation areas
– GL account determination
Depreciation Key Configuration

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• Review of Day 3
Structure
Agenda – Day 4

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• Master Data
– Asset Number & Sub Number
– Asset Master
– Mass Changes to Master Data
– Asset Master Data Conversion
Asset Accounting

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• Asset will be assigned an asset number within the asset class
number range in a company code
• Every uniquely identifiable asset, for which
valuation/depreciation has to be recorded and maintained
separately, is identified in the AA with a unique asset master
record.
• Each asset master record is a sub-ledger, linked to the General
Ledger through account determination.
• Excluding depreciation journal, every asset transaction should
be posted to the asset number; i.e., asset account.
• General Ledger can be posted in real time or in batch mode,
based on the configuration setup for the depreciation area in
the chart of depreciation.
Master Data – Asset Number

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• Sub-number can be used for differentiating part of the main
asset
• Four-digit suffix of the main asset number
• Main asset fields can be copied to sub number master data as
set up in the screen layout configuration; e.g., cost centre is
usually maintained at the main asset level
• Asset sub number is an independent asset
– Effort for maintaining asset with 1 sub number will be doubled
– Retirement needs to be done for main asset and each sub number
– Depreciation can be calculated differently from the main asset. For
example, Machine A with asset number 150056 has 3 major
components that need individual maintenance and tracking: They are
created as sub-asset numbers to the main asset 150056-0001 Power
supply, 150056-0002 Conveyor belt, 150056-0003 Coolant.
Master Data – Asset Sub-number

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• Store asset specification & detailed information.
Optional and mandatory fields are set up by defining
screen layout rules at the asset class level
General Info
(Description)
Time-dependent
assignment
• Description 1
• Description 2
We can specify information validity using Time Interval
• Plant: physical plant of the asset as set up in Material
Management module
• Cost Centre: owner of the asset that will bear the
depreciation expense. Can be used as account
assignment object to derive segment for segment
reporting.
Asset Master

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Allocation
Origin
• Evaluation group: Additional information for reporting purpose.
There are 5 evaluation groups available with user-defined values
in configuration. For example, evaluation group 1 for location of
the asset (e.g., area 1, area 2, etc); evaluation group 2 for
describing the production line (e.g., process 1, process 2, etc.)
• Vendor: supplier of the asset, it will be populated
automatically upon asset acquisition
Depreciation
Areas
• Depreciation key: how the depreciation is calculated; e.g.,
straight line method, double declining method
• Useful life: how long the depreciation will be calculated
• Ordinary Depreciation start date: when the depreciation is
started
– Depreciation key and useful life are defaulted per asset class based
on configuration
– Depreciation terms can also be set as time-dependent in later
version (ECC 6.0)
Asset Management

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• Refer to System Walkthrough 4.4 – Asset Master in
your Faculty Guide.
– Display/Create Asset
System Walkthrough 4.4 – Asset
Master

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• Asset Accounting provides capability to update fields in
several asset master records using mass changes.
Some instances for mass changes are given below
– When there is a change to the Cost Centre structure, you
have to change the Cost Centre assignment of all assets
affected
– Changes made at the asset class level. Changes at this
level affect only those assets that are created after the
change was made. This change should be applied to the
already existing assets
– User error for large number of assets
Mass Changes to Master Data

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• Steps to execute mass changes:
– Defining the change rules using Validation & Substitution
rule (transaction OA02)  what the changes are
– Selecting the assets and entering them in a worklist
(transaction AR01)  verification step that only the asset
listed are to be changed
– Checking and correcting the worklist, and releasing the
worklist (transaction AR31)  execution of the mass
changes
Mass Changes to Master Data
(cont.)
Define the change rule Asset selection to worklist Release the worklist
e.g., change cost centre A
to B
e.g., if asset class =
machinery for company
code A, acquisition date
after 01.01.2005

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• Use transaction AS91 Create Legacy Data to create converted asset
(AS92 to Change legacy data already created)
• Take over values (i.e., asset values at the change over date/SAP go live
date) by depreciation area need to be uploaded per asset master
– The take over values to be populated are depending on the
Depreciation Area setup (how the depreciation area gets the value)
– Generally you should convert “gross” values (original acquisition
cost and current accumulated depreciation) rather than “net” values
(net value of assets at time of conversion)
• GL Balance is uploaded separately from the asset values in Asset
Accounting
– AS91 posts only to FI-AA and does NOT update the GL account
balance
– Reconciliation between the GL balance and total asset values needs
to be done after to data upload – ensure they match!
Asset Master Data Conversion
(1 of 3)

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• Take over values are maintained for each Asset master during
legacy data transfer
(2 of 3)

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• Acquisition value
• Accumulated
depreciation - up to
the end of last fiscal
year
• Depreciation value
from the beginning of
the year until the last
period before the take
over date
(3 of 3)

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• Refer to System Walkthrough 4.5 – Legacy Old
Asset in your Faculty Guide.
– Display Legacy Asset
– Mass Changes
Legacy Old Asset

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• Refer to Exercise 4.1 - Create Asset in your
Participant Workbook.
– Your task is to create an asset master.
Exercise 4.1 – Create Asset

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• Refer to Exercise 4.2 - Create Asset Sub Number in
your Participant Workbook.
– Your task is to create an asset sub number for the
asset created in Exercise 4.1.
Exercise 4.2 – Create Asset Sub
Number

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• Refer to Exercise 4.3 – Configuration: Add Values to
Evaluation Group in your Participant Workbook.
– Your task is to add a new value to an evaluation group.
Exercise 4.3 – Configuration:
Add Values to Evaluation Group

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• Review of Day 3
Structure
Agenda – Day 4

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• Asset business transactions include Acquisitions, Transfers,
Retirements.
• Key parameters that govern asset accounting transactions include
document type, posting key, transaction type.
• FI Document types used for Asset business transactions:
– AA Asset Posting
– AF Depreciation Posting
• Posting key used for postings Asset related transactions
– 70 Debit Asset
– 75 Credit Asset
• Transaction type
– Mandatory information for every asset posting to differentiate business
transactions (acquisitions, transfers, retirements, etc.)
– Each transaction type belongs a transaction type group (which reflects a
category of business transactions)
– SAP Standard transaction types are commonly used.
Asset Business Transactions
Overview

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• Transaction type - Examples:
1xx Acquisition
2xx Retirement
3xx Transfer
e.g., 100 External acquisition, 110 In-house
acquisition
e.g., 200 Retirement without revenue, 260
Retirement for new acquisition with revenue
e.g., 320 Transfer (retiring) of new acquisition,
330 Receiving transfer of new acquisition
Overview (cont.)
• Each asset transaction creates an Asset Accounting
document as well as an FI accounting document at the
minimum

67
Overview – Asset Document
• Transaction Type
100 is used here for
external acquisition
(i.e., acquisition from
vendor)

68
Overview – Asset Document
(cont.)

69
• Manual asset acquisition posting in FI (Accounts
Payable) through vendor invoice; i.e., transaction F-90
• Asset document and an FI accounting document are
created
Ps. Key Account D/C
70 Asset account Dr
31 Vendor account Cr
Asset Acquisition – Direct FI
Process

70
• If MM module is implemented, asset posting can be
automatically generated using account assigned purchase
orders. Purchase Requisition/Purchase order should be
specified with account assignment category A (= Asset)
Asset Acquisition – Purchase
Process
Create
Asset Master
Create Purchase
Requisition (PR)
Create Purchase
Order (PO)
Goods
Receipt
Asset acquisition:
Dr. Asset
Cr. GR/IR clearing
Asset Master needs to
be created before PR
creation as the number
should be specified in
PR/PO
User should put asset number
in the PR/PO
FI - AA MM - Purchasing MM - Purchasing MM - Purchasing

71
Process – Example (1 of 3)

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• Configuration of account assignment category “A”
– Consumption indicator is A (Assets)
– Field Status is set for field “Asset” as mandatory entry.

73
• Material document is created at the time of
goods receipt. Asset document and FI
accounting document are automatically
generated
Asset acquisition (Purchase Process)
Dr. Asset
Cr. GR/IR clearing

74
• There are three types of asset retirement:
– Retirement with revenue to customer (F-92)
– Retirement with revenue without specifying the customer (ABAON)
– Retirement without revenue/scrapping (ABAVN)
Dr. Accumulated depreciation
Dr. Write-off expense/ Loss on property
Cr. Asset
Dr. Proceed from asset sale
Dr. Accumulated Depreciation
Dr/Cr. Gain/Loss on asset sale
Cr. Asset
Dr. Bank clearing
Cr. Proceed from asset sale
Cr. Vat out
Dr. Accum depreciation
Dr. Customer
Dr. Proceed on asset sale
Cr.Proceed on asset sale
Cr. Asset
Cr. VAT out
Dr/Cr. Gain/loss on property
Dr. Bank clearing
Cr. Customer
Note: Proceed on asset sale account need
to be defined in configuration
Asset Retirement

75
• Transfer from one cost centre to the other (AS02)
– This is done through asset master data change; i.e.,
cost centre change
– No Accounting document is created
• Transfer location (AS02)
– This is also done through asset master data change,
i.e., depending on the setup, can be plant change,
evaluation group change, or other field change
– No FI document is created
Asset Transfer

76
• Transfer between company codes (ABT1N)
– This is done through FI document posting
– Can be done separately, i.e., asset retirement in one
company and asset acquisition in the other company, or if
intercompany transaction is setup through intercompany
journal
• Transfer between one asset to another asset (ABUMN)
– This is done through FI document posting
– Both acquisition and accumulated depreciation values are
transferred
Asset Transfer (cont.)
Dr. Asset (target)
Cr. Accumulated depr (target)
Dr. Accumulated depr (source)
Cr. Asset (source)

77
Asset Business Transactions –
Segment Reporting (1 of 5)
• Asset Accounting component facilitates segment reporting.
• Use of Account Assignment Objects is necessary to achieve
“Segment Reporting” using the New GL.
• Example : Cost centre
(Object Name: KOSTL)
has been activated
• Note: Users cannot add
to the list of account
assignment objects.
Activation status can be
changed based on
business requirements

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• Profit centre & segment can be “derived” from other cost (e.g.,
via cost centre)
• For segment reporting, assign the account assignment types
(APC Values and depreciation posting) to the Account.
Assignment Object, for the transactions, for each of the
company codes

79
• Segment:
EMEA is
thus derived
for asset
3000 0
1
2
3

80
• FI Invoice posting for asset acquisition -> Derivation of segment

81
• Document Splitting
– Vendor/tax line items are split into multiple line items
based on the segments derived in the offsetting line
items, in this case, the asset line items
– Document line items are split for the scenarios that
have been configured in FI-GL for segment reporting

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• Refer to System Walkthrough 4.6 – Asset – Business
Transactions in your Faculty Guide.
– Asset Acquisition
– Asset Change Cost Centre
– Transfer Asset to Asset
– Retirement with Revenue
– Scrapping
System Walkthrough 4.6 – Asset
– Business Transactions

83
• Refer to Exercise 4.4 – Asset Acquisition from FI in
– Your task is to post an asset acquisition to the asset
master created in Exercise 4.1.
Exercise 4.4 – Asset Acquisition
from FI

84
• Refer to Exercise 4.5 – Asset Explorer in your
– Your task is to display the asset.
Exercise 4.5 – Asset Explorer

85
• Refer to Exercise 4.6 – Asset Transfer – Change
Cost Centre in your Participant Workbook.
– Your task is to transfer an asset from one
department to another.
Exercise 4.6 – Asset Transfer –
Change Cost Centre

86
• Refer to Exercise 4.7 – Asset Transfer – Asset to
Asset in your Participant Workbook.
– Your task is to reclassify an asset.
Exercise 4.7 – Asset Transfer –
Asset to Asset

87
• Refer to Exercise 4.8 – Asset Retirement with
Revenue to Customer in your Participant
Workbook.
– Your task is to record the sale of an asset with
revenue to a customer.
Exercise 4.8 – Asset Retirement
with Revenue to Customer

88
• Refer to Exercise 4.9 – Display Asset Document in
– Your task is to display the asset documents.
Exercise 4.9 – Display Asset
Document

90
• Review of Day 3
Structure
Agenda – Day 4

91
• Depreciation Run
• Asset Under Construction (AUC) Settlement
• Year End Closing
– Open & Close Period for Asset
– Fiscal Year Change
• Reporting
Period End Closing & Reporting

92
• Depreciation must be run sequentially by period; i.e.,
period 1 should be run successfully before period 2
depreciation
• Depreciation run options:
– Planned Depreciation: run this every end of period
(month end)
– Repeat Run: if depreciation has already been run and
it is required to run the depreciation again. SAP will
only post depreciation that has not been posted; i.e.,
there will not be double posting
Depreciation Run

93
• Depreciation run options (cont.):
– Restart Posting Run: if there are errors during
depreciation posting, after correcting the error (for
instance, GL account not found), execute “restart
posting run” (the old session should be deleted)
– Unplanned Posting Run: to run depreciation for several
periods, e.g., if period 1 and 2 have not been run and it
is desired to run period 3, choose unplanned posting
run for period 3
Depreciation Run (cont.)

94
Run Actual
Depreciation
Test Run
Depreciation
Rectify the
Error (if any)
Rectify the Error
(if any) & Repeat
Depreciation Run
Check
Depreciation
Run Log
Depreciation Run – Process Flow
Dr. Depreciation Expense
Cr. Accumulated Depreciation

95
• AUC represents asset that has not finished being
constructed, i.e., capital work in progress, and
therefore not being depreciated. Once the work is
completed, AUC should be settled to fixed asset
• AUC will collect all the cost from external (purchase),
internal work, and material consumption. It is defined
as separate asset class with separate account
determination
Asset Under Construction (AUC)
Settlement (1 of 5)

96
Expense
e.g., Plant Maintenance Order
(for repair maintenance)
WBS – Project System (for
project)
Expense
Expense
Material
Material
Material
AUC
Month End
Settlement to AUC Settlement to fixed asset
Fixed Asset
Settlement (2 of 5)
Execute AuC
Settlement
Create AuC Asset
master in AuC
asset class
AuC Asset
receives
postings
Define Distribution
Rules for AuC asset
Create Final
asset master
AuC Settlement Process Flow in SAP system
Month End –
After the
repair/project
finish
Repairs

97
• There are two types of settlement:
– AUC Settlement without Line Item Management
– AUC Settlement with Line Item Management
Settlement (3 of 5)

98
• AUC Settlement without Line Item Management
– Similar to transfer between two assets within the
same company code
Dr. Asset
Cr. AUC
Settlement (4 of 5)

99
• AUC Settlement with Line Item Management
– Distribution rule needs to be defined per AUC to set the
target settlement and % of distribution
– Line items in the current year that do not require
capitalization (i.e., expense) can be settled as adjustment
postings to Cost Centre
Dr. Asset
Cr. AUC
20 %
Settlement (5 of 5)

100
• Fiscal year change (AJRW): the opening of a new
fiscal year for a company code. Asset values from
the previous fiscal year are carried forward
cumulatively into the new fiscal year
– No posting can be made to the new fiscal year before
fiscal year change
– Before changing to fiscal year YYYY, fiscal year
YYYY – 2 should be closed
– Carried out as background processing for
performance reasons
Year End Closing (1 of 3)

101
• Close fiscal year (AJAB): Once the fiscal year is
closed, no posting can be made to Asset Accounting
in that fiscal year
– Current fiscal year cannot be closed
– Fiscal year can be re-opened if necessary. This is not
a recommended practice, though
– Should be done sequentially; i.e., close fiscal year the
year following the last closed fiscal year
– Carried out as background processing for performance
reasons

102
• Fiscal year can only be closed if:
– All depreciation runs for the year are completed
without any error
– All assets acquired in the fiscal year have already
been capitalized. Exclusion can be made for asset
under construction
– All incomplete assets (master records) have been
rectified

103
• All standard reporting can be accessed from
Information System folder
– Asset History Sheet  list of asset values with detail
of asset transactions
– Asset Balance by Asset number  list of asset
values
– Posted Depreciation Related to Cost Centres  list
of posted depreciation per cost centre per period
– List of Origins of Asset Debit  list of asset
acquisition by source of addition
Reporting (1 of 4)

104
• All standard reporting can be accessed from
Information System folder (cont.)
– Asset Transactions, Asset Acquisition, Asset
Retirement
– Directory of Unposted Asset  list of asset master
without value
– Depreciation Forecast  simulate
depreciation/asset values for current or future fiscal
year
Reporting (2 of 4)

105
• Sort Version: control data sorting and totaling in asset reports
– Maintained in configuration
– User-defined sort version starts with ‘Z’
• For example:
0007 Company Code/Asset Class
 sort records based on company code – asset class
Z001 Company Code/Asset Class/Cost Centre/Eval Group 1
 sort records based on company code – asset class – cost centre – eval
group 1
Reporting (3 of 4)

106
• Depreciation Simulation: simulate asset
values/depreciation using different depreciation key
for future fiscal years
– Need to create/maintain Simulation Version before
running the report (OAV7)
– E.g., Z1 – Simulate values for all asset belonging to
asset class 2000 with depreciation key DG30 to use
new depreciation key LINK and increase the useful
life by 20%
– Run Depreciation Forecast report and specify the
simulation version
Reporting (4 of 4)

107
• Refer to System Walkthrough 4.7 – Depreciation in
your Faculty Guide.
– Depreciation and Log
– AUC Line Settlement
– Maintain Sort Version (OAVI)
– Simulation Version (OAV7)
Depreciation

108
• Refer to System Walkthrough 4.8 – Reporting in your
Faculty Guide.
– Asset History Sheet - S_ALR_87011990
– Asset Balance by Asset Number – S_ALR_87011963
– Posted Depreciation Related to Cost Centres -
S_ALR_87010175
– List of Origins of Asset Debit - S_ALR_87012058
– Asset Transactions, Asset Acquisition, Asset Retirement –
S_ALR_87012048, S_ALR_87012051, S_ALR_87012052
– Directory of Un posted Asset - S_ALR_87012056
– Depreciation Current Year- S_ALR_87012026
Reporting

110
• Refer to Exercise 4.10 - AUC Settlement in your
– Your task is to create receiver asset (fixed asset),
create a settlement rule from the AUC to the fixed
asset, and post the settlement.
Exercise 4.10 – AUC Settlement

111
• Refer to Exercise 4.11 – Configuration: Maintain
Sort Version in your Participant Workbook.
– Your task is to create a new sort variant to be used
in Asset reporting.
Exercise 4.11 – Configuration:
Maintain Sort Version

112
• Refer to Exercises 4.12 to 4.19 in your Participant
Workbook.
– Your task is to execute the asset accounting-related
reports
Exercises 4.12 through 4.19 –
Reporting

113
• Refer to the Optional Class Exercises in your
– Run planned depreciation and display log for the
period
– Each participant can do Repeat Run after the
planned depreciation for a particular asset
Optional Class Exercises

114
• Review of Day 3
Structure
Agenda – Day 4

115
Online Document Splitting –
New GL Functionality
• Example – Document Splitting
• Document Splitting & Zero Balancing
• Configuration
• Logic for Document Splitting Logic
• Customizing Steps
• Extended Document Splitting – Document Splitting
Rule
• Examples of Document Splitting & Zero Balancing
• Recommendations

116
Example – Document Splitting

117
Document Splitting & Zero
Balancing
• Activate Document Splitting for the client and at the same
time it can be deactivated for a specific company code
• Recommendations:
– Inheritance - activate the inheritance
• If no characteristics are specified, characteristics will be inherited
from the lines with characteristics
– Default assignment
• Make sure that you specify a default assignment for cases where
the characteristics cannot be determined
– General Ledger Account Assignment to Item Categories
• Revenue, Expense, Balance Sheet accounts have to be assigned
to the correct item categories (e.g., 30000, 20000, and 10000)

118
Document Splitting Configuration
(1 of 5)
• Document Splitting - Business Transaction
– Business Transaction (BT): A business transaction is
an event that leads to a value update in accounting

119
• Document Splitting - Item Category
– Item category: The item category characterised the
items of an accounting document
(2 of 5)

120
(3 of 5)
• Document Splitting - BTV
– Business Transaction Variant (BTV): A BTV is a special version
of a business transaction in which you can further limit the item
categories that are specified in the business transaction
• See the BTV 0001 for BT 0300
• Note: The vendor item is required for this BTV

121
(4 of 5)
• Document Splitting - Splitting Method
– The splitting method defines how the split is performed
• The splitting method combined with the Business Transaction
and the Business Transaction Variant produce a rule
• Procedure 0000000012 is the standard (recommended to
customers)

122
(5 of 5)
• Document Splitting - Splitting Rule
– Rule: Determines which item categories will be split, as well as
which base can be used for splitting
• E.g., the Customer Invoices Business Transaction (0200) with BTV
(0001) will be split along with Taxes on Sales/Purchases items
based on item categories 01000, 01100, 07000, 20000 and 30000

123
Logic for Document Splitting
• Document Splitting - Splitting Rule Logic
– Determines which item categories will be split as well as
which base can be used for splitting
• E.g., the Customer Invoices Business Transaction (0200) with BTV
(0001) will be split along with Taxes on Sales/Purchases items
bases on item categories 01000, 01100, 07000, 2000, 30000

124
Key Customizing Steps
• Document Splitting - Key Customizing Steps
– Classify GL Accounts for Document Splitting
– Classify Document Types for Document Splitting
– Define a Zero-Balance Clearing Account
– Define Document Splitting Characteristics for General
Ledger Accounting
– Define Document Splitting Characteristics for
Controlling
– Define Post-Capitalization of Cash Discount to Assets
– Edit Constants for Non-assigned Processes
– Activate Document Splitting
– Define You Own Splitting Rules (Optional)

125
Classify GL Accounts for
Document Splitting
• Classify the GL accounts that are linked to the item category for
Document Splitting

126
Classify Document Types for
Document Splitting (1 of 3)
• Add your customer created document types

127
• Customizing menu path: Financial Accounting (New) >
General Ledger Accounting > (New) > Business Transactions
> Document Splitting > Classify Document Types for
Document Splitting
• All documents that are posted must refer to a combination of
business transaction and transaction variant. The transaction
variant controls the processing in the document split
• Some transactions are automatically assigned within the
program to a combination of business transaction and variant
(Clearing case: FB1D, FB1K, FB1S, FBRA), because these
always proceed in the same way (internal Customizing table
V_T8G10/SM30). In these cases, certain processes are used
for the split (business transactions: 1010 and 1020)

128
• Consultant: Derivation via the transaction assumes that the
processing of the respective transaction with respect to the
business transaction is always identical (Examples:
Transaction MIRO as an alternative to the hereby entry RE...,
transaction MR11… or negative example: FB50, FB01 etc…)
• For all further postings that are also actually carried out in the
system, all possible document types must be assigned
business transaction and variant! That is, assignments that
are not stored here cause an error message for the respective
posting.
• Attention: Through this control (processing in the document
split), the significance of the document type is increased
considerably in comparison to its use previously

129
Define a Zero Balance Clearing
Account
• For account assignment objects for which you want to have a zero balance
setting, the system checks whether the balance of account assignment object
is zero after document splitting.
• If this is not the case, the system generates additional clearing items for which
we create a clearing account for these additional clearing items

130
Define Document Splitting
Characteristics for GL
Accounting (1 of 3)
• Define the characteristics for which document splitting is
required for GL accounting

131
Accounting (2 of 3)
• Customizing menu path: Financial Accounting (New) >
General Ledger Accounting (new) > Business Transactions >
Document Splitting > Define Document Splitting
Characteristics for General Ledgers
• This setting provides the characteristics that have been
created as a scenario by SAP and as customer fields
• “Zero balance” switch: If the indicator is set, the system
checks while posting whether the balance is zero for the
characteristic. If this is not the case, then the system creates
in the document additional clearing lines on clearing accounts
that produce the zero balance. This setting generally makes
sense if balance reporting is to be carried out on this
characteristic

132
Accounting (3 of 3)
• “Mandatory Field” switch: If the indicator is set, then all
postings for which no value is set after the document split for
the specified field are rejected by an error message.
(Emergency switch, if postings do not go through and should
definitely take place, despite this. Attention, in this case a
complete balance on the respective dimension is at risk)

133
Characteristics for Controlling

134
Define Post-Capitalization of
Cash Discount to Assets

135
Edit Constants for Non-Assigned
Processes

136
Activate Document Splitting

137
Define Your Own Splitting Rules
• Do not change SAP-delivered rules
• If you want to extend the splitting rules, copy them to your own
rules (Note: You need to define your own splitting method first)
• Tip: The split is not rule-based in case of clearing and if a zero
balance is generated. The split is always performed for these
processes

138
Extended Document Splitting –
Document Splitting Rule
• Extended Document Splitting

140
Example – Online Document
Splitting Results in Two Ways to
View a Document
• The entry view of a
document shows
the base journal
input
• The GL View shows
the additional splits
generated by the
system. This is
sometimes called
Enhanced or
Enriched
Entry View

141
Example – Document Entry View
of Documents Show the
Traditional Journal Entry Lines

142
Example – GL Views of
Documents Show Online Splits

143
Example – Zero Balancing
Splitting
• Document Splitting Simulation with Zero Balancing Example
• This is a great feature that is available with SAP ECC 6.0

144
Example – Zero Balancing
Splitting (cont.)
• Document Splitting Simulation with Zero Balancing Example
(cont.)

145
Recommendations
• Document Splitting and Zero Balancing
– Define your splitting characteristics
• I.e., characteristics that will be used to produce your B/S and P&L
• Define profit centre and segment as splitting characteristics
– Zero balancing characteristics
• Make sure that you select this option for your splitting
characteristics
• Doing so will make sure that zero balance is secured in each
document
– Mandatory characteristics
• Make sure that you select this option for your splitting
characteristics
• Doing so will make sure that the selected characteristics are
populated in each document line

146
Recommendations (cont.)
• Use splitting and zero balancing functionalities to enable line
items to be divided for selected characteristics to produce
financial statements for the selected characteristics
– These functionalities are available for segment, profit centre
and business area
• Make sure that you select zero balancing and the mandatory
option for your splitting characteristics. By doing so, you will
make sure that a characteristic is populated for each line and
zero balance per characteristic is secured in each document
• The extended data structure of new GL is available for standard
reporting

147
Visibility of Online Document
Splitting – Important!
• Document splitting is only visible in the General
Ledger
• The sub-ledgers only contain the Entry View of the
document

148
• Enter Company Code Global Parameters (OBY6)
Company Code Global Parameters
IMG Path: Financial
Accounting>Financial Accounting
Global Settings>Company
Code>Enter Global Parameter
Country & Currency
Chart of Accounts
Fiscal year variant
Field status variant &
Posting period variant

149
1. What is the highest level of organisation in
Asset Accounting?
2. Why are multiple depreciation areas setup?
3. What are some of the instances for making
mass changes to asset master records?
4. What are the three types of asset retirement?
5. What does the document splitting rule logic
determine?
Knowledge Check

151
– Chart of depreciation
• Directory of depreciation areas
• Highest organisation unit in asset accounting
– Depreciation Area
• Facilitates valuation of assets
• One depreciation area for each method of accounting
• Facilitates parallel accounting
• Controls postings to GL (Real time, periodic, no postings,
etc.)
Day 4 Lessons Learned (1 of 4)

152
– Asset Class
• Classification of assets
• Controls screen layout for asset masters
• Account determination
• Asset Master number ranges
• Activation of asset class for depreciation area
• Default values for assets (depreciation terms)
– Depreciation Key
• Calculation Methods
• Set as default in asset class

153
• Master Data
– Creation of asset masters
– Mass change of assets
– Legacy data transfer
• Business Transactions
– Transaction type
– Document Types
– Acquisitions, Retirements and Transfers
– Segment Reporting
• Activation of Account Assignment Objects
• Segment Derivation and posting

154
• Period End/Year End transactions
– Depreciation Run
– AuC Settlement
• 2 types of settlements
• Use of line settlement and settlement profile
– Fiscal Year Change and Fiscal Year close – Need
and differences
• Reports

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