Basic Configuration settings for implementing Asset Accounting in SAP 6.0
The asset accounting module in SAP is one where the accounting pertaining to fixed assets is done. These include transactions like acquisition of fixed assets, sale of fixed assets, in-house development of assets, settlement of WIP, and accounting for depreciation on fixed assets and so on.
A separate Asset Accounting Module is required for these transactions because there are some distinguishing characteristics of fixed assets as compared to normal General Ledger accounts. Some of these characteristics of fixed assets which necessitate a separate Asset accounting module, are given below :
- Fixed assets have a life span exceeding one year. But they are subject to wear and tear, and to provide for this we need to depreciate them. The Asset Accounting Module enables such calculation of depreciation (we can create depreciation keys where we give the rate of depreciation). Such feature is not there in the normal GL Accounting.
- Fixed assets must be shown as a separate head in the balance sheet of companies, and that too under broad categories. Example : Land, Plant and Machinery etc. In the Asset Accounting Module, we can categorize individual fixed assets into asset classes, and thus we can meet this requirement. In other words, classification of fixed assets for balance sheet disclosure purposes becomes easy.
- Sometimes we may have self-constructed fixed assets which are categorized as WIP in construction stage. These must be settled from WIP to normal GL accounts after construction. This facility of settlement is provided by the Asset accounting module.
- The management may require different reports pertaining to fixed assets like asset history report, report of fixed assets cost center wise etc, which are readily available in the Asset Accounting Module.
- Apart from this some other features like assets planned values, calculation of insurance value, physical inventory data etc. are possible in asset accounting.
In order to set up the asset accounting module in SAP, some configuration needs to be done in IMG. This includes setting up the organization structure, defining the depreciation areas, creating the different asset classes, account assignment, defining depreciation keys and so on. All these configuration settings has been discussed below:
1) Chart of Depreciation: A chart of depreciation is a directory of depreciation areas arranged according to business requirements. Each chart of depreciation contains the rules for the evaluation of assets that are valid in a specific country or economic area.
Each company code defined in Asset Accounting must refer to a chart of depreciation.
Copy reference Chart of Depreciation: SAP provides country-specific charts of depreciation with predefined depreciation areas. These charts of depreciation are only references for customer charts of depreciation and therefore, cannot be used directly. When you create your own chart of depreciation, you must copy a reference chart of depreciation. Once the
same is copied, give the required description to the newly created Chart of Depreciation.
Transaction Code: EC08
IMG Menu Path: Financial Accounting (New) à Asset Accounting à Organizational Structures à Copy Reference Chart of Depreciation/Depreciation Areas à Copy Reference Chart of Depreciation
2) Define Chart of Depreciation and depreciation areas: You can change the definition of the depreciation areas that were copied from the standard depreciation plan, and add additional depreciation areas if required:
Transaction Code: OADB
IMG Menu Path: Financial Accounting (New) à Asset Accounting à Organizational Structures à Copy Reference Chart of Depreciation/Depreciation Areas à Copy/Delete Depreciation Areas
3) Assign Chart of Depreciation to Company code: When you assign a Chart of Depreciation, you assign a Company code for asset accounting.
Transaction Code: OAOB
IMG Menu Path: Financial Accounting (New) à Asset Accounting à Organizational Structures à Assign Chart of Depreciation to Company Code
4) Asset Classes: Asset classes are the most important structuring elements for fixed assets. You can define any number of asset classes in the system. You can use them to structure your fixed assets according to different criteria. Asset class controls asset master data. Many values are derived from asset class while creating the master data. Example : Asset number, GL accounts, screen layouts are derived from asset class. Further it provides default depreciation keys while creating the master data.
Individual assets must compulsorily be assigned to an asset class at time of creating them, e.g. A Table purchased may be booked as a individual asset linked to an asset class "Furniture". As given earlier, companies are required to classify their assets in the balance sheet into different broad heads, and asset classes may be created to suit these. Based on asset classes, we also assign the account assignment for various transactions pertaining to that asset class.
Transaction Code: OAOA
IMG Menu Path: Financial Accounting (New) à Asset Accounting à Organizational Structures à Asset Classes à Define Asset Classes
5) Specify Account Determination: The most important function of an asset class is to link asset master records to their respective general ledger accounts in Financial Accounting. This link is created by the account determination key in each asset class. You can assign several asset classes to the same account determination key.
Transaction Code: SPRO
IMG Menu Path: Financial Accounting (New) à Asset Accounting à Organizational Structures à Asset Classes à Specify Account Determination
6) Create Screen Layout Rules: Screen Layout rules are created to make it easier to maintain the asset master data as the asset master contains a large number of fields which are used for different purposes.
Transaction Code: SPRO
IMG Menu Path: Financial Accounting (New) à Asset Accounting à Master Data à Screen Layout à Define Screen Layout for Asset Master Data à Create Screen Layout Rules for Asset Master Record
7) Number Assignment Across Company Codes: In Asset Accounting you can assign the main asset number on the basis of cross-company codes.
Transaction Code: AO11
IMG Menu Path: Financial Accounting (New) à Asset Accounting à Organizational Structures à Specify Number Assignment Across Company Codes
8) Define how depreciation areas post to General Ledger: This setting will determine how the depreciation areas post their APC transactions and/or depreciation to the GL. SAP can post the APC transactions of one depreciation area to the general ledger online automatically. Usually this is the book depreciation area 01. For the rest, transactions to the general ledger can be posted automatically using periodic processing.
Transaction Code: OADX
9) Assign the General Ledger Accounts: Account determination is a set where GL accounts are assigned to post asset acquisition, retirement & depreciation based on various business process scenario. These account determinations are then assigned to asset classes to derive & control GL postings pertain to the asset class. Here we give the Chart of account wise General Ledger Account determination for various asset accounting transactions, like acquisition, gain/loss on sale, ordinary depreciation etc.
Transaction Code: AO90
10) Specify the Financial Statement Version for Asset Reports: This defines which financial statement version should SAP use for each depreciation area as a default. This default applies when the financial statement version is contained in the sort version used for a given report.
Transaction Code: OAYN
Specify Account Assignment Types for Account Assignment Objects: Here we can define how the controlling area posting of cost required for each asset transaction type. We configure the account assignment objects that can be posted based on :
- The transaction type, and
- Account assignment type
IMG Menu Path: Financial Accounting à Asset Accounting à Integration with the General Ledger à Additional Account Assignment objects -> Specify account assignment types for account assignment objects
11) Assign Tax code for non-taxable transactions: Here we give the input/output tax code which is used when posting non-taxable transactions to tax-relevant accounts from the Accounting interface. As an alternative, it is possible to set an indicator in the G/L account master record which permits transactions "not relevant to tax" to be posted even without a tax code.
Transaction Code: OBCL
12) Assign settlement profile: The settlement profile includes settings on the allowed receivers of the settlement. We can give settlement profile 10 to enable settlement to all receivers. The settlement profile is applicable to assets under construction.
Transaction Code: OAAZ
13) Maintain Depreciation keys & activate them: Depreciation keys contain the calculation methods for depreciation calculation and parameters that control :
- Ordinary depreciation
- Special depreciation
- Scrap value (cutoff value)
Transaction Code: AFAMA
14) Specify document type for posting depreciation: Here we give the accounting document type to be used in depreciation postings, for the company code.
Transaction Code: AO71
15) Specify Intervals & Posting Rules: Here we specify the depreciation areas for which the depreciation is posted to the general ledger during the depreciation run. We specify if the period for depreciation posting in the run is monthly, bi-monthly, quarterly etc.
Transaction Code: OAYR
16) Determine Depreciation Areas in the Asset Class: Here, asset classes are assigned default values for the depreciation key and useful life. These values are defaulted whenever postings to assets of these classes is done.
Transaction Code: OAYZ
I hope this will help the readers with the basic settings required for configuring Asset Accounting in SAP 6.0.