Can you please Provide details of Asset Asset Accounting in SAP?

Asset Accounting in SAP
 Asset Accounting records all accounting transactions relating to the management of assets.
It consists of the following
- Asset Master Data
- Accounting Transactions in Asset Accounting
- Closing Procedure in Asset Accounting
 Each asset belongs to a company code and business area. All postings made for the asset (acquisitions, retirements, depreciation, etc.) are applied in the assigned company code and business area.
 Additionally, you can assign the asset to various CO objects (cost center, internal order, activity type) and logistic organizational units (for selection purposes only).

Asset Class
 The asset class is the main criteria for defining the asset. Each asset has to be assigned to an asset class. In the asset class, you can define certain control parameters and default values for depreciation and other master data.
 Assets that do not appear in the same line item of the balance sheet (such as buildings and equipment) have to be assigned to different asset classes. Additionally, there is at least one special asset class for assets under construction and one for low-value assets. The asset classes used by IDES for this are:
 4000 For assets under construction
 5000 For low-value assets
 Note 1: You can also create asset classes for intangible assets and leased assets. There are functions available for processing leases.
 Note 2: The application component PM (Plant Maintenance) is used for the technical management of assets. The application component TR (Treasury) is used for managing financial assets.

Asset Valuation
 It often occurs that asset balances and transactions need to be valuated differently for various purposes. You may, for example, use various valuation methods for:
 Financial statements based on regional requirements
 Financial statements for tax purposes (if a different deprecation method is allowed)
 Controlling (costing)
 Parallel accounting methods for group financial statements (per IAS, US-GAAP, etc.)
 In order to keep more than one valuation basis, so-called depreciation areas are kept in the R/3 System. Separate transaction figures are kept in each area:
 per asset and depreciation area
 For individual value components such as balances, depreciation, remaining book value, etc.
 Various data is stored in the asset master data for depreciation areas and controls the calculation of normal and special depreciation for the special depreciation area. You can thus use a different depreciation method for general business procedures than the depreciation method required by the tax authorities.

Integration of Asset Accounting with General Ledger
 Since the depreciation areas in asset accounting do not exist in the general ledger, these values have to be posted to various G/L accounts in the general ledger. The G/L accounts are then used in various financial statement versions (financial statements per GAAP, financial statements for tax authorities, group financial statements, and so on).
 These G/L accounts are:
 Balance sheet accounts, which record the adjustments to the asset's value
 Depreciation accounts for depreciation and appreciation
 The assignment of the G/L accounts to various valuation areas is saved in a single account assignment key, which is entered in the asset master record. Assets of the same asset class all have the same account assignment key, that is, their values are all posted to the same reconciliation accounts.
 Note: Many companies prefer to keep parallel valuations in Asset Accounting (either statistically or for information purposes) and not in the general ledger. In this case, you do not need to make the related G/L account assignments.
 For reporting purposes, parts of an asset can be kept under asset sub-numbers, and assets can be combined in group assets.
 The main asset is assigned the sub-number 0000, allowing the asset sub-numbers to be assigned as desired.
 A group asset has its own master data. Several main assets can be assigned to a group. This is important in the USA.

Transaction Types in Asset Accounting
 The transaction type is an addition to the asset posting keys 70 and 75 and it has to be included when posting to an asset account. The transaction type is necessary for asset accounting, since it specifies exactly where the asset posting is listed in the asset history sheet.
 The transaction type is the distinguishing characteristic of the various asset postings, which include:
 Buying and selling
 Credit memos
 Acquisitions from internal production
 Adjustment postings
 Retirements without revenue
 Depreciation and appreciation
 and so on
 Asset transactions (acquisitions, retirements) can be posted in various ways to meet the organizational and business requirements of the company. In FI-AA you can post:
 Without a vendor or a purchase order. The offsetting entry is made in a G/L clearing account.
 Integrated with A/P but without reference to a purchase order.
 Via materials management using the MM functions (purchase order, goods receipt, invoice receipt).
 When posting to accounts of two subsidiary ledgers, the reconciliation accounts of both subsidiary ledgers are updated in the general ledger.

Unplanned Depreciation
 Unplanned depreciation is posted if something happens to the asset which permanently lowers the asset's value.
 As with every asset transaction, you need to use a specific transaction type for unplanned depreciation.
 It is possible to enter different values in the various valuation areas for the damages incurred. For example, the company may set the loss higher for cost accounting than for the company's financial statements.
 After posting the transaction, the unplanned depreciation is saved as planned values. The actual amounts are posted when the depreciation posting run is carried out during closing.

Assets under Construction
 The expenses for assets under construction can be managed in two ways:
 In the application component IM (Investment Management), you can create, post, and manage investment orders. These orders are then reconciled with the asset under construction. IM provides extensive functions for supporting investment procedures.
 If IM is not used, the asset under construction can be posted to directly in Asset Accounting, since assets under construction rarely occur.
 Once the asset is complete,
 master data has to be created for the completed assets
 The values from the asset under construction account have to be posted again as completed assets, and the assets have to be activated. To do so, the expenses can be distributed to several asset accounts using a distribution rule.

Asset Explorer
 Asset Explorer offers a clear overview per depreciation area, asset, and fiscal year for:
 Planned values
 Posted transactions
 Posted amounts
 Posted and planned depreciation
 Depreciation parameters

Closing Procedure in Asset Accounting
 Closing can roughly be divided up into two types of work:
 Legal requirements (mandates required by the government)
 Technical/organizational tasks (preparatory steps that are necessary technically or that support the accounting organization)
 The switch to the New Year is completed in the old fiscal year, thus carrying the balances of the asset accounts forward to the new fiscal year.
 At the beginning of the new fiscal year, a technical reconciliation is performed, which compares the transaction figures in Asset Accounting with the corresponding figures in the G/L accounts.
 Afterwards, inventory is taken and adjustment postings are made should any corrections need to be made. The depreciation posting run posts the depreciation to the general ledger.
 Since only one depreciation area can post its asset postings to the general ledger, the additional, relevant depreciation areas are posted to the general ledger using a program (periodic asset account postings).
 The asset history sheet can now be created.
 Note: Different steps in the closing process may be required in certain countries. Your trainer will be able to explain the main features that are specific to your country.

Asset Inventory
 You can create one or several inventory lists with the R/3 System for the inventory process. The lists are given to the employees who complete the inventory check. They note any discrepancies and return the list to the accounting department, and the accountants enter the corrections in the system.

Depreciation Posting Run
 All depreciation (normal depreciation, special depreciation, unplanned depreciation) is initially kept in the form of planned values in Asset Accounting. Only after the depreciation posting run has been completed is the depreciation actually posted in Asset Accounting. Additionally, a batch input is created which contains the postings for the G/L accounts. When this is run, the depreciation is posted to the corresponding depreciation accounts.

Asset History Sheet
 The asset history sheet is the most important and most complete evaluation available for closing. As with financial statements, the structure of the asset history sheet is based heavily on country-specific requirements. It is thus possible to create various asset history sheet versions.
 Each asset history sheet version contains various history sheet groups such as:
 Book values at the beginning of the fiscal year
 Acquisitions
 Retirements
 Adjustment postings
 Depreciation
 Book values at the end of the fiscal year

Configuration Steps for Asset Accounting
1 EC08 - Copy Chart of Depreciation
2 FTXP- Creation of 0% Tax Codes
3 OBCL- Assign Tax Codes for non-Taxable Transactions
4 OAOB- Assign Chart of Depreciation to Company Code
5 IMG -Specify Account Determination
6 IMG - Create Screen Layout Rules
7 OAOA- Define Asset Classes
8 AS08 -Define Number Ranges for Master Classes
9 AO90 -Integration with GL
10 OAYZ –Determine Depreciation Areas in Asset Classes
11 IMG - Define Screen Layout for Asset Master Data
12 AO21 - Define Screen Layovers for Asset Depreciation Areas
13 FBN1 - Define Number Ranges for Depreciation Postings
14 OAYR - Specify Intervals and Posting Rules
15 OAYO - Specify Round up Net Book Valuation
16 Depreciation Keys
17 Define Base Methods
18 AFAMD - Define Declining Balance Methods
19 AFAMS – Define Multi level Methods
20 AFAMP – Define Period Control Methods
21 AFAMA – Define Depreciation Keys
22 AS01 – Asset Master Creation
23 AS11 – Creation of Sub-Asset
24 F-90 – Asset Purchase Posting
25 AW01 - Asset Explorer
26 AFAB – Depreciation Run
27 F-92 – Sale of Asset
28 ABUMN - Transfer of Asset
29 ABAVN - Scrapping of Asset

Asset Accounting: Accounting Entries:

1. Acquisition: With Vendor -F-90
Fixed Asset a/c Dr
(With acquisition cost)
Vendor Cr
2. Asset Disposal – Sales to a Customer: - F-92
Dr. Customer account (A/R)
Cr. Revenue for asset disposal
Cr. Fixed asset – acquisition cost
Dr. Accumulated depreciation
Dr. Clearing account for asset disposal
Cr. Gain/loss of fixed asset disposal
The posting date of the retirement posting will also be updated into the field "deactivation date" in the asset master as the retirement date.
3. Asset Disposal – As a Scrap -ABAVN
An asset could be disposed as a scrap. In this case, no revenue is expected and a loss will be realized in the P&L if the fixed asset being scrapped still carries a net book value.
Cr. Fixed asset – acquisition cost
Dr. Accumulated depreciation
Cr. Gain/loss of fixed asset disposal
4. Asset Transfer within a Company – Reclassification
The NBV(Net Book Value) of an existing asset master record could be transferred to another asset within the same company.
Cr. Asset – acquisition cost (old asset)
Dr. Accumulated depreciation (old asset)
Dr. Asset – acquisition cost (new asset)
Cr. Accumulated depreciation (new asset)
The old asset being transferred will become a retired asset and the transfer posting date will be updated as the retirement date in the asset master record. For the new receiving asset, the transfer will be the same as if it is being acquired. The transfer posting date will be used as the capitalization date.
5. Asset under Construction (AUC)
(Internal Order as Investment Measure)
1. Define the AUC Asset Class (with investment measure) - OAOA
2. Define the Asset Class – for Main Asset - OAOA
3. Define Investment Profile - OITA
 -Assign the AUC Asset Class (Step-1) in the investment profile
4. Assign Investment Profile to Model Order - OITA
5. Define Order Type (Investment) - KOT2
- Settlement Profile - OKO7
- Maintain Allocation Structures - OKO6
- Planning Profile - OKOS
- Budget Profile - OKOB
6. Create an Internal Order - KO01
- With the Investment Profile
- AUC automatically created by the system using Asset Class given in the Investment Profile
1. Post the amounts to IO - FB01
Dr. Material supplied to Asset (Expenditure)
Cr. Cash account
2. Settle the amounts to AUC from IO (Pricing type: Automatic) - KO88
Dr. Asset under Construction account
Cr. Contra Capitalized
Create the Main Asset - AS01
3. Settle the amounts to Main Asset from AUC - KO88
Dr. Final Asset account
Cr. Asset under Construction account
4. Sale of Asset from One Company code to another Company code
A. If Selling and Buying Company is separate Entities:
In Selling Company:
A/R Posting
Dr Customer a/c (for the sale value)
Cr Revenue –Asset Retirement
Asset Posting
Dr Clearing of Asset Retirement
Dr P&L (Loss)
Dr Accumulated Depreciation
Cr Asset
In Buying Company:
Dr Asset
Cr Vendor
Note:
- Posting date of the document will be copied into the asset master as the capitalization date.
- The depreciation start date of each depreciation area will also be determined and updated in the depreciation area data tab page.
- Asset acquisition posting could also be done without PO from the MM module.
- Posting could be done in FI posting only.
B. If selling and buying Company is Inter Companies - ABT1N
An inter company transfer in the asset history sheet can be an asset acquisition in one company code and an asset retirement in another company code. Fixed assets can only be evaluated at client, and not company code level.
In Selling Company:
A/R Posting
Dr Inter Company Customer a/c
Cr Revenue –Asset Retirement
Asset Posting
Dr Clearing of Asset Retirement
Dr P&L (Loss) $1300
Dr Accumulated Depreciation
Cr Asset $6000
In Buying Company:
Dr Asset
Cr Inter Company Vendor
1. Note:
- Posting date of the document will be copied into the asset master as the capitalization date.
- The depreciation start date of each depreciation area will also be determined and updated in the depreciation area data tab page.
- Asset acquisition posting could also be done without PO from the MM module.
- Posting could be done in FI posting only.
2. Note:
The process for posting intercompany transactions is as follows:
- The initial entry is parked.
- Then an email is sent to the other branch to view the document.
- On approval of the transaction, the parked document is then posted to the g/l in both companies. The company receiving the revenue will be the one responsible to book into system using the US dollar as base currency.
5. Month End Processing – Depreciation Run-AFAB
Dr. Depreciation expense
Cr. Accumulated depreciation

Asset Accounting in SAP ECC 6.0
a. Fixed Assets can have multiple depreciation areas to handle multiple GAAP requirements. e.g., Local GAAP vs. US GAAP.
Note: Specify the General Ledger that is posting to Asset Accounting (Define valuation areas for parallel valuation, and Delta valuation area to post valuation deference)
• Depreciation area 01 – Asset valuation area 01 (will always link to the Leading Ledger)
• Depreciation 02 and depreciation area 12 – Other asset valuation areas that can be tied to NLs as required.
b. The program used for transaction ASKB has changed to RAPERB2000 and for AFAB, it is RAPOST2000
c. Functional area assignment is mandatory
d. Previously in 4.6C we use to give the batch ID in the variants in ASKB and AFAB. Now it is mandatory to have direct postings done for depreciation and APC postings. Therefore for document types which handle depreciation, the batch input session must be unchecked.
e. Posting indicators in depreciation area (Old assignments)
1. Post depreciation at periodic intervals to the general ledger.
2. Post asset values & depreciation at periodic intervals
3. Automatically post values online (real time)
Additional Assignments as New GL
4. Post APC directly + depreciation
5. Post APC only on periodic basis
6. Post APC only