Asset Accounting Asset Accounting is an important module of SAP Fi, Asset accounting manages all transactions related to assets for an entity. Asset Accounting full fill every country legal requirement which varies from country to country. It minimises time, energy and cost for a company. When transactions are posted in asset accounts, reconciliation accounts iin general ledger are updated in real time. Transactions in asset accounting include asset acquisition, asset retirement, asset sale, asset transfer, asset revaluation and asset depreciation. ‘The purpose of Asset Accounting is to maintain the up-to-date value of Fixed Assets in the company, Asset Accounting Manage and monitor Fixed Assets for any organization by way of Asset Master Records in SAP System, i Cash or any valuable owned by the business that can be converted into. neTypes of Assets Cash or any valuable owned by the business that can be converted into cash or anything beneficial to the future operations of business can be termed as an asset. Land, building, machinery, furniture, stock cash in hand, cash at bank etc., are examples. Assets can be grouped under the following categories: a, Fixed assets: Assets which are acquired and employed'by business concems for longer period of time are called fixed assets. Examples are machineries, building, etc. b. Current Assets: Assets which are held for a short period are known asa. Fixed assets: Assets which are acquired and employed by business concerns for longer period of time are called fixed assets. Examples are machineries, building, etc. b. Current Assets: Assets which are held for a short period are known as current assets. Such assets are expected to be realised in cash or consumed during the normal operating cycle of the business. Examples are cash in hand and at bank, stock of goods, etc. The assets can be classified into: (a) Tangible or real assets and (b) intangible assets Tangible assets: These are the assets which can be touched, seen or felt. fg: machinery, stock of goods, furniture, etc. Intangible assets: These are assets which cannot be touched, seen or felt. Eg: goodwill, trade mark, etc.Asset under Construction: Assets under Construction are a special form of tangible assets, They are usually displayed as a separate balance sheet item, requiring separate account determination, and their own asset classes, ... Once the asset is complete, a transfer is made to the final fixed asset ‘Low Value of Asset: Low value assets are fully depreciated in the year of purchase or in the period df acquisition Leased Assets: Leased Assets create special Accounting requirements for the lease. During the term of lease, Leased Assets remain the property of the Jeaser or manufacturer.Integration in SAP system > Real time Integration with General Ledger > Material Management (MM) > Production Planning (PP) > Accounts Payable (FI-AP) > Accounts Receivable (FI-AR) > Cost Accounting (CO) > Plant Maintenance (PP)Configuration 1. Copy Reference Chart of Depreciation 2. Define Depreciation Area 3. Assign Input Tax indicator for Non-Taxable Acquisition 4. Assign Chart of Depreciation to Company code 5. Specify Account Determination 6, Create Screen Layout Rules 7. Define Number Range Intervals 8. Define Asset Class 9. Create G/L Account1. COPY REFERENCE CHART OF DEPRECIATION — EC08 A chart of Depreciation is a list of depreciation Areas arranged according to the business and legal requirements. Chart of Depreciation enables us to manage all rules for the valuation of the assets in a particular country. Chart of Depreciation are used in order to manage various legal requirements for depreciation and valuation of assets. These Chart of Depreciation are usually Country specific and are defined independently of the other organisational unit. A chart of depreciation can be used for all the company codes in the country. SPROSAP Ref Img>Financial Accounting (New) Asset Accounting > Organisational Structure Copy Reference Chart of Depreciation/Depreciation Areas Press F6(Copy) From Chart of Depreciation ; OIN To + Your Company Code Enter Go Back Specify Description of Chart of Depreciation Change Description SAVE2. DEFINE DEPRECIATION AREA. OADB Each Depreciation Area is setup to handle depreciation for a particular purpose (E.g., Book Depreciation, Tax Depreciation, Group Depreciation, Cost Accounting Depreciation Ete.) Every Depreciation is belonging to at least one chart of depreciation., and is managed independently from other depreciation areas, Group of Depreciation area is known as chart of depreciation. SPRO SAP Ref lmg->Financial Accounting (New) Asset Accounting > Organisational Structure >Copy Reference Chart of Depreciation / Depreciation Areas‘Chart Of Dep: Your Company code Enter ‘Select all raw except Book of Depreciation and Depreciation as per Income Tax Act 1961 Delete It THEN SAVE INS — O} ‘You define an incoming and outgoing tax code for each company code. to be used for posting non-taxable transactions to tax-relevant accounts SPROSAP Ref ImgFinancial Accounting Global settings (New)>Tax on Sales’ Purchases>Posting>Assign Tax code for Non-Taxable Transactions Position Your Code Input Tax : V0(0%) Output Tax: AO (06) SAVE4. ASSIGN CHART OF DEPRECIATION TO COMPANY CODE — OAOB I SPROSAP Ref Img3Financial Accounting (New)>Asset Accounting > ‘Organisational Structure Assign Chart of Depreciation to Company code Position Your Company Code~> Select Chart of Depreciation~> Save‘Account Determination links the Asset class/Asset Master records to the general ledger Account. So that whatever the values posted in that particular assets get automatically posted in the particular General ledger Account SPRO-Sap Reference Img.> Financial Accounting DAsset Accounting >6. CREATE SCREEN LAYOUT RULE -S_ALR 87003868 ‘Screen Layout specifies the status of the fields in the asset master record. You use the screen layout to determine if fields are required entry or optional entry fields, or if they are suppressed completely, SPRO Sap Reference Img.->Financial Accounting Asset Accounting > Organisational Structure> Asset Class>Creaie Screen Layout Rule Select Standard Layout rule>Press Copy(F6)>Change Screen Layout oumber and Name > Press Enter>Save. Do the Same for other Assets Classes (One at a time)1 DEFINE NUMBER RANGE INTERVAL — ASO8 ‘Number range interval controls the number of assets in each class. It basically the no of Assets SPROSap Reference Img.>Financial Accounting +Asset Accounting> ps a erseanieny saci Asset Class>Define Number Range Intervalee a - a 8. DEFINE ASSET CLASS —OAQA In SAP, Asset classes are used to classify the fixed assets in the asset accounting according to the asset types. One of the most important criteria for sarong cat eases rom Sn ascearding pola of Vow. Asset class means the group of similar assets, Each asset master data must be allocated to one asset class, for e.g.. Building, Vehicles, Furniture, Machines, etc. Asset classes are defined at SAP client level and contain key control parameters such a5 mumber assignment for asset, account determination and screen layout rules |SPRO->SAP Ref Img->Financial Accounting (New) > Asset Accounting > Organizational Structures > Asset Classes > Define Asset ClassesBLU PAL 23] |elelalzlalala| [ala] | ae if adil ESAsset Life Cycle Machinery Cost = 100000 Useful Life = 6years Depreciation Per Year = 1000 Asset Salvage Value = 40000 | Depreciation = Cost of Asset - Salvage Value/ Asset = 100000-40000/6 = 10000,Depreciation = Cost of Asset — Salvage Value/ use full life1,Purchase Machinery @ RS: 100000/- Machinery A/c Dr 100000 To Vendor /Bank 100000 2. Depreciation Charged Depreciation A/c Or 10000soe errr pe mere emer i 3. Profit on Sale of Asset Bank Ale Dr 50000 Accmitd Dep on Machinery A/ Dr 60000 To Machinery A/c 100000 To Profit on Sale of Asset 10000 4. Loss on Sale of Asset Accmitd Depon Machinery Or 6000010. ASSIGN G/L ACCOUNT — A090 SPRO SAP Ref Img Financial Accounting (New) > Asset Accounting > Integration with General Ledger Accounting > Assign G/L Accounts Enter Chart of Depreciatiqn->Chart of Account->R100 (Your Account Determination) Double Click on Balance sheet Account Balance Sheet Account Acquisition and Product Cost: Vehicle Loss made on Asset Retirement: Scrapping of Asset Clearing A/C Revenue from Asset Sale _ : Sale of Fixed Asset Gain From Asset Sale : Profit on Sale of Fixed Asset Loss From Asset Sale: Loss on Sale of Fixed Asset8. Define Asset Classes 9. Create G/L Account 10. AssignG/LAccount| | 11. Specify Document Type for Posting Depreciation 12. Define Number Rages for AA & AF 13. Specify Intervals and Posting Rules 14. Depreciation Calculation Methods 15. Maintain Depreciation Keys 16. Determine Depreciation Areas in the Asset Class.SeRo PSAP. Sefing Stace ‘Account ig 3 > Integration with general ledger->Post Depreciation to General Ledger Accounting Specify Document Type for Posting of Depreciation > Specify Document Type for Posting of Depreciation Position >Company codeAFSSAVE 12. DEFINE NUMBER RAGES FOR AA & AF -OBA7 SPROPSAP Ref Img?Financial Accounting (New) > Asset Accounting > Integration with general ledger>Post Depreciation to General Ledger Accounting Specify Document Type for Posting of Depreciation Define Document Type Position > AA/AF No Range Information > Company Code > Interval > Add Raw> [RoRnge [From [To | SRvam_] for pee pe XXX. XXX. EIDepreciation Value of normal wear and tear for an asset ‘SAP supports the following Types of Depreciations Depreciation is the planned deduction for wear and tear during the normal use of an Asset. Special Depreciation represents deduction for wear and tear on asset from a purely tax-based point of view. This form of Depreciation allows percentage st Persp ede rebate a pmo“for e.g: there could be a sudden break out of a fire damaging an asset, which forces you to depreciate fully as it is no longer useful economically iation Cal 0 10 L Define Base method I SPRO> IMG-*> Financial Accounting (New) Asset Accounting> Depreciation} Valuation Methods Depreciation Key>Calculation Methods Define Base Methods ‘Base method primarily specifies: « The Type of depreciation (Ordinary/ Special Depreciation) « Depreciation Method used (Straight Line’ Written Down value Method) + Treatment of the depreciation at the end of Planned useful life of asset or when the Net Book value of asset is zero ‘Straight Line Method (SLM) + This is the simple method of depreciation.Depreciation Calculation Method I. Define Base method SPRO> IMG> Financial Accounting (New)? Asset Accounting > Depreciation> Valuation Methods Depreciation Key Calculation Methods Define Base Methods Base method primarily specifies: The Type of depreciation (Ordinary’ ial Depreciation) + Depreciation Method used (Straight Line’ Written Down value Method) Treatment of the depreciation at the end of Planned useful life of asset or when the Net Book value of asset is zero This is the simple method of depreciation. of each year over useful life of asset. It charges equal amount of depreciation In first add up all the costs incurred to bring the asset in use and then it so hr esi te ect meso esas Ren,‘Straight Line Method (SLM) Under this Method the amount of depreciation charged during the period of the life of the asset is constant. The cost is evenly distributed over the productive life of the asset. The Amount of depreciation to be charged annually is calculated by the formula Depreciation «Original Cost of Asset - Salvage Value /Useful Life Purchase Cost of Asset. = 100000Under this Method the amount of depreciation charged during the period of the life of the asset is constant. The cost is evenly distributed over the productive life of the asset. The Amount of depreciation to be charged annually is calculated by the formula Depreciation =Original Cost of Asset - Salvage Value /Useful Life Purchase Cost of Asset = 100000 Useful Life» 10 years Asset Salvage Value = 40000 Depreciation = Original Cost of Asset — Salvage Value/ use full life = 100000-40000/10Written Down Value Method (WDV) ‘Under this method depreciation is charged at a fixed percentage on the reducing balance of the asset. The amount of depreciation charged every year also goes on decreasing. Purchase Cost of Asset = 100000 Percentage = 10% I1" Year - Depreciation= 100000 x 10/100 = 10000 = NBV = $0000 2" Year Depreciation=90000 x 10/100 = 9000 NBV= 81000 3° year - Depreciation= 81000x 10/100 = 8100 NBV= 72900 Lisvear [ooote [sooo tooo [3oe00 [sone] | 2% Year {90000 | 90000x10/100 [9000 | g1000 | 81000x 10/100 hedetermining depreciation amounts. It represents a combination of calculation rules, which are used for the automatically calculated depreciation types cians wees eet pacueuk Accounting > > Valuation Methods Depreciation Key > Maintain Repyctaion Rey Degciciac iy Any Key — : Depreciation for Vehiche No. Ordinary Depreciation with special Depreciation Eonar“No. Ordinary Depreciation with special Depreciation — > Tick the check box, Period Control According to Fiseal Year < tick the check box Double chek on: Assgnment of calculanon method NEW ENTRIES Dep Type. Ordinary Depreciation Phase From the start of Depreciation Base Method 0014 Period Control 001 Muln-level method: Your Code Class Stranght line method SAVESENTER?BACK ‘Select raw Click on Activate Sur cieh at Naz eapatd Kael ae ame > Valuation > Determine Depreciation Areas in the Asset Class ISelect Asset Class Double Click on: Depreciation Area Double click on ; Book Depreciation Screen layout = 1000 Max useful life ; 15 Un tick area deact. Press Enter Dep. Key : Depreciation for vehicle Then SAVE 17, N T-code: $ Alr 87009044 SPRO PSAP Ref IMG > Financial accounting (new) > Asset Accounting ees Cas Serre Uavont > alan ates Lanne OF 18 ee Trecniscavints bb habe booa tenet aE. i Center Opt. Entry SAVEKey Business Process Create Asset Master Record Create Asset Sub - Number Asset Acquisition from Vendor Asset Acquisition without Vendor Asset Explorer Asset Transfer Asset Retirement with Customer Asset Sale without Customer Asset Retirement by Scrapping Depreciation Run ReportsSAP Mama > Avobecting > Flonuciel hocourkag > Fled Assets > asset DCreate > Asset Asset class : Choose Your Asset Class Press Enter Description : Motor Van Depreciation areas: Useful life 715 : Today DateAsset Master Record20. ASSET ACQUISITION — F-90 ‘SAP Meow > Accounting Financial Accounting>Fixed Assets > Posting > Acquisition > External Acquisition > F720 with Vendor Document date : Posting date ‘Company code ? ‘Currency SINR PstKey: 31 Account : Choose Vendor | Press ENTER. ( Enter Purchase Amount)Asset Acquisition - Journal Entry Asset = A/c Dr To Cash/Bank/Vendori = - ASSET EXPLORER — AWOL SAP Menu Accounting > Financial Accounting >Fixed Assets > Information System>Reports on Asset Accounting Individual Asset > ‘SAP Menu > Accounting >F nancial Accounting>Fixed Assets > Posting > Acquistion > Extemal Asset Acquistion > Acquis. w/Autom. Offsetung Entry Create offsetting G/l for Asset mn F500 and asagn m AO90 (Assign account 4 ce T-code_; F500 Gh Tas: Anat Ofte Charing,23. ASSET TRANSFER — ABUMN SAP Menu > Accounting > Financial accounting > Fixed Asset > Posting > Transfer > Transfer within Company code Company code Document Date Posting Date Asset Value Date Text Transfer to ASSET Additional Details: past Nationa tac ceva a ese tin tall accounts. We can sell Fixed Asset to a customer for certain amount of cash SAP Menu > Accounting > Financial accounting > Fixed Asset > Posting Retirement Retirement with revenue> F-92 with customer I Document date Posting date é Type :DRSAP Menu > Accounting > Financial accounting > Fixed Asset > Posting PRetirement-}Retirement with revenue Asset Sale Without customer Company code = Asset Document Date Posting Date Text =26. |\SSET RETIREMENT BY SCRAPPING ~ ABAVN SAP Menu > Accounting > Financial accounting > Fixed Asset > PO? Rati tamer neat REE OF PEE Company code : Asset Document date Posting Date Asset value Date 3 Text : Asset Retirement by scrapping itionsl Detai Document Type [AA Partial Reti Amount Period Percentage Rate Quantity OPrior Year Acquis. © From current year Acquisition Then SAVE2). DEPRECIATION RUN — AFAB SAP Menu > Accounting > Financial accounting > Fixed Asset > Periodic processing >Depreciation Run > Execute Company code : Fiscal Year Posting Period : © Planed Posting Run ® List Asset © Test Run Execute Uncheck Test ran Outputdevice Loi Enter > Immediate > SaveOye 7 OC VATE FU