ASSET ACCOUNTING

WHAT IS SAP ASSET ACCOUNTING?

The Asset Accounting (FI-AA) component is used for managing and supervising fixed assets with the
SAP System. In Financial Accounting, it serves as a subsidiary ledger to the General Ledger, providing
detailed information on transactions involving fixed assets.

Ex; land , buildings, plant and machinery ets

What is chart of depreciation?

1. Charts of depreciation are used in order to manage various legal requirements for the
depreciation and valuation of assets.
2. Chart of depreciation at client Level
3. After creation of chart of depreciation then it is assigned to company Code by using t-
code OAOB.

4. Charts of Depreciation is a Country-Specific.

5. In the simplest scenario, all of your company codes are in the same country and are
subject to the same legal requirements for asset valuation, then you only need one
chart of depreciation

6. SAP provides typical reference charts of depreciation for each country.

7. They have different depreciation areas and depreciation keys depending on that
country’s specific requirements. You cannot use these charts of depreciation directly.
8. You must create your own chart of depreciation by copying the reference chart of
depreciation. Delete any depreciation areas that are not needed.

What are depreciation areas?

1. Depreciation area in the chart of depreciation is applicable to all the company codes
belonging to the country. Chart of depreciation is basically list of all the depreciation
areas.
2. Depreciation areas needed for company code maintained in USA is different from
company code in India.
3. Hence the number of depreciation areas needed for asset accounting in a company
code depends upon the country to which country the company code is belongs.

4. The list of depreciation areas applicable to a country is referred as Chart of Depreciation

5. Depending upon the accounting principle, appropriate depreciation key is
maintained in depreciation areas.

Depreciation area type are

  Book Depreciation
 Tax Depreciation
 Costing Depreciation
 Group Depreciation
We determine the depreciation areas by using t-code OADB will assign the depreciation areas
for asset class by using t-code OAYZ

configuration steps in asset accounting

Organizational structure
1. define chart of depreciation
2. assign input tax indicator for non-taxable acquisitions OBCL
3. assign chart of depreciation to the company code OAOB
4. define account determination
5. specify screen layout rules
6. define number range intervals AS08
7. define asset classes OAOA
8. determine depreciation areas in asset class OAYZ
9. create required GL accounts for asset accounting FS00
9. define account assignments AO90
10.define number range for depreciation document type OBA7

Depreciation key
11. define posting rules for depreciation posting OAYR
12.define rounding off rules for depreciation OAYO
13. define base method
14. define multi-level method AFAMS
15. define period control method AFAMP
16. define depreciation key AFAMA

END USER JOB

17. asset creation AS01
18. Asset explorer AW01N
19. Acquisition of asset for cash F-02
20.Asset Acquisition with vendor / external acquisition
F-90
19. depreciation run AFAB

Entries

1) ASSET ACQUISITION

The entry that gets generated on processing this transaction is as follows:

Dr Asset a/c

Cr Vendor a/c

The asset value dates are mentioned at the time of purchase. The asset value dates determine the
date from which the depreciation would be calculated.

2) RETIREMENT/SALE OF AN ASSET

The entries that get generated are as below: (with notional figures)

When asset is sold

Dr Accumulated Depreciation A/c

Dr Loss on Sale of Asset A/c (if applicable)

Dr Clearing Account from Asset Sale

Cr. Asset (APC Value) A/c

Cr. Profit on Sale of Asset A/c (if applicable)

When the asset sold is cleared against the customer invoice

Dr Customer A/c

Cr. Clearing Account from Asset Sale

At the time of payment,

Dr Bank Incoming A/c

Cr. Customer A/c

3) WRITE-UP OF AN ASSET

The accounting entry that gets generated is:

Dr Accumulated depreciation a/c

Cr Depreciation

4) DEPRECIATION POSTING RUN

The entries that get generated are as below:

Dr Depreciation a/c

Cr Accumulated Depreciation a/c

depreciation t-code AFAB

Reasons for posting run

1. Planned posting run

 Planned depreciation cannot be executed for specific asset, planned depreciation
run is always carried out for all the asset of the company code.
 Every month planned depreciation is posted.
 If a single asset has error, then planned depreciation will fail and no asset will get
depreciated.
 Next month depreciation cannot be executed until and unless depreciation for all
the periods is complete
2. Repat
 When depreciation is executed successfully but some asset transactions were
posted after depreciation run.
 So, these transactions were not included in depreciation amount calculation.
 hence the depreciations already posted for the period needs to be corrected.
 In order to post delta depreciation, depreciation run is executed in repeat mode.
3. Restart
 If depreciation is not complete due to some reasons like power failure, depreciation
program forcefully stopped, system crash etc.,
 The depreciation run can be executed in restart mode. So that depreciation can be
completed successfully.
4. Unplanned posting run
 In case of some unforeseen or unplanned event with an asset, unplanned
depreciation needs to be posted to the particular asset.
 Unplanned depreciation is posted to specific asset using t-code ABAA
depreciation key
By using AFAMA t-code we maintain depreciation key in asset accounting.

The depreciation key contains the value settings which are necessary for determining
depreciation amounts. It represents a combination of calculation rules, which are used for the
automatically calculated depreciation types like

1. Ordinary depreciation
2. Special depreciation
3. Imputed interest
You assign calculation method to each depreciation key like

1. Base method
2. Declining balance method
3. Period control method
4. Multi-level method
Depreciation key is at chart of depreciation level so it is available in all company codes

asset class
1. In SAP, Asset classes are used to classify the fixed assets in the asset accounting
according to the asset types.
2. Each asset master data must be allocated to one asset class, for e.g., Building,
Vehicles, Furniture, Machines, etc.
3. Asset classes are defined at SAP client level and contain key control parameters such
as number assignment for asset, account determination and screen layout rules.
4. By using t-code OAOA we will define the asset class in asset account
5. In OAOA T-code it contains key control parameters such as

A. Asset class
B. Short text
C. Asset type i.e., Account determination and Screen layouts
D. Number assignment for asset
E. Select the No AUC or summary management of AUC for all asset classes.