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How To: Settling Internal Orders and Wbs Elements Costs To Different Assets Under Construction

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Biswajit Ghosh

This document provides instructions for setting up cost accounting in SAP for assets under construction (AuC) using internal orders or WBS elements to separate costs into different assets. It describes defining a source structure to split costs, creating a model order and investment profile template, setting up AuC asset classes, and assigning the source structure to the AuC classes to link all the components together for cost settlement from internal orders to the appropriate AuC assets.

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How To: Settling Internal Orders and Wbs Elements Costs To Different Assets Under Construction

Uploaded by

Biswajit Ghosh
1K views5 pages
This document provides instructions for setting up cost accounting in SAP for assets under construction (AuC) using internal orders or WBS elements to separate costs into different assets. It describes defining a source structure to split costs, creating a model order and investment profile template, setting up AuC asset classes, and assigning the source structure to the AuC classes to link all the components together for cost settlement from internal orders to the appropriate AuC assets.

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This document provides instructions for setting up cost accounting in SAP for assets under construction (AuC) using internal orders or WBS elements to separate costs into different assets. It describes defining a source structure to split costs, creating a model order and investment profile template, setting up AuC asset classes, and assigning the source structure to the AuC classes to link all the components together for cost settlement from internal orders to the appropriate AuC assets.

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© All Rights Reserved
Download as DOCX, PDF, TXT or read online from Scribd
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1K views5 pages

How To: Settling Internal Orders and Wbs Elements Costs To Different Assets Under Construction

Uploaded by

Biswajit Ghosh
This document provides instructions for setting up cost accounting in SAP for assets under construction (AuC) using internal orders or WBS elements to separate costs into different assets. It describes defining a source structure to split costs, creating a model order and investment profile template, setting up AuC asset classes, and assigning the source structure to the AuC classes to link all the components together for cost settlement from internal orders to the appropriate AuC assets.

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HOW TO: SETTLING INTERNAL ORDERS

AND WBS ELEMENTS COSTS TO


DIFFERENT ASSETS UNDER
CONSTRUCTION
Dmitry Kaglik

December 7, 2015

SAP

2 Comments

Many companies using SAP need to run Assets accounting. When an asset is being
physically created, the company needs to account for costs. These costs often form a
part of a balance sheet that is called “Assets under construction”.

SAP gives you an option to to accumulate costs of Assets under Construction (AuC) on
the assets in a special Asset Class. Creating an asset is often a project, which lasts
some time and requires additional reporting.

There is an SAP functionality to separate costs per different projects using either Internal
Orders or WBS elements. These two objects, Internal Orders (IOs) and Work
Breakdown Structure Elements (WBS Elements) are very similar in many aspects, while
WBS elements have a more advanced functionality. However, for the purpose of this
article I will only mention IOs. There is an absolute mirror in the WBS elements
configuration.

It is quite logical that these elements of SAP functionality: IOs, AuCs and Assets are
linked to each other. The functionality in general looks this way:

1. Original costs are posted during the period to P&L GL accounts with an assignment of
Internal Order;
2. At the period end, the special program calculates the balance of IO and moves the costs
to an AuC, which has a reconciliation account in the Balance Sheet part of the Chart of
Accounts;
3. When the project is completed, the final settlement moves the costs from AuC to the final
asset;
4. The final asset is now capitalized and ready for the depreciation.
That is a simple logic and it works if you only have one class of AuC. But many
companies prefer to split costs of AuCs, for example between tangible and non-tangible
assets. Can you set this up in SAP?

Let SAP Expert guide you!

1. Define Source Structure


This is the SAP configuration that you run in the Internal Orders section of IMG:

Controlling – Internal Order – Actual Postings – Settlement – Maintain Source Structure

Here you define the source structure, splitting your cost elements between at least two
Source Assignments. Let’s call them “Tangible” and “Non-tangible”. Each Source
Assignment contains a range or a group of cost elements. SAP automatically checks
that cost elements do not overlap and gives you an error message if they do.

Source Structure

2. Define Model Order


The second step is to create a Model Order. The purpose of this model order is to be a
template for the future Internal Orders, and also to hold an assignment to Investment
Profile.

You can create, edit or display Model Orders in the IMG node

Investment Management– Internal Orders as Investment Measures – Master Data –


Orders – Define Model Orders.

You may need to create a special Order Type for Model Orders, which you can do in a
nearby configuration node. Also, you will need to assign a Model Order to the Order type
of regular Internal Orders.
3. Define Investment Profile
The third step is to create an Investment Profile, which will define the parameters for
settlement of Internal Orders to Assets Under Construction.

Investment Profiles are managed in IMG node

Investment Management – Internal Orders as Investment Measures – Master Data –


Define Investment Profile

The most important bit here is to tick the checkbox “AuC per source
structure/assignment”.

Investment Profile
Once created, you can assign Investment Profile to the Model Orders in the same IMG
node.

4. Create classes for Assets Under


Construction
If you want to split costs of projects between different Assets under Construction,
probably with a different assignment of GL accounts, you need to have at least two
different classes of AuCs.

You create these classes in the IMG node

Investment Management – Internal Orders as Investment Measures – Master Data –


Assets under Construction – Define Asset Classes

You can also do the same in the Assets Accounting section of the IMG. There is no
difference. The thing to remember is that AuC class should have the radiobutton “Status
of AuC” set to “Investment Measure”.
Asset class for Investment Measure

5. Assign Source Structure to the classes


of Assets Under Construction
The last part of the configuration is linking all the different components to each other:
Investment Profile, Source Structure and AuC classes.

You can do this in the IMG node

Investment Management – Internal Orders as Investment Measures – Master Data –


Define Assignment of AuC Classes per Source Assignment

AuC per source structure


You can see that my Investment Profile is assigned to different parts of Source
Assignment. Each record in this table has details, where the relevant AuC class is
specified.

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