Introducing New Asset Accounting in SAP S4HANA __ Copy Zn9j-Qe5x-6gcp-Fbrh

Oona Flanagan

Introducing New Asset Accounting in SAP S/4HANA (FI-AA) ®

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Copy No. zn9j-qe5x-6gcp-fbrh for personal use of JULIANA SANCHES [email protected]

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but crucial sub-component of an SAP product; or if you want to understand all the hype around product xyz: SAP PRESS E-Bites have you covered. Authored by the top professionals in the SAP universe, E-Bites provide the excellence you know from SAP PRESS, in a digestible electronic format, delivered (and consumed) in a fraction of the time! Ravi Ravipati Introducing Profitability Analysis in SAP S/4HANA Finance ISBN 978-1-4932-1439-6 | $19.99 | 74 pages Sobana Iyengar Introducing the Material Ledger in SAP S/4HANA ISBN 978-1-4932-1558-4 | $19.99 | 65 pages Sharma, Ayuluri, Darla, Kilaru Introducing SAP BPC for SAP S/4HANA Finance ISBN 978-1-4932-1463-1 | $19.99 | 116 pages

The Author of this E-Bite Oona Flanagan has more than 17 years of FI-CO implementation experience and support in a number of multinational companies. She has written a wide variety of training documentation, manuals, and guides, and led many training courses over the years. She is a fellow of the Chartered Institute of Certified Accountants and the British Computer Society. Oona owns her own company, Jazzmore Solutions Ltd., and continues to work as a FI-CO consultant.

What You’ll Learn See what SAP S/4HANA can do for your asset accounting processes. Explore the new data structure that allows you to manage and monitor your fixed assets. From capitalization and retirements, to period-end process, reporting and transfers to postings. Finally, preview the migration process from SAP ERP and third-party systems to start your SAP S/4HANA project! 1 New Asset Accounting at a Glance .................................................................... 5 1.1 Fixed Assets .................................................................................................... 6 1.2 SAP S/4HANA.................................................................................................. 8 1.3 New Asset Accounting .................................................................................. 10 2 Organization Structure and Master Data ........................................................ 14 2.1 Organizational Data/Structure ...................................................................... 15 2.2 Parallel Valuation, Ledgers, and Currencies ................................................... 19 2.3 Asset Master Data ........................................................................................ 21 3 Capitalization .................................................................................................. 42 3.1 Without Investment Management ................................................................ 43 3.2 With Investment Management ..................................................................... 48 3.3 Other Acquisition Processes .......................................................................... 55 4 Retirements, Impairments, and Value Adjustments........................................ 68 4.1 Retirements .................................................................................................. 68 4.2 Mass Retirement or Change .......................................................................... 76 4.3 Impairments ................................................................................................. 78 4.4 Revaluation .................................................................................................. 80

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4.5 Investment Support ...................................................................................... 81 5 Depreciation ................................................................................................... 82 5.1 Depreciation Definition and Methods ........................................................... 82 5.2 Types of Depreciation ................................................................................... 87 5.3 The New Depreciation Engine in SAP S/4HANA ............................................. 92 6 SAP General Ledger Postings........................................................................... 92 6.1 Capitalizations .............................................................................................. 93 6.2 Settlements ................................................................................................ 101 6.3 Retirements and Transfers .......................................................................... 102 6.4 Depreciation ............................................................................................... 104 6.5 Additional Adjustments .............................................................................. 106 7 Period-End Processing and Reporting ........................................................... 106 7.1 Period-End and Year-End Processes ............................................................ 106 7.2 Reporting.................................................................................................... 107 8 Migration at a Glance.................................................................................... 116 8.1 Migration from an Existing SAP System ....................................................... 116 8.2 Greenfield Migration from a Legacy System ................................................ 120 8.3 Central Finance ........................................................................................... 123 9 What’s Next? ................................................................................................ 124

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New Asset Accounting at a Glance

Asset Accounting, concerned with the recording and reporting of fixed assets, is one of the earliest submodules in SAP. Apart from some modifications to introduce the

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new SAP General Ledger (hereafter, referred to as SAP General Ledger; see the section The SAP General Ledger in Section 1.3) in 2004, Asset Accounting didn’t change a lot until 2013. That year, a new version known as New Asset Accounting, was introduced in SAP ERP 6.0 (the predecessor of SAP S/4HANA) and then optimized to run on SAP S/4HANA. This E-Bite explains what New Asset Accounting is and how it works in SAP S/4HANA. We start in the first section by explaining what is included in the term fixed assets and describing some of the key Asset Accounting concepts, and then we introduce SAP S/4HANA and explain New Asset Accounting. If you’ve already used Asset Accounting in SAP, you may be particularly interested in the section Changes Brought in by New Asset Accounting (Section 1.3), which explains what is different in New Asset Accounting for SAP S/4HANA compared to classic Asset Accounting. If you haven’t used Asset Accounting in SAP before, you may want to skip that section initially until you’re more familiar with the SAP concepts and terms explained in the rest of the E-Bite.

1.1

Fixed Assets

A fixed asset is something intended for long-term use by the company in its normal course of business, typically longer than a single accounting period. The cost, or depreciation, is spread over the useful life (or expected life) of the asset rather than charged to the profit and loss (P&L) in the year of purchase. In the context of this EBite, the term asset is used interchangeably with fixed asset. Most countries have their own legislation regarding what can be included in the value of the asset, how much depreciation is charged, and when it’s charged, along with requirements regarding records to be kept of acquisitions, disposals, transfers, and depreciation for each asset. Sometimes different records have to be kept for different purposes, for example, for Generally Accepted Accounted Principles according to local legislation (local GAAP), for International Financial Reporting Standards (IFRS), or for group or tax purposes. You may also need to keep separate records for revaluations and investment support. In SAP S/4HANA, the New Asset Accounting module holds the asset register and allows the recording, management, and depreciation of many types of fixed assets. New Asset Accounting also integrates with other submodules, for example, SAP


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Investment Management (IM), SAP Project System (PS), and SAP Plant Maintenance (PM) or SAP Enterprise Asset Management (EAM). Not all long-term assets are physically used by the business and classified as fixed assets. Assets may be purchased for resale, for example, in the motor trade, in which case, they would be treated as stock rather than a fixed asset. They may also be used in the leasing business, in which case, they come under slightly different accounting regulations and may be recorded in several different ways depending on their complexity.


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1.2


SAP S/4HANA

Recently, SAP redesigned its SAP Business Suite programs based on a new inmemory database called SAP HANA. There have been a number of intermediate steps, for example, running just a data warehouse on SAP HANA, running the old SAP Business Suite on an SAP HANA database, or running just the SAP HANA optimized finance programs (SAP Simple Finance). The arrival of Simple Logistics finalized the full suite, and then the word Simple was dropped, and the combined product became known as SAP S/4HANA. The “S/4” part follows the naming convention to its predecessor “R/3.” There are two editions: SAP S/4HANA (the on-premise version) and SAP S/4HANA Cloud. “Cloud” refers to a multitenanted public cloud. You and a number of other companies are (securely) sharing one standardized, simplified system with limited configuration allowed and almost no custom work. You can’t opt out of the quarterly upgrade, and you must use SAP Fiori as your user interface. The on-premise edition, which is simply called SAP S/4HANA, can be physically on your own server, on a third-party server, on your own cloud, or on a third-party cloud, but it’s a private cloud so you’re completely free to do what you want. For example, you can use SAP Fiori or the SAP GUI to run transactions and write custom programs as much as you want, and you can choose if and when to install the (approximately) yearly upgrade. The yearly versions of the on-premise edition, and the quarterly SAP S/4HANA Cloud editions are known by their release month and date, for example, SAP S/4HANA 1503, SAP S/4HANA 1511, and SAP S/4HANA 1610, with the next being SAP S/4HANA 1709 for the on-premise editions. Although this E-Bite is based on SAP S/4HANA 1610 edition, (released in October 2016), a lot of what is covered applies to Asset Accounting in general, New Asset Accounting on SAP ERP 6.0, and the different releases of the SAP S/4HANA editions. When SAP applications were originally written, they had to split data into many different tables because the technology at the time couldn’t deal efficiently with one giant table. A number of programs were required for managing indexing, summarizing, and producing additional tables to hold the aggregated data. Companies might have an Online Analytical Processing (OLAP) system to deal with complicated reporting in addition to their Online Transactional Processing (OLTP)


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or data-entry system, but frequently the data transfer was long and complicated and often could only be processed overnight, making it permanently out of date. Most business intelligence tools are now embedded into SAP S/4HANA or interface with them on a real-time basis, eliminating the need to transfer data elsewhere for analysis. With the cheaper and more powerful technology now available, fewer tables are necessary, and calculations can be made on the fly and in memory, allowing a massive increase in speed while reducing the data footprint at the same time. In addition, SAP has rewritten a lot of the application programs to optimize this new structure and introduce new functionality. SAP Fiori apps (like smartphone apps) are described as the “new user experience” and are a simplified way of accessing transactions both on desktops and mobile devices. Some of the most common transactions now appear as tiles on the SAP Fiori dashboard and behave similar to the equivalent GUI transactions, which are still available. Others introduce new functionality, for example, in Figure 1, by displaying summary information on the tile itself and allowing you to drill down further after you select the app.

Figure 1 SAP Fiori Tiles: Summary Information on the Face of the Tile

In New Asset Accounting, the layout of most of the SAP GUI transactions and the SAP Fiori tiles is very similar. When you post a transaction, or enter master data, you have access to the same data, only the screen is simplified and slightly more user friendly. The role-based SAP Fiori transactions are designed to allow users to


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see only the required information and perform only those steps required for their own role. Where possible, we’ve mentioned the SAP Fiori equivalent, but not all transactions in this E-Bite are available in SAP Fiori yet, although the number of SAP Fiori apps is increasing quickly and you can add your own. At the time of writing, there were 54 asset transactions for SAP S/4HANA in the SAP Fiori apps reference library and around 300 in the Fixed Assets branch of the SAP GUI menu, although many of these are rarely used by the average user. Because of this, and the fact that not all companies will immediately implement SAP Fiori, this E-Bite will show mainly the classic SAP GUI transactions to maximize the information available to the user. Even if you’re using SAP Fiori, it should be easy to follow as, in most cases, the screen layout is the same, and only the background and design may look different.

Note If using the SAP GUI, you don’t have to remember menu paths or transaction codes; most users simply save them to their Favorites directory at the top of the SAP menu.

1.3

New Asset Accounting

New Asset Accounting is SAP’s latest version of the Asset Accounting module and was introduced in SAP ERP 6.0 Enhancement Pack 7 (EHP 7). It has since been fully optimized for SAP S/4HANA. Although called New Asset Accounting, many of the underlying principles and structure remain the same, so existing Asset Accounting users will still see many familiar transactions, for example, the Asset Explorer screen (covered in more detail in the section Asset Explorer in Section 7.2). However, other transactions have been enhanced with additional fields or functionality. So why is it called New Asset Accounting? In the section Changes Brought in by New Asset Accounting, we’ll list the key differences and benefits, but if you’re looking to implement New Asset Accounting and aren’t already familiar with the (new) SAP General Ledger functionality, which is an integral part of New Asset Accounting, the next section provides a few words on the SAP General Ledger.


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The SAP General Ledger With the old version of the SAP General Ledger, the easiest way to account for additional accounting principles in one system was by using additional accounts in a separate range of the same chart of accounts. For example, your main accounts might be local GAAP, so you might have a separate range of accounts for delta postings where IFRS or group accounts differed. Typical delta postings might be where you have different accruals, taxes, or different valuations for fixed assets.

NOTE Although still referred to as the “new” General Ledger well over a decade after its introduction, we will be using the current product title in this E-Bite: the SAP General Ledger.

The (new) SAP General Ledger, introduced in 2004, brought in the concept of having one or more parallel ledgers, which allows you to post most transactions (invoices, payments, etc.) for two or more sets of books simultaneously to additional parallel ledgers and report on them independently. New transaction codes allow you to post adjustments in the additional ledgers so that a single ledger represents a complete set of books according to a specific set of accounting principles. The SAP General Ledger enables you to post acquisitions, disposals, and depreciation in Asset Accounting for one set of books in real time to the main or leading ledger in SAP ERP Financials (FI), and postings for the other accounting principles to parallel ledgers, albeit at the end of the month.

Changes Brought in by New Asset Accounting Apart from improvements to speed and performance, most of the enhancements brought in by New Asset Accounting revolve around posting to the different accounting principles more efficiently and reporting on them. In the following subsections, the key differences are listed; in some cases, a more detailed explanation is given in the relevant section later in the E-Bite.


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Instant Access to Correct Up-to-Date Values All depreciation areas (see the section Depreciation Areas in Section 2.1) in New Asset Accounting are now equal and post in real time. You can also navigate and drill down to most financial documents in the Asset Explorer, not just those in the main depreciation area. When a change is made to an asset, its planned depreciation (used to post actual depreciation) is immediately updated, and all reports show up-todate values.

Single Source of Truth The reconciliation between FI and Asset Accounting is assured by design; for example, reconciliation accounts, which don’t allow manual postings, are now used in all depreciation areas, which helps preserve the integrity of the postings. Cost elements are now integrated into the chart of account master records, ensuring that SAP ERP Controlling (CO) is aligned with FI. Postings to the other ledgers no longer take place separately at the periodend, so postings can’t be accidentally omitted, and you have access to up-todate figures all through the period, not just at the month-end.

Simplification of Posting Logic New transactions and accounts have been introduced that allow you to post independently to individual depreciation areas, accounting principles, or ledger groups, if required.

Transparency A separate line item is produced for each asset posting, including the acquisition and retirement values, the depreciation P&L charge, and the accumulated depreciation, which allows full visibility in FI.

No Redundancy of Data New Asset Accounting no longer requires the use of delta depreciation areas in addition to normal depreciation areas.


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New Logic and Easier Data Structures Aids Reporting Custom reports are rarely necessary now to merge data from different places or tables as more data from CO, Profitability Analysis (PA), Purchasing, Sales and Distribution (SD), Asset Accounting, and so on are now stored in a single table in FI and available in the general ledger line item reports.

Smart Migration When migrating from another SAP system to SAP S/4HANA, although many tables are obsolete, compatibility views in SAP S/4HANA have the same name as the previous tables to allow custom reports and certain programs to continue to run. If your existing system has been converted to SAP S/4HANA (as opposed to uploading opening balances), data from years prior to the migration are stored and remain accessible for reporting. You can choose which depreciation area posts to which ledger (previously only Depreciation Area 1 posted to the leading ledger).


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Organization Structure and Master Data

Smooth Period-End The period-end procedure is simpler and faster, with up-to-date data available all through the month. Postings are direct or in the background, so there are no more batch postings. The depreciation posting at month-end is faster because the values don’t have to be recalculated. The planned value is simply posted directly; that is, no additional batch postings are required. Posting each ledger to different periods is possible as long as the year start and end dates are the same, for example, having calendar months for local GAAP, but quarterly periods for International Accounting Standards (IAS).

Intuitive SAP Fiori Apps Shorter training times and better user experience are provided with SAP Fiori apps.

Prerequisites New Asset Accounting is available even if you’re not on SAP S/4HANA (as long as you’re on SAP ERP 6.0 EHP 7 or above), but you must have the new version of the SAP General Ledger implemented first and use the ledger approach. It’s activated at the client level and, therefore, applies to all company codes. Not all of the features are available until you migrate to SAP S/4HANA, and after you’re on SAP S/4HANA, classic Asset Accounting no longer exists.

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Fixed assets can be quite complex because they often have to be valued differently for various financial purposes, such as statutory, group, international, or tax reporting, as well as management or cost accounting. There may also be different requirements for how an asset is retired and revalued, and how depreciation is calculated. The next section explains how these requirements can be grouped together and integrated with the financial structure of the company.


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2.1


Organizational Data/Structure

The organizational structure and master data in New Asset Accounting consists of the same key elements as before, that is, the chart of depreciation, depreciation areas, and asset classes. We’ll explain these three elements first.

Chart of Depreciation In SAP S/4HANA, the different accounting principles, methods of depreciation, legal requirements, and so on for a particular country continue to be grouped together under the umbrella of a chart of depreciation. SAP supplies a template chart of depreciation for most countries based on the legal requirements for that country, but you can create more than one chart of depreciation for a country if there are different business requirements. Each company code with fixed assets is then linked to its local chart of depreciation.

Depreciation Areas The chart of depreciation will contain one or more depreciation areas. A depreciation area typically corresponds to a specific reporting requirement or accounting principle, such as local GAAP or IFRS. However, a separate depreciation area can be used for anything when you need to report different values or use different depreciation methods. You can have additional depreciation areas for cost accounting, insurance, investment support, and for various tax calculations. Different values can be included in the capitalization cost of the asset or the depreciation, and different rules also can be used regarding what can be capitalized. For one accounting principle, you may be able to include certain fees in the total cost of the asset, such as the dismantling costs of the previous asset, that aren’t allowed for another accounting principle. Perhaps the whole asset must be charged to costs for one accounting principle but can be capitalized for another. Group accounting may require you to depreciate something over five years, but for local or tax purposes, you have to depreciate it over three years. The depreciation itself may follow different rules, for example, straight line for one purpose and reducing balance for another. Each depreciation area allows you to have different values for different purposes for each asset where required.


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Fiscal periods can be calendar or noncalendar and can also differ slightly between FI and New Asset Accounting, but the year-end date must be identical. You can set this at the company code level or at the depreciation area level, but there are some restrictions. Many companies simply have one depreciation area for local GAAP with perhaps an additional area for IFRS or group accounting to mirror the structure they have for financial reporting. Other countries, for example, the United States, may have a number of additional depreciation areas to deal with the different tax calculations. Figure 2 shows an example of some U.S. depreciation areas. The first two are book or local GAAP in local and group currency, the next two are IFRS in local and group currency, and the others are different tax calculations. Only the book and IFRS depreciation in local currency physically post to the financial ledger(s), but you can see that, in this case, the other depreciation areas are linked to either LG (local GAAP) or IFRS accounting principles.

Figure 2 Depreciation Areas in the Sample U.S. Chart of Depreciation

The accounting principles in turn are linked to ledger groups, namely 0L, which is always known as the leading ledger and, in this case, 2L, which is a parallel ledger. The leading ledger is effectively the main or default ledger, and prior to New Asset Accounting, Depreciation Area 1 always had to be linked to the leading ledger and was the only one to post in real time. Now, this is no longer the case, and Depreciation Area 1 can be linked to any ledger, and more than one depreciation area can post in real time.


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Asset Classes An asset class in SAP is a group of fixed assets that share similar properties, such as account determination, depreciation rules, and master data. All fixed assets must belong to an asset class, which is created at the global level so that all the companies on one SAP client can share the same configuration and categorize their assets in the same way, although users will only see the active asset classes for their country’s chart of depreciation. Because the account determination is at the asset class level, you normally need at least one asset class for each line that you’re required to show separately in the balance sheet. However, you may require additional asset classes for several reasons. For example, you might want to report in greater detail on certain types of machinery, or you might want to split your asset classes further to help users complete the asset master data accurately by defaulting in certain values or making different fields mandatory depending on the type of asset. You can either set fixed depreciation rules per asset class or allow each asset in an asset class to have different rules. For example, for laptops and desktops, you may have a useful life of three years with the serial number mandatory, but for all other computer equipment, the serial number isn’t mandatory, and the useful life may be five years or even variable. In this case, you could have two separate asset classes, one with the useful life already defaulted in at three years (you can also choose whether it can be overridden or not) and with the serial number field mandatory in the master data, and the second asset class with different values accordingly. Both asset classes could point to the same accounts in FI. The asset class also determines the numbering of the asset in the fixed asset register. You can have the same numbering for all asset classes or a separate number range for each asset class or similar group of asset classes. Some companies use the SAP asset number as their inventory number (and physically attach it to the asset with a metal plate or sticker), but it isn’t mandatory, and there is a separate field in the asset master data to hold a different inventory number if required. You can create an asset class for the types of assets listed in the following subsections.


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Tangible and Intangible Tangible fixed assets are physical objects, such as buildings, machines, and vehicles that you can see and touch. Assets can also be intangible, for example, goodwill, software, or a right to something such as a brand name or trademark.

Leased Assets You can set up separate classes for leased assets and include some of the terms of the lease in the asset master for only those classes.

Low-Value Assets Typically, fixed assets have a minimum value, sometimes set by local legislation and sometimes set by the company, so although a stapler may last many years, you would not treat it as a fixed asset. Nevertheless, you may still want to keep a register of certain popular low-value assets, for example, mobile phones or tablets, which are written off in the year of purchase. They can still be recorded in the asset register using a low-value asset class. Against the low-value asset class, you can set a maximum value, and you can also set up a number of similar items as one asset number, for example, 10 mobile phones of the same brand, or group them by cost center. Low-value assets are usually fully expensed in the year of purchase. When creating a low-value asset, you still charge depreciation, but by setting the expected useful life as one month or one period, the item is fully depreciated straight away.

Asset under Construction A special type of asset class that most companies will need is the Asset under Construction (AuC) class. This is designed to be used where the costs, including parts, labor, and other service fees, of one or more assets are gathered and held prior to capitalization until the assets are completed and ready to be taken into use. Typically, this might occur when an asset, such as a plant or building, is either being built or purchased over time with different materials. However, some companies, in order to have a single process for all assets, may post all assets to AuCs even if they are then immediately capitalized.


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A key feature of assets held in the AuC class is that they aren’t depreciated until they are transferred to the final asset and brought into use.

2.2

Parallel Valuation, Ledgers, and Currencies

Companies are often obliged to draw up a set of statutory accounts in their local country but need to adjust those statutory accounts when reporting to the head office that requires consistency in what they report globally or for IFRS. Alternatively, their main books may be set up according to group practices, and they need to adjust for local GAAP or report in different currencies.

Note Although in SAP S/4HANA up to 10 currencies are now available (of which, 2 are fixed and 8 are freely definable), only 3 can be used in Asset Accounting.

Originally, if you wanted to record and report on data for more than one accounting principle in SAP, the only way to do this was by using a different area of the chart of accounts. The new SAP General Ledger brought in the technology for parallel ledgers to enable you to keep two sets of books simultaneously. However, not all companies will want to set up parallel ledgers, especially if they only have a few differences between accounting principles. Therefore, New Asset Accounting with SAP S/4HANA still allows the choice of the two methods explained in the next two sections.

Account Approach If you choose not to set up any parallel ledgers in FI, you can continue to use the chart of accounts to post different accounting principles to different areas of the chart of accounts. This is called the account approach and can be set by company code. Some companies keep the chart of account length the same and use a completely separate range of accounts. However, you can also add an additional digit to your existing accounts; for example, if you use 123456 for book or local GAAP, you can


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add a prefix to create 8123456 to post to group or IFRS accounts. This just makes it easier to understand, compare, and reconcile the two values. Your reports then access the different accounts accordingly. Although no additional physical ledgers are set up in FI with the account approach, there are many new transactions in New Asset Accounting on SAP S/4HANA that allow you to choose which accounting principle to post to. Even with the account approach, you’ll need to set up ledger groups for the different accounting principles and link the depreciation areas to them.

Ledger Approach With the ledger approach, you need to have a depreciation area set up in New Asset Accounting for each additional ledger that you’re posting to in FI and for each currency. The ledger approach excludes appendix ledgers, which is a new functionality brought in by SAP S/4HANA and explained in the following note.

Note Appendix ledgers exist in FI only and also allow reporting of different accounting principles, but, unlike parallel ledgers, they only take delta postings. When running a report in an appendix ledger, they are automatically combined with their base ledger. They are useful when there are only a few adjustments and were sometimes used in the earlier versions of SAP S/4HANA, where you could not create a parallel ledger.

Having separate ledgers means that although you may be posting different amounts for the different accounting principles, you can use the same chart of account codes in each ledger. To summarize, with the ledger approach, you post to the same accounts in different ledgers; with the account approach, you post to different accounts in the same ledger.


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2.3


Asset Master Data

An asset master record contains all the master data about an asset such as description, depreciation rates, useful life, and cost center, and it has a link to the transactions and values. Probably the most relevant date for an asset is the date of capitalization, which is normally when all paperwork is complete, and the asset is brought into use. This date usually defaults in automatically from the posting document, which, depending on the configuration, could be an invoice, a goods receipt, or a financial journal. This isn’t necessarily the start date of depreciation. As long as a year-end hasn’t passed, the start date of depreciation can be backdated, and any depreciation from earlier periods will be posted in the current or prior period, if it’s still open and the following month’s depreciation hasn’t been run.

Creating an Asset To understand the types of fields available in the asset master, we’ll run through the transaction to create an asset and explain some key fields. Your screens will differ from the ones shown as most companies will only have the subset of fields that are relevant to them. For example, if you have no leasing, it’s unlikely that the Leasing tab will have been configured. An asset master is usually created with Transaction AS01 if you’re using the SAP GUI or Create Asset Master Record if using SAP Fiori. The first option is to choose an asset class, which is where you choose what type of asset you want to create. The lower area of the opening screen, Reference, is available if you want to copy an existing asset (see Figure 3) and enter its details.


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Figure 3 Transaction AS01: Create Asset Initial Screen

The Post-capitalization checkbox need only be selected if you’re going to use the post-capitalization transaction, which will post the prior year’s depreciation separately at the point of capitalization (see the section Post-Capitalization in Section 3.3). If you want to create a number of similar assets (e.g., you’ve just purchased three laptops of the same make but want to create a separate asset number for each), you can specify the number of assets you want to create and create all three in one go by entering “3” in the Number of Similar Assets field on the initial Create Asset screen. You can then enter the relevant data for the first asset, most of which will be relevant for all the assets you’re creating. After saving, a second screen pops up asking if you want to create or maintain the assets (see Figure 4). If you choose Create, all the assets that you create will be identical. If you choose Maintain, you can enter different inventory numbers, cost centers, and evaluation groups (see Figure 5), depending on what you’ve requested in the configuration.


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Figure 4 Transaction AS01: Creating Multiple Assets at Once

Figure 5 Transaction AS01: Maintaining Fields for Multiple Assets

On the next screen, you’ll see a number of tabs relating to the new asset. The first tab is the General data screen of the asset.

General Data Here you enter the unique details to identify the asset, for example, Description and Serial number, as shown in Figure 6. You’ll notice at the top of the screen, there are two fields for the Asset number and subnumber. Both will be filled with an asset number after the asset is saved. In this case, as we’re entering a “main” asset, the second field will always be zero. For further information on subnumbers, see the section Subnumbers and Group Assets. The Asset Main No. Text field defaults to the same text as the Description field, but if you’re creating a subasset, you can enter the description of the main asset here instead.


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Figure 6 Asset Master Record: General Tab

The code for the account determination will default in automatically as it’s linked to the asset class. If you have more than one asset class with the same account determination, they will post to the same account in the SAP General Ledger. The Inventory Note field gives you 15 characters to enter a number or additional information for inventory purposes. By selecting Include asset in inventory list, you can choose whether the asset should be included in lists for inventory; for example, you may not be able to do a physical count of intangible assets, so you would exclude it for those assets. You can set the default for this field as “selected” for certain asset classes, such as all the tangible asset classes. The Posting information normally defaults in automatically when you post the values against the asset, but the Capitalized On date can be overwritten.


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On this screen, there is also a Quantity field if you want to include several assets under the same asset number; for example, you might have one asset number for 10 chairs. Some companies simply create one asset number per invoice/order, but this isn’t ideal, especially if you have several items on an invoice that might be going to different cost centers and might be disposed of at different times.

Time Dependent With the items on this tab, you can choose whether to overwrite the old data or to have a different code depending on the time period. Sometimes if a code such as a cost center is incorrect, you may want to change it and correct the historic data; other times, however, it may be correct for the change not to be made historically. If, for example, you have a car owned by a salesman with a sales cost center to which the depreciation is posted for the first four months of the year, and then the car is transferred to a marketing person who has a different cost center for the remainder of the year, you may still want to run historic reports with the old cost center for the first part of the year. When you change a cost center in the fixed asset screen that has already had postings against it, you’ll see a popup (Figure 7 and Figure 8), asking if you want to overwrite the historic data or create a second interval for the new information.

Figure 7 Asset Master Record: Time-Dependent Data


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Figure 8 Asset Master Record: Time Interval for Time-Dependent Data

At the bottom left of the Time-Dependent tab data entry screen, just above the More Intervals button, you’ll see the Asset shutdown checkbox (see Figure 9). This checkbox enables you to shut the asset down for a specific period, and, if used in conjunction with the appropriate depreciation key, you can ensure that no depreciation is calculated for that asset for the specified period. If you want the asset to start up again automatically, you’ll need to create the relevant time periods, for example, a new period when the Asset shutdown checkbox is selected, then an additional period where the Asset shutdown checkbox is deselected.


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Figure 9 Asset Master Record: Time-Dependent Tab

Selecting the More Intervals button lists all existing time periods that have been created and the settings for each.

Allocations The Allocations tab is used for a number of purposes. In addition to the Investment Reason and Envir. Investment (environmental investment reason) fields, there are five fields for user-specific evaluation groups (Figure 10), which can be used for further classifications for reporting. For example, geographical classification can be used when the location doesn’t already exist as a plant or cost center, and a type of machine or equipment classification can be used when this isn’t already split by a different asset class.


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Other classification options include type of use, technology, or more detail on the category of the asset such as roof or window, desktop or laptop, and so on. Four of the evaluation groups have four characters and one has eight. You can either restrict the values to preconfigured codes or users can enter values without validation.

Figure 10 Asset Master Record: Allocations Tab


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The Asset Super Number field can be used when you want to group assets together for reporting, as it’s less complex than the group number (see the section Subnumbers and Group Assets) and also appears in the selection criteria in many reports. The Investment support measures fields are for managing government grants or subsidies, which although they reduce the cost to the organization, need to be separated from the original cost of the asset, known in SAP as the acquisition and production costs (APC) of the asset. The allocation screen also contains fields pertaining to the integration with PM or SAP EAM. You can choose whether to automatically create an asset in SAP EAM on saving the asset master record in New Asset Accounting or to launch a workflow to do so, and you can also set up synchronization so that any changes flow through to SAP EAM. This link isn’t mandatory, and many companies find that components of complex machinery such as factory production line are recorded differently for financial and maintenance purposes. For example, Asset Accounting may group assets according to how they were invoiced, whereas SAP EAM may split or group them in more or less detail than FI, according to which items would be serviced together or which items are fitted together and would be out of use if one of them needed to be repaired.

Origin Some fields on this screen (see Figure 11), have to be entered manually, and some default in automatically from the FI posting, if the posting contains a vendor. For example, the Vendor, which is the vendor number from an integrated asset posting, should appear automatically or can be entered manually, but you may need to enter the Manufacturer, Country of Origin, Type Name, and so on. Note that the Vendor field is linked to the vendor master data and must therefore be an existing vendor in the system, whereas the Manufacturer isn’t linked. The Original Asset and Acq. On fields are used when an asset is transferred from another asset and defaults in the original number of the old asset and the date of the transfer. You can also manually type in an asset number, such as the number from the legacy system. This may or may not be the same as the inventory number.


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Figure 11 Asset Master Record: Origin Tab

The account assignments on the Time-dependent tab relate to the depreciation calculations, but the investment order here will take statistical postings. This is explained in Section 3.2.

Net Worth Tax This tab is available for companies that want to record more tax information (see Figure 12). You can preconfigure your own set values for some of the fields, such as the Classification Key, Property Indicator, and Manual Val. Reason, but other fields aren’t validated, so you can enter what you want.


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Figure 12 Asset Master Record: Net Worth Tax Tab

Leasing The Financial Accounting Standards Board (FASB) and the International Accounting Standards Board (IASB) have released a new accounting standard, IFRS 16 Leases, which stipulates how leases must be reported on the balance sheet. This represents quite a major process change, as well as a change in accounting. For companies with a significant amount of leasing, SAP provides the Real Estate Management module. SAP Real Estate Management is able to capture details about contracts and conditions, and it’s specifically designed to support a more complex leasing process. The option still remains to use the Leasing tab in the asset master, as shown in Figure 13.


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Figure 13 Asset Master Record: Leasing Tab

Depreciation Areas The Deprec. Areas tab, shown in Figure 14, contains information about how depreciation is to be calculated. It includes the start date of depreciation (ODep Start), which is normally defaulted in from the initial financial posting based on the date of capitalization and the rules configured in the depreciation key. On this screen, you can see all the depreciation areas, that is, the different accounting principles that depreciation is being calculated for, and under certain circumstances, you can deactivate (Deact checkbox) a depreciation area for a specific asset. The depreciation key governs precisely how the depreciation is calculated, both for the acquisition and for any subsequent movements, for example, if the asset is retired or transferred in a period. It determines whether the depreciation should be calculated for that period in full, pro rata, or by any other convention depending on local legal requirements, as well as whether interest should be charged. It also covers whether acquisitions can be added to the asset in subsequent years or only in the year of acquisition, the different methods to be used, and so on. The different


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methods and types of depreciation are covered in more detail in Section 5.1 and Section 5.2.

Figure 14 Asset Master Record: Deprec. Areas Tab

If all the assets in the same asset class have the same depreciation rules, you can default in a depreciation key and a useful life (UseLife) in years (and periods [Prd] if required) that can’t be changed, or you can allow the user to override or enter information manually. You can also set maximum and minimum values per asset class for the useful life if required.

Tracking Changes For audit purposes, you may want to find out who has made changes to an asset and when. There are several ways of doing this.

For a Single Asset You can display the changes on a single field or all changes for the asset from inside the asset master record by choosing Environment Change Documents and then choosing either On FIELD if you just want to see the changes on the field where the cursor is or choosing On ASSET if you want to see changes on the whole asset (see Figure 15).


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Figure 15 Displaying Changes to an Asset from the Asset Master Record

Alternatively, you can choose the SAP GUI Transaction AS04 to see the same changes for a single asset but in a slightly different format, where you can drill down into all changes or just one change. Note that not all of the changes shown will have been made in the asset master record transaction; for example, the date of capitalization may have been changed by an invoice posting transaction such as Transaction MIRO (see Figure 16), which is an invoice posting against a purchase order (PO). You can add columns to the variant to see more detail, such as the transaction code and description.

Figure 16 Asset Master Record: Changes by Transaction Code


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For Multiple Assets Transaction AR15 (Changes to Asset Master Records) can be run for all assets or for a range of assets to see changes by date, by user, or for a particular field.

)

)


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As shown in see Figure 20, you can now see all assets where the useful life has been changed and who made the change and when; (assuming that in the configuration you’ve set the Useful Life as a field that can be changed for the asset classes you’re checking).

Figure 20 Transaction AR15: Displaying Changes to Useful Life


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Deactivate, Block, or Delete Asset There are several ways of preventing postings to an asset, depending on whether there have already been postings, whether you want to prevent the postings permanently or only temporarily, and whether you still want to allow depreciation postings.

Block You can block an asset from the asset master record by going to the top menu, choosing Asset Block/Delete Block, and then selecting Block again for that asset, or you can use Transaction AS05, which arrives at the same screen. At the bottom of the screen shown in Figure 21, you’ll see the Acquisition lock area. Selecting Locked to Acquis. will prevent further acquisition postings to the asset. If there are any outstanding transactions, such as an open PO, you’ll received a yellow warning message, but you can still overwrite the message and block the asset.

Figure 21 Transaction AS05: Blocking against Further Acquisition Postings


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Note Blocking an asset by selecting Locked to Acquis. doesn’t prevent depreciation postings to that asset.

Delete An asset can only be deleted if it has no values posted against it. Similar to using the Block functionality, select Asset Block/Delete Delete, and then select Delete again (or use Transaction AS06). In the screen that appears, select the Physically Delete Asset radio button from the Deletion area at the bottom. On saving, select YES when asked to confirm that you want to delete the asset, and the asset will be physically deleted. This transaction can’t be undone.

Deactivate The first screen of the asset master record (General tab) contains a Deactivation on field (Figure 22). This is filled automatically when the asset is retired and blocks all postings except for reversing the retirement itself. Although, technically, you should be able to manually deactivate an asset, you can’t deactivate it if there are acquisition values, and, if you retire it first, the asset is automatically deactivated.

Figure 22 Asset Master Record: Asset Deactivation Date on the General Tab

Subnumbers and Group Assets There are two ways of grouping assets together. You can add subnumbers to a normal asset (this would normally be related parts of that one asset), or you can create a group number and link assets of the same class to it. The group method is a legal requirement in the United States. The setup of each is explained in the next sections.


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Subnumbers Normally an asset number in SAP will contain a suffix of zero. You may want to add subassets to a main number that relate to the main asset, for example, a monitor that goes with a computer processor. By creating the monitor as a subnumber, it can more easily be disposed of or transferred separately at a later date, and you can enter separate data, such as a different serial number, for the main asset. Local legislation may dictate the exact rules for the depreciation relating to subsequent acquisitions to the original asset and which assets can be grouped together. A subnumber is created using Transaction AS11.

Group Assets In most countries, assets are depreciated at the individual asset level; however, some countries (e.g., United States) need to group assets and show summary depreciation at the group level. To achieve this, the relevant depreciation areas and asset classes should be flagged in the configuration as relevant to group assets. Next a group asset is created for each asset class using Transaction AS21 (Create Group Asset), which contains similar fields to the ordinary asset master record transactions. In the master record of the group asset, you can then specify the assignment of an asset to the group asset for each depreciation area by drilling down to the detail screen in the Depreciation tab. One asset can be assigned to different groups in different depreciation areas if required (see Figure 23 and Figure 24).

Figure 23 Group Asset Entered in the Additional Specifications Area


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Figure 24 Asset Master Record: Group Depreciation Area

Although you can still see the details of the individual assets in the asset master record and the Asset Explorer, depreciation will be planned and calculated at the group asset level. In the Asset Explorer, you can see the individual asset transactions, the total APC and depreciation values, and so on. In other reports, you’ll also see the values grouped together under the group asset, but inside the report, you can select the Break down grp.asset button (Figure 25 and Figure 26) to see the individual asset balances that are linked to the group.

Figure 25 Asset History Report: Break Down Group Asset


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Figure 26 Asset History Report: Group Asset with Breakdown by Individual Asset

Validations You can configure a validation check on a field in the asset master record, for example, to only allow specific values for a particular asset class and to show a warning message or block the user from continuing until the correct value is filled in. Validations also exist in FI for verifying transactional postings.

Substitutions and Worklists Substitutions are usually used in conjunction with worklists to carry out mass changes and also for creating or transferring a number of assets in one go. First, a substitution rule needs to be defined in the configuration, for


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example, changing a cost center from ABC to XYZ. Next you can create a worklist, either from Transaction AR01 (Generate Worklist) or from any other fixed asset report that has an icon to create a worklist. Then you choose the purpose of the worklist, for example, Change Master Data, and you can process it with the relevant substitution rule. Section 4.2 explains worklists in more detail using mass retirement as an example.

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A number of different processes can be used to record an asset in the fixed asset register in SAP S/4HANA.The method chosen will depend on a number of factors, not least the complexity of the organization. You can use a simpler process for assets that are brought into use immediately, such as computers or office equipment, and a more complex process for long-term projects to construct buildings or factory plants that may continue over a period of time, perhaps even years. Most of the processes after capitalization, such as depreciation or retirement, aren’t affected by the method of capitalization used, unless you’ve used the post-capitalization process (the slight difference in this case will be explained in the section Post-Capitalization). The following sections go through the various options available to acquire an asset and discuss the benefits or disadvantages of each. If you want to see the related financial postings, we’ve detailed these in Section 6. We’ll start with the simplest methods and work our way up.

Note You’ll notice that depreciation areas, accounting principles, and ledger groups may be used almost interchangeably, depending on the transaction. The depreciation area contains the depreciation rules in Asset Accounting. Although not all depreciation areas post to FI (some may calculate tax values for reporting only), you may have several depreciation areas linked to an accounting principle, which in turn is linked to a ledger group. Some ledger groups may have the


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same code as the ledger and only contain that ledger.

3.1

Without Investment Management

We start by going through some direct finance and purchasing acquisition transactions without using Investment Management (IM). Then, in Section 3.2, we’ll explain what IM is and go through the same transactions using investment measures.

Nonintegrated Journal with an Offsetting Account Costs are posted between an offsetting account and an asset without any integration to Accounts Payable (AP) or a vendor account at the time of the asset posting. The vendor invoice is generally received at some point but posted independently of the asset posting. Segregation of duties may require AP to post the invoice to an initial suspense account or an offsetting account, and the asset accountant(s) may need to transfer the costs to the asset in a separate posting. Alternatively, there may be a requirement to capitalize the asset separately because it’s already in use, even though the vendor invoice hasn’t yet been received, or the costs have been posted elsewhere and need to be transferred back to the asset. In the SAP S/4HANA GUI, you typically use Transaction ABZOL (Acquis. w/Autom. Offsetting Entry), as shown in Figure 27, which unlike its predecessor, Transaction ABZON, has fields allowing you to select accounting principles and depreciation areas independently if required. The SAP Fiori equivalent is called Nonintegrated Asset Acquisition. In both transactions, you can either create the asset beforehand or during the transaction. After you’ve entered the dates and amount, the transaction will post automatically between the asset and the normal offsetting account set up in the configuration. You can also override the offsetting account by entering an account of your choice on the Additional Details tab. Figure 28 shows the various permutations possible.


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Figure 27 Transaction ABZOL: Nonintegrated Acquisition Posting

Figure 28 Nonintegrated Asset Acquisition Flows

Note Prior to New Asset Accounting, only the leading ledger was updated in real time, and you needed to run Transaction ASKB (APC Values Posting) at the period-end to post to the other ledgers. With SAP S/4HANA, this step is no lon-


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ger required as all the ledgers are updated at the time of the transaction.

If after you’ve capitalized the asset, the invoice arrives with a slightly different value (one that is acceptable), you may need to make a second adjustment posting to the asset with Transaction ABZOL. You can also use Transaction ABZOL to post to an AuC instead, settling the costs to the final asset at a later stage. Settlement in this context is the SAP term to transfer costs from an object such as an investment order, Work Breakdown Structure (WBS) element (see Section 3.2), or an AuC to a fixed asset or a cost center so that the costs may be held temporarily before capitalization as part of a work in progress. An example is the construction of a building or factory plant over a longer period of time, where you want to show the costs as investments but don’t yet want to capitalize them and start depreciation. If the construction projects are highly complex, and you want more detailed control over the different elements, you may prefer to use projects with WBS elements so that you can assign the budget and track the expenditure in more detail. SAP project systems allow capacity and resource planning, milestones, Gantt charts, and much more.

Integrated with Vendor but without Purchase Order This is when an invoice is received and posted directly to the asset (or the AuC) as well as the vendor at the same point in time. This process may be suitable for companies that don’t have a formal PO process in place for Asset Accounting and want to record the costs against the asset at the time of posting the invoice. When making a posting to a vendor, you must post to all ledgers at the same time, so in SAP S/4HANA, a technical clearing account allows you to split out the postings and post independently to each ledger for the asset (see Table 1). This allows you to post differently to each accounting principle. To maintain integrity, the technical clearing account can’t be posted to manually. In Section 6, we show you some example postings to explain the exact debits and credits for different scenarios. Ledger Group

Vendor Invoice Posting

All Ledgers

Debit Technical Clearing Account

Asset Posting

Credit Vendor


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Debit Asset Credit Technical Clearing Account

Local GAAP

Debit Asset Credit Technical Clearing Account

Table 1 Integrated Postings Using the Technical Clearing Account

Prior to posting the invoice, the asset or AuC master record needs to be created because the asset or AuC number will be entered during the transaction. In SAP S/4HANA, the transaction for this type of posting using the SAP GUI is Transaction F-90 (Acquisition from Purchase with Vendor) and the SAP Fiori equivalent based on the same transaction is Acquisition without Order (integrated AP). This isn’t the most user-friendly process whether using SAP Fiori or not because, in both cases, you have to manually enter posting keys and transaction types (see the following note). The normal vendor invoice Transaction FB60 is an FI-only transaction that doesn’t allow you to enter an asset, but, technically, you can still use any transaction you’re more familiar with that allows you to enter a vendor, posting keys, and an asset transaction type.

Note A posting key is a two-digit code in SAP that combines the type of account (vendor, customer, asset, stock, or general ledger) with the debit or credit. Posting keys 21 to 29 are vendor debits that denote credit notes and payments, and posting keys 31 to 39 are vendor credits that denote invoices or adjustments. For assets, there are only two posting keys 70 (debit) and 75 (credit), so you need to enter a three-digit transaction type to denote whether it’s a current or prior acquisition, credit memo, goods receipt (GR) retirement, transfer, and so on so that it will show in the correct column in the asset movement reports.

Purchase Order Processing This process may start with a purchase requisition (PR) or with a PO (see Figure 29). The asset master data are created at or near the start of the process, and then when


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the asset is received, it can be capitalized either at the time of posting the GR or the invoice, depending on the settings.

Figure 29 Purchase Order Flow with Asset

Creating the Asset Master Prior to the Purchase Order The asset or AuC master is created first, and then when entering the PR or the PO using account assignment category (AccAssCat) A Asset, you’ll be required to enter the asset number in the Asset field (Figure 30) in the item detail.

Figure 30 Entering or Creating the Asset Number during PR/PO Creation

Creating the Asset Master during Purchase Order Entry When creating the PR or PO, if you haven’t already created the asset, you can click on the Assets button, shown at the bottom of Figure 30, and complete the fields in the popup to create the asset at the same time.

Posting a Valuated Goods Receipt If a valuated GR has been selected in the vendor master data or PO settings, then the asset is posted to (capitalized) at the point of GR (see Figure 31). If the invoice


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has a slightly different amount from the original PO, and therefore the GR amount is different from the invoice, the system will automatically make an adjustment posting of the difference to the asset when the invoice is posted.

Figure 31 Asset Posted with Goods Receipt and with Invoice

Posting a Nonvaluated Goods Receipt In some countries, the asset can’t be capitalized until the invoice is received, even if the asset is in use (see Figure 31). In this case, you choose a nonvaluated GR setting in the PO (or vendor master), in which case, no value is posted at the point of GR; that is, the asset will only be capitalized at invoice receipt.

3.2

With Investment Management

Investment Management (IM) is the area or submodule in SAP S/4HANA that deals with controlling and planning the expenditure on investments. Typically, you set up availability control so that you can’t spend or raise a PO to commit to spend unless there is budget available. You can choose whether to warn, for example, when you reach 95% of budget, or even allow a small percentage overspend.


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An investment program can be created to manage the Capex (capital expenditure) and Opex (operating expenditure) projects and to provide an overview of the planning and budgeting process for all the related investments. If used in conjunction with SAP Project System (PS), you can create a project containing a hierarchical structure with WBS elements for a more detailed analysis (see Figure 33). WBS can be used for more detailed project planning of material and resources and gathering costs. You can have a project mix of WBS elements that are only expensed and others that are capitalized. Depending on the complexity of the


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organization, you may not need such a hierarchical approach and can use investment orders to track costs instead.

Figure 33 Example of Investment Program with Projects, WBS Elements, and Orders

This approach, using WBS elements or investment orders, is more suitable for companies with larger investments in, for example, buildings, plants, and machinery, where more costs are involved in each stage of the process, and the asset can’t be capitalized until all the work is complete and the asset brought into use. A lot more functionality is available, such as appropriation requests that allow review of the expenditure during the planning phase, approval workflows, and reporting, but the part of IM we’re most concerned with in this E-Bite is using the investment measure functionality to post actual costs against an investment order or a WBS element as part of the capitalization process.


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Without Purchase Order Processing One or more AuCs and the related settlement rules can be created automatically at the time of releasing the investment order or WBS elements, but you can choose to create them manually. You can post directly to the investment order or WBS elements by journaling costs there from another account, which is a nonintegrated posting as there is no vendor involved. You can also post a vendor invoice directly to an investment measure, such as a WBS element or investment. This is an integrated posting, so the technical clearing account is used to allow separate documents for the asset postings to the different ledgers. In both cases, because the investment order or WBS element is only updated after the costs have been incurred, you can’t use the availability control to prevent costs going over budget. Periodically, the costs are settled first to the AuC and then to the asset when it’s brought into use (see Figure 34). Technically, you can also settle directly from an investment order or WBS element, but if you want to settle directly to the asset anyway, you should probably choose a simpler approach (unless you want to enter plan data or budget data anyway).

Figure 34 Without Purchase Order Processing but with Investment Measures

In SAP S/4HANA, when you settle to the final asset, you can create a different settlement rule for each ledger group. Figure 35 shows the line item distribution rule (Transaction AIAB, Distribute), which is where you select the items that you want to settle as you may have collected a number of different costs for a number of assets. The first line in the diagram is ledger group 0L, which is the leading ledger,


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and the second line in this case is ledger group 2L, which is a parallel ledger that has been set up for another accounting principle. You can select both and create one rule for all ledger groups, or you can create different rules for each ledger. As you assign a settlement rule to each line, the status will change from red to green.

Figure 35 Transaction AIAB: Choosing Line Items to Create Settlement Rules

Figure 36 shows Transaction AIBU (Settle) posting a separate document for each ledger group. This transaction can be run separately or selected from within the previous Transaction AIAB (Distribute).


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Figure 36 Transaction AIBU: Settlement of AuC to Asset

Figure 37 shows the results of the settlement. You can see that although there were two ledger groups posted to with two documents (one for each accounting principle), in fact five depreciation areas were updated. In this example, the local company was in the United Kingdom, so area 1 is local GAAP in local company code and currency, and area 15 is a tax calculation that doesn’t update any ledger. Area 31 is local GAAP but in USD, and areas 32 and 33 are IFRS in GBP and USD, respectively.


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Figure 37 Transaction AIBU: Detail of AuC Settlement to Final Asset

With Purchase Order Processing PO processing using investment measures is useful when you want to collect together and control the expenditure on a number of costs that are involved in the creation of an asset. Perhaps you have architect fees, surveys, labor, and so on when building a large plant or building, or you might have different parts when assembling a conveyor belt or other factory plant and machinery. You enter the


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investment order or WBS element in the PO, and valuated GRs and invoice differences (or the full invoice in the case of a nonvaluated GR) will then post to the investment order or WBS element.

Purchase Order Processing with Internal Orders and Assets under Construction Settlement can be made to an AuC first and then from the AuC to the asset when the asset is ready to be brought into use. Sometimes companies put ready-made assets such as vehicles, computers, furniture, and office equipment through the same process to have a single process for all assets. Others skip the AuC and settle directly to an asset. Using the PO process with availability control means a budget can be entered on the investment order, and this has the advantage that the budget warning and blocking messages can prevent overspend before the PO is placed with the vendor.

Purchase Order Processing with Project systems, Work Breakdown Structure Elements, and Assets under Construction Similar to the internal order, costs can be gathered on the WBS elements, checked against budget, and settled to an AuC until the completion of the project/asset (see Figure 38). The asset master records can then be created, and the AuC can be settled to the final assets.

Figure 38 Investment Measures and Purchase Order Processing

3.3

Other Acquisition Processes

Another way of acquiring an asset is via a transfer, either within the company (intracompany) or within the group (intercompany). We cover the transactions that


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allow you to do the transfer out of one asset into another in a single transaction. We also cover in this section post-capitalization, which refers to capitalizing an asset this year that should have been charged last year. Finally, we briefly mention credit notes and corrections.

Transfers We’ll explore two types of transfers in this E-Bite: intercompany transfers and intracompany transfers.

Intercompany Transfers An intercompany transfer is where one company sells or transfers an asset to another company, usually within the same group. If both companies are on the same SAP instance and within the same controlling area, it can be automated by transferring the value from the asset in one company code to the asset in the other company code in a single transaction. To do this, you need to have the intercompany accounts set up in both company codes. You can either create the asset for the target company code via Transaction ABT1L (Intercompany Asset Transfer; its equivalent is Asset Transfer Intercompany in SAP Fiori), in which case, you select the new asset in the first screen and then click on the master data icon to create the asset in the transaction. Or, you can create the new asset in the target company code before you start by using Transaction AS01 (Create Asset), in which case, you select Exist.Asset and enter the asset number. If both companies share the same chart of depreciation you can automatically copy some details from the sending to the target (receiving) company in both transactions. Figure 39 shows the entry screen for Transaction ABT1L, where we’ve selected Rev. from NBV. To take the same net book value to the target company, you could also enter revenue here if a payment is due between the company codes. Transaction ABT1L and its predecessor Transaction ABT1N are identical, and you can’t select by ledger group or accounting principle in either transaction.


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Figure 39 Transaction ABT1L: Intercompany Asset Transfer

On the Additional Details tab, you select the Transfer Variant (see Figure 40) to specify the valuation method and transaction type to be used for the transfer. If you have an asset with an APC value of $6,000 and accumulated depreciation of $1,500, and you choose the Gross method, then the APC and accumulated depreciation will be the same in the target company as the source. If you choose the Net method, then the APC in the target company will be the net book value of the asset in the source company (i.e., $4,500), and no accumulated depreciation will be posted.


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Figure 40 Transaction ABT1L: Intercompany Transfer Variant

As you can see from Figure 41, one document is produced for each ledger for each company code, and the asset master is also created in the target company code if you’ve chosen to create the asset in the same transaction as the transfer.

Figure 41 Transaction ABT1L: Posted Documents

In addition to the individual company documents, two intercompany documents are also produced, one for each ledger, which can be seen with Transaction FBU3 Display Cross-Company Code Transaction (see Figure 42). The intercompany


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documents simply combine the existing documents of the two company codes so that you can see the cross-company posting more easily; they don’t make any additional amounts postings.

Figure 42 Intercompany Document with Postings to Two Company Codes

For Figure 42, we reversed the transfer and reposted it using the net method, so that you can see that although the gross book value has been credited, and the accumulated depreciation has been debited from the sending company code ZOF4, only the net book value is posted in the target company code ZOF6. Figure 43 shows the Asset Explorer in the sending Company Code ZOF4, after the transfer. You can see the values being cleared from the asset in the Change column and the Retirement to affiliated company with revenue using transaction type (TType) 230 in the bottom section.


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Figure 43 Asset Explorer: Asset with Intercompany Transfer Out

Intracompany Transfers Transfers within one company code involve transferring the value from one asset to another asset. It may be that the asset was originally created in the wrong asset class, or some other change is required that isn’t easy to do after postings have been made against the asset, so you want to transfer the values to a clean asset and start again. The SAP S/4HANA intracompany transfer transaction, which now allows you to select separate ledgers, is Transaction ABUML, and the SAP Fiori app is Post Transfer within Company Code. This transaction is almost identical to Transaction ABT1L used for intercompany transfers, but on the Additional Details tab, the transfer variant should default to 4 for Transfer within a company code, and you can enter


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separate accounting principles and depreciation areas. You enter the dates and the asset numbers that you want to transfer from and to, although you can also create the receiving asset during the transaction. The system will normally transfer the gross book value, or APC, in SAP terms, plus the accumulated depreciation to the receiving asset. If the useful life is different, then the monthly depreciation will be adjusted accordingly. Figure 44 shows the posting to the leading ledger, but there will be also be separate documents for the postings to any parallel ledgers. As you can see from the posting, the same gross book value is credited in the first asset and debited in the second, accumulated depreciation is debited in the first asset and credited in the second, and the final figure is the current year depreciation.

Figure 44 Display Document: Intracompany Transfer

Post-Capitalization If you decide to capitalize an asset with a capitalization date and depreciation start date of a previous period in the same year, assuming the previous periods are closed and depreciation has already been run for those periods, most depreciation methods in SAP will post a catch-up amount of depreciation in the current period and then post the normal amount of depreciation going forward. SAP won’t, however, post catch-up depreciation in the same way for the prior year depreciation if the capitalization and depreciation start dates refer to a previous year.


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There is, however, a post-capitalization transaction that splits out the amount referring to the prior year and posts it to a separate account in FI. In our example, an asset costing $36,000 with a useful life of three years, should have been capitalized on July 1, 2016, but is entered into the system only on May 1, 2017, after the previous year, ending December 31, 2016, has been closed. If you select the Post-capitalization checkbox on the selection screen when you create the asset (refer to Figure 3), then on capitalization, six months’ depreciation (i.e., $6,000) will already be credited to accumulated depreciation in the acquisition posting. Then, when you run the first month’s depreciation in May, it will post five months’ current year catch-up depreciation of $5,000 in May and then $1,000 per month for the remaining useful life up to June 2019. If you hadn’t used the post-capitalization transaction, the catch-up depreciation would be the same, but the initial $6,000 would now be spread over the remaining two years and two months. Figure 45 shows how the postcapitalization posting has automatically split out and posted the prior year’s depreciation.

Figure 45 Transaction FB03: Display Document for Post-Capitalization

The SAP S/4HANA transaction for post-capitalization is Transaction ABNAL, which allows you to post to all ledgers or just to a certain ledger group (see Figure 46).


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Figure 46 Transaction ABNAL: Post-Capitalization

Figure 47 shows how the values look in the Asset Explorer of Transaction AW01N after the post-capitalization has taken place. As you can see, the depreciation relating to the previous year shows up as a value adjustment rather than the current year or previous year depreciation.


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Figure 47 Asset Explorer: Post-Capitalization

Figure 48 shows the expired and the remaining useful life at the beginning of 2017.


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Figure 48 Asset Explorer: Useful Life and Start Date of Depreciation after Post-Capitalization

Credit Notes and Corrections The processes are generally similar but in reverse for credit notes or reversals, and again you can choose which depreciation areas and accounting principles to post to and change the default offsetting account. We’ll run through some of the transactions in the next section.

Credit Notes Transaction ABGL and Transaction ABGFL are almost identical transactions to post a credit amount to an asset, but the first defaults in transaction type 105, which is Credit Memo in Invoice Year (see Figure 49), and the second defaults in transaction type 160, Credit Memo in Following Year. In both cases, the default accounts are


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the same, but it allows them to be differentiated in reporting. If you try to enter a credit note using Transaction ABGL against an asset that has no acquisition in the current year, you’ll get an error message blocking you from posting because the acquisition value is negative.

Figure 49 Transaction ABGL: Current Year Credit Note

Reversals If a document is posted in the Asset Accounting module, it can’t be reversed in the FI module. Transaction AB08 is available instead, which will reverse the asset posting and the related financial documents. To post a reversal on an asset, you select the asset rather than the financial document. The system displays all the postings against that asset for you to choose the correct one (see Figure 50) and reverse it (using the Reverse button available at the top of the screen).


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Figure 50 Transaction AB08: Reversal of Asset Accounting Document

If you need to reverse anything involving a settlement, use the reversal option in settlement Transaction KO88 from the top menu Settlement Reverse, or in Transaction AIBU from the top menu Environment Reverse. Alternatively, you can use Transaction AIST, which is a reversing transaction. As you can see from the example in Figure 51, the reversal transaction is almost identical to the initial transactions.

Figure 51 Transaction AIST: Reversal of AuC Settlement


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Retirements, Impairments, and Value Adjustments

4 Retirements, Impairments, and Value Adjustments The previous section covered acquisitions. This section provides an overview of some of the other transactions that can occur with an asset, such as retirements, transfers, value adjustments, and other business processes in SAP S/4HANA. The first section explains how retirements are processed.

4.1

Retirements

An asset can be sold or disposed of without proceeds, that is, written off the books. It can also be transferred, but this has been dealt with in the section Transfers under acquisitions. The generic term for writing off an asset without proceeds in SAP is scrapping, but the asset could be lost, stolen, obsolete, broken, thrown away, destroyed, and so on, and you can also write off the whole or only part of the asset. You can set your configuration to determine how the net book value is calculated for each ledger, such as how much depreciation is calculated in the month of disposal. It may be that for group purposes, you have to calculate a full month’s depreciation regardless of the date that the asset is disposed, but for local purposes, a pro rata depreciation calculation is required. The next section explains the sale of an asset with proceeds.

Sales The posting of a sale of a fixed asset to a customer can be done in a one-step posting directly between the customer and the asset or by posting the customer invoice separately from retiring the asset. Although, in practice, the one-step posting transaction may seem neater, if your company uses the Sales and Distribution (SD) module of SAP to record sundry sales and print invoices, you may have to retire the asset in a separate step.

Posting in One Step with Customer The SAP S/4HANA Transaction F-92 (With Customer; SAP Fiori transaction: Asset Sale with Invoice) allows you to post between a customer account and an asset in


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one transaction. Several documents will be produced if you have more than one ledger or accounting principle, and you can post the proceeds from the sale at the same time. There is a Correspondence function that enables you to print an invoice to send to the customer off the back of the accounting document. The amount the customer pays may not equal the exact net book value in the accounts, so a profit (gain) or loss may be made. There are different processes to account for this profit or loss. As standard, SAP can show the proceeds separately as required by many countries, and it can also work out whether there is a net profit or net loss and post to different accounts accordingly. In addition, you can choose to post everything to one account. Section 6.3 explains the financial postings in more detail, but in this scenario where the customer and asset are posted to in the same transaction, there are usually three main steps, not necessarily always processed in the following order: 1. Use the integrated asset sale transaction to create a customer invoice and to clear the asset from the asset register. 2. Print the customer invoice for the sale. 3. When the payment arrives, post between the bank and the customer to clear the customer invoice. We’ll illustrate this process with the example in Figure 52. The asset was purchased in 2016 for $6,000 with a useful life of five years and then sold at the end of March 2017 for $5,500. In the Posted values tab in Figure 52, you can see the opening balances at the beginning of 2017 in the Fiscal year start column and the closing values in the Posted values column, with the Change column showing the current year transaction. On the bottom section, you can see that the first three periods’ depreciation are in green, indicating that they have been posted, and the subsequent periods (not all shown) are in yellow, indicating that they are planned postings. When the asset is sold, the net profit will be $1,000 ($5,500 proceeds less net book value of $4,500).


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Figure 52 Asset Explorer: Revenue Retirement of Prior Year Asset

In the first part of the asset sale transaction, you post a debit to the customer and a credit to the asset proceeds account (plus any relevant taxes, not shown in this example). Note that this isn’t the actual bank posting, which will be made separately between the customer account and the bank, but the balancing entry of the customer debit, used to calculate whether there is a net gain or loss on the sale. On the proceeds line of the transaction, you’ll see the Asst retirement checkbox, which you need to select, and a popup will appear (see Figure 53). You need to enter the value date here (Asset Val. Date), which tells the system at what date to calculate


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the net book value. If you select the Compl. Retiremnt checkbox, then the system will retire the net book value at the asset value date. Or you can choose to retire part of the asset if applicable, in which case, the system will work out the percentage of the APC and accumulated depreciation to get the correct net book value. The Transaction Type field should default to 210 (Retirement with Revenue).

Figure 53 Transaction F-92: Selecting the Asset and Value to be Retired

After closing the popup screen and returning to the transaction, you’ll still be at the proceeds entry; to see the asset posting, you can either click on the Display Document Overview icon (not shown here) or, from the top menu, select the Document Simulate option. Initially, you’ll only see the two postings, a debit to the customer and a credit to the proceeds (Figure 54); however, if you click on the new


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Asset Accounting icon at the top of the screen, you’ll see the proposed postings to the asset accounts as well (see Figure 55).

Figure 54 Transaction F-92: Overview of Asset Sale

Figure 55 Transaction F-92: Proposed Asset Postings

You can also click on the AP/Currency button (Accounting Principle/Currency) to see a dropdown allowing you to choose to display the posting simulation for any combination of currency or ledger group that you want. If you want to print an invoice from SAP for this transaction after completing the posting, assuming you have the invoice format configured in SAP, you can go to the


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document display either from Transaction FB03 or from the customer line item display in Transaction FBL5N. In the document display, select Environment Correspondence from the top menu to see a list of options from which you can choose the customer invoice, which can then be printed out using the standard correspondence process.

Asset Sale without Customer Some companies may prefer to use their standard sundry sales billing process in the SD module to post the customer side of the fixed asset sales against the proceeds P&L account, and then use a separate transaction to remove the asset from the fixed asset register. When payment is received in the bank, it then clears the customer invoice. The SAP S/4HANA GUI Transaction is ABAOL (previously Transaction ABAON), and the SAP Fiori equivalent post is Asset Sale without Customer. We’ll use an identical example to the previous posting to illustrate this. Figure 56 shows Transaction ABAOL. After you’ve selected the asset that you want to retire and the relevant dates, you then have to decide how you want the posting to appear. In Figure 56, we’ve selected Manual Revenue to allow the system to calculate whether a gain or loss has occurred. This posting will offset the proceeds posted during the customer invoice. In Figure 57, you can see the proposed gain of $1,000. You still have to post the proceeds from the bank to clear the customer invoice. If you select Rev. from NBV and enter the depreciation area from which you want to use the net book value, normally the main one posting to your leading ledger, the posting will be made to clear the whole asset (see Figure 57). If you haven’t entered a manual revenue, the system won’t split the posting out to the gain or loss account but will post the net book value to the Clear Asset Disposal account only.


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Figure 56 Transaction ABAOL: Asset Sale without Customer

Figure 57 Transaction ABAOL: Proposed Postings for Retirement without Customer

This transaction has additional functionality; for example, if you click on the Multiple Assets button (refer to Figure 56), a blank list will appear at the bottom for you to list a number of assets. You can also partially retire an asset from the


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Partial retirement tab (see the section Partial Retirement and Figure 58), and you can change document types, add references and notes, and so on from the Additional Details and Note tabs.

Scrapping For scrapping, no proceeds are received, and the SAP S/4HANA GUI transaction to use is Transaction ABAVL (Asset Retirement by Scrapping, which is old Transaction ABAVN), and the SAP Fiori transaction is Post Asset Retirement By Scrapping. This transaction is identical to the nonintegrated sale without customer except that there is no box to select manual revenue or net book value because the net book value is selected automatically. The posting will therefore be the same as the scrapping transaction if you hadn’t chosen the Manual Revenue radio button. You also have the facility here to partially scrap an asset or scrap multiple assets.

Partial Retirement Partial retirement is available in any transactions where you see the Partial retirement tab, as shown in Figure 58.

Figure 58 Transaction ABAOL: Partial Retirement of Asset Tab

You have the option to enter the amount (Amount Posted) or percentage (Percentage Rate) that you want to retire. Quantity is only really applicable if you have more than one asset, for example, if you capitalized 10 laptops against a single asset number.


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Multiple Retirement The retirement of multiple assets using the Multiple assets button has already been mentioned. This is suitable if you’re retiring in full a small number of assets, but it’s quite easy to make a typing error and retire the incorrect asset. If you have a large number of assets to retire, for example, due to a factory closure, it may be better to use the asset worklist, which is explained in the next section about mass retirements and mass changes.

4.2

Mass Retirement or Change

There are several steps in this process. The first step is to run the asset report to select the assets to be retired and create a worklist; then, you can use the worklist to process the asset retirement. This has the advantage that you can see the information such as descriptions and amounts about the assets that you’re about to retire and also have a clear list that can be approved and printed out before you press the final button.

Tip The worklist process described here can be followed for other mass changes using substitutions for changing a cost center or other field in a number of assets.

There are several transactions that you can use to select the assets for your worklist, for example, Transaction AR01 (Generate Worklist), the asset balance transactions such as Transaction S_ALR_87011963 (Asset Balances) and Transaction S_ALR_87011990 (Asset History); however, any transaction should work where you have the Add to worklist button available, as shown in Figure 59. In the selection criteria, ensure that you select the details list to list the individual assets rather than summarizing by asset class. First, run the report with the selection criteria narrowed down as much as possible, for example, by asset class, cost center, plant, location, and so on, or even asset number if these are already known. We’ve run the Asset Balances report in Figure 59.


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Figure 59 Transaction S_ALR_87011963: Asset Balances

Next you create a worklist by selecting the WL button (next to the Add to worklist button at the top of the report). This gives you the option to name the worklist and choose what you want to use it for, such as retirement with and without revenue, mass change, or intercompany transfer. If you choose retirement without revenue or scrapping, for example, you then select which accounting principle or depreciation area you want the changes to take place in, plus the dates and any text that might be required. If you want to choose the mass change option, you must create a substitution rule beforehand. After you’ve added the assets, you can go back into the worklist and check it with Transaction AR30 (Display Worklist) or edit the header or contents with Transaction AR31 (Edit Worklist) (see Figure 60) and then release the worklist to post the retirements.


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Figure 60 Transaction AR31: Edit Worklist

4.3

Impairments

IFRS and US GAAP require any impairment, or sudden drop in value of an asset, to be recognized immediately in the books as a revaluation decrease, that is, an expense, and the future depreciation to be adjusted accordingly. An impairment in SAP S/4HANA can be posted to the asset using Transaction ABAWL (Revaluation), which is also what you use for both upward and downward revaluations, depending on the transaction type entered. First you enter the Company Code, Asset number, and Trans. Type, which will then take you to the next screen where you can enter the dates and amounts (Figure 61). Transaction ABAWL doesn’t post to FI directly. When you click on Save, you’ll see a message that this transaction was posted with an Asset Accounting document, and you’ll need to run the depreciation posting transaction to post it to FI.


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Figure 61 Transaction ABAWL: Enter Manual Impairment Adjustment to an Asset

In Figure 62, the impairment adjustment can be seen as a negative adjustment in the Revaluation line of the Asset Explorer.

Figure 62 Asset Explorer: Impairment Posting as a Negative Revaluation


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4.4


Revaluation

In New Asset Accounting, you can use an index to increase the value of a number of assets on a regular basis, for example, in an area of high inflation. Organizations may also need to revalue their assets for a specific purpose such as a sale or merger. The preferred approach is to revalue at the yearend to avoid issues with accumulated depreciation, but it’s also technically possible at the end of a period mid-year. You need to ensure that all the depreciation, acquisitions, and retirements are correctly posted prior to the revaluation, and only active assets will be revalued, that is, not retired assets. If you want to keep historical values, you may need to create a new depreciation area. The SAP S/4HANA revaluation transaction is Transaction AR29N (Post Revaluation and New Valuation), and the SAP Fiori transaction is Asset Revaluation. You can also post a one-off revaluation, in a similar way to posting an impairment, using Transaction ABAWL and selecting the appropriate transaction types (see Figure 63).

Figure 63 Asset Explorer: Revaluation Posting


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4.5


Investment Support

Investment support refers to a grant of a subsidy from the government and can either reduce the APC value of an asset or be posted as a value adjustment. Assets that are eligible for investment support are identified by an investment support Key in the asset master record Allocations tab (refer to Figure 10). The investment support can be posted collectively (Transaction AR11N) or manually on an individual asset basis. If you want to record a number of different investment measures separately, you can create separate depreciation areas.

Down Payments You can post a down payment directly to an AuC, but you won’t be able to settle the AuC until the down payment is cleared by an invoice (or reversed). The down payment shows up against the AuC as shown in Figure 64.

Figure 64 Asset Explorer: Down Payment Posted against AuC


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Depreciation

Depreciation

This section provides an overview of the depreciation features and business processes in SAP S/4HANA. We’ll start by explaining what depreciation is from an accounting point of view and the different ways of calculating it. Then we’ll explain how it works and what the difference is between the various types of depreciation in New Asset Accounting.

5.1

Depreciation Definition and Methods

Depreciation is an accounting method of allocating the cost of an asset over its useful life (or immediately, in the case of low-value assets). Depreciation can either be spread evenly or linear; for example, if the asset is expected to last four years, then a quarter can be charged each year (straight-line depreciation). On the other hand, if the value of the asset typically depreciates a lot faster in the first year, you can use the reducing balance (also known as declining balance) or sum of the digits to spread the costs differently. The useful life varies depending on the type of asset and the environment in which it’s used, and countries have different legislation on what is allowed. Many other depreciation methods are used as well, for example, for management accounting or depending on local legislation, such as spreading the cost based on unit of production or hours of service, or using maximum amount or double-decline. SAP provides a number of depreciation keys for more specific tax depreciation. For example, many keys are already provided in the sample USA chart of depreciation for Adjusted Current Earnings (ACE), Accelerated Cost Recovery System (ACRS), Modified Accelerated Cost Recovery System (MACRS), Alternative Minimum Tax (AMT), and so on. All of these can be configured in SAP S/4HANA, and a manual depreciation key is also available (see the section Unplanned and Manual Depreciation in Section 5.2). These different methods, including rules about scrap value and changeover, are stored in SAP as depreciation keys, and different keys can be assigned to each depreciation area. You can see the depreciation keys (Dkey) in the asset master


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record (Transaction AS03) on the Deprec. Areas tab in Figure 65, as well as the useful life (UseLife) and start period of ordinary depreciation (ODep Start).

Figure 65 Asset Master: Deprec. Areas Tab

If you drill down on one of the depreciation areas, you’ll see additional information (Figure 66). You can enter a Scrap value or a Changeover year if you’re changing to a different method of depreciation, for example, when the asset reaches a certain value. You can add time-dependent intervals for certain fields such as the depreciation key, useful life, and scrap value by using the same logic used in the master data for cost centers. If you then double-click on the depreciation key and drill down further, you arrive inside the workings of the depreciation key (see Figure 67).


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Depreciation

Figure 66 Asset Master: Detail of Depreciation

Figure 67 Asset Master: Depreciation Calculation Detail


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You can’t change the configuration here, and although you probably don’t want to know all the details, this screen gives you an idea of how flexible the Asset Accounting module is. Clicking on the dropdown for Period Control Methods, for example (Figure 68), shows you how the system will behave for acquisitions, additions in later years, retirements, transfers, revaluations, investment support, unplanned depreciation, write-ups, and so on.

Figure 68 Period Control Methods

Transaction AW01N, which you can also get to by clicking on the Asset values icon in Transaction AS03 (Display Asset), has information on the Posted values tab about the Planned (yellow) and Posted (green) depreciation for each asset, as shown in Figure 69. Additional selection criteria allow you to move between depreciation areas and fiscal years. Under the Comparisons tab (Figure 70 and Figure 71), you can see not only a comparison by year but also a comparison of the different depreciation areas by year and currencies.


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Depreciation

Figure 69 Asset Explorer: Planned and Posted Depreciation

Figure 70 Asset Explorer: Comparison of Depreciation by Year

Figure 71 Asset Explorer: Comparison by Depreciation Area and by Year


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Depreciation

Often depreciation is charged against a cost center, but it can also be posted against internal orders, WBS elements, or a cost center at the same time as a statistical object, such as a statistical internal order or a statistical WBS element.

5.2

Types of Depreciation

SAP S/4HANA provides different types of depreciation. For example, ordinary or planned depreciation is the routine depreciation based on the criteria in the asset master record, but under certain circumstances, you may want to amend the depreciation that is charged, so we’ll explain the options available.

Ordinary Depreciation Depreciation, including any relevant interest (e.g., for cost accounting), plus any revaluations and impairments, is posted periodically. The type of period (e.g., week, calendar month, quarter) is set in the configuration, and you can also choose periods such as 4-4-5 weeks. In SAP S/4HANA, as each change or posting is made to an asset, the planned depreciation is updated in real time, so that at the end of the period, no further calculation is required, and the planned depreciation is posted and becomes actual depreciation. In SAP S/4HANA, you can now choose whether to post depreciation for all accounting principles at the same time or to run the depreciation for each accounting principle separately. SAP S/4HANA still uses Transaction AFAB (Figure 72 and Figure 74), but the selection screen is slightly different. You no longer need to choose a reason for the posting run because SAP S/4HANA will automatically know whether it’s planned, repeat, restart, or unplanned depreciation. You can choose to run the posting separately for each accounting principle, or you can leave the Accounting Principle field blank and run it for all accounting principles.


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Figure 72 Transaction AFAB: Depreciation Posting Run

A very useful addition is the Info for Posting Parameters button at the top of the Depreciation Posting Run selection screen (Figure 72). This allows you to see which periods and which accounting principles were last posted (see Figure 73).

Figure 73 Transaction AFAB: Posting Parameters

Although the depreciation transaction is still run in the background in New Asset Accounting, it will run faster as it’s not recalculating every asset, just taking the planned values that are always up to date. As before you can see all the detail first


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in test mode (see Figure 74), but remember to select Detailed Log in the selection screen.

Figure 74 Transaction AFAB: Results of Test Run

Transaction AFBP (Depreciation Posting Monitor) shows the depreciation runs in a particular period and allows you to drill down for more detail, including the selection criteria used and the document numbers produced (see Figure 75). In this particular example, there are four lines because an additional asset was added after the first depreciation run, and there is a separate line for each accounting principle.

Figure 75 Transaction AFBP: Depreciation Posting Monitor


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Unplanned and Manual Depreciation Ordinary depreciation is intended to cover the normal wear and tear of an asset, but there may be circumstances where additional depreciation needs to be posted, such as when the asset has been used more than expected, has been in tougher conditions, or has been damaged. There is also a separate transaction for impairment, which is posted by the depreciation run (for convenience, this has been covered in Section 4.3 because it’s similar to revaluation). In SAP S/4HANA, you can amend the amount of depreciation calculated by the system using one of several transactions. You can increase the depreciation with unplanned depreciation, entered with Transaction ABAAL, or you can decrease it with write-up in Transaction ABZUL. Each has a different transaction type and appears in a different row in the Asset Explorer. With unplanned depreciation, you can make a one-off posting any time in addition to the normal depreciation that is posted based on the depreciation key. However, if you want to use manual depreciation, you have to assign a manual depreciation key (e.g., MANU instead of LINR) instead so that only manual depreciation is posted. In both cases, only the Asset Accounting module is updated initially, and FI and Co are updated with the depreciation run. Neither transaction will accept negative values, so if you want to decrease the amount of depreciation already posted, you can use the Transaction ABZUL (Write-Up) instead, even if you have an ordinary depreciation key in place. Clicking on Area Selection (3) in Figure 76 gives you the option to choose more than one depreciation area, whereas leaving the Accounting Principle and Depreciation Area fields blank means that it will post to all.

Warning! Even though you may see the message beginning Asset Transaction was posted with AA document no, this isn’t updating FI. FI will only be updated at the time of the depreciation run by Transaction AFAB.


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Figure 76 Transaction ABAAL: Entering Unplanned Depreciation

Figure 77 shows an example of unplanned depreciation in the Asset Explorer. It’s separated from the ordinary depreciation in the top area of the screen, and you can also see the posting in the lower part, with transaction type (TType) 650, which identifies it as unplanned depreciation for a current year acquisition.

Figure 77 Asset Explorer: Unplanned Depreciation


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5.3

SAP General Ledger Postings

The New Depreciation Engine in SAP S/4HANA

New Asset Accounting brings with it the new Depreciation Calculation Engine. It was designed to cope with more country-specific requirements (particularly Japan) and calculates by period intervals rather than transaction. The engine also includes more flexibility for time-dependent changes, for example, when making mid-year changes to depreciation terms such as useful life, depreciation key, scrap value, and so on. The final calculated amount, in most cases, will be the same as before, but one area where you may see some change is when the useful life of an asset changes part way through its life.

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This section explains the integration between New Asset Accounting and the SAP General Ledger, where SAP S/4HANA brings a number of improvements. Historically in SAP, although the asset itself was updated in all depreciation areas, only postings to Depreciation Area 1 updated the general ledger accounts immediately. You had to wait until the end of the period to transfer the values from the other depreciation areas, and, even then, you could only drill down to the first document, that is, from Depreciation Area 1 in the Asset Explorer. In SAP S/4HANA, all depreciation areas post in real time; in other words, they update the general ledger accounts at the same time as they update the asset, plus you can drill down to the documents for all ledgers from the Asset Explorer. The postings update Universal Journal documents, which allow more information to be transferred and reported on in FI. In this section, we go through different types of transactions so that you can see how the postings are made and also what happens with the different ledgers depending on whether you use the ledger approach or the account approach.

Tip


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Your main set of accounts will be in the default or leading ledger, contained in ledger group 0L. In our example, Depreciation Area 1 with depreciation rules according to local GAAP will post to ledger group 0L, and Depreciation Area 32 (accounting principle IFRS) will post to ledger group 2L. The other depreciation areas will calculate values for reporting but not post to the general ledger accounts.

6.1

Capitalizations

Some accounts in SAP such as customers, vendors, taxes, and the Goods Received/Invoices Received (GR/IR) account don’t allow unilateral postings, that is, postings in only one ledger. To include asset movements such as acquisitions, transfers, and disposals in postings with these accounts and at the same time post to multiple ledgers, it’s necessary to split the posting into an operational document and a valuated document using a specific account called the technical clearing account, which is account 16014000 in our example.

Note All the balance sheet asset accounts in all ledgers posted to by New Asset Accounting, including the technical clearing account, will now be reconciliation accounts; that is, they will only allow automatic postings from Asset Accounting. This applies even if you’re using the accounts approach.

Nonintegrated Our first example, is a straightforward posting debiting an asset and crediting a normal P&L account; in this case, it’s a correction from the office supplies account, but it could be a transfer from any standard account. If you leave the Ledger Group field blank, it will post to all accounting principles, or you can post a separate document to each ledger with different amounts or accounts.

Ledger Approach Because we’ve left the Ledger Group field blank when posting, all ledger groups were posted to, producing a separate document for each accounting principle/ledger group (see Figure 78 and Figure 79).


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Figure 78 Transaction FB03: Simple Nonintegrated Local GAAP Posting

Figure 79 Transaction FB03: Simple Nonintegrated IFRS Posting

Tip When you first display a New Asset Accounting document in Transaction FB03 (Display Document), you’ll see the Asset Accounting button, which will take you to an overview of all the documents. Clicking on the AP/Currency button (refer to Figure 78) allows you to toggle between the different accounting principles and currencies to see all the related postings.

Account Approach In this company code, ZOF7, a separate range of accounts has been set up for the second accounting principle, named GroupAccounting with a Ledger Group of A1, but in the same ledger. The accounts are similar but two digits shorter. In Figure 80, you can see the Local GAAP posting, and, in Figure 81, in a separate document, you can see the GroupAccounting posting to Ledger Group A1.


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Figure 80 Transaction FB03: Simple Nonintegrated Local GAAP Posting

Figure 81 Transaction FB03: Simple Nonintegrated GroupAccounting Posting

As you can see in both cases, two documents have been posted in a single transaction in real time. For the parallel approach, each document is identical but in a separate ledger group. For the account approach, the actual ledger is the same, but the accounts used are different. You may notice that even in the account approach, in SAP S/4HANA, the Ledger Group field is still filled in, even though there is no separate ledger as such, and the posting is made to the leading ledger in FI.

Integrated with Vendor (without a Purchase Order) This example is an integrated posting made between the asset and the vendor directly (without a PO). This is where the new technical clearing account functionality comes into play.

Ledger Approach The first posting (document number 1900000006 in Figure 82 and in Figure 83), which is called the operational posting, credits the vendor and debits the technical clearing account number 16014000. The Ledger Group field is blank, which means


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that the posting is updating all ledgers. Although you can’t see it in the figures, the document type used here is KR (the standard vendor invoice document). The second and third postings, which are called valuating postings, both debit the fixed asset and credit the technical clearing account in different ledgers. This effectively means that three documents are created: document 1900000006 for all ledgers, document 100000022 only in the leading ledger group (local GAAP), and document 7000000034 only in the parallel ledger (IFRS). The balance on the technical clearing account is zero because the credit in each ledger matches the debit that is in all ledgers from the operational document. You can keep the same document type for the second and third documents or choose a different one; in this case, the chosen document type was AA.

Figure 82 Transaction FB03: Integrated Vendor/Asset Local GAAP Posting

Figure 83 Transaction FB03: Integrated Vendor/Asset Local IFRS Posting


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Account Approach Here again, three documents are produced in total (see Figure 84 and Figure 85) in a similar way using the technical clearing account to offset both the vendor and the asset posting. The difference is that under the ledger approach, the postings to the asset are made to two different accounts, and the balance on the technical clearing account is zero, whereas in the account approach, the balance isn’t zero. Because all postings in the account approach are made to the same ledger, you need to have a balance on the technical clearing account to offset the postings for the second accounting principle.

Figure 84 Account Approach: Integrated Vendor/Asset Posting to Local GAAP

Figure 85 Account Approach: Integrated Vendor/Asset Posting to Group Accounting

In all cases, thanks to the technical clearing account, you could easily capitalize an asset only for one accounting principle and post the value to expenses for another, or use the technical clearing account to transfer part of the value, for example, to freight costs.


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With Purchase Order Processing This will depend on the exact process flow, for example, whether you enter an AuC, an asset, an investment order, or a WBS element in the PO.

Nonvaluated Goods Receipt with the Asset under Construction or Asset Number Entered in the Purchase Order If your GR is nonvaluated, this will follow the integrated with vendor flow. When you enter the GR, there will be no posting in FI, but when you post the invoice, three documents will be created with similar postings to the earlier section Integrated with Vendor (without a Purchase Order). The first (operational), between the vendor and the technical clearing account, will post to all ledgers. The other two documents (valuating) will each post to an asset and the technical clearing account, but in different ledgers, for the ledger approach. For the account approach, they will both post in the leading ledger but to different general ledger accounts.

Valuated Goods Receipt with the Asset under Construction or Asset Number Entered in the Purchase Order In this case, the postings to the asset are made at the time of the GR. The GR/ IR account is the standard way that SAP enables automatic three-way matching among the invoice, GR, and PO. Normally, the GR will debit costs or stock (or, in this case, assets) and credit the GR/IR account, and then when the invoice is received, it will credit the vendor and debit the GR/IR account. This way, your GR/IR account will always show your accruals, which you can analyze by PO line item; in fact, SAP S/4HANA lets you analyze by a lot more. If there is anything that doesn’t match, the invoice will be blocked for payment (unless it’s within the tolerance for three-way matching). The GR/ IR account is one of the accounts to which you can’t make unilateral postings. In SAP S/4HANA, however, the operational posting for all ledgers credits the GR/IR account and debits the technical clearing account. The two valuating postings will then credit the technical clearing account and debit the asset, each in a separate ledger for the ledger approach. Assuming the vendor invoice is for the same amount, the invoice posting will then credit the vendor and debit the GR/IR account as usual (see Figure 86 and Figure 87).


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Figure 86 GR Posting to GR/IR and Technical Clearing for Local GAAP

Figure 87 GR Posting to GR/IR and Technical Clearing for IFRS

Tip You’ll note that the transaction type (in the A.TrnsType column) in Figure 86 is no longer 100, which was External Asset Acquisition, but is now 120, which is Goods Receipt, to help you with later analysis. Different transaction types are used for other movement types such as transfers and disposals, and these transaction types drive where the asset appears in reports, such as the Asset History, which analyzes the different movement types during the year.

If the vendor invoice is different, for example, the asset costs slightly more, the difference will cause additional documents to be produced because the invoice posting will then become integrated. You can see in Figure 88 and Figure 89 that the first posting credits the vendor with the full amount but debits the GR/IR with the GR amount, posting the difference to the technical account. The other postings to the two ledgers credit the technical clearing account and debit the asset with the


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additional amount. The postings would be similar if the invoice had been less than the GR, but they would have reduced the asset value.

Figure 88 Posting of the Difference between Invoice and GR for Local GAAP

Figure 89 Posting of the Difference between Invoice and GR for IFRS

The account approach is similar—debiting the technical clearing account and crediting the GR/IR in the first document, and crediting the technical clearing account and debiting the asset in the second two documents but using different accounts for the asset. If the invoice matches, then the posting is simple, just credit the vendor and debit the GR/IR. If the invoice is different, again the technical clearing account is used in a similar way to collect the difference and then post it to the asset against a different range of accounts in each ledger. This section outlined the postings where the asset is entered directly in the PO. A similar approach applies if the AuC is entered in the PO, but sometimes instead of


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an asset, the costs may be collected on an investment order or WBS element, prior to settling to an asset.

6.2

Settlements

In this example, we’re using an investment order to illustrate the different steps, but the process and postings for WBS elements are similar. When a valuated GR is entered, the GR/IR account is credited, and the investment order plus the settlement P&L account is debited. When you post the invoice, the vendor is credited, and the GR/IR account is debited. If the invoice is for a different amount, any difference is added to the investment order. This applies to both the ledger and the account approaches. The next step is the transfer or settlement from the investment order to the AuC. If you’re using investment measures, your AuC may already be created; if not, you’ll need to create an AuC and enter it in the settlement rule of the investment order so that it knows where to settle to. When you post the settlement, the settlement P&L account is credited, and the asset is debited in a single document, updating all ledgers. Again, this applies for both approaches. At this point, no assets have been capitalized, and the costs are sitting on AuCs. Finally, when you want to capitalize the asset, you settle from the AuC to the final asset. You need to create your assets first, and, in Transaction AIAB, you create the rules to settle from the AuC to the final assets. You’ll notice from Figure 90 that in SAP S/4HANA, you can create settlement rules by ledger. When you assign a settlement rule, the line status of that cost goes green. On executing the settlement, two documents are produced, one for each ledger, crediting the settlement account and debiting the asset. You could also choose to have only one ledger group settle to an asset and the other ledger group post to expenses.

Tip


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If posting a credit note after settlement has been made from the AuC to the final asset, you may find that the balance on the AuC will be negative. In the Asset Master Depreciation tab, you can go to Depreciation Area, double-click on each depreciation area, and then select the Neg.Vals Allowed checkbox (see Figure 66) to allow that asset to have a negative value so that you can settle the credit note to it.

Figure 90 Transaction AIAB: Costs Collected on the AuC to be Assigned to an Asset Settlement Rule

6.3

Retirements and Transfers

In the configuration at the asset class level and for each accounting principle, you have the option of entering a different account for each of the following options (plus for revenue clearing from sales to affiliated companies): Loss made on asset retirement without revenue Clearing account revenue from asset sale Gain from asset sale Loss from asset sale The four options, individually or in combination, should cover the legal requirements of most countries for both sales and scrapping. For example, if you don’t need the split, you can enter the same account all the way through, you can have different accounts for gain or loss, or you can have the same account in both fields.


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If the asset is scrapped, the APC account will be credited, the accumulated depreciation account will be debited, and the balance will go to the account configured in Loss from asset sale. Because the original value of the asset may be different for each accounting principle, and the value of the accumulated depreciation to date may also be different depending on the depreciation method used and the useful life of the asset, a separate document will be produced for each accounting principle and ledger group. If posting a sale to the customer (see Figure 91 and Figure 92), the posting becomes integrated again; the customer posting must be made for the same amount to all ledgers, along with the revenue received; and a technical clearing account is required for the asset posting. One document is produced debiting the customer and crediting revenue for all ledgers, and two separate documents are produced crediting APC, debiting accumulated depreciation, and posting the relevant balance in each ledger to gain on disposal. The purpose of the Clearing account revenue from asset sale account is so that some countries can show the proceeds separately.

Figure 91 Asset Retirement with Revenue Posting for Local GAAP


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Figure 92 Asset Retirement with Revenue Posting for IFRS

If the customer invoice is posted separately to the asset retirement, the postings will be the same as in Figure 91 and Figure 92—also in two separate documents with the only difference being that they are posted at two different times with different transactions as opposed to all in one posting as shown here. The principle is the same for the account approach but uses a different range of accounts.

6.4

Depreciation

Depreciation isn’t summarized but posted at line item level and is straightforward: credit accumulated depreciation and debit depreciation expense. You can choose to post unplanned depreciation to the same or a different account. If using the ledger approach, the accounts will be the same and the ledgers different, but for the account approach, the account numbers will be different for the second accounting principle/ledger group. Transaction FAGLL03 (G/L Account Line Item Display) now shows a lot more detail than before. Figure 93 shows the P&L depreciation expense account, including items such as the cost center (Cost Ctr), Profit Center, and Segment, as well as the Asset and subnumber (ASNo).


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Figure 93 G/L Account Line Item Display: Depreciation P&L Expense Account


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6.5

Period-End Processing and Reporting

Additional Adjustments

As you would expect, credit note and reversal postings are generally the reverse of the original, and they should be carried out in the module in which they originated. There are too many different asset transactions to cover the debits and credits of every single one, but you can see from the preceding examples that the system is flexible enough to allow for different values for different accounting principles, although it won’t let you post operational documents separately (e.g., to accounts such as vendors, customers, and GR/IR). Whenever it needs to do this, the system uses the technical clearing account to ensure that all parts of the transaction balance.

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The period-end in SAP S/4HANA has been simplified because more postings take place in real time than at the end of the period. This section covers the standard period-end and year-end processes and gives a brief overview of some of the reports.

7.1

Period-End and Year-End Processes

Transaction ASKB no longer exists to post the asset movements for the additional ledgers as they are now posted in real time. The depreciation run is usually carried out at the period-end, which was covered in Section 5.2 in the subsection Ordinary Depreciation. The only other periodic postings to be carried out in New Asset Accounting are impairment (Section 4.3), revaluation (Section 4.4) and investment support (Section 4.5). Some companies run settlement programs from investment orders and WBS elements to AuCs automatically overnight, rather than leaving it to the period-end to have up-to-date information on a daily basis and to avoid too many processes happening at the period-end. Note that Transactions ABST and ABST2 also no longer exist in SAP S/4HANA. These transactions were used to check the consistency of the asset postings with the


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general ledger accounts and to list any differences, but now they are no longer required as the general ledger accounts are updated at the same time as the assets.

Year-End There are two steps to the year-end in Asset Accounting. The first takes place around the year-end and “opens” the new year so that you can start posting. You can start this program in the last posting period of the year. The second step generally takes place sometime later when all postings and adjustments have been completed, and the old year can be formally closed. Historically, the new year could be opened independently for financial postings and Asset Accounting, but that is no longer the case. In New Asset Accounting, it’s included in the FI carryforward Transaction FAGLGVTR and can’t be run separately.

Note The carryforward transaction to open the new year can’t be processed if the previous year hasn’t been closed.

The transaction to close the old asset year is Transaction AJAB, and it’s run for all depreciation areas and accounting principles. The program checks whether all the depreciation and other adjustments have been posted correctly and if there are any incomplete assets or errors. If everything is properly posted, the program updates the closed fiscal year tables and prevents further postings in that year.

7.2

Reporting

SAP S/4HANA provides a large number of reports, so we’ll only cover a few of the most used reports in this section to give you a flavor of what is available.

Finance Reports Historically in SAP, different tables were required to store data from the FI, CO, Purchasing, SD, and Asset Accounting modules, but now most of the line item data are stored in one table (table ACDOCA), which is easily accessible by standard reports such as Transaction FAGLL03 and Transaction FAGLL03H Line Item Browser


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(new). In Figure 94, which has been run for one asset, number 600001, you can clearly see the asset number in each line, even for the P&L line items.

Figure 94 Transaction FAGLL03 G/L Account Line Item Display


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)

Asset Explorer Transaction AW01N (Asset Explorer; SAP Fiori: Asset Values), also mentioned in Section 5.1 where depreciation was explained, is a very useful transaction to find out everything you need to know for one specific asset at a time. Using the icons at the top left of the Asset Explorer screen (Figure 96), you can toggle between the asset master record (Transaction AS03: Display Asset) and the Asset Explorer screen, and you can also jump to other reports such as the Asset History for that asset. The Asset Explorer screen has a number of different sections. In the top left, you can select which depreciation area you want to see the figures for. In the bottom left, you can see, for example, the vendor from whom the asset was purchased, the account, and cost center that it was posted against, as well as drill down into the detail of those records. At the top right, you select the Company Code, Asset, and Fiscal year. Next, you have four tabs with different information. The last three tabs relate to depreciation and were explained in Section 5.1. The Planned values tab shows you the opening and closing balances and any posted or planned movements for the whole year. You can print or export this section, for example, to Microsoft Excel. The icon to the right of the calculator icon even allows you to calculate the net book value of the asset at a specific date, such as mid-year.


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The asset in Figure 96 was capitalized in 2016, so if you were to change the Fiscal year field to 2016, you would see the capitalization transaction and could drill down to the related accounting documents in all ledger groups. In 2017, you can see that there was a Write-Up of depreciation.

Figure 96 Transaction AW01N: Asset Explorer

Asset Balances Quite a number of reports in the SAP GUI are presorted, for example, by asset number, by asset class, by cost center, by plant, and so on, so we’ll just give one example of each. Transaction S_ALR_87011994 (Asset Balances) in Figure 97 shows the acquisition value (Acquis.val.), accumulated depreciation (Accum.dep.), and book value (Book val.) by individual asset for one depreciation area at a time. The selection screen can be expanded to allow you to select by a number of other criteria.


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Figure 97 Transaction S_ALR_87011994: Asset Balances in ALV Format

Tip With many reports, you can select whether you want the report to be ALV or not. ALV originally stood for ABAP List Viewer, but, in practice, it just means a tabular format that is often easier to format or export to Excel.

Asset History The Asset History report, Transaction S_ALR_87011190, is legally required in Germany but is useful in all countries, as it shows the opening and closing balances of each asset and the different transactions that have taken place during the year, including transfers, depreciation, revaluation, adjustments, and so on (see Figure 98). The transaction type used when posting with many transactions classifies the amount into the relevant column. You can choose different sort variants as well as different history sheet versions in the selection criteria to have a different report


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layout, but you can also change fields around, sort, filter, and subtotal inside the report.

Figure 98 Asset History Sheet: Asset Movements and Opening/Closing Balances

Tip Although the selection criteria may seem limited when entering transactions, on expanding the selection (+ icon at the top of the screen in Figure 99) or choosing dynamic selections (striped icon), you’ll see that you can restrict the selection by dates, evaluation groups, origin data (vendor/manufacturer), project or WBS, and many other options.

Figure 99 Asset History Report: Selection Screen Icons


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Asset Transactions Transaction AR19 (Figure 100) lists all the asset documents showing the transaction type so you can see whether it was a direct capitalization, GR, settlement, retirement, or transfer.

Figure 100 Transaction AR19: Asset Transactions

Country-Specific Reports SAP S/4HANA also provides country-specific reports for local legal requirements. For example, for the United States, you have Transaction S_ALR_ 87012066 (Analysis of Retirement Revenue; see Figure 101) and Transaction S_ALR_87012047 (Asset Acquisitions for Mid-Quarter Convention). SAP Fiori has the same name as the SAP GUI for both transactions.


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Figure 101 Transaction S_ALR_87012066: USA Retirement Revenue

Inventory List The Inventory list screen, Transaction S_ALR_87011982 (see Figure 102), can be used by employees to verify which assets exist and match them back to the assets in the system. They can be run by cost center or plant.

Figure 102 Transaction S_ALR_87011982: Inventory List


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Posted Depreciation Two useful reports show posted depreciation: Transaction S_P99_ 41000192: Posted Depreciation by Asset and Posting Period, and Transaction S_ALR_87010175: Posted Depreciation Related to Cost Centers. Both reports can show posted depreciation by period, but the second includes the cost centers as well. Historically, to post something in CO (SAP’s management accounting module), you had to create either a primary cost element of the same number as the chart of account, or a secondary cost element for CO-only postings. In SAP S/4HANA, the process is simplified, and cost elements no longer exist independently but are incorporated in the chart of account where appropriate. Each account must be set up as one of the following: balance sheet account, nonoperating expense or income (not relevant to CO), primary costs or revenue, or secondary costs. However, CO documents and reports still do exist.

Simulations If you’ve entered the relevant data such as an investment profile, asset classes and capitalization dates in the investment orders and projects, you’ll be able to simulate how much depreciation will be posted in the future, even if the asset isn’t yet capitalized. Using simulation versions, you can also simulate changes in the method of depreciation and useful life.

Investment Measures Because this E-Bite focuses on assets, we’ll only briefly mention the investment measure reporting, which is partly found in the Controlling menu in the SAP GUI and partly under Project Systems.

Investment Orders There are many ways to report on investment orders. The Order Manager, Transaction KO04, shows the master data for the investment orders, and


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Migration at a Glance

with Transaction KOB1 (Display Actual Cost Line Items for Orders), you can run actual line item reports to check what has been posted and settled on each investment order. There are also many reports showing different combinations of actuals, plan, and budget items; variances by period, quarterly, and yearly comparisons; cumulative; and so on.

Work Breakdown Structure Elements These are mostly reported as part of the project they have been created under; for example, master data can be seen in the Project Builder (Transaction CJ20N) or actual line items in Transaction CJIA. In a similar way to investment orders, you can also report on commitments, budgets, and plans.

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The complexity and choice of your migration will depend on the complexity of your business, the type of migration you’re doing, what you already have set up, and what functionality you want to use going forward. This section helps you understand the various migration options to SAP S/4HANA and, in particular, New Asset Accounting, and how the migration process for fixed assets has changed with SAP S/4HANA. We start by discussing which option to choose. We also cover some (but not all) of the tasks involved during the migration to give you an idea of what is involved on the Asset Accounting side.

8.1

Migration from an Existing SAP System

This option enables you to keep the same system all the way through and convert your existing data in place, as opposed to exporting it from one system and uploading it to a different system. You can only use this option if you’re migrating to an on-premise edition of SAP S/4HANA (i.e., not SAP S/4HANA Cloud).


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Note As explained in Section 1.2, even though an on-premise SAP S/4HANA system may physically be on a cloud, SAP S/4HANA Cloud refers to the public cloud, where a conversion would be impossible in a multitenanted environment.

Keeping the same system means that you keep some or all of the historic data as required, and you can still run prior year reports after the migration, although you can’t go back and post to closed years. Prerequisites for the SAP S/4HANA migration include having the SAP HANA database installed, as well as SAP Business Suite ERP 6.0 and EHP 7. The new version of the SAP General Ledger is mandatory for New Asset Accounting, even though it’s not necessarily required for FI alone. The Software Update Manager (SUM) takes care of the actual conversion to SAP S/4HANA and also migrates the database, but there may be a number of Customizing steps to convert your chart of depreciation into the format required by SAP S/4HANA, which we’ll cover in the section During the Migration.

Note The SAP S/4HANA migration can be done at any period-end, but document splitting (part of the new SAP General Ledger functionality) can’t currently be implemented in SAP S/4HANA 1610, although it can be converted if it already exists. This functionality is planned for future releases. From 1610, parallel ledgers can be added in SAP S/4HANA. If you do a (new) SAP General Ledger migration prior to moving to SAP S/4HANA, you also have the option of migrating to New Asset Accounting prior to the SAP S/4HANA migration, if timing permits.

Prior to the Migration Various tools are available, such as the Maintenance Planner (see Figure 103) to help your Implementation Team analyze your system prior to migration and plan the various steps, regardless of whether you’re planning a system upgrade or a new implementation.


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Figure 103 Maintenance Planner Tool

It’s important to run the Maintenance Planner, pre-check, and custom code migration as early as possible in the project so that you get an overview as soon as possible of what adaptations may be required. Pre-checks will tell you which addons aren’t supported in SAP S/4HANA and whether they can be uninstalled. SAP Solution Manager plays a key role in the recording of information. Although the downtime for the conversion itself can be quite minimal, for example, over a weekend, depending on the complexity and size of the data, the preparation and testing will be the time-consuming part, as you’ll need to convert each of your systems. This may include development, quality, testing, training, and so on, as well as production, giving you a number of “test” runs prior to the production system conversion. It’s important to treat the conversion as a fully integrated project with full involvement of the Finance department as well as IT to ensure the integrity of the data by running the relevant reports in all modules before and after to check the figures. You may also want to archive old data that you don’t want to migrate to reduce the downtime and avoid bringing across obsolete coding. If you’re migrating to SAP S/4HANA at a year-end, you should ensure that all your year-end processes are complete and that the year-end carryforward has been run


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prior to the migration. Only one fiscal year can be open during the asset migration, and the last year can’t be reopened after migration. In any case, you must have completed all periodic postings, including depreciation, revaluations, and your usual period-end activities.

During the Migration During the migration to SAP S/4HANA, a number of technical and Customizing steps in FI and other modules have to be carried out, many of which (particularly in FI) relate to the fact that the FI and CO modules are “merging” and also to accommodate the new Universal Journal. A few examples, but by no means a definitive list, are ensuring that both FI and CO have the same fiscal year variant (identical code not just similar setup), linking CO to a ledger, setting up document types for CO, and configuring some additional account determination and profitability analysis (CO-PA) settings. The transactions will then be migrated, and the relevant documents converted to Universal Journals. Now we come to the asset part, where there is a certain amount of Customizing for your implementation team to complete, depending on what you already have set up. New Asset Accounting will automatically be activated during the migration. Starting with the parallel ledgers (if not already set up), you’ll need one depreciation area for each ledger and each standard currency, for example, local, group, or global currencies. You’ll no longer need depreciation areas for deltas; this was required in earlier versions for technical reasons that no longer apply with SAP S/4HANA. Even if you’re using the account approach instead of the ledger approach for the different accounting principles, there are some technical steps to link the different accounting principles to ledger groups. Next, there are a few changes to the general ledger account master records. If you’re using the ledger approach, your APC and accumulated depreciation accounts should already be reconciliation accounts, plus you’ll also need to set up the technical clearing account as a reconciliation account. This is the account used, for example, in acquisitions and retirements to allow all depreciation areas to post to their relevant accounts and ledgers in real time (see Section 6.1 for further details).


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As part of the FI-CO migration, cost elements disappear, and cost categories are updated into the G/L account master records. Transaction types (also mentioned in Section 6.1 in the subsection With Purchase Order Processing) can no longer be ledger specific, so if you’ve been using a transaction type that is set to post only to specific ledgers, this will have to be disabled. Another step is calculating the initial planned depreciation values, as these are now calculated in real time rather than on a periodic basis (see the subsection Ordinary Depreciation in Section 5.2). Part of the migration is to activate compatibility views, which are views created from the new tables with the same names as old tables so that any custom reports reading the old tables will still run. After all the transaction data are migrated, and the various tables and views are regenerated, you can run all your reports and reconcile everything.

8.2

Greenfield Migration from a Legacy System

A greenfield migration means a completely brand new implementation and applies both to SAP S/4HANA and SAP S/4HANA Cloud. Although the obvious choice might be to simply convert the existing data if you’re already on SAP, many companies are using the move to SAP S/4HANA to streamline their business processes as well as their data, tidying up their chart of accounts, harmonizing their divisions, and generally getting rid of a lot of nonstandard or no longer used customizing and custom programs that have accumulated over the years. This is almost impossible to achieve without moving to a new “clean” system. With a brand-new SAP S/4HANA implementation, you’ll be migrating your data from a legacy system, which can be SAP, non-SAP, or a mixture of systems. Possibly your main data may be on one system, but your fixed assets may be on a Microsoft Excel spreadsheet or other software. This section also covers the situation when you’ve migrated from an existing SAP system, but you had no asset accounting— old or new—installed.


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The most important part of the asset migration is the asset review and cleanup. Ensure that all nonexistent assets have been disposed of using the normal retirement procedures in the legacy system. You can review whether you want to group assets differently and make sure the descriptions are up to date and all have the correct depreciation methods and useful lives. You should also check for negative values. Depreciation is sometimes miscalculated on legacy systems such as Excel and may appear to have a net book value of zero, but due to rounding will be read by the upload program as having a negative net book value and may be difficult to upload. You need to ensure that your asset register balances match the financial accounts, not just in total but by asset class. One of the major changes is that during the migration, the general ledger accounts will automatically be updated at the same time as the asset values. Previously, you uploaded the asset master data and values in one step and then manually posted the corresponding values into FI in a separate step. If transferring data onto SAP from a legacy system, you may need to set up offsetting accounts for the legacy data transfer and decide on a document type to be used in the configuration. You’ll need to enter the transfer date and the last closed fiscal year. If it’s a mid-year migration, you’ll need to specify the last period posted in the legacy system. If you’ve been involved in asset migrations to SAP before, you may have used the Legacy System Migration Workbench (LSMW). You would probably have filled in a Microsoft Excel template with all your master data and transaction data, and this would have been uploaded in a batch file to SAP, updating only the Asset Accounting module. Someone would then have posted the corresponding entries into FI and performed a reconciliation to ensure that the two agreed. Due to the structural changes brought about by SAP S/4HANA, for example, the Universal Journal with new tables, ledger structures, and transactions, the LSMW is currently not a viable option for a new asset data migration to SAP S/4HANA. There are three main options recommended by SAP depending on the number of assets involved.


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Manual This is only practical if you have a very small number of assets to upload. You may be familiar with Transaction AS91, which was available in earlier versions of SAP and allowed you to both create an asset and post historical opening balances to it. This transaction is still available to create the asset master for the migration (along with Transaction AS92 to amend), but the ability to post values has been disabled. A new Transaction ABLDT is now required to post the transactional data, which will create a Universal Journal posting (see Figure 104).

Figure 104 Transaction ABLDT: Entering Legacy Values to a Fixed Asset Manually

You can also use Transaction ABLDT to post current-year transactions at the same time, if you’re doing a mid-year implementation. There are many columns not shown in Figure 104, but further to the right, there is a column for entering currentyear depreciation to date.

Medium and Large Amounts of Data Excel and Transaction AS100 (Legacy Data Transfer in Asset Accounting) has been adapted to the Universal Journal. But for very large amounts of data, you’ll need to use Business Application Programming Interfaces (BAPIs) to create a program to do the upload.


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8.3


Central Finance

Central Finance is often mentioned as a third deployment option to use SAP S/4HANA functionality with minimum disruption. Where a company has a distributed landscape with a lot of SAP and sometimes non-SAP systems, the quickest way to get started is using Central Finance, which can then be followed by a staggered full migration if required. The finance data from all the systems are replicated (i.e., new documents are posted) into a harmonized Central Finance system, which can also contain systems that have already been completely migrated. The advantage of this over replicating the data into SAP Business Warehouse (SAP BW), for example, is that it’s not only in real time, but, for SAP systems, it allows you to drill down from a document in the Central Finance system to the source document, such as a sales order or PO. At the same time, you can harness the power of SAP S/4HANA in the Central Finance system for other postings—either Head Office adjustments or for already migrated company codes—and you have access to all the SAP S/4HANA tools, planning, and reporting capabilities for everything. We mention it briefly here to explain the implications for fixed assets. The FI documents from Asset Accounting that are sent to Central Finance are


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What’s Next?

only replicated as FI documents and not currently as fixed assets, and some of the fixed asset information may be removed. Therefore, although in the source system, the APC and accumulated depreciation accounts are set up as reconciliation accounts, in the SAP S/4HANA Finance system, they aren’t.

9

What’s Next?

Now that you’ve explored new asset accounting, you're ready to utilize key fixed asset transactions for capitalization, retirement, depreciation, and more. But FI-AA doesn’t work in a vacuum, and setting it up is only one piece of SAP S/4HANA Finance. Recommendation from Our Editors If you want to migrate your data from SAP ERP Financials to SAP S/4HANA Finance, and then customize its key functionality: General Ledger, Asset Accounting, Controlling, and Cash Management, and more, pick up Implementing SAP S/4HANA Finance by Anup Maheshwari, the go-to resource for SAP S/4HANA Finance implementation. Visit www.sap-press.com/4045 and check out Implementing SAP S/4HANA Finance!

In addition to this book, our editors picked a few other SAP PRESS publications that you might also be interested in. Check out the next page to learn more!

More from SAP PRESS SAP S/4HANA Finance—An Introduction: SAP S/4HANA Finance is the future, so take a good look! Learn what SAP S/4HANA Finance (formerly SAP Simple Finance) can do, what it offers your organization, and how it fits into the new SAP S/4HANA solution.


124

411 pages, 2nd edition, pub. 02/2016 E-book: $59.99 | Print: $69.95 | Bundle: $79.99 www.sap-press.com/4122

SAP S/4HANA—An Introduction: Looking to make the jump to SAP S/4HANA? Explore what SAP S/4HANA offers, from the Universal Journal in SAP S/4HANA Finance to supply chain management in SAP S/4HANA Materials Management and Operations. 449 pages, pub. 11/2016 E-book: $59.99 | Print: $69.95 | Bundle: $79.99 www.sap-press.com/4153

SAP HANA—An Introduction: What does SAP HANA mean for you? This book is your introduction to all the essentials: from implementation options to the basics of data modeling and administration. 549 pages, 4th edition, pub. 10/2016 E-book: $59.99 | Print: $69.95 | Bundle: $79.99 www.sap-press.com/4160

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