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Day 1

SAP Financial Accounting (FI) Boot camp

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STRUMS

a hartung:consult company

Agenda – Day 4

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• 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 1

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• 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

FI Asset Accounting

• FI-AA provides for the accounting of fixed assets
• As a sub module 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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FI Asset Accounting (cont.)

• 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.

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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 – Organization Structure

• Organization Structure
• Client
• Chart of Accounts
• Chart of Depreciation
• Company Code(s)
• Asset Class(es)
• Depreciation Area(s)
• Asset Masters

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Organization Structure – �Chart of Depreciation

• 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.

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Organisation Structure – Chart of Depreciation – Example

• 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

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Organisation Structure – Depreciation Areas (1 of 7)

• 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

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Organisation Structure – Depreciation Areas (2 of 7)

• Depreciation areas are set up to accommodate calculation of parallel values of depreciation for 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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Organisation Structure – Depreciation Areas (3 of 7)

• Depreciation areas are set up to accommodate calculation of parallel values of depreciation for different purposes (cont.):
• Rules for posting to General Ledger are configured per depreciation area. List of rules are:

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Organisation Structure – Depreciation Areas (4 of 7)

• Depreciation areas are set up to accommodate calculation of parallel values of depreciation for different purposes (cont.):
• 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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Organisation Structure – Depreciation Areas (5 of 7)

• Depreciation areas are set up to accommodate calculation of parallel values of depreciation for different purposes (cont.):

– Assignment of depreciation areas to Parallel Ledgers

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Assignment of depreciation area to the ledger group facilitates parallel accounting

Organisation Structure – Depreciation Areas (6 of 7)

• 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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Organisation Structure – Depreciation Areas (7 of 7)

• 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.

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• Most depreciation areas will copy the asset value (APC) from Book Depreciation

Organisation Structure – Depreciation Areas – Example

• Standard Chart of Depreciation for Australia (0AU) has five depreciation areas:

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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

Organisation Structure – Depreciation Key

• 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

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Depreciation Key

Calculation Method

Chart of Depreciation

Organisation Structure – Calculation Method: Base Method

• 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

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Organisation Structure – Calculation Method: Declining Balance Method (1 of 3)

• 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

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Organisation Structure – Calculation Method: Declining Balance Method (2 of 3)

• 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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Organisation Structure – Calculation Method: Declining Balance Method (3 of 3)

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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

Calculation Method – Multi-Level Method

• 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

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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 – Period Control

• Determine when depreciation is calculated in the system relative to the transaction posting date
• Examples of period control:

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• 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

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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

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• 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.

Organisation Structure – Asset Class (1 of 4)

• 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

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Organisation Structure – Asset Class (2 of 4)

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• Acquisition & Prod cost
• Accumulated Depreciation

Organisation Structure – Asset Class (3 of 4)

• 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

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Organisation Structure – Asset Class (4 of 4)

• Determination of depreciation areas for asset class

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• Depreciation area is activated for an asset class

Organisation Structure – Account Determination (1 of 3)

• 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

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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 (2 of 3)

• 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

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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 (3 of 3)

• Determination of GL accounts – Simple illustration

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Company code

Asset Class

Account Determination

Asset Master

Chart of depreciation (COD)

01 – Book depren.

-----

Chart of Account

GL 11000 - Acquisition

-----

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Transaction posting to an asset sub-ledger will update the General Ledger:

COD + COA + Account Determination + depreciation Area + Transaction => GL account

Asset Organisational Hierarchy – Example

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Low Value Asset (LVA)

• 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

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Low Value Asset (cont.)

• 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

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System Walkthrough 4.1 – Chart of Depreciation

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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 4.1 – 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 4.2 – Depreciation Area

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

Hidden Slide�System Walkthrough 4.2 – Depreciation Area

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

System Walkthrough 4.3 –�Depreciation Key Configuration

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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

Hidden Slide�System Walkthrough 4.3 –�Depreciation Key Configuration

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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

����Questions

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Agenda – Day 4

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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

Asset Accounting

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

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Master Data – Asset Number

• 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.

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Master Data – Asset Sub-number

• 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.

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Asset Master

• Store asset specification & detailed information. Optional and mandatory fields are set up by defining screen layout rules at the asset class level

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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 Management

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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)

System Walkthrough 4.4 – Asset Master

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

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Mass Changes to Master Data

• 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

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Mass Changes to Master Data (cont.)

• 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

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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

Asset Master Data Conversion �(1 of 3)

• 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!

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Asset Master Data Conversion �(2 of 3)

• Take over values are maintained for each Asset master during legacy data transfer

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Asset Master Data Conversion �(3 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

System Walkthrough 4.5 – Legacy Old Asset

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

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Exercise 4.1 – Create Asset

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

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Exercise 4.2 – Create Asset Sub Number

• 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.

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Exercise 4.3 – Configuration: Add Values to Evaluation Group

• 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.

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����Questions

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Agenda – Day 4

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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

Asset Business Transactions Overview

• 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.

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Asset Business Transactions Overview (cont.)

• Transaction type - Examples:

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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

• Each asset transaction creates an Asset Accounting document as well as an FI accounting document at the minimum

Asset Business Transactions Overview – Asset Document

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• Transaction Type 100 is used here for external acquisition (i.e., acquisition from vendor)

Asset Business Transactions Overview – Asset Document (cont.)

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Asset Acquisition – Direct FI Process

• 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

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Ps. Key Account D/C

70 Asset account Dr

31 Vendor account Cr

Asset Acquisition – Purchase Process

• 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)

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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

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FI - AA

MM - Purchasing

MM - Purchasing

MM - Purchasing

Asset Acquisition – Purchase Process – Example (1 of 3)

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Asset Acquisition – Purchase Process – Example (2 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.

Asset Acquisition – Purchase Process – Example (3 of 3)

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• 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

Asset Retirement

• There are three types of asset retirement:
• Retirement with revenue to customer (F-92)

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• Retirement with revenue without specifying the customer (ABAON)

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• Retirement without revenue/scrapping (ABAVN)

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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 Transfer

• 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

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Asset Transfer (cont.)

• 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

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Dr. Asset (target)

Cr. Accumulated depr (target)

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Dr. Accumulated depr (source)

Cr. Asset (source)

Asset Business Transactions – Segment Reporting (1 of 5)

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• 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

Asset Business Transactions – Segment Reporting (2 of 5)

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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

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Asset Business Transactions – Segment Reporting (3 of 5)

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• Segment: EMEA is thus derived for asset 3000 0

1

2

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Asset Business Transactions – Segment Reporting (4 of 5)

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

Asset Business Transactions – Segment Reporting (5 of 5)

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• 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

System Walkthrough 4.6 – Asset – Business Transactions

• 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

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Exercise 4.4 – Asset Acquisition from FI

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

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Exercise 4.5 – Asset Explorer

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

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Exercise 4.6 – Asset Transfer – Change Cost Centre

• 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.

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Exercise 4.7 – Asset Transfer – Asset to Asset

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

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Exercise 4.8 – Asset Retirement with Revenue to Customer

• 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.

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Exercise 4.9 – Display Asset Document

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

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����Questions

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Agenda – Day 4

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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

Period End Closing & Reporting

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

90

Depreciation Run

• 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

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Depreciation Run (cont.)

• 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

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Depreciation Run – Process Flow

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Run Actual

Depreciation

Test Run

Depreciation

Rectify the

Error (if any)

Rectify the Error

(if any) & Repeat

Depreciation Run

Check

Depreciation

Run Log

Dr. Depreciation Expense

Cr. Accumulated Depreciation

Asset Under Construction (AUC) Settlement (1 of 5)

• 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

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Asset Under Construction (AUC) Settlement (2 of 5)

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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

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

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AuC Settlement Process Flow in SAP system

Month End –

After the

repair/project

finish

Repairs

Asset Under Construction (AUC) Settlement (3 of 5)

• There are two types of settlement:
• AUC Settlement without Line Item Management
• AUC Settlement with Line Item Management

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Asset Under Construction (AUC) Settlement (4 of 5)

• AUC Settlement without Line Item Management
• Similar to transfer between two assets within the same company code

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Asset Under Construction (AUC) Settlement (5 of 5)

• 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

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Dr. Asset

Cr. AUC

20 %

Year End Closing (1 of 3)

• 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

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Year End Closing (2 of 3)

• 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

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Year End Closing (3 of 3)

• 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

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Reporting (1 of 4)

• 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

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Reporting (2 of 4)

• 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

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Reporting (3 of 4)

• 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

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Reporting (4 of 4)

• 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

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System Walkthrough 4.7 – Depreciation

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

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System Walkthrough 4.8 –�Reporting

• 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

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Hidden Slide�System Walkthrough 4.8 –�Reporting

• 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

108

Exercise 4.10 – AUC Settlement

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

109

Exercise 4.11 – Configuration: Maintain Sort Version

• 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.

110

Exercises 4.12 through 4.19 – Reporting

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

111

Optional Class Exercises

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

112

Agenda – Day 4

113

• 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

Online Document Splitting – �New GL Functionality

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114

• 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

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Example – Document Splitting

115

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)

116

Document Splitting Configuration (1 of 5)

117

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

118

• Document Splitting - Item Category
• Item category: The item category characterised the items of an accounting document

Document Splitting Configuration (2 of 5)

Document Splitting Configuration (3 of 5)

119

• 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

Document Splitting Configuration (4 of 5)

120

• 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)

Document Splitting Configuration (5 of 5)

121

• 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

Logic for Document Splitting

122

• 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

Key Customizing Steps

123

• 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)

Classify GL Accounts for Document Splitting

124

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

Classify Document Types for Document Splitting (1 of 3)

125

• Add your customer created document types

Classify Document Types for Document Splitting (2 of 3)

• 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)

126

Classify Document Types for Document Splitting (3 of 3)

• 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

127

Define a Zero Balance Clearing Account

128

• 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

Define Document Splitting Characteristics for GL Accounting (1 of 3)

129

• Define the characteristics for which document splitting is

required for GL accounting

Define Document Splitting Characteristics for GL 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

130

Define Document Splitting Characteristics for GL 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)

131

Define Document Splitting Characteristics for Controlling

132

Define Post-Capitalization of Cash Discount to Assets

133

Edit Constants for Non-Assigned Processes

134

Activate Document Splitting

135

Define Your Own Splitting Rules

136

• 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

Extended Document Splitting – Document Splitting Rule

137

• Extended Document Splitting

HIDDEN SLIDE�Extended Document Splitting – Document Splitting Rule (cont.)

138

• Extended Document Splitting

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

​

139

​

Entry View

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

140

Example – GL Views of Documents Show Online Splits

141

Example – Zero Balancing Splitting

142

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

Example – Zero Balancing Splitting (cont.)

143

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

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

144

Recommendations (cont.)

145

• 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

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

​

146

Company Code Global Parameters

• Enter Company Code Global Parameters (OBY6)

147

����Knowledge Check

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?

​

148

����End of Day Q & A

149

Day 4 Lessons Learned (1 of 4)

• Organisation Structure
• 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.)

​

150

Day 4 Lessons Learned (2 of 4)

• Organisation Structure
• 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

151

Day 4 Lessons Learned (3 of 4)

• 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

152

Day 4 Lessons Learned (4 of 4)

• 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
• New GL Online Document Splitting

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153