How to Configure Valuation of Fixed Assets
This Articles, looks at the steps involved in the configuration of the valuation of fixed assets in asset accounting and also explains the various steps involved in defining depreciation for foreign currencies in asset accounting. In this chapter, you will learn how to:
Setting the Chart of Depreciation
The treatment and disclosure requirements of depreciation and valuation of assets varies from country to country. SAP comes with various charts of depreciation in an attempt to meet individual country-specific legal disclosure requirements. Therefore, charts of depreciation are always country-specific. Often, charts of depreciation are independent of other company codes outside the same country. All company codes in the same country are assigned the same chart of depreciation, since they fall under the same legal disclosure requirements and therefore need the same chart of depreciation. For example, if Company Code 1 and Company Code 2 are UK companies, they should be assigned to the same chart of depreciation for the UK. Likewise, all company codes operating in the United States can use the same chart of depreciation specifically for the United States, and so on.
Benefits of chart of depreciation include:
To set chart of depreciation, use this menu path: IMG: Financial Accounting (New) ➤ Asset Accounting ➤ Valuation ➤ Set Chart of Depreciation. The Chart of Depreciation Selection screen is displayed in Figure 3-1.
Figure 3-1. Chart of depreciation selection screen
Enter your chart of depreciation (B10) in the ChDep field (this is the chart of depreciation key you defined in Chapter 1 in the Copy Reference Chart of Depreciation/Depreciation Areas section). Then click the Enter button at the bottom-left side of the screen. This will take you back to the Display IMG screen. In the status bar at the bottom of the screen, the system will notify you that the chart of depreciation B10 was set.
Depreciation Areas
Depreciation was explained in depth in Chapter 1. In this step you will define depreciation areas for your asset accounting. During this customizing activity, you will also specify area type, specify transfer of APC values, specify transfer of depreciation terms, and set up areas for parallel valuation for your asset accounting according to IAS/IFRS standard.
Depreciation areas are important because they allow you to calculate various asset values in parallel for individual fixed assets for different purposes. For example, you may want to generate values for the balance sheet, which may be different from costing accounting for internal management purposes. The depreciation terms and values for asset valuation are managed in the depreciation area. You can create up to 99 depreciation areas in SAP ERP. Depreciation areas are grouped in the chart of depreciation according to country-specific requirements.
Defining Depreciation Areas
In this step, you define the depreciation areas and specify the area type that will allow you to calculate asset values in parallel for each asset for various purposes. SAP comes with various county-specific depreciation areas you can adopt and adjust to meet your requirements.
Figure 3-2. The choose activity screen
Figure 3-3. The Change View “Define Depreciation Areas”: Screen
Note You may not need to carry out any specifications in this activity, because the standard Chart of depreciation (1GB) for your country you copied in Chapter 1 contains the corresponding settings needed for the settings in this step.
Note on this screen, you will notice that the area types are defaulted. You can overwrite them by entering the area types of your choice in the type field.
You may not need to carry out any specifications in this activity because when you copied the standard chart of depreciation (1GB) for your country in Chapter 1, the area types for each depreciation areas were copied with the chart of depreciation.
Specify Transfer of APC Values
The standard system copies the asset balance sheet values from depreciation area 01 to all other depreciation areas during posting. (The only exceptions to this rule are areas for revaluation and for investment support, as well as derived depreciation areas.) Therefore, you only need to carry out this step if you want to copy posting values from a different depreciation area, not depreciation area 01.
In this step, you define transfer rules for posting acquisition values of depreciation areas. These transfer rules let you ensure that certain depreciation areas have identical acquisition values. For example, you can ensure that the depreciation areas holding foreign currency values use the same values in local currency.
In your customizing, you must ensure that of your country-specific chart of depreciation with the appropriate depreciation areas are defined based on the standard required transfer rules.
Figure 3-5. The Change View “Depreciation Areas: Rules for Value Takeover”: Overview screen
Note depreciation area 31 (the consolidated balance sheet in group currency) should show depreciation area 30 (the consolidated balance sheet in local currency), so that they are valued uniformly to the book depreciation area. the only difference is the currency.
Ident. By activating the identical check box, this will ensure that depreciation areas manage identical acquisition values.
Note You may not need to carry out any specifications in this activity because when you copied the standard chart of depreciation for your country (1GB) in Chapter 1, the acquisition value transfer rules were copied for each depreciation areas with the chart of depreciation.
Figure 3-6. The Change View “Depreciation Areas: Rules for Takeover of Deprec. Terms”: screen
Update the following fields:
TTr: When you enter the depreciation area 01 (the primary depreciation area) in the depreciation term transfer field for other depreciation areas, the system will automatically copy the depreciation terms from area 01 to the specified areas.
Note the depreciation area 31 for consolidate balance sheet in group currency should show the depreciation area 30, so that they are valued uniformly to the book depreciation area. the only difference is the currency.
Identical: The check box you activate will ensure that depreciation areas are managed in identical depreciation terms.
Note You may not need to carry out any specifications in this activity because the standard chart of depreciation (1GB) for your country in Chapter 1. the area types for each depreciation area you copied holds the transfer rules for the depreciation terms of the depreciation areas.
Click the Enter
button at the top-left side of the screen to confirm your entries and save 
your depreciation terms transfer rules.
Setting Up Areas for Parallel Valuation
When setting parallel valuation you have to create additional accounting principles for one real and one derived depreciation area in asset accounting. The derived depreciation makes it possible to determine new asset value from a predetermined asset value. The derived depreciation applies mathematical formulas to ensure that the values of the asset subledger are the same in the general ledger accounting.
In this activity, you set up parallel valuation to meet certain accounting principles (for example, IAS or US GAAP) and disclosure requirements using the wizard tool. The wizard helps you define parallel valuation in asset accounting when you use the new general ledger in conjunction with the ledger approach in the new general ledger. You may not necessarily need to use the wizard if you have been using the account approach. You can also perform your settings manually instead of using the wizard.
To create valuation areas for parallel valuation, follow this menu path: IMG: Financial Accounting (New) ➤ Asset Accounting ➤ Valuation ➤ Depreciation Areas ➤ Set Up Areas for Parallel Valuation. The Chart of Depreciation Selection screen pops up.
Specify your chart of depreciation (B10) and click the Continue or Enter
buttons at the bottom-left side of the screen to proceed to the wizard tool (the Set Up Parallel Valuation screen is shown in Figure 3-7).
Figure 3-7. The initial wizard screen that will help you set up parallel valuation in asset accounting
Note Carefully read the note on the screen for further instructions on how to customize the settings for parallel valuation in asset accounting.
Click the Continue
button at the bottom of the screen to assign a master area to the ledger group. The Control of Leading area of the Set Up Parallel Valuation screen comes up with this message:
“Determine the chart of depreciation to be processed. For the leading depreciation area, you have to enter a ledger group that contains the leading ledger. If a ledger group with leading ledger is already set up, this is proposed. You change this assignment.”
The list of activities you will set are displayed on the left side of the screen. Your chart of depreciation (B10) and the depreciation area (the master depreciation area 01) are defaulted by the system. Update the Ledger Group field by entering the leading ledger (0L).
The bottom line is that you want to use the accounting principle LGAP (Local GAP) for the ledger group that contains the leading ledger. At the same time, use the accounting principle IAS (International Accounting Standards) for another ledger group for real and derived depreciation areas and assign the ledger group to them.
To enter areas for parallel valuation, click the Continue button again to proceed to the Control of Area for Parallel Valuation section of the screen.
Update the following fields:
Depreciation area: Enter the depreciation area (30) you want to use for your real depreciation area in this field.
Ledger group: Enter the code (L5) for IAS in this field.
To create or select a delta area, click the button again. The information screen pops up with the information.
Click the Enter button at the bottom-right side of the pop-up screen to continue customizing. The Create Delta Area? section of the Set Up Parallel Valuation screen comes up. This screen gives you the option to create new depreciation area or to using an existing depreciation area. Since in this activity you want to create the derived depreciation area, you will be creating a new depreciation area.
Select the Create New Depreciation Areas option and then click the button. The Control of the Delta Area of the Set Up Parallel Valuation screen is displayed (see Figure 3-8). This is where you define your derived depreciation area.
Figure 3-8. The wizard screen where you specify the area for posting APC differences between the leading depreciation area and parallel valuation in a ledger group
Update the following fields:
Depreciation area: Enter a two-digit character you want to use as your derived depreciation area code (33) in this field and enter a short description that best describes your depreciation area. For example, IAS support.
Ledger group: The ledger group (L5) is defaulted by the system. This is inherited from the settings on the Control of Area for Parallel Valuation section in the preceding setting.
Post in G/L: The system defaults how APC should be copied to the assigned ledger group in this field. You can display the list of how the APC values should be copied to the assigned ledger group. However, we recommend that you stick to the default option (Area Post APC Only), as posting control is not allowed in the derived area.
Click the button at the bottom of the screen and the Overview section of the Set Up Parallel Valuation screen comes up displaying your settings. See Figure 3-9.
Figure 3-9. The wizard screen where you check your parallel valuation settings
If you’re satisfied with the settings, click the button. The complete section of the Set Up Parallel Valuation screen comes up with the following information “When you choose Complete, the settings you made are updated to the database.”
The following additional modifications are made in the background:
Posting control for the area for parallel valuation is set to Post Depreciation. The delta area updates real APC differences (no special depreciation logic). Both depreciation areas use the same accounts as the master depreciation area. In certain cases, it might be necessary to change the intervals for depreciation posting and the other posting settings (transaction OAYR) of the depreciation area for parallel valuation in company code selection when defining posting rules. In addition, you should use report RAACCOBJ01 or transaction AACCOBJ to check if the account assignment types are maintained as you want for both depreciation areas.
Click the
button at the bottom of the screen. The Display IMG screen is displayed with a notification at the status bar at the bottom of the screen that the specification was saved.
Determining Depreciation Areas in the Asset Class
In this activity, you maintain the depreciation term for your asset class in the depreciation class. An asset in the asset class uses the same depreciation terms. The depreciation terms contain the depreciation key and the asset’s useful life. The depreciation key holds the values needed for determining depreciation amount (depreciation key will be discussed in great detail in Chapter 4). The asset useful life is the estimated period an asset will be used for. Importantly, when you have maintained depreciation terms in the asset class, you do not have to maintain it again in the asset master record, rather they can be default values from the asset class.
To determine depreciation areas in the asset class, use this menu path: IMG: Financial Accounting (New) ➤ Asset Accounting ➤ Valuation ➤ Determine Depreciation Areas in the Asset Class. The Change View “Asset class”: Overview screen is displayed. This screen contains the list of the asset classes.
Using the
button at the bottom-left side of the screen, search for your asset classes. Select the asset class you want to determine depreciation area (AS3000 Plant & Machinery) and double-click the Depreciation areas folder on the left pane of the screen. This will take you to the Change View “Depreciation Areas”: Overview screen (see Figure 3-10). This screen contains the depreciation areas in the chart of depreciation that you assigned to the asset class for Plant and Machinery. On this screen, you will activate the depreciation areas you want to assign to the depreciation key and the asset’s useful life, and specify the screen layout rule you are applying to each depreciation area. The screen layout dictates the field status in the asset master record. For example, the screen layout determines whether the input fields are required, are optional entry fields, or are suppressed.
Figure 3-10. The screen where you determine depreciation areas in the asset class
Update the following items:
Deact: Normally, the depreciation area is deactivated by the system automatically, so you should activate the book depreciation that you want to apply the depreciation terms. For this activity, activate the following depreciation areas by removing unchecking their check boxes:
■ Note after activating the depreciation areas, specify the layout rules first before you specify the depreciation key, the useful life of the asset, and the index. after you specify the screen layout rule and press enter on your keyboard, other fields will be released for input.
■ Tip use the specifications in figure 3-10 to customize your depreciation area in the asset class.
Click the Enter button at the top-left side of the screen to confirm your entries and save your customizing.
Deactivating the Asset Class for the Chart of Depreciation
This function serves as control mechanism, as it allows you to lock asset classes for the chart of depreciation. For example, the asset class that you do not want to use can be locked and then unlocked at any time.
To deactivate asset class for chart of depreciation, use this menu path: IMG: Financial Accounting (New) ➤ Asset Accounting ➤ Valuation ➤ Determine Depreciation Areas in the Asset Class. The Change View “Lock Asset Class for Chart of Depreciation”: Overview screen is comes up, displaying the list of asset classes in the system. Using the position button at the bottom of the screen, search for the asset class that you want to lock. Deactivate it by making sure that the Lock check box that’s assigned to the asset class for the chart of depreciation is checked.
■ Note You only deactivate an asset class for the chart of depreciation if you want to prevent it from being used in the chart of depreciation.
Amount Specifications (Company Code/Depreciation Area)
In this activity, you will customize these specifications for your company code and the depreciation area:
Specify the Maximum Amount for Low-Value Assets and Asset Classes
In this step, you will carry out two specifications. First, you will specify what you consider to be the maximum amount for low-value assets (LVAs) and the maximum amount for LVAs for your company code. Based on your specifications, when you post asset acquisitions, the system will automatically check the maximum amount for LVAs against the value posted for LVAs.
To specify the maximum amount for LVAs and asset classes, use this menu path: IMG: Financial Accounting (New) ➤ Asset Accounting ➤ Valuation ➤ Amount Specifications (Company Code/ Depreciation Area) ➤ Specify Max. Amount for Low-Value Assets and Asset Classes. The Choose Activity screen appears, displaying the two specification options—Specify LVA Asset Classes and Specify Amount for Low Value Assets.
Specify LVA Asset Classes
The specification you carry out in this step will allow the system to check for low-value asset amounts and perform quantity checks.
On the Choose Activity screen, select Specify LVA Asset Classes from the displayed options and click the
button at the bottom-right side of the screen. The Change View “Asset Class”: Overview screen appears, displaying the list of asset classes in the system.
Using the button at the bottom of the screen, call up the asset class for the LVA asset (AS7000) that you defined in Chapter 1 in the “Asset Classes” section. Select your asset class and double-click the Low-Val. Asset check in the asset class, which is on the left pane of the screen. The Change View “Low-Val. Asset Check”: Overview screen is displayed, as shown in Figure 3-11.
Figure 3-11. The screen where you specify how you want the system to carry out the system maximum amount check for low-value assets
Specify how you want the system to carry out the maximum amount check for the low-value asset. SAP comes with a standard low-val. check that you can choose from:
0 - No maximum amount check: When you use this specification, no maximum check will be carried out by the system.
1 - Value based maximum amount check: When you use this specification, the system will carry out a low-value asset check based on the asset acquisition amount.
2 - Check maximum amount with quantity: When you use this specification, the system will perform a low-value asset check based on the asset quantity.
Click the Enter button at the top-left side of the screen to confirm your entries and save your customizing.
You now need to return to the Choose Activity screen to specify the amount for low-value assets. Click on the Back
button at the top-left side of the screen twice. The Choose Activity screen is displayed.
Specify the Amount for Low-Value Assets
In this step, you specify the maximum amount for low-value assets for your company code.
To specify the amount for low-value assets for your company code, select Specify Amount for Low-Value Assets from the displayed specification options on the screen and click the button at the bottom-right side of the screen. The Change View “Company Code Selection”: Overview screen appears, displaying the list of company codes in the system. You can call up your company code (7200) using the button at the bottom of the screen.
Select your company code and double-click the Amount for Low-Value Assets folder in the company code selection on the left pane of the screen. The Change View “Amount for Low-Value Assets”: Overview screen is displayed, as shown in Figure 3-12.
Figure 3-12. The screen where you specify the minimum and maximum amount for low-value assets
Specify your low-value amount for each depreciation area and the maximum low-value amount purchase for each depreciation area. You can use the specifications in Figure 3-12 as a guide.
Click the Enter button at the top-left side of the screen to confirm your entries and save your specifications.
Specify Rounding of Net Book Value and/or Depreciation
Two specifications are carried out in this activity. One for each company code and the other for each depreciation area. This specification will allow you to determine how the system will round decimal places for the net book values at year end and carry out the determination of automatic depreciation and replacement value for each depreciation area and each company code.
To specify rounding of decimal places in the net book value, use this menu path: IMG: Financial Accounting (New) ➤ Asset Accounting ➤ Valuation ➤ Amount Specifications (Company Code/Depreciation Area) ➤ Specify Rounding of Net Book Value and/or Depreciation. The “Document Lines: Display Messages” screen appears, displaying a list of inconsistent rounding entries that were automatically corrected by the system (see Figure 3-13).
Figure 3-13. The screen displaying corrections to be made by the system to correct the rounding of decimal places for the Net Book Value.
Click the Continue button at the bottom of the screen to accept the proposed corrections to be made by the system for each of the depreciation areas for your company code. The Information screen pops up with a message that says “Changes have to be saved first”.
Click the Continue button at the bottom-right side of the pop-up screen to initiate the saving process. The Change View “Company Code Selection”: Overview screen appears displaying the company codes.
Using the button at the bottom of screen, search for your company code (7200). Select your company code and double-click the Rounding Specifications folder on the left pane of the screen. The Change View “Rounding
Specifications “: Overview screen appears displaying the depreciation areas for your company code.
The next step is to activate the rounding specifications for each of the depreciation areas. First, select the depreciation area (01 – Book depreciation) from the displayed list of depreciation areas. Click the Details
button at the top-left side of the screen. The screen where you will carry out your rounding specifications comes up (The Change View “Rounding specifications”: Details screen).
For your rounding specifications in this activity, you should perform the following specifications:
Net book value at year end: This indicator specifies that net book value of an asset should be rounded to whole units of currency at the end of the fiscal year.
Replacement value: Select the check box for replacement value. This specification will allow the system to perform automatic rounding of fixed assets at the replacement value. The replacement value is important for cost accounting or to determine insurance values.
Arithmetic Rounding: Select the Arithmetic Value check box. This allows the system to automatically determine rounding rules. For example, 5.49 is rounded to 5 and 5.50 is rounded to 6.
Click the Enter button at the top-left side of the screen to confirm your entries and save your specifications.
Now return to the Change View “Rounding Specifications”: Details screen using the Back button at the top-left side of the screen to specify the rounding rules for the remaining depreciation areas displayed on the screen.
Specify Memo Value
In this activity, you can specify the memo value for depreciation areas and specify asset classes without a memo value for each depreciation area for your company code. The memo value is the value that is not depreciated, so that memo posting for an asset that has already exceeded its planned useful life can be made. The planned depreciation per annum is the year that the asset is acquired and it’s reduced by the memo value by the system.
You can access the screen where you can specify memo value using this menu path: IMG: Financial Accounting (New) ➤ Asset Accounting ➤ Valuation ➤ Amount Specifications (Company Code/ Depreciation Area) ➤ Specify Memo Value. You specify that asset classes without a memo value not be taken into account by using the indicator in the asset class.
We recommend that you not manage memo values, because the memo value functions are provided for the management of memo values from a previous system in FI-AA. Secondly, the system often takes the gross values into consideration and does not just adjust the remaining asset book value. This allows fully depreciated assets with a 0 book value to be disclosed legally in the balance sheet. The gross value is the asset acquisition amount and the adjusted amount. However, if you the specify memo value, it is compulsory that you make sure all the related assets have equivalent book value amounts as the memo value.
Defining the Fiscal Year
The fiscal year is normally your company code accounting year or annual accounting period. A fiscal year variant defines your company’s accounting posting periods. A proper business accounting transaction normally covers a 12-month period. The normal rule is that business transactions are assigned to the period during which the transaction took place. The fiscal year variant is customized to match your company’s fiscal year, which does not necessarily have to be the same as the normal calendar year (that is, January to December). SAP ERP is dynamic enough to fit into your company’s calendar or fiscal year. For details on how to define the fiscal year, refer to our book entitled SAP ERP Financial Accounting and Controlling Configuration and Use Management.
In this activity, you’ll make specifications for the fiscal year in asset accounting. You can define a different fiscal year for calculating depreciation in asset accounting from the FI fiscal year. You will look at how to specify other versions on company code levels and specify other versions on depreciation area levels.
To specify the fiscal year variant for asset accounting, use this menu path: Accounting (New) ➤ Asset Accounting ➤ Valuation ➤ Fiscal Year ➤ Fiscal Year Variants.
Specify Other Versions on Company Code Levels
In this step, you carry out the specifications of the fiscal year version for asset accounting on your company code only if the fiscal year you are applying to your asset accounting is different from your general ledger in FI’s fiscal year. In practice, it is rare to use different fiscal years for asset accounting and for the general ledger in FI.
To access the specification of other versions on the company code level, use this menu path: Accounting (New) ➤ Asset Accounting ➤ Valuation ➤ Fiscal Year ➤ Fiscal Year Variants ➤ Specify Other Version on Company Code Level. The Change View “FI-AA Fiscal year version for company code”: Overview screen appears. This is the screen where you assign the fiscal year variant for asset accounting to the general ledger in FI for your company code. Search for your company code from the displayed list of company codes (7200) by clicking the button at the bottom of the screen. Update the following field:
FV: This is the field where you specify the fiscal year version of your asset accounting to the general ledger in FI. This specification will allow the system to use the specified fiscal year variant for posting asset values to the general ledger in FI. We advise that you leave this field blank, which means the system will automatically use the fiscal year variant you assigned to your company code in FI.
Specify Other Versions on Depreciation Area Levels
In this step, you assign the fiscal year version to each depreciation area for your company code. This specification will allow the system to apply the specified fiscal year to each depreciation area differently from the fiscal version for your company code.
To access the screen where you perform the specification, use this menu path: Accounting (New) ➤ Asset Accounting ➤ Valuation ➤ Fiscal Year ➤ Fiscal Year Variants ➤ Specify Other Version on Depreciation Area Level. The Change View “Company codes”: Overview screen appears displaying the company codes
in the system. Search for your company code (7200) from the list of the displayed company codes. Select your company code and double-click the Fiscal Year folder on the left pane of the screen. The Change View “Fiscal Year Variant”: Overview screen appears displaying the depreciation areas defined for your company code. Update the following field:
Fyear version: Enter the fiscal year version you want to apply for posting asset values to the general ledger in FI. You can access the fiscal year versions already in the system using the depreciation area’s matchcode. We recommend that you leave this field blank for this activity. By leaving this field blank, the system will automatically use the fiscal year variant you assigned to your company code in FI.
Specifying Currencies in Asset Accounting
The currencies are represented in the SAP ERP company code currency and additional currency (parallel currency). In FI, you specify that the currency ledgers be managed for each company code. The currency for company code is often referred to as local currency or the national currency of the company code. All other currencies other than the company code currency are referred to as foreign currencies from the company code view. Foreign currencies allow you to manage ledgers in two parallel currencies (namely, group currency and hard currency) in conjunction with your company code currency. Group currency is used for consolidated financial reports and hard currency is used in countries with high inflation rates.
In this activity, you will define a depreciation area for foreign currencies for the valuation of fixed assets on the level of asset accounting and specify the use of parallel currencies for the legal consolidation of your fixed assets.
Define Depreciation Areas for Foreign Currencies
To manage asset values in a foreign currency FI-AA, it is important to define depreciation areas for foreign currencies. In asset accounting, you can manage depreciation areas in any currency specifically on group currency. This enables you to meet certain legal disclosure requirements relating to the legal consolidation of the corporate group activities and for the corporate group consolidation of financial statements.
Particularly when the valuation of assets at the group level is completely different from the company code valuation, it is recommended that you use a separate depreciation area for group currency for coordinating the group activities and for historical management of values.
To define depreciation areas for foreign currencies, use this menu path: Accounting (New) ➤ Asset Accounting ➤ Valuation ➤ Currencies ➤ Define Depreciation Areas for Foreign Currencies. The Change View “Company Code Selection”: Overview screen is displayed containing the list of company codes existing in the system.
To access the screen where you specify the currencies for each depreciation area, select your company code from the list of displayed company codes and double- click the Depreciation Area Currency folder in the Company Code selection on the left pane of the screen. The Change View “Depreciation Area Currency”: Overview screen is displayed (see Figure 3-14) containing a list of depreciation areas for your company code.
Figure 3-14. The screen where you define depreciation area for foreign currencies
Enter the currency you want to apply to each depreciation area in the Crcy (currency) field.
Click the Enter button at the top-left side of the screen to confirm your entries and save your specifications.
Specify the Use of Parallel Currencies
You can specify parallel currencies in addition to the company code currency in the asset accounting module. The foreign currency specifications can be used for the legal consolidation of fixed assets. Your specifications in this activity will allow you to post asset values within asset accounting and, at the same time, update values in several currencies. You can also make postings simultaneously in the FI document in parallel with the posted amount in the company code currency in FI. The following settings must be in place for this function to work effectively:
When these settings are in place, the system will be able to post the corresponding documents with additional values automatically from each depreciation area. It is important to note that the SAP asset accounting module also supports postings made periodically to the general ledger in FI (i.e., parallel currencies not posted online).
To define depreciation area for foreign currencies, use this menu path: Accounting (New) ➤ Asset Accounting ➤ Valuation ➤ Currencies ➤ Specify the Use of Parallel Currencies. The Determine Work Area: Entry screen pops up.
Enter the chart of depreciation you are working on (B10) in the Chart of Dep. field and click the Continue button at the bottom of the screen to proceed. The Change View “Set Up Parallel Currencies”: Overview screen is displayed containing the existing depreciation areas, as shown in Figure 3-15.
Figure 3-15. The screen where you specify the use of parallel currencies for the depreciation area
The system defaults the settings in this activity. Make sure the settings meet your requirements.
Click the Enter button at the top-left side of the screen to confirm your entries and save your specifications.
Defining Group Assets
Depreciation calculation and posting of depreciation normally takes place at the level of individual assets. In some countries it is important to carry out special calculations to meet certain tax requirements. For example, in the United States certain tax reporting requirements are compulsory. Hence, these settings will be ideal for calculating depreciation at a higher level. To achieve this objective, you can group assets together into asset groups. For example, assets can be grouped together per depreciation area.
In this activity, you will be looking how to specify depreciation areas for group assets and how to specify asset classes for group assets.
Specify Depreciation Areas for Group Assets
In this activity, you specify the depreciation areas you want to assign to a group asset. This specification will allow you to determine the depreciation areas you want to manage on the asset group level. You may want the system to copy the line items for the depreciation areas on the specified asset group of asset, when you post an asset an acquisition to the related asset, but you first have to make this assignment in the specifications for the given depreciation area in the asset master record.
To specify depreciation areas for group assets, use this IMG menu path: Accounting (New) ➤ Asset Accounting ➤ Valuation ➤ Group Assets ➤ Specify Depreciation Areas for Group Assets. The Change View “Company Code selection”: Overview screen is displayed containing the list of existing company codes.
Using the button at the bottom of the screen, search for your company code (7200). Select your company code from the displayed company code and double-click the Group Assets folder in the Company code selection to
proceed to the Change View “Group Assets”: Overview screen (see Figure 3-16).
This is where the actual assignment of group assets to depreciation areas takes place.
Figure 3-16. The screen where you determine the depreciation areas you want to apply to group assets
Specify the book depreciation areas you want to apply to group assets by selecting the asset group of your choice. You can use the screen (Figure 3-16) as a guide.
Click the Enter button at the top-left side of the screen to confirm your entries and save your specifications.
Specify Asset Classes for Group Assets
You may reserve some special assets specifically for group assets (i.e., set aside certain asset classes to be used in conjunction with group assets). The assets you specify for group assets in this activity cannot be used for normal assets.
To specify asset classes for group assets, use this menu path: Accounting (New) ➤ Asset Accounting ➤ Valuation ➤ Group Assets ➤ Specify Asset Classes for Group Assets. The Change View “Asset Class: Indicator for group assets only”: Overview screen is displayed containing the list of existing asset classes in the system. Using the button at the bottom of the screen, you can search for your asset classes. To specify certain asset classes for group assets, you should click the Class Consists Entirely of Group Assets check box shown in Figure 3-17 for the asset classes in question. For this activity, we recommend you leave the Class Consists Entirely of Group Assets check box unchecked (as shown in Figure 3-17).
Figure 3-17. The screen where you can activate asset classes for group assets
Summary
This articles looked the steps involved in the configuration of the valuation of fixed assets in asset accounting and explained the steps involved in defining depreciation areas for foreign currencies. In the process, you looked at how to set a chart of depreciation and the benefits of a chart of depreciation. You then learned about the customizing of depreciation areas. As part of the customizing steps involved in defining depreciation areas, you looked at how to specify area types for depreciation areas, specify transfer of APC values, and transfer of depreciation terms. We also showed you how to set up areas for parallel valuation using the wizard tool. Using the wizard tool, you saw how to assign a master area to a ledger group, enter an area for parallel valuation, create or select a delta area and, finally, saw the settings needed to carry out parallel valuation. We also took you through the steps involved in the amount specifications for your company code and depreciation areas by specifying maximum amount for low-value assets classes, rounding of netbook value, and specifying memo values.
As part of the valuation of fixed asset accounting configuration, we explained what fiscal year is and looked at how to define additional fiscal year variants in asset accounting at the depreciation level. You looked at how currencies are represented in the system and learned about depreciation area for foreign currencies, specifically the use of parallel currencies. Finally, you looked at how to specify depreciation areas for foreign currencies and asset classes for group assets.
In the next chapter, you will look at the configuration of depreciation in asset accounting. You will look at how to define ordinary depreciation, special depreciation unplanned depreciation, the valuation methods, and posting control. Further settings in asset depreciation include the definition of the cut-off value key, maximum base value, and the asset-specific base value percentages.
Jakarta, 23rd June 2020
Muhammad Hasan Mufid
- Define depreciation areas in asset accounting
- Determine depreciation areas in the asset class
- Set up areas for parallel valuation
- Specify maximum amount for low-value asset
- Specify rounding of net book value and/or depreciation
- Specify other versions on company code level
- Specify other versions on depreciation area level
- Define depreciation areas for foreign currencies
- Specify the use of parallel currencies
Setting the Chart of Depreciation
The treatment and disclosure requirements of depreciation and valuation of assets varies from country to country. SAP comes with various charts of depreciation in an attempt to meet individual country-specific legal disclosure requirements. Therefore, charts of depreciation are always country-specific. Often, charts of depreciation are independent of other company codes outside the same country. All company codes in the same country are assigned the same chart of depreciation, since they fall under the same legal disclosure requirements and therefore need the same chart of depreciation. For example, if Company Code 1 and Company Code 2 are UK companies, they should be assigned to the same chart of depreciation for the UK. Likewise, all company codes operating in the United States can use the same chart of depreciation specifically for the United States, and so on.
Benefits of chart of depreciation include:
- The ability to define and manage assets’ valuation and depreciation parameters in the same chart of depreciation.
- Asset valuation can be performed using parallel approaches to meet different purposes via depreciation areas such as balance sheet or cost accounting or tax purposes.
- Fiscal year adjustments can be performed to reflect certain depreciation calculations.
- Methods of valuation can be held in depreciation keys. SAP comes with most of the keys (you can change or add to these keys).
To set chart of depreciation, use this menu path: IMG: Financial Accounting (New) ➤ Asset Accounting ➤ Valuation ➤ Set Chart of Depreciation. The Chart of Depreciation Selection screen is displayed in Figure 3-1.
Figure 3-1. Chart of depreciation selection screen
Enter your chart of depreciation (B10) in the ChDep field (this is the chart of depreciation key you defined in Chapter 1 in the Copy Reference Chart of Depreciation/Depreciation Areas section). Then click the Enter button at the bottom-left side of the screen. This will take you back to the Display IMG screen. In the status bar at the bottom of the screen, the system will notify you that the chart of depreciation B10 was set.
Depreciation Areas
Depreciation was explained in depth in Chapter 1. In this step you will define depreciation areas for your asset accounting. During this customizing activity, you will also specify area type, specify transfer of APC values, specify transfer of depreciation terms, and set up areas for parallel valuation for your asset accounting according to IAS/IFRS standard.
Depreciation areas are important because they allow you to calculate various asset values in parallel for individual fixed assets for different purposes. For example, you may want to generate values for the balance sheet, which may be different from costing accounting for internal management purposes. The depreciation terms and values for asset valuation are managed in the depreciation area. You can create up to 99 depreciation areas in SAP ERP. Depreciation areas are grouped in the chart of depreciation according to country-specific requirements.
Defining Depreciation Areas
In this step, you define the depreciation areas and specify the area type that will allow you to calculate asset values in parallel for each asset for various purposes. SAP comes with various county-specific depreciation areas you can adopt and adjust to meet your requirements.
- To define depreciation areas, use this menu path: IMG: Financial Accounting (New) ➤ Asset Accounting ➤ Valuation ➤ Depreciation Areas ➤ Define Depreciation Areas. The Choose Activity screen pops up with the option to define depreciation areas or specify area type (see Figure 3-2).
Figure 3-2. The choose activity screen
2. Select Define Depreciation Areas and click the button at the bottom- right side of the screen. The Determine Work Area: Entry screen pops up. This screen will allow you to specify the chart of depreciation you want to define for your depreciation areas.
button at the bottom- right side of the screen. The Determine Work Area: Entry screen pops up. This screen will allow you to specify the chart of depreciation you want to define for your depreciation areas.
3. Enter your chart of depreciation (B10) in the Chart of Dep. field and click the Continue button at the bottom of the screen. You’ll proceed to the screen where you will carry out the specification of the depreciation areas for your chart of depreciation. The Change View “Define Depreciation Areas”: Overview screen appears (see Figure 3-3), showing the associated depreciation areas.
Continue button at the bottom of the screen. You’ll proceed to the screen where you will carry out the specification of the depreciation areas for your chart of depreciation. The Change View “Define Depreciation Areas”: Overview screen appears (see Figure 3-3), showing the associated depreciation areas.Figure 3-3. The Change View “Define Depreciation Areas”: Screen
Note You may not need to carry out any specifications in this activity, because the standard Chart of depreciation (1GB) for your country you copied in Chapter 1 contains the corresponding settings needed for the settings in this step.
4. Check the displayed chart of depreciation to see if it meets your requirements. You may also want to delete unwanted depreciation areas. To delete any unwanted depreciation areas, select the depreciation area you want to delete from the list of the displayed depreciation areas and click the Delete 
button at the top-left side of the screen. Then save your depreciation area.
Specify Area Type
SAP comes with standardization of depreciation areas you can assign to your depreciation area. You can access the list of standardization of depreciation areas supplied by SAP using the matchcode by the Type field for each depreciation area. The specification of area type will allow you to determine the valuation method applicable to each depreciation area. For example, when you specify the standardization of depreciation area 18 (balance sheet according to other guidelines, such as IAS) for Book depreciation area 01, the system will apply this specification strictly to depreciation area 01. Likewise, when you specify the standardization of depreciation area 04 (Net Worth Valuation) to a given depreciation area, the system will use the net worth in the valuation of an asset for the specified depreciation area.
Figure 3-4. The Change View “”Actual Depreciation Areas: Area Type””: Overview screen
button at the top-left side of the screen. Then save your depreciation area. Specify Area Type
SAP comes with standardization of depreciation areas you can assign to your depreciation area. You can access the list of standardization of depreciation areas supplied by SAP using the matchcode by the Type field for each depreciation area. The specification of area type will allow you to determine the valuation method applicable to each depreciation area. For example, when you specify the standardization of depreciation area 18 (balance sheet according to other guidelines, such as IAS) for Book depreciation area 01, the system will apply this specification strictly to depreciation area 01. Likewise, when you specify the standardization of depreciation area 04 (Net Worth Valuation) to a given depreciation area, the system will use the net worth in the valuation of an asset for the specified depreciation area.
- The screen where you can specify area type for your depreciation area can be accessed on the Choose Activity screen shown previously in Figure 3-2 by double-clicking Specify Area Type from the displayed list on the screen. The Chart of Depreciation Selection screen then pops up. This screen will allow you to specify the chart of depreciation you are working on.
- Enter your chart of depreciation (BT 10) in the Chart of Depreciation (ChDep) field.
- Click the Continue
Figure 3-4. The Change View “”Actual Depreciation Areas: Area Type””: Overview screen
Note on this screen, you will notice that the area types are defaulted. You can overwrite them by entering the area types of your choice in the type field.
You may not need to carry out any specifications in this activity because when you copied the standard chart of depreciation (1GB) for your country in Chapter 1, the area types for each depreciation areas were copied with the chart of depreciation.
Specify Transfer of APC Values
The standard system copies the asset balance sheet values from depreciation area 01 to all other depreciation areas during posting. (The only exceptions to this rule are areas for revaluation and for investment support, as well as derived depreciation areas.) Therefore, you only need to carry out this step if you want to copy posting values from a different depreciation area, not depreciation area 01.
In this step, you define transfer rules for posting acquisition values of depreciation areas. These transfer rules let you ensure that certain depreciation areas have identical acquisition values. For example, you can ensure that the depreciation areas holding foreign currency values use the same values in local currency.
In your customizing, you must ensure that of your country-specific chart of depreciation with the appropriate depreciation areas are defined based on the standard required transfer rules.
- To go to the screen where you specify the transfer of APC values, use this menu path: IMG: Financial Accounting (New) ➤ Asset Accounting ➤ Valuation ➤ Depreciation Areas ➤ Specify Transfer of APC Values. The Change View “Depreciation areas: Rules for value takeover”: Overview screen appears containing areas and chart of depreciation areas (see Figure 3-5).
Figure 3-5. The Change View “Depreciation Areas: Rules for Value Takeover”: Overview screen
- Update the following fields:
Note depreciation area 31 (the consolidated balance sheet in group currency) should show depreciation area 30 (the consolidated balance sheet in local currency), so that they are valued uniformly to the book depreciation area. the only difference is the currency.
Ident. By activating the identical check box, this will ensure that depreciation areas manage identical acquisition values.
Note You may not need to carry out any specifications in this activity because when you copied the standard chart of depreciation for your country (1GB) in Chapter 1, the acquisition value transfer rules were copied for each depreciation areas with the chart of depreciation.
2. Click the Enter button at the top-left side of the screen to confirm your entries and save your acquisition values’ transfer rules.
button at the top-left side of the screen to confirm your entries and save your acquisition values’ transfer rules.
Specify Transfer of Depreciation Terms
The specifications you carry out in this step will allow you to define the transfer rules for the depreciation terms of the depreciation areas assigned to your chart of depreciation. This will allow you to determine the depreciation area from which the terms are copied. You have the option of specifying whether the depreciation terms for a depreciation area are optional or mandatory. The importance of specifying transfer of depreciation terms is that it allows you to maintain identical or uniform depreciation for the specified depreciation areas, as you will not be able to maintain other depreciation terms for the copying depreciation areas in the asset master record.
As part of your customizing, you should ensure that the depreciation areas holding foreign currency values use the same values in the local currency.
The specifications you carry out in this step will allow you to define the transfer rules for the depreciation terms of the depreciation areas assigned to your chart of depreciation. This will allow you to determine the depreciation area from which the terms are copied. You have the option of specifying whether the depreciation terms for a depreciation area are optional or mandatory. The importance of specifying transfer of depreciation terms is that it allows you to maintain identical or uniform depreciation for the specified depreciation areas, as you will not be able to maintain other depreciation terms for the copying depreciation areas in the asset master record.
As part of your customizing, you should ensure that the depreciation areas holding foreign currency values use the same values in the local currency.
- To go to the screen where you specify the transfer of depreciation terms, use this menu path: IMG: Financial Accounting (New) ➤ Asset Accounting ➤ Valuation ➤ Depreciation Areas ➤ Specify Transfer of Depreciation terms. The Change View “Depreciation Areas: Rules for Takeover of deprec. Terms”: screen appears containing areas and chart of depreciation areas (see Figure 3-6).
Figure 3-6. The Change View “Depreciation Areas: Rules for Takeover of Deprec. Terms”: screen
Update the following fields:
TTr: When you enter the depreciation area 01 (the primary depreciation area) in the depreciation term transfer field for other depreciation areas, the system will automatically copy the depreciation terms from area 01 to the specified areas.
Note the depreciation area 31 for consolidate balance sheet in group currency should show the depreciation area 30, so that they are valued uniformly to the book depreciation area. the only difference is the currency.
Identical: The check box you activate will ensure that depreciation areas are managed in identical depreciation terms.
Note You may not need to carry out any specifications in this activity because the standard chart of depreciation (1GB) for your country in Chapter 1. the area types for each depreciation area you copied holds the transfer rules for the depreciation terms of the depreciation areas.
Click the Enter
button at the top-left side of the screen to confirm your entries and save your depreciation terms transfer rules. Setting Up Areas for Parallel Valuation
When setting parallel valuation you have to create additional accounting principles for one real and one derived depreciation area in asset accounting. The derived depreciation makes it possible to determine new asset value from a predetermined asset value. The derived depreciation applies mathematical formulas to ensure that the values of the asset subledger are the same in the general ledger accounting.
In this activity, you set up parallel valuation to meet certain accounting principles (for example, IAS or US GAAP) and disclosure requirements using the wizard tool. The wizard helps you define parallel valuation in asset accounting when you use the new general ledger in conjunction with the ledger approach in the new general ledger. You may not necessarily need to use the wizard if you have been using the account approach. You can also perform your settings manually instead of using the wizard.
To create valuation areas for parallel valuation, follow this menu path: IMG: Financial Accounting (New) ➤ Asset Accounting ➤ Valuation ➤ Depreciation Areas ➤ Set Up Areas for Parallel Valuation. The Chart of Depreciation Selection screen pops up.
Specify your chart of depreciation (B10) and click the Continue or Enter
buttons at the bottom-left side of the screen to proceed to the wizard tool (the Set Up Parallel Valuation screen is shown in Figure 3-7). Figure 3-7. The initial wizard screen that will help you set up parallel valuation in asset accounting
Note Carefully read the note on the screen for further instructions on how to customize the settings for parallel valuation in asset accounting.
Click the Continue
button at the bottom of the screen to assign a master area to the ledger group. The Control of Leading area of the Set Up Parallel Valuation screen comes up with this message:“Determine the chart of depreciation to be processed. For the leading depreciation area, you have to enter a ledger group that contains the leading ledger. If a ledger group with leading ledger is already set up, this is proposed. You change this assignment.”
The list of activities you will set are displayed on the left side of the screen. Your chart of depreciation (B10) and the depreciation area (the master depreciation area 01) are defaulted by the system. Update the Ledger Group field by entering the leading ledger (0L).
The bottom line is that you want to use the accounting principle LGAP (Local GAP) for the ledger group that contains the leading ledger. At the same time, use the accounting principle IAS (International Accounting Standards) for another ledger group for real and derived depreciation areas and assign the ledger group to them.
To enter areas for parallel valuation, click the Continue
button again to proceed to the Control of Area for Parallel Valuation section of the screen. Update the following fields:
Depreciation area: Enter the depreciation area (30) you want to use for your real depreciation area in this field.
Ledger group: Enter the code (L5) for IAS in this field.
To create or select a delta area, click the
button again. The information screen pops up with the information. Click the Enter
button at the bottom-right side of the pop-up screen to continue customizing. The Create Delta Area? section of the Set Up Parallel Valuation screen comes up. This screen gives you the option to create new depreciation area or to using an existing depreciation area. Since in this activity you want to create the derived depreciation area, you will be creating a new depreciation area.Select the Create New Depreciation Areas option and then click the
button. The Control of the Delta Area of the Set Up Parallel Valuation screen is displayed (see Figure 3-8). This is where you define your derived depreciation area.Figure 3-8. The wizard screen where you specify the area for posting APC differences between the leading depreciation area and parallel valuation in a ledger group
Update the following fields:
Depreciation area: Enter a two-digit character you want to use as your derived depreciation area code (33) in this field and enter a short description that best describes your depreciation area. For example, IAS support.
Ledger group: The ledger group (L5) is defaulted by the system. This is inherited from the settings on the Control of Area for Parallel Valuation section in the preceding setting.
Post in G/L: The system defaults how APC should be copied to the assigned ledger group in this field. You can display the list of how the APC values should be copied to the assigned ledger group. However, we recommend that you stick to the default option (Area Post APC Only), as posting control is not allowed in the derived area.
Click the
button at the bottom of the screen and the Overview section of the Set Up Parallel Valuation screen comes up displaying your settings. See Figure 3-9. Figure 3-9. The wizard screen where you check your parallel valuation settings
If you’re satisfied with the settings, click the
button. The complete section of the Set Up Parallel Valuation screen comes up with the following information “When you choose Complete, the settings you made are updated to the database.”The following additional modifications are made in the background:
Posting control for the area for parallel valuation is set to Post Depreciation. The delta area updates real APC differences (no special depreciation logic). Both depreciation areas use the same accounts as the master depreciation area. In certain cases, it might be necessary to change the intervals for depreciation posting and the other posting settings (transaction OAYR) of the depreciation area for parallel valuation in company code selection when defining posting rules. In addition, you should use report RAACCOBJ01 or transaction AACCOBJ to check if the account assignment types are maintained as you want for both depreciation areas.
Click the
button at the bottom of the screen. The Display IMG screen is displayed with a notification at the status bar at the bottom of the screen that the specification was saved. Determining Depreciation Areas in the Asset Class
In this activity, you maintain the depreciation term for your asset class in the depreciation class. An asset in the asset class uses the same depreciation terms. The depreciation terms contain the depreciation key and the asset’s useful life. The depreciation key holds the values needed for determining depreciation amount (depreciation key will be discussed in great detail in Chapter 4). The asset useful life is the estimated period an asset will be used for. Importantly, when you have maintained depreciation terms in the asset class, you do not have to maintain it again in the asset master record, rather they can be default values from the asset class.
To determine depreciation areas in the asset class, use this menu path: IMG: Financial Accounting (New) ➤ Asset Accounting ➤ Valuation ➤ Determine Depreciation Areas in the Asset Class. The Change View “Asset class”: Overview screen is displayed. This screen contains the list of the asset classes.
Using the
button at the bottom-left side of the screen, search for your asset classes. Select the asset class you want to determine depreciation area (AS3000 Plant & Machinery) and double-click the Depreciation areas folder on the left pane of the screen. This will take you to the Change View “Depreciation Areas”: Overview screen (see Figure 3-10). This screen contains the depreciation areas in the chart of depreciation that you assigned to the asset class for Plant and Machinery. On this screen, you will activate the depreciation areas you want to assign to the depreciation key and the asset’s useful life, and specify the screen layout rule you are applying to each depreciation area. The screen layout dictates the field status in the asset master record. For example, the screen layout determines whether the input fields are required, are optional entry fields, or are suppressed.Figure 3-10. The screen where you determine depreciation areas in the asset class
Update the following items:
Deact: Normally, the depreciation area is deactivated by the system automatically, so you should activate the book depreciation that you want to apply the depreciation terms. For this activity, activate the following depreciation areas by removing unchecking their check boxes:
- 01 Book depreciation 15 Tax balance sheet 20 Cost accounting
- 41 Investment subsidy
- 60 Book depreciation
■ Note after activating the depreciation areas, specify the layout rules first before you specify the depreciation key, the useful life of the asset, and the index. after you specify the screen layout rule and press enter on your keyboard, other fields will be released for input.
- DepKy: Enter the depreciation key you want the depreciation term to apply to each of the depreciation area in your asset class. SAP comes with standard depreciation keys you can use. You can access the list of supplied depreciation keys by SAP by using the matchcode by the depreciation key field. It is also possible to define your own depreciation key. We will be looking at defining depreciation keys and the various forms of depreciation methods in Chapter 4 when you learn to define the depreciation key.
- Use: Enter the useful economic life of the asset in this field. For example, it is assumed that you will use an asset for 10 years, after which point you will discontinue its use.
- Layout: Specify the screen layout (1000). SAP comes with a standard screen layout that you can use.
■ Tip use the specifications in figure 3-10 to customize your depreciation area in the asset class.
Click the Enter
button at the top-left side of the screen to confirm your entries and save your customizing.Deactivating the Asset Class for the Chart of Depreciation
This function serves as control mechanism, as it allows you to lock asset classes for the chart of depreciation. For example, the asset class that you do not want to use can be locked and then unlocked at any time.
To deactivate asset class for chart of depreciation, use this menu path: IMG: Financial Accounting (New) ➤ Asset Accounting ➤ Valuation ➤ Determine Depreciation Areas in the Asset Class. The Change View “Lock Asset Class for Chart of Depreciation”: Overview screen is comes up, displaying the list of asset classes in the system. Using the position button at the bottom of the screen, search for the asset class that you want to lock. Deactivate it by making sure that the Lock check box that’s assigned to the asset class for the chart of depreciation is checked.
■ Note You only deactivate an asset class for the chart of depreciation if you want to prevent it from being used in the chart of depreciation.
Amount Specifications (Company Code/Depreciation Area)
In this activity, you will customize these specifications for your company code and the depreciation area:
- Specify the maximum amount for low-value assets and asset classes
- Round the net book value and/or depreciation
- Specify memo value
Specify the Maximum Amount for Low-Value Assets and Asset Classes
In this step, you will carry out two specifications. First, you will specify what you consider to be the maximum amount for low-value assets (LVAs) and the maximum amount for LVAs for your company code. Based on your specifications, when you post asset acquisitions, the system will automatically check the maximum amount for LVAs against the value posted for LVAs.
To specify the maximum amount for LVAs and asset classes, use this menu path: IMG: Financial Accounting (New) ➤ Asset Accounting ➤ Valuation ➤ Amount Specifications (Company Code/ Depreciation Area) ➤ Specify Max. Amount for Low-Value Assets and Asset Classes. The Choose Activity screen appears, displaying the two specification options—Specify LVA Asset Classes and Specify Amount for Low Value Assets.
Specify LVA Asset Classes
The specification you carry out in this step will allow the system to check for low-value asset amounts and perform quantity checks.
On the Choose Activity screen, select Specify LVA Asset Classes from the displayed options and click the
button at the bottom-right side of the screen. The Change View “Asset Class”: Overview screen appears, displaying the list of asset classes in the system. Using the button at the bottom of the screen, call up the asset class for the LVA asset (AS7000) that you defined in Chapter 1 in the “Asset Classes” section. Select your asset class and double-click the Low-Val. Asset check in the asset class, which is on the left pane of the screen. The Change View “Low-Val. Asset Check”: Overview screen is displayed, as shown in Figure 3-11.
Figure 3-11. The screen where you specify how you want the system to carry out the system maximum amount check for low-value assets
Specify how you want the system to carry out the maximum amount check for the low-value asset. SAP comes with a standard low-val. check that you can choose from:
0 - No maximum amount check: When you use this specification, no maximum check will be carried out by the system.
1 - Value based maximum amount check: When you use this specification, the system will carry out a low-value asset check based on the asset acquisition amount.
2 - Check maximum amount with quantity: When you use this specification, the system will perform a low-value asset check based on the asset quantity.
Click the Enter
button at the top-left side of the screen to confirm your entries and save your customizing. You now need to return to the Choose Activity screen to specify the amount for low-value assets. Click on the Back
button at the top-left side of the screen twice. The Choose Activity screen is displayed. Specify the Amount for Low-Value Assets
In this step, you specify the maximum amount for low-value assets for your company code.
To specify the amount for low-value assets for your company code, select Specify Amount for Low-Value Assets from the displayed specification options on the screen and click the
button at the bottom-right side of the screen. The Change View “Company Code Selection”: Overview screen appears, displaying the list of company codes in the system. You can call up your company code (7200) using the button at the bottom of the screen. Select your company code and double-click the Amount for Low-Value Assets folder in the company code selection on the left pane of the screen. The Change View “Amount for Low-Value Assets”: Overview screen is displayed, as shown in Figure 3-12.
Figure 3-12. The screen where you specify the minimum and maximum amount for low-value assets
Specify your low-value amount for each depreciation area and the maximum low-value amount purchase for each depreciation area. You can use the specifications in Figure 3-12 as a guide.
Click the Enter
button at the top-left side of the screen to confirm your entries and save your specifications. Specify Rounding of Net Book Value and/or Depreciation
Two specifications are carried out in this activity. One for each company code and the other for each depreciation area. This specification will allow you to determine how the system will round decimal places for the net book values at year end and carry out the determination of automatic depreciation and replacement value for each depreciation area and each company code.
To specify rounding of decimal places in the net book value, use this menu path: IMG: Financial Accounting (New) ➤ Asset Accounting ➤ Valuation ➤ Amount Specifications (Company Code/Depreciation Area) ➤ Specify Rounding of Net Book Value and/or Depreciation. The “Document Lines: Display Messages” screen appears, displaying a list of inconsistent rounding entries that were automatically corrected by the system (see Figure 3-13).
Figure 3-13. The screen displaying corrections to be made by the system to correct the rounding of decimal places for the Net Book Value.
Click the Continue
button at the bottom of the screen to accept the proposed corrections to be made by the system for each of the depreciation areas for your company code. The Information screen pops up with a message that says “Changes have to be saved first”. Click the Continue
button at the bottom-right side of the pop-up screen to initiate the saving process. The Change View “Company Code Selection”: Overview screen appears displaying the company codes. Using the
button at the bottom of screen, search for your company code (7200). Select your company code and double-click the Rounding Specifications folder on the left pane of the screen. The Change View “Rounding Specifications “: Overview screen appears displaying the depreciation areas for your company code.
The next step is to activate the rounding specifications for each of the depreciation areas. First, select the depreciation area (01 – Book depreciation) from the displayed list of depreciation areas. Click the Details
button at the top-left side of the screen. The screen where you will carry out your rounding specifications comes up (The Change View “Rounding specifications”: Details screen). For your rounding specifications in this activity, you should perform the following specifications:
Net book value at year end: This indicator specifies that net book value of an asset should be rounded to whole units of currency at the end of the fiscal year.
Replacement value: Select the check box for replacement value. This specification will allow the system to perform automatic rounding of fixed assets at the replacement value. The replacement value is important for cost accounting or to determine insurance values.
Arithmetic Rounding: Select the Arithmetic Value check box. This allows the system to automatically determine rounding rules. For example, 5.49 is rounded to 5 and 5.50 is rounded to 6.
Click the Enter
button at the top-left side of the screen to confirm your entries and save your specifications. Now return to the Change View “Rounding Specifications”: Details screen using the Back
button at the top-left side of the screen to specify the rounding rules for the remaining depreciation areas displayed on the screen. Specify Memo Value
In this activity, you can specify the memo value for depreciation areas and specify asset classes without a memo value for each depreciation area for your company code. The memo value is the value that is not depreciated, so that memo posting for an asset that has already exceeded its planned useful life can be made. The planned depreciation per annum is the year that the asset is acquired and it’s reduced by the memo value by the system.
You can access the screen where you can specify memo value using this menu path: IMG: Financial Accounting (New) ➤ Asset Accounting ➤ Valuation ➤ Amount Specifications (Company Code/ Depreciation Area) ➤ Specify Memo Value. You specify that asset classes without a memo value not be taken into account by using the indicator in the asset class.
We recommend that you not manage memo values, because the memo value functions are provided for the management of memo values from a previous system in FI-AA. Secondly, the system often takes the gross values into consideration and does not just adjust the remaining asset book value. This allows fully depreciated assets with a 0 book value to be disclosed legally in the balance sheet. The gross value is the asset acquisition amount and the adjusted amount. However, if you the specify memo value, it is compulsory that you make sure all the related assets have equivalent book value amounts as the memo value.
Defining the Fiscal Year
The fiscal year is normally your company code accounting year or annual accounting period. A fiscal year variant defines your company’s accounting posting periods. A proper business accounting transaction normally covers a 12-month period. The normal rule is that business transactions are assigned to the period during which the transaction took place. The fiscal year variant is customized to match your company’s fiscal year, which does not necessarily have to be the same as the normal calendar year (that is, January to December). SAP ERP is dynamic enough to fit into your company’s calendar or fiscal year. For details on how to define the fiscal year, refer to our book entitled SAP ERP Financial Accounting and Controlling Configuration and Use Management.
In this activity, you’ll make specifications for the fiscal year in asset accounting. You can define a different fiscal year for calculating depreciation in asset accounting from the FI fiscal year. You will look at how to specify other versions on company code levels and specify other versions on depreciation area levels.
To specify the fiscal year variant for asset accounting, use this menu path: Accounting (New) ➤ Asset Accounting ➤ Valuation ➤ Fiscal Year ➤ Fiscal Year Variants.
Specify Other Versions on Company Code Levels
In this step, you carry out the specifications of the fiscal year version for asset accounting on your company code only if the fiscal year you are applying to your asset accounting is different from your general ledger in FI’s fiscal year. In practice, it is rare to use different fiscal years for asset accounting and for the general ledger in FI.
To access the specification of other versions on the company code level, use this menu path: Accounting (New) ➤ Asset Accounting ➤ Valuation ➤ Fiscal Year ➤ Fiscal Year Variants ➤ Specify Other Version on Company Code Level. The Change View “FI-AA Fiscal year version for company code”: Overview screen appears. This is the screen where you assign the fiscal year variant for asset accounting to the general ledger in FI for your company code. Search for your company code from the displayed list of company codes (7200) by clicking the
button at the bottom of the screen. Update the following field:FV: This is the field where you specify the fiscal year version of your asset accounting to the general ledger in FI. This specification will allow the system to use the specified fiscal year variant for posting asset values to the general ledger in FI. We advise that you leave this field blank, which means the system will automatically use the fiscal year variant you assigned to your company code in FI.
Specify Other Versions on Depreciation Area Levels
In this step, you assign the fiscal year version to each depreciation area for your company code. This specification will allow the system to apply the specified fiscal year to each depreciation area differently from the fiscal version for your company code.
To access the screen where you perform the specification, use this menu path: Accounting (New) ➤ Asset Accounting ➤ Valuation ➤ Fiscal Year ➤ Fiscal Year Variants ➤ Specify Other Version on Depreciation Area Level. The Change View “Company codes”: Overview screen appears displaying the company codes
in the system. Search for your company code (7200) from the list of the displayed company codes. Select your company code and double-click the Fiscal Year folder on the left pane of the screen. The Change View “Fiscal Year Variant”: Overview screen appears displaying the depreciation areas defined for your company code. Update the following field:
Fyear version: Enter the fiscal year version you want to apply for posting asset values to the general ledger in FI. You can access the fiscal year versions already in the system using the depreciation area’s matchcode. We recommend that you leave this field blank for this activity. By leaving this field blank, the system will automatically use the fiscal year variant you assigned to your company code in FI.
Specifying Currencies in Asset Accounting
The currencies are represented in the SAP ERP company code currency and additional currency (parallel currency). In FI, you specify that the currency ledgers be managed for each company code. The currency for company code is often referred to as local currency or the national currency of the company code. All other currencies other than the company code currency are referred to as foreign currencies from the company code view. Foreign currencies allow you to manage ledgers in two parallel currencies (namely, group currency and hard currency) in conjunction with your company code currency. Group currency is used for consolidated financial reports and hard currency is used in countries with high inflation rates.
In this activity, you will define a depreciation area for foreign currencies for the valuation of fixed assets on the level of asset accounting and specify the use of parallel currencies for the legal consolidation of your fixed assets.
Define Depreciation Areas for Foreign Currencies
To manage asset values in a foreign currency FI-AA, it is important to define depreciation areas for foreign currencies. In asset accounting, you can manage depreciation areas in any currency specifically on group currency. This enables you to meet certain legal disclosure requirements relating to the legal consolidation of the corporate group activities and for the corporate group consolidation of financial statements.
Particularly when the valuation of assets at the group level is completely different from the company code valuation, it is recommended that you use a separate depreciation area for group currency for coordinating the group activities and for historical management of values.
To define depreciation areas for foreign currencies, use this menu path: Accounting (New) ➤ Asset Accounting ➤ Valuation ➤ Currencies ➤ Define Depreciation Areas for Foreign Currencies. The Change View “Company Code Selection”: Overview screen is displayed containing the list of company codes existing in the system.
To access the screen where you specify the currencies for each depreciation area, select your company code from the list of displayed company codes and double- click the Depreciation Area Currency folder in the Company Code selection on the left pane of the screen. The Change View “Depreciation Area Currency”: Overview screen is displayed (see Figure 3-14) containing a list of depreciation areas for your company code.
Figure 3-14. The screen where you define depreciation area for foreign currencies
Enter the currency you want to apply to each depreciation area in the Crcy (currency) field.
Click the Enter
button at the top-left side of the screen to confirm your entries and save your specifications.Specify the Use of Parallel Currencies
You can specify parallel currencies in addition to the company code currency in the asset accounting module. The foreign currency specifications can be used for the legal consolidation of fixed assets. Your specifications in this activity will allow you to post asset values within asset accounting and, at the same time, update values in several currencies. You can also make postings simultaneously in the FI document in parallel with the posted amount in the company code currency in FI. The following settings must be in place for this function to work effectively:
- The parallel currency you assigned to your company code must have the same currency type and the same currency of the depreciation area.
- The depreciation terms and APC values managed in the depreciation area must be identical to the book depreciation.
When these settings are in place, the system will be able to post the corresponding documents with additional values automatically from each depreciation area. It is important to note that the SAP asset accounting module also supports postings made periodically to the general ledger in FI (i.e., parallel currencies not posted online).
To define depreciation area for foreign currencies, use this menu path: Accounting (New) ➤ Asset Accounting ➤ Valuation ➤ Currencies ➤ Specify the Use of Parallel Currencies. The Determine Work Area: Entry screen pops up.
Enter the chart of depreciation you are working on (B10) in the Chart of Dep. field and click the Continue
button at the bottom of the screen to proceed. The Change View “Set Up Parallel Currencies”: Overview screen is displayed containing the existing depreciation areas, as shown in Figure 3-15. Figure 3-15. The screen where you specify the use of parallel currencies for the depreciation area
The system defaults the settings in this activity. Make sure the settings meet your requirements.
Click the Enter
button at the top-left side of the screen to confirm your entries and save your specifications.Defining Group Assets
Depreciation calculation and posting of depreciation normally takes place at the level of individual assets. In some countries it is important to carry out special calculations to meet certain tax requirements. For example, in the United States certain tax reporting requirements are compulsory. Hence, these settings will be ideal for calculating depreciation at a higher level. To achieve this objective, you can group assets together into asset groups. For example, assets can be grouped together per depreciation area.
In this activity, you will be looking how to specify depreciation areas for group assets and how to specify asset classes for group assets.
Specify Depreciation Areas for Group Assets
In this activity, you specify the depreciation areas you want to assign to a group asset. This specification will allow you to determine the depreciation areas you want to manage on the asset group level. You may want the system to copy the line items for the depreciation areas on the specified asset group of asset, when you post an asset an acquisition to the related asset, but you first have to make this assignment in the specifications for the given depreciation area in the asset master record.
To specify depreciation areas for group assets, use this IMG menu path: Accounting (New) ➤ Asset Accounting ➤ Valuation ➤ Group Assets ➤ Specify Depreciation Areas for Group Assets. The Change View “Company Code selection”: Overview screen is displayed containing the list of existing company codes.
Using the
button at the bottom of the screen, search for your company code (7200). Select your company code from the displayed company code and double-click the Group Assets folder in the Company code selection to proceed to the Change View “Group Assets”: Overview screen (see Figure 3-16).
This is where the actual assignment of group assets to depreciation areas takes place.
Figure 3-16. The screen where you determine the depreciation areas you want to apply to group assets
Specify the book depreciation areas you want to apply to group assets by selecting the asset group of your choice. You can use the screen (Figure 3-16) as a guide.
Click the Enter
button at the top-left side of the screen to confirm your entries and save your specifications.Specify Asset Classes for Group Assets
You may reserve some special assets specifically for group assets (i.e., set aside certain asset classes to be used in conjunction with group assets). The assets you specify for group assets in this activity cannot be used for normal assets.
To specify asset classes for group assets, use this menu path: Accounting (New) ➤ Asset Accounting ➤ Valuation ➤ Group Assets ➤ Specify Asset Classes for Group Assets. The Change View “Asset Class: Indicator for group assets only”: Overview screen is displayed containing the list of existing asset classes in the system. Using the
button at the bottom of the screen, you can search for your asset classes. To specify certain asset classes for group assets, you should click the Class Consists Entirely of Group Assets check box shown in Figure 3-17 for the asset classes in question. For this activity, we recommend you leave the Class Consists Entirely of Group Assets check box unchecked (as shown in Figure 3-17).Figure 3-17. The screen where you can activate asset classes for group assets
Summary
This articles looked the steps involved in the configuration of the valuation of fixed assets in asset accounting and explained the steps involved in defining depreciation areas for foreign currencies. In the process, you looked at how to set a chart of depreciation and the benefits of a chart of depreciation. You then learned about the customizing of depreciation areas. As part of the customizing steps involved in defining depreciation areas, you looked at how to specify area types for depreciation areas, specify transfer of APC values, and transfer of depreciation terms. We also showed you how to set up areas for parallel valuation using the wizard tool. Using the wizard tool, you saw how to assign a master area to a ledger group, enter an area for parallel valuation, create or select a delta area and, finally, saw the settings needed to carry out parallel valuation. We also took you through the steps involved in the amount specifications for your company code and depreciation areas by specifying maximum amount for low-value assets classes, rounding of netbook value, and specifying memo values.
As part of the valuation of fixed asset accounting configuration, we explained what fiscal year is and looked at how to define additional fiscal year variants in asset accounting at the depreciation level. You looked at how currencies are represented in the system and learned about depreciation area for foreign currencies, specifically the use of parallel currencies. Finally, you looked at how to specify depreciation areas for foreign currencies and asset classes for group assets.
In the next chapter, you will look at the configuration of depreciation in asset accounting. You will look at how to define ordinary depreciation, special depreciation unplanned depreciation, the valuation methods, and posting control. Further settings in asset depreciation include the definition of the cut-off value key, maximum base value, and the asset-specific base value percentages.
Jakarta, 23rd June 2020
Muhammad Hasan Mufid
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