Customizing Organizational Structures in SAP Asset Accounting (FI-AA)
· Create settings for country-specific disclosure requirements
· Copy reference chart of depreciation/depreciation area
· Copy reference chart of depreciation
· Assign chart of deprecation to company code
· Specify number assignment across company codes
· Define asset classes
Organizational Structures
Organizational structures are the minimum basic settings in Asset Accounting (FI-AA) needed to meet various business functions. They also determine how assets accounts are managed. They depict how business processes are broken into manageable units that allow the classifications and assignments of FI-AA components to other organizational units at a given point in time in the SAP system (e.g., cost centers, plants, etc.). The classification of assets plays a significant role, because it allows you to organize assets accounting based on defined accounting criteria (e.g., according to asset classes, depreciation methods, etc.).
Asset Accounting (FI-AA) is a component in SAP R/3 that serves as a subsidiary ledger to the Financial Accounting (FI) general ledger containing information that relates to fixed asset transactions posted in the system.
Specifying the Setting for Country-Specific Disclosure Requirements
Asset accounting disclosure requirements vary from country to country based on the accounting standards prevalent in a particular country. For example, the amount allowed for Low Value Assets (LVA) differs from country to country.
SAP comes with settings for most countries. Hence, you don’t need to do anything here, but it’s smart to check the existing settings to make sure that they meet your requirements.
You check your country-specific settings from the Change View “Asset Accounting: Country information”: Overview screen (see Figure 1-1). To access this screen, use the menu path: IMG ➤ Financial Accounting (New) ➤ Asset Accounting ➤ Organizational Structures ➤ Check Country-Specific Settings. The screen shown in Figure 1-1 appears.
Defining Chart of Depreciation and Depreciation Areas
It is important to note that in SAP R/3 system all GL accounts are defined in the chart of accounts and Asset Accounting works with the chart of accounts assigned to the company code in FI. A chart of accounts dictates the structure of general ledger accounts and contains the list of G/L accounts used by a company code(s) for business processes and for posting daily financial transactions from which financial statements and balance sheet are drawn at any given time. A detailed discussion of the charts of accounts is outside the scope of this book. However, the chart of accounts is covered in the book entitled SAP ERP Financial Accounting and Controlling: Configuration and Use Management (Apress 2015), which can serve as a very good reference.
Chart of Depreciation
A chart of depreciation is a list of country-specific depreciation areas supplied by SAP to meet legal and business disclosure requirements for your company code. Depreciation areas are predefined settings for calculating different values in parallel for individual fixed assets to meet certain disclosure requirements.
SAP comes with a predefined sample chart of depreciation for most countries that you can use. The system also allows you to create your own chart of depreciation by copying existing chart of depreciation in the system and modifying them to meet your requirement. This will be discussed in detail in the “Copying Reference Chart of Depreciation/Depreciation Areas” section later in this chapter. The chart of deprecation is country specific. It means that chart of depreciation varies from country to country. Hence it is important to use the chart of depreciation that is applicable to your country. Like chart of accounts, each company code is only entitled to use one chart of deprecation. Just as it is possible for several company codes to
use the same chart of accounts, more than one company code can use the same chart of depreciation simultaneously.
Depreciation Area
The depreciation area is defined in the chart of depreciation with two numeric digits. SAP ERP comes with predefined depreciation areas, which specifically meet each country’s accounting treatment and disclosure requirements. It is also possible for you to define your own depreciation area. Whether you want to use the chart of depreciation supplied by SAP or define your own chart of depreciation is a matter of choice. Once the depreciation key is defined and assigned to the asset master record, it is then possible to post values and depreciation to the assigned accounts.
The chart of depreciation contains different depreciation areas with depreciation keys such as 01- Book depreciation, 15-Tax Balance sheet, 20-Cost-accounting depreciation, 41-Investment support deducted from asset, etc. Depreciation key 01 is usually the leading depreciation area in SAP ERP. SAP ERP has the flexibility that allows you to display different depreciation areas with the same value and depreciation terms in different currencies. The system also allows different assets valuation to be carried out to meet different needs. For example, to produce financial statements to meet local requirements, for internal management reporting, financial statements according to IAS, US GAAP, etc.
Copying Reference Chart of Depreciation/Depreciation Areas
This is where you actually commence the customizing of your chart of depreciation. The chart of depreciation is nothing other than a list of depreciation areas that hold the appropriate parameters that enable you to conform to certain countries legal requirements on asset valuation. You can only define chart of depreciation by copying the country-specific reference charts of depreciation provided by SAP. When you copy the required predefined chart of deprecation for your company code country, the system copies all the depreciation areas in the reference chart of deprecation. Go through the depreciation area carefully and delete the unwanted depreciation area.
The chart of depreciation you will define in this section will be assigned to your company code later in the “Assigning the Chart of Depreciation to a Company Code” section.
1. To get to the screen where you define a chart of depreciation, use this menu path: IMG: Financial Accounting (New) ➤ Asset Accounting ➤ Organizational Structures ➤ Copy Reference Chart of Depreciation/Deprecation Areas. The Choose Activity screen containing a list of options you can choose from is displayed in Figure 1-2.
Figure 1-2. The initial screen where you commence defining the chart of depreciation
2. The screen gives you the sequence of activities you can perform. Select Copy Reference Chart of Depreciation from the list of activities options displayed on the screen (by clicking on it) and then click the button at the bottom
right of the screen. The Organizational Object Chart of depreciation screen appears. This is the screen where you can display, copy, check or transport the organizational object.
3. Choose the Copy button at the top-left side of the screen in order to copy a chart of account reference object that is specific to your company code.
4. The Copy screen pops up. This screen has two input fields: From Chart of dep and To Chart of dep. Enter the reference chart of the depreciation code you are copying, 1GB, in the From Chart of Dep field. Then enter your proposed chart of depreciation code, B10, in the To Chart of dep field (the target chart of depreciation code). Click the Enter button at the bottom right of the screen to confirm your specifications.
You can access the list of standard chart of depreciation codes provided by SAP using the matchcode by the From Chart of Dep. field. The Information screen is displayed with the message “Chart of depreciation 1GB copied to B10”. Click the Enter button at the bottom-left side of the screen. The Organizational Object Chart of Depreciation screen appears, displaying the action you carried out. In this case, that’s “Chart of dep. 1GB copied to B10.”
5. The next step is to name your chart of depreciation by specifying the description for your chart of deprecation B10. To return to the previous screen (Choose Activity in Figure 1-2), click the Back button at the top-left side of the screen. Select the Specify Description of Chart of Depreciation from the displayed list of activities by clicking on it and clicking the button at the bottom-right side of the screen. The Change View “Chart of depreciation: Specify Name”: Overview screen contains a list of existing chart of depreciations, as shown in Figure 1-3.
6.
Figure 1-3. The screen where you change the description name for your chart of depreciation
7. Search for your company code using the button at the bottom of the screen. Change the inherited description name to your proposed description. For example, use Chart of Depreciation for Company code 7200. Save your chart of depreciation. The system will indicate in the status bar at the bottom of the screen that “Data was saved.”
8. The final step in this activity is to delete any unwanted depreciation areas in the chart of account you defined. Click the Back button at the top-left side of the screen to return to the Choose Activity screen (Figure 1-2). Select Copy/Delete Depreciation Areas from the displayed list of activities on the screen and click the button at the bottom-right side of the screen. The Determine Work Area: Entry screen pops up. Enter your chart of deprecation code B10 in the Work Area field on the screen and click Enter at the bottom of the screen. The Change View “Define Depreciation Areas”: Overview screen contains the list of the depreciation areas copied from the reference depreciation 1GB, as shown in Figure 1-4.
Figure 1-4. The screen for displaying and adjusting depreciation areas
9. Select the items you do not want from the list of the displayed items and delete them by clicking the Delete button at the top-left side of the screen. In this activity, we deleted the following depreciation areas we did not want:
· 32-Book depreciation in group currency
· 51-Investment support posted to liabiliti
10. Since you deleted two items, the system will notify you in the status bar at the bottom of the screen that two entries were deleted (“Number of deleted entries: 2”). Then save your depreciation areas by clicking the Save button at the
top-left side of the screen. The Document lines: Display Messages screen (see Figure 1-5) pops up displaying a list of the items you want to delete.
Figure 1-5. The screen dislaying line items marked for delection
11. If you are satisfied with the items you deleting, click the Continue button at the bottom of the Document lines: Display Messages screen to confirm your deletions. The system will then display the message that “Data was saved” in the status bar at the bottom of the screen.
12. You can view and make changes to each depreciation area setting. To do this, select the 1-Book depreciation area from the the displayed list of depreciation areas in Figure 1-4 and click the Details button at the top-left side of the screen. The Change Vew: “Define Depreciation Areas”: Details screen comes up (Figure 1-6). Check the settings provided by SAP and see if they meet your requirements. You can change them using the drop-down arrow next to
each field.
Figure 1-6. The screen where further specifications to the business areas can be performed
13. Click Save .
■ Note the next step in this activity is to assign a chart of depreciation to your company code. Before you do this, we recommend that you specify the use of parallel l currencies first. otherwise, you may experience problems when assigning company codes to the chart of depreciation.
Specifying the Use of Parallel Currencies
Values posted in asset accounting can be updated in various currencies, and at the same time, a parallel FI document can be posted in the FI as a local currency (company code currency) amount. The bottom line is for the system to supply the corresponding posting documents with additional values from the defined depreciation areas. In order for the system to perform this task, you must make sure that:
· Currency type and the currency in the depreciation area are the same, with the corresponding parallel currency defined in your company code.
· The depreciation terms and acquisition values managed in the depreciation area are identical.
Complete the following steps:
1. To go to the screen where you specify the use of parallel currencies for your assets valuation in the depreciation area, follow this menu path: IMG: Financial Accounting (New) ➤ Asset Accounting ➤ Valuation ➤ Currencies ➤ Specify the Use of Parallel Currencies. The Change View “Set Up Parallel Currencies”: Overview screen appears (Figure 1-7). Update these currency types: using Currency Type 30-Group Currency and 40-Hard Currency.
Figure 1-7. The screen where you set up parallel currencies for depreciation areas
2. Using the drop-down arrow by each field, specify the 30-Group currency for 2-Book depreciation and 40-Hard currency for 3-Book depreciation. These
specifications will allow to maintain legal consolidation for your fixed in group and hard currencies, respectively. Save your specifications.
Assigning the Chart of Depreciation to a Company Code
In this activity, you assign the chart of depreciation you defined to your company code.
1. To go to the screen where you assign a chart of depreciation, follow the menu path: IMG: Financial Accounting (New) ➤ Asset Accounting ➤ Organizational Structures ➤ Assign Chart of Depreciation to Company Code. The Change View “Maintain Company Code in Asset Accounting”: Overview screen is displayed (Figure 1-8.
Figure 1-8. The screen where you assign the chart of depreciation you defined to your company code
2. Search for your Company Code 7200 using the button at the bottom of the screen and assign the Chart of Depreciation – B10 you created previously.
3. Save your work.
Asset Classes
Assets are structured systematically into groups often referred to as asset classes. For example, assets with similar characteristics are classified in the same asset class such as machinery, furniture and fittings, motor vehicles, land and buildings, etc. You can define several asset classes in the system. Like charts of
depreciation, asset classes are created at the client level. This makes asset classes available to all company codes. Each asset class usually has master data and depreciation area sections. Master data is data about the asset class held in the system database that remains relatively unchanged over a period of time. It contains information that needs to be used over and over, over a period of time, the same way.
In asset class customizing, we will be looking at the following control parameters:
· Account determination
· Screen layout rules
· Number ranges
Specifying Account Determination
Account determination for asset accounting is defined in the asset class and it serves as the primary connection between asset accounting and the G/L accounts in FI. Posting all related assets values in the system to the general ledger is determined by the company code chart of accounts, the depreciation area, and the account determination key. Based on the specification of account determination in your customizing, the system will automatically calculate all the changes in the asset values arising from
depreciation, asset revaluation, and other form of reduction in value and update the asset values. Depending on your configuration, the system will perform online updates for the master data depreciation area, while all other depreciation areas are posted directly or during periodic processing.
When defining account determination for your asset classes, you should take the number of G/L accounts on your asset balance sheet into consideration. In other words, you should make sure that the account determination you are creating in this activity is the same number of G/L accounts defined for your assets. Interestingly, you may not need to create account determinations in practice, because the standard account determinations supplied by SAP will be sufficient. However, we have decided to define our own account determination in this activity in order to take you through the steps involved just in case you need to create an account determination.
1. To get to the screen where you specify account determination for your asset class, use this menu path: IMG: Financial Accounting (New) ➤ Asset Accounting ➤ Organizational Structures ➤ Asset Classes ➤ Specify Account Determination. The Change View “FI-AA: Account Determination”: Overview appears.
2. Click the button at the top-left side of the screen to go to the screen where you create the account determinations for your asset classes.
3. Using the data in Figure 1-9, update the following fields:
· Acct. Determ.: You can enter up to eight digits as your account determination identifier, which you will assign to your asset classes later.
· Name for Account Determination: Enter a name that best describes your account determinations.
Figure 1-9. Creating Account determinations for Asset Classes
4. Click Enter at the top-left side of the screen and save your account determinations.
Creating Screen Layout Rules
The screen layout controls the field status in the asset master record. For example, the screen layout determines whether a field is required, optional or suppressed.
In this activity, you will create the appropriate keys for your screen layout rules and descriptions. Normally, the field group rules for screen layouts are defined in the asset master data. You create the screen layout rules by copying the standard screen layout rules supplied by SAP and adjust them to meet your requirements. It is possible to use the predefined screen layout instead of creating your own screen layout rules.
1. You can create screen layout rules using the menu path: IMG: Financial Accounting (New) ➤ Asset Accounting ➤ Organizational Structures ➤ Asset Classes ➤ Create Screen Layout Rules. The Change View “Asset Accounting: Screen Layout for Master Record”: Overview screen is displayed, as shown in Figure 1-10. Although you will be creating your own screen layout rules for asset accounting in this activity, we recommend that you stick to the standard screen layout rules supplied by SAP.
Figure 1-10. The screen where you copy the standard screen layout rules supplied by SAP, which you can then adjust to meet your requirements
2. You can only copy the existing screen layout rules provided by SAP and modify them to meet your requirement. The system does not enable you to create your own screen layout rules. So you can only copy existing screen layout rules and then modify them to meet your requirements. To copy items from the displayed screen, click on the items you want to copy to select them. You will notice that the items you select turn yellow. To copy the selected screen layout rules, click the Copy button at the top-left side of the screen.
3. Change the copied items using the data in Figure 1-11.
Figure 1-11. The modified screen layout roles specifications to meet your requirements
■ Note When defining the screen layout rules for your asset classes, you should take the number of g/l accounts for your asset balance sheet into consideration as you did when defining account determinations.
4. Click the Enter button at the top-left side of the screen to confirm your changes and then save your screen layout rules.
Defining the Number Range Interval
It is important to classify asset portfolio on the basis of structured number ranges for better asset management. It is customary to define number ranges for asset classes for your company code, which is used for assigning main asset number to your asset. Each asset class is assigned a number range from which the system automatically can draw when you post an asset in the system. Number range interval assignment may not necessarily be assigned internally; it is also possible to assign number ranges externally. Internal number range assignment is done by the system automatically in a sequential manner. External number range assignment is done by the users when they enter an asset document into the system.
However, it is recommended that you use internal number range assignment for your asset classes to keep the complexities of asset management to a minimum.
When customizing number range intervals, we recommend that you copy the standard number range interval supplied by SAP. Although it is possible to create your number range intervals afresh, but it is a lot easier to copy existing number range intervals and adjust them to meet your requirements. Better still, you can use existing number range intervals already created in the system.
In this step, you will be copying the number range intervals from company code 1000. Company code 1000 is a standard company code supplied by SAP. Using company code 1000 as the template in the creation of the number range is ideal.
1. To define number range intervals for your company code, use the menu path: IMG: Financial Accounting (New) ➤ Asset Accounting ➤ Organizational Structures ➤ Asset Classes ➤ Define Number Range Interval. The Range Maintenance: Asset Number screen is displayed, as shown in Figure 1-12.
Figure 1-12. The initial screen where number range intervals are created or copied
2. Since you are copying number range intervals in this activity, enter the company code 1000 in the Company code field and click the Copy button at the top-left side of the screen. The Copy Company Code dialog screen pops up. Update the following fields:
· From: The Company code 1000 you are copying is the system default. You can overwrite it if you chose to.
· To: Enter the target company code 7200 in this field. This is the company code you are transporting the company code 1000 number range intervals to.
3. Click the Copy button at the bottom of the Copy Company Code screen to copy the number range intervals for company code 1000 to your company code 7200. The Transport Number Range Intervals screen is displayed with a message, as shown in Figure 1-13.
Figure 1-13. The system message explaining the transport number range intervals you have copied
4. Click the Continue button at the bottom-right side of the screen. The system will notify you at the bottom of the Range Maintenance: Asset Number screen that “the company code 1000 was copied to 7200”.
Defining the Asset Classes
Assets are structured into classes in Asset Accounting (FI-AA) for efficient asset portfolio management and for asset reporting purposes. You assign assets to the appropriate asset class. Therefore, asset classes are a vital aspect of asset accounting.
Asset classes are an important aspect of Asset Accounting in FI-AA. It allows assets to be structured in a systematic manner by assigning assets to the appropriate asset classes. The benefit of asset classes is that they allow efficient management of your asset portfolio and asset reporting purposes. You can assign
multiple assets to an asset class, as depicted in Figure 1-14. On the other hand, it is not possible to assign an asset to more than one asset class.
Figure 1-14. A typical example of asset categorization in asset classes in asset accounting
The importance of asset classes:
· Correct assignment of assets and related business transactions to appropriate GL accounts.
· Clearer asset distinctions are made at the asset class levels rather than in GL accounts.
· It allows default values to be assigned when creating assets.
· It allows adequate asset grouping for reporting purposes. In this activity, you will define the following asset classes:
· Land—Freehold
· Building—Factory
· Plant & Machinery
· Office Equipment
· Fixtures & Fittings
· Vehicle—Carriage
· Low Value Assets
· Assets under Construction Complete the following steps:
1. To define the asset classes for your asset accounting, use the menu path: IMG: Financial Accounting (New) ➤ Asset Accounting ➤ Organizational Structures ➤ Asset Classes ➤ Define Asset classes. The Change View “Asset classes”: Overview screen is displayed.
2. Click the button on the top-left side of the screen to go to the screen where the specifications of your asset classes will be carried out (Figure 1-15).
Figure 1-15. The screen where you define asset class for your asset accounting
3. Update the following fields:
· Asset Class: Enter your proposed asset class key for the object you are defining the asset class for (AS1000 Lan—Freehold) in this field. Make sure you use a meaningful asset class as your asset key. For example, AS1000, AS2000, AS3000, etc.
· Short Text: Enter a short description that best describes the asset class you are defining. For example, Land-Freehold, Building-Factory, Plant & Machinery, etc.
· Account Determ: Enter the appropriate account determination for your asset class object from the list of account determinations you defined earlier in the Account Determinations section. For example, in this activity the account determination for Land-Freehold is AD1000, Building-Factory is AD2000, and so on. You can access the account determinations list using the matchcode by the account determination field. Matchcode is the search function provided by SAP and it allows you to search or lookup items codes in the system.
· Scr.layout Rule: Enter the appropriate screen layout for your asset class object defined in the Screen Layout Rule section. You can access this list using the matchcode. Examples of screen layout you defined in this activity are: Land- Freehold – S100, Building-Factory S200, Plant & Machinery – S300, etc.
· Number Range: Enter a number range key from the list of the number range intervals you defined in the Number Range section. The number range key you entered in this field will allow the system to assign numbers internally to assets entered in the asset class. For example, for Land-Freehold, you use number range key 01, for building-factory, you use number range key 02, and so on. What happens is that when you post an asset in the the asset class for Land- Freehold, for instance, the system automatically assigns a number to the posted asset within the number range assigned to the number range key (01).
· Status of AuC: In this section of the screen, you have three options you can choose from. For example No AuC or summary management of AuC, Line item settlement and Investment measure. For assets that did not fall into the category of assets under construction, select No AuC or summary management. If you want to carry out a line item settlement for assets under construction, select
the Line Item Settlement option. Finally, select Investment Measure from the options represented by SAP if you want to plan and monitor investments that are not directly capitalized due their scope or size of in-house production.
· Real Estate Indicator for Asset Class: You have two options to choose from in this section. For assets that are not real estate, specify “Other Asset Without
Real Estate Management” and for assets that are real estate, specify “Real Estate Property or Building”.
4. Click the Enter button at the top-left side of the screen and save your asset class.
5. To create the remaining asset classes, repeat steps 2-4 with the appropriate settings for each asset class in Step 3.
Summary
In this chapter, you looked at how to customize organizational structure in asset accounting. You checked country-specific settings provided by SAP in the system to see if it meets your country disclosure requirements. You learned what the chart of accounts and chart of depreciation are. You learned how to copy the reference chart of depreciation and depreciation areas. You customized this activity to take you through the steps involved in parallel currencies specifications and assign chart of depreciations to your company code.
Finally, you looked at the various customizing steps in asset classes. In this step, you defined account determinations, created screen layout rules, and defined number range intervals for your asset classes.
In the next chapter, you will be looking at how to integrate asset accounting with G/L account in FI, specify posting keys for asset posting, define field status variants for asset accounting, assign input tax indicator for non-taxable acquisitions, specify financial statement version for asset reports, and then specify document types for posting depreciation and posting rules.
- Muhammad Hasan Mufid (SAP FI Consultant)
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