Asset Accounting

ASSET: - An asset represents an economic resource for a company or represents access that other
individuals or firms do not have. A right or other access is legally enforceable, which
means economic resources can be used at a company's discretion, and their use can be precluded
or limited by an owner.

Types of Assets
Current Assets: - Current assets are short-term economic resources that are expected to be
converted into cash within one year. Current assets include cash and cash equivalents, accounts
receivable, inventory, and various prepaid expenses.

Fixed Assets: - Fixed assets are long-term resources, such as plants,

equipment, and buildings. An adjustment for the aging of fixed assets is made
based on periodic charges called depreciation, which may or may not reflect
the loss of earning powers for a fixed asset.

Financial Assets: - Financial assets represent investments in the assets and securities of other
institutions. Financial assets include stocks, sovereign and corporate bonds, preferred equity, and
other hybrid securities. Financial assets are valued depending on how the investment is
categorized and the motive behind it.
Intangible Assets: - Intangible assets are economic resources that have no physical presence.
They include patents, trademarks, copyrights, and goodwill. Accounting for intangible assets differs
depending on the type of asset, and they can be either amortized or tested for impairment each
year.

Asset Classes:
Land ----------------> Land Reconciliation GL Account
Buildings ----------------> Buildings Reconciliation GL Account
Plant & Machinery - - - - - - - - - - - - - - - - > Plant & Machinery Reconciliation Account
FF ----------------> FF Reconciliation GL Account
Vehicles ----------------> Vehicles Reconciliation GL Account

 We are dividing the assets in to Asset classes based on how want to represent them in the
Balance Sheet.
 For each Asset Class, we need to Reconcile separately.

Depreciation: -
Entry Depreciation Expenses a/c Dr
To Accumulated Depreciation a/c Cr
Ex: - Building 1: 1,00,000 Depreciation @ 10%/Annum Life of the Asset 10 Years.
2017 = 10,000
2018 = 10,000
2019 = 10,000
2020 = 10,000
Accumulated Depreciation = 40,000
2021 Net Book Value  60,000 (Purchase Value – Accumulated Depreciation)
Balance Sheet
Assets Liabilities
Buildings 1,00,000 | Accumulated Depreciation 40,000
Depreciation Areas: -
Book Depreciation
Tax Depreciation
Cost Depreciation
Ex: - Plant & Machinery: 1,00,000 : 5years : 16 hrs per Day.
1. Tax Depreciation Are  10% only 1,00,000
-10,000
90,000  Net Book value as per Tax Depreciation
2. Book Depreciation Area  20% 1,00,000
-20,000
80,000  Net Book Value as per Book Depreciation
Note: - Maximum 99 Depreciation areas allowed.

 Daily 16hrs work 

New After 4 years (Depreciation)

Asset Accounting Configuration:
Step 1A: - Define Chart of Depreciation
Path: SPRO  SAP Reference IMG  Financial Accounting  Asset Accounting  Organizational
Structures  Copy Reference Chart of Depreciation/Depreciation Area.
Double click on “Copy Reference Chart of Depreciation”
Click on “Copy Button”
Select “1IN” (Sample document India)
From Chart of Depreciation : 1IN
To Chart of Depreciation : NCLC
Press “Enter”
Save in “New Request Prompt” (as Asset Accounting)

Step 1B: - Specify Description of Chart of Depreciation

Path: SPRO  SAP Reference IMG  Financial Accounting  Asset Accounting  Organizational
Structures  Copy Reference Chart of Depreciation/Depreciation Area.
Double click on “Specify Description of Chart of Depreciation”
Click on “Position”
Chart of Depreciation : NCLC
Description : Chart of Depreciation for NCLC
Click on “Save”
Step 1C: - Delete Depreciation Areas Not Required
Path: SPRO  SAP Reference IMG  Financial Accounting  Asset Accounting  Organizational
Structures  Copy Reference Chart of Depreciation/Depreciation Area.
Double click on “Copy/Delete Depreciation Areas”
Chart of Depreciation : NCLC Press “Enter”
Keep only this two
And Delete remain.

Click on “Save”
Step 2: - Assign Input Tax Indicator for Non–Taxable Acquisitions
Path: SPRO  SAP Reference IMG  Financial Accounting  Asset Accounting  Integration
with the General Ledger  Assign Input Tax Indicator for Non-Taxable Acquisitions.
Click on “Position”
Company code : NCLC press “Enter”
Input Tax Code : I0 (0%)
Click on “Save”
Step 3: - Assign Chart of Depreciation to the Company code
Path: SPRO  SAP Reference IMG  Financial Accounting  Asset Accounting  Organizational
Structures  Assign Chart of Depreciation to the Company code.
Click on “Position”
Company code : NCLC
Chart of Depreciation : NCLC
Click on “Save”

Step 4: - Specify Account Determination for Asset Classes

 It will determine which GL account to be picked up.

Asset Classes (8 Characters only)
Land  NCLCLAND
Buildings  NCLCBUIL
Plant & Machinery  NCLCPM
Fixtures & Fittings  NCLCFF
Vehicles  NCLCVEH
Assets Under Constructions  NCLCAUC

Path: SPRO  SAP Reference IMG  Financial Accounting  Asset Accounting  Organizational
Structures  Asset Classes  Specify Account Determination
Click on “New Entries”
Account Determination : NCLCAD1
Name for AD : Land

Click on “Save”
Step 5: - Create Screen Layout Rules for Asset Classes
Path: SPRO  SAP Reference IMG  Financial Accounting  Asset Accounting  Organizational
Structures  Asset Classes  Create Screen Layout Rules.
1000 : Real Estate
1100 : Buildings
2000 : General Machinery Pre-defined &
Provided by SAP
3000 : Fixtures & Fittings
3300 : Low value Assets
4000 : Assets Under Constructions
Select Above Mentioned & click on “Copy”
Change “Screen layout rule & Name of Screen layout”

Click on “Enter” & “Save”

Step 6: - Define Number Range for Each Asset Class

Path: SPRO  SAP Reference IMG  Financial Accounting  Asset Accounting  Organizational
Structures  Asset Classes  Define Number Range Interval.
Company code : NCLC
Click on “Change intervals”
Click on “Insert Intervals”

“Enter” & “Save”

Step 7: - Define Asset Class
Path: SPRO  SAP Reference IMG  Financial Accounting  Asset Accounting  Organizational
Structures  Asset Classes  Define Asset Classes.
Click on “New Entries”
1. Land
Asset Class : NCLCLAND : NCLC LAND ASSET CLASS
Short Text : NCLC LAND
Asset type
Account Determination : NCLCAD1
Screen Layout rule : NCL1
Number Range : 01
Select “Include Asset”
Select “No AUC or summary management of AUC”
2. Buildings
Asset Class : NCLCBUIL : NCLC Building ASSET CLASS
Short Text : NCLC Building
Asset type
Account Determination : NCLCAD2
Screen Layout rule : NCL2
Number Range : 02
Select “Include Asset”
Select “No AUC or summary management of AUC”
3. Plant & Machinery
Asset Class : NCLCPM : NCLC Plant & Machinery ASSET CLASS
Short Text : NCLC Plant & Machinery
Asset type
Account Determination : NCLCAD3
Screen Layout rule : NCL3
Number Range : 03
Select “Include Asset”
Select “No AUC or summary management of AUC”
4. Fixtures & Fittings
Asset Class : NCLCFF : NCLC Fixtures & Fittings ASSET CLASS
Short Text : NCLC Fixtures & Fittings
Asset type
Account Determination : NCLCAD4
Screen Layout rule : NCL4
Number Range : 04
Select “Include Asset”
Select “No AUC or summary management of AUC”
 5. Vehicles
Asset Class : NCLCVEH : NCLC Vehicles ASSET CLASS
Short Text : NCLC Vehicles
Asset type
Account Determination : NCLCAD5
Screen Layout rule : NCL5
Number Range : 05
Select “Include Asset”
Select “No AUC or summary management of AUC”
6. Assets Under Constructions
Asset Class : NCLCAUC : NCLC Assets Under Constructions ASSET
CLASS
Short Text : NCLC AUC
Asset type
Account Determination : NCLCAD6
Screen Layout rule : NCL6
Number Range : 06
Select “Include Asset”
Select “Line Item Settlement”
Click on “Save”

Step 8: - Define Depreciation Area for Each Asset Class : OAYZ

Chart of Depreciation : NCLC
1. Click on “Position”
Asset Class : NCLCLAND press “Enter”
Select your “Asset Class”
Double click on “Depreciation Area”
Click on “Book Depreciation”
Select “Area Deactivation”
Click on “Save”
Click 2 times on “Cancel”
2. Click on “Position”
Asset Class : NCLCBUIL
Select your “Asset Class”
Click on “Book Depreciation”
Screen Layout : 2000 (dep. On asset sub-no. level)
Remove “Area Deactivation tick”
Click on “Save”
Click 2 times on “Cancel”
3. Click on “Position”
Asset Class : NCLCPM
Select your “Asset Class”
 Click on “Book Depreciation”
Screen Layout : 2000 (dep. On asset sub-no. level)
Remove “Area Deactivation tick”
Click on “Save”
Click 2 times on “Cancel”
4. Click on “Position”
Asset Class : NCLCFM
Select your “Asset Class”
Click on “Book Depreciation”
Screen Layout : 1000 (dep. On Main asset no. level)
Remove “Area Deactivation tick”
Click on “Save”
Click 2 times on “Cancel”
5. Click on “Position”
Asset Class : NCLCVEH
Select your “Asset Class”
Click on “Book Depreciation”
Screen Layout : 1000 (dep. On Main asset no. level)
Remove “Area Deactivation tick”
Click on “Save”
Click 2 times on “Cancel”
6. Click on “Position”
Asset Class : NCLCAUC
Select your “Asset Class”
Click on “Book Depreciation”
Screen Layout : No Screen layout
Select “Area Deactivation”
Click on “Save”
Click 2 times on “Cancel”

Required Accounts
Common GL accounts: - Those GL accounts which can be used for any asset class.
1. Depreciation Exp a/c
2. Profit on Sale of Asset a/c
3. Loss on Sale of Asset a/c
4. Loss on Scrapping of the Asset a/c
5. Revenue from Sale of Asset a/c
Specific GL accounts: - Those GL accounts can be used only for which those accounts are created
for.
1. Asset a/c for each class
2. Accumulated Depreciation for each class
Step 9: - Create Required GL accounts : FS00
Buildings: 7 accounts
1. FS00 to create Buildings Asset a/c 200200
GL a/c : 200200
Account type : Asset
Select “Balance Sheet Account”
Text : Buildings Asset Account
Account currency : INR
Reconciliation type : Asset
Select “Line item display”
Sort Key : 018 (Asset no)
Field status : G067 (Recon)
Click on “Save”
2. FS00 to create Accumulated Depreciation Buildings a/c 100200
GL a/c : 100200
Account type : Liability
Select “Balance Sheet Account”
Text : Accumulated Depreciation Buildings Account
Account currency : INR
Reconciliation type : Asset
Select “Line item display”
Sort Key : 018 (Asset no)
Field status : G067 (Recon)
Click on “Save”
3. FS00 to create Depreciation Expenses a/c 400500
GL a/c : 400500
Account type : Expenses
Select “Balance Sheet Account”
Text : Depreciation Expenses Account
Account currency : INR
Select “Only Bal in local currency”
Select “Line item display”
Sort Key : 018 (Asset no)
Field status : G001
Click on “Save”
4. FS00 to create Profit on Sale of Asset account 300300
GL a/c : 300300
Account type : Incomes
Select “Balance Sheet Account”
Text : Profit on Sale of Asset account
Account currency : INR
Select “Only Bal in local currency”
 Select “Line item display”
Sort Key : 001 (Asset no)
Field status : 052 (Accounts for fixed asset retirement)
Click on “Save”
5. FS00 to create Loss on Sale of Asset Account 400300
GL a/c : 400300
Account type : Expenses
Select “Balance Sheet Account”
Text : Loss on Sale of Asset Account
Account currency : INR
Select “Only Bal in local currency”
Select “Line item display”
Sort Key : 001 (Asset no)
Field status : 052 (Accounts for fixed asset retirement)
Click on “Save”
6. FS00 to create Loss on Scrapping of Asset Account 400400
GL a/c : 400400
Account type : Expenses
Select “Balance Sheet Account”
Text : Loss on Scrapping of Asset Account
Account currency : INR
Select “Only Bal in local currency”
Select “Line item display”
Sort Key : 001 (Asset no)
Field status : G001
Click on “Save”
7. FS00 to create Revenue on Sale of Asset Account 300100
GL a/c : 300100
Account type : Incomes
Select “Balance Sheet Account”
Text : Revenue on Sale of Asset Account
Account currency : INR
Select “Only Bal in local currency”
Select “Line item display”
Sort Key : 001 (Asset no)
Field status : G052 (Accounts for fixed asset retirement)
Click on “Save”
Step 10: - Assign the Accounts for Accounts Determination : Ao90
Chart of Depreciation : NCLC
Select your “Chart of Accounts”
Double click on “Account Determination”
Click on “Position”
Account Determination : NCLCAD2 (Buildings) press “Enter”
Select “NCLCAD2” & Double click on “Balance Sheet Accounts”
Acquisition account assignment
Acquisition and Product cost : 200200 (Buildings Asset Account)
Retirement account assignment
Loss made on asset retirement w/o revenue : 400400 (Loss on Scrapping asset a/c)
Clearing a/c Revenue from asset sale : 300100 (Revenue from Sale of Asset a/c)
Gain form Asset sale : 300300
Loss from Asset sale : 400300
Double click on “Depreciation”
Ordinary Disp. A/c assignment
Accu. Dep. A/c for Ordinary depreciation : 100200 (Accumulated Dep Buildings a/c)
Expenses a/c for ordinary depreciation : 400500 (Depreciation Exp a/c)
Click on “Save”

Step 11: - Define Number Range for Depreciation : OBA7

Click on “Position”  Document type  AF  04
Company code : NCLC
Click on Change Intervals  Insert Interval
04 2021 4000000 4099999
Click on “Save”
Step 12: - Define Posting Rules for Depreciation : OAYR
Click on “Position”  Company code : NCLC
Select your “Company code details”
Double click on “Posting Rules”
Select “Monthly Postings” Click on “Save”
Step 13: - Define Rounding Off Rules : OAYO
Click on “Position”  Company code : NCLC
Select your “Company code details”
Double click on “Rounding Specifications”
Click on “Book Depreciation”
Select “Arithmetic Rounding”
Click on “Save”

Step 14: - Define Screen layout for Asset Master Record Fields
Path: SPRO  Financial Accounting  Asset Accounting  Master Data  Screen Layout 
Define Screen Layout for Asset Master data.
Double click on “Define Screen Layout for Asset Master Data”
“Position”  “Your Screen layout” (Already saved) (NCL2 for Buildings)
Select your “Screen Layout”
Double click on “Logical field groups”
Do changes what is Required. Click on “Save”
Note: - Asset Master record related field status can be managed here.

Step 15: - Define Screen Layout for Depreciation Area of Asset Master Record: AO21
Do changes what is required.
Note: - Depreciation area fields of Asset Master Record can be managed here.

Step 16: - Define Depreciation Key : AFAMA

Depreciation Key: - Depreciation key is a very important field in Asset Master Record. It is a
mandatory field which need to be given at the time of creation of any Asset Master Record.
Depreciation key contains information about all the parameters required for the calculation
of depreciation on an asset.
Depreciation key contains calculation methods; each calculation method provides
information about a different parameters required for the calculation of depreciation of an asset.

 There are four calculation methods.

1. Base Method.
2. Declining Balance Method.
3. Period Control Method.
4. Multi-Level Method.
All the four methods need to be given for the calculation of Depreciation.
Define Depreciation Key : AFAMA
Chart of Depreciation : NCLC
Click on “New Entries”
Depreciation Key : NCL1 NCLC Depreciation Key
Select “Period Control according to fiscal years”
Select “Depreciation to the day”
Double click on “Assignment of calculation methods”
Click on “New Entries”

We Have to create these 4 methods

before creating Depreciation Key

1. Base Method: - Base method provides information about the basic parameters information
required to calculate depreciation.
 We will use a standard base method: 0014 (Provided by SAP)
2. Declining Balance Method: - This is generally used for Tax Depreciation. Factorising the
depreciation is possible through Declining Balance Method.
 We will use Standard: 001 (Provided by SAP)
3. Period Control Method: - This method decides when the depreciation on asset should start
and when it should end. (AFAMP)
 We have to create manually through T code AFAMP
Click on “New Entries”
Chart of Depreciation : NCLC
Period Meth Description Acq Add Retain Trans
Period Control Method NCLC 01 01 01 01
006

Click on “Save”
4. Multi-Level Method : AFAMS
Click on “New Entries” to create “Straight Line Method”
 Multi Meth : NC1 SLM – Straight Line Method
Validity start : 2 from Ordinary Depreciation
Click on “Levels”
Click on “New Entries”
Acq Year Years Period Base Value Percent
999 0 01 10%
9999

Click on “Save”
 Click on “New Entries” to create “Written Down Value Method”
 Multi Meth : NC2 WDV - Written Down Value Method
Validity Start : 2 from Ordinary Depreciation
Click on “Levels”
Click on “New Entries”
Acq Year Years Period Base Value Percent
999 0 24 10%
9999

Click on “Save”
 After completion of these 4 methods we have to create “Depreciation Key”

Create Depreciation Key : AFAMA

Click on “New Entries”

Depreciation Key : NCL1 NCLC Depreciation Key

Select “Period Control”

Select “Dep. To the day”

Double click on “Assignment of Calculation methods”

Click on “New Entries”

Dep type : Ordinary Depreciation

Phase : from the start of Depreciation

Base Meth : 0014

Dec Meth : 001

Period Meth : 006

Multi Meth : NC1

Click on “Save”

Click on “Back” to Activation screen

Select “Depreciation Key”

Click on “Activate”
To Create Master Record : AS01

Asset Class : NCLCBUIL

Company code : NCLC

Press “Enter”

Description : NCLC Building 1

Go to “Depreciation Key” tab

Depreciation Key : NCL1

Using life : 10

Dep Start : 21.03.2022

Click on “Save”

To Check Asset Explorer : AW01N

Company code : NCLC

Asset : 200001

Fiscal Year : 2021

Press “Enter”

 Acquisition of Asset for Cash : F-02

Document date : 21.03.2022
Company code : NCLC
70 – Debit Asset

Debit Posting key : 70 (Debit Asset) 75 – Credit Asset

A/c : 200001 – 0 (Main)

T type : 100 (External)
press “Enter”
Amount : 6,00,000
Credit Posting key : 50 (Credit GL)
A/c : 200000 (Main Bank A/c)
press “Enter”
Amount : *
Click on “Save”
Creation of Sub-Asset Master Record : AS11

Asset : 200001 (Main Asset)

Company code : NCLC

Number : 1 (* means how many accounts want to create)

Press “Enter”

Description : NCLC Building 4th Floor

Asset Name : NCLC Building 1

A/c Determination : NCLCAD2

Capitalization : 21.03.2022

Go to “Depreciation Area”

Depreciation Key : NCL1

Use life : 10

Dep Start : 21.03.2022

Click on “Save”

 Acquisition of Asset on Credit with Vendor : F-90

Doc date :
Company code : NCLC
Posting Key : 31 (Credit Vendor)
A/c : 40000000 (Mudra add agency) press “Enter”
Amount : 2,00,000
Posting Key : 70 (Debit Asset)
A/c : 200001-1
Trans type : 100 (External Acquisition)
press “Enter”
Amount : *
Click on “Save”

To Change Chart of Depreciation : OAPL

Depreciation Posting Run : AFAB

1. Unplanned Depreciation Posting Run: This run is used when we want to execute the
depreciation posting run first time in the middle of fiscal year.
2. Planned Posting Run: Once Depreciation run has been posted using unplanned posting run
– Next period on-words we can use Planned Depreciation Posting Run.
3. Repeat Depreciation Posting Run: If we missed any assets in the previous depreciation
posting run we can de Repeat to post only those missed assets using Repeat Depreciation
Posting option.
4. Restart Depreciation Posting Run: This is used when Depreciation posting run was abruptly
disturbed in the middle of Depreciation run, then we use Restart option it will start from
where it stopped.

Company code : NCLC

Fiscal year : 2021

Posting Period : 12

Select “Unplanned Depreciation Posting Run”

Select “List Assets”

Select “Test Run” (if you are running for testing purpose”

Click on “Execute”

Program

Execute in Background

Output Device click on “Enter”

Click on “Immediate”

Click on “Save”

System

Services

Jobs

Job Overview

Click on Execute
Retirement of an Asset: -

1. Retirement of Asset with Revenue  Sale of Asset

2. Retirement of Asset without Revenue  Scrapping of Asset

Retirement of Asset with Revenue

A. Retirement of Asset with Revenue of Cash : ABAON

Company code : NCLC
Asset No : 200001 – 0
Document date : 28.03.2022
Posting date : 28.03.2022
Asset Value date : 28.03.2022
Text : Being Sale of Asset of Cash
Manual Revenue : XXXXXXXX
Simulate & Save
B. Retirement of Asset with Revenue on Credit : F-90
Company code : NCLC
Asset No : 200001 – 0
Document date : 28.03.2022
Posting date : 28.03.2022
Asset Value date : 28.03.2022
Text : Being Sale of Asset of Cash
Manual Revenue : XXXXXXXX
Simulate & Save

Retirement of Asset without Revenue (scrapping of asset) : ABAVN

Company code : NCLC

Asset no : 200002 – 1
Document date : 28.03.2022
Posting date : 28.03.2022
Asset Value date : 28.03.2022
Text : Being Scrapping of the Asset
Manual Revenue : XXXXXXXX
Simulate & Save

Entry
Asset Transfer within the Company code : ABUMN

Reason 1: - When an asset has been created in the wrong Asset class and we want to shift the
asset to correct asset class.

Process: -

1. Create the required GL a/c for correct Asset class : FS00

2. Assign the accounts for Account Determination : AO90
3. Create a new Asset master record under correct asset class : AS01

Execute ABUMN to Asset Total Transfer.

Company code : NCLC

Asset no : 200002 – 1
Document date : 28.03.2022
Posting date : 28.03.2022
Asset Value date : 28.03.2022
Text : Being Transfer the Asset to PM Class
Transfer to
Select “Existing asset” : 300000 – 0
Simulate & Save

Reason 2: - When we split an asset into two or more Assets we can use Asset transfer. We will
create a new Asset master record and then transfer the value of the Asset proportionally to new
Asset.

Execute ABUMN to Asset Amount Partial Transfer.

Company code : NCLC

Asset no : 200002 – 1
Document date : 28.03.2022
Posting date : 28.03.2022
Asset Value date : 28.03.2022
Text : Being Transfer the Asset to PM Class
Transfer to
Select “New asset”
Click on “Master Data”
Description : CSK7 Building 5
Press “Enter”
Capitalized on : 28.03.2022
Go to “Depreciation Area”
Depreciation Key : CSK1
Use life : 10 years
Dep Start date : 28.03.2022
 Click on “Back”
Go to “Partial Transfer” tab
Amount posted : 100000
Select “From current year Acquisition”
Simulate & Save

Scrap Value:

1. Asset Master Record Level - - - - - - - Scrap Value : AS02

1A. Specify the Scrap Value in the Asset Master Record : AS02
Asset no : 200004
Sub-number : 0
Company code : CSK7
Click on “Asset Values”
Click on “Simulate”
Go to “Parameters” tab
Scrap Value : Specify Scrap value here
Click on “Save”
1B. Make the Relevant Changes in the Depreciation Key : AFAMA
Chart of Dep : NCLC
Click on “Position”
Dep Key : NCL1
Select your “Dep Key”
Double click on “Assignment of Calculation methods”
Do changes what are required
Click on “Save”
2. Depreciation Key Level - - - - - - - - - Multiple Assets
2A. Create a Cut off Value Key : ANHAL
Click on “New Entries”
Cutoff Value Key : PK1
Select “From Capitalization date”
Click on “Save”
2B. Make the
Configuration for Unplanned Depreciation:

1. Define Depreciation Areas : OADB

Net Book values - - - - - - - - All Values Allowed
Unplanned Dep Values - - - - - - - All Values Allowed
2. Create Two GL accounts : FS00
Unplanned Depreciation Expenses a/c
Unplanned Accumulated Depreciation A/c
3. Assign the Accounts for Accounts Determination : AO90
4. Post Unplanned Depreciation Posting on an Asset : ABAA

Class Missed

|
Asset Catch up and Asset Smoothing: -

Asset Catch-up: - Whenever there is change in Depreciation rate in the middle of the financial
year, the difference (Backlog) in the depreciation already posted and the new Depreciation to be
posted will be added to the next immediate following period.

 Ex: - Asset Value 6,00,000  10 years life  10% Dep (as per Old Dep rate)
Asset Value 6,00,000  5 years life  20% Dep (as per New Dep rate)
Apr  5,000
May  5,000
June  5,000 10 years - - - - 10% Dep
July  5,000 rate
Aug  5,000
Sep  5,000
Oct  40,000 = 10,000 + 30,000 = 40,000
Nov  10,000
Dec  10,000
Dep rate changed to 5 years - - - 20%
Jan  10,000
Feb  10,000
March  10,000
90,000
Total = 6,00,000*20/100 = 1,20,000
1,20,000—90,000= 30,000  Backlog amount will be added to next period.

Create a Multi-Level method for 20% Depreciation : AMAMS

Multi-level meth : CS3 : SLM – Straight line Method

Validity Start : From Ordinary depreciation start date
Double click on “Levels”
Click on “New Entries”

Click on “Save”

To Change Depreciation Method : AFAMA

Chart of Depreciation : CSK7

Click on “Position”  your Depreciation Key (NCL1)
Select your “Depreciation Key”
Double click on “Assignment of Calculation Method”

Multi-Level Meth : CS3

Click on “Save”
Asset Smoothing: - If we select this option the Backlogging Depreciation will spread our
remaining periods of the year.

 Ex: - Asset Value 6,00,000  10 years life  10% Dep (as per Old Dep rate)
Asset Value 6,00,000  5 years life  20% Dep (as per New Dep rate)
Apr  5,000
May  5,000
June  5,000 10 years - - - - 10% Dep
July  5,000 rate
Aug  5,000
Sep  5,000
Oct  15,000
Nov  15,000
Dec  15,000
Dep rate changed to 5 years - - - 20%
Jan  15,000
Feb  15,000
March  15,000
90,000
Total = 6,00,000*20/100 = 1,20,000
1,20,000—90,000= 30,000  Backlog amount will be shared to remaining periods.

To Activate Smoothing Indicator : OAYR

Click on “Position”

Company code : NCLC press “Enter” select your company code

Double click on “Posting Rules”

Select “Smoothing” check box

Click on “Save”

Revaluation of Asset: -
Step 1: - Define Depreciation Areas for Revaluation of Assets : OADB
Chart of Depreciation : NCLC
Double click on “Book Depreciation”
Revaluation : All Values Allowed (from Drop down list)
Click on “Save”
Step 2: -Create Two GL Accounts : FS00
A. Revaluation Reconciliation GL A/c
B. Revaluation Reserve A/c
Execute FS00 to Create Revaluation Reconciliation GL A/c
GL a/c : 200201
Company code : NCLC
Account Type : Asset
Select “Balance sheet A/c”
Text : Revaluation of Buildings Recon A/c
Currency : INR
Reconciliation a/c type : Assets
Select “Line item display”
Sort Key : 018 (Asset no)
Field Status : G067 (Reconciliation)
Click on “Save”
Execute FS00 to Create Revaluation Reserve GL A/c
GL a/c : 100202
Company code : NCLC
Account Type : Liabilities
Select “Balance sheet A/c”
Text : Revaluation Reserve A/c
Currency : INR
Reconciliation a/c type : Assets
Select “Line item display”
Sort Key : 018 (Asset no)
Field Status : G001 (General)
Click on “Save”
Step 3: - Assign Accounts for Accounts Determination : AO90
Chart of Depreciation : NCLC
Select “Chart of Accounts” : NCLC
Double click on “Accounts Determination”
Position  Your Account Determination  Select your Account Determination
Double click on “Balance sheet Accounts”
Go to “Revaluation accounts assignments”
Revaluation Acquisition & Production : 200201
Offsetting A/c : 100202
Click on “Save”

Step 4: - Limit Transaction Type : OAXJ

1. Select 850 (Debit Side)
Double click on “Depreciation Area”
Click on “New Entries”
Area : 01 (Book Depreciation)
Select “Always Post”
Click on “Save”
2. Select 855 (Credit side)
Click on “Depreciation Area”
Click on “New Entries”
Area : 01 (Book Depreciation)
Select “Always Post”
Click on “Save”

Step 5: - Check Whether Revaluation APC is Allowed : OABW

 APC – Acquisition & Production Cost
Execute OABW
Select “Revaluation of APC check box”
Name of Depreciation Area Revaluation of APC
Book Depreciation

Click on “Save”
Step 6: - Check Asset Posting Rules to Ensure Posting of Revaluation is Allowed : OAYR
Execute OAYR
Position  Company code  Select your company code
Double click on “Posting Rules”
Select “Post Revaluation”
Click on “Save”

Step 7: - Post Revaluation of an Asset : ABAW

Company code : NCLC
Asset no : 200006
Sub no : 0
Document date : 29.03.2022
Posting date : 29.03.2022
Posting Period : 12
Transaction type : 850 (Debit Asset (Increment))
Press “Enter”
Asset Value Date : 29.03.2022
Amount Post : 3,00,000
Click on “Save”