ASSET ACCOUNTING

This is also a Sub Ledger ( Subsidery Ledger)

Chart of Depreciaion: Asset Customization steps will be made for Chart of
Depreciation and Chart of Depreciation will be assaigned to Company Code /Comp.
Codes.

In SAP we don’t have option of creating the Chart of Depreciation for our own company
But SAP has given the option to copy the Existing Chart of Accounts of Germany or
Indian. We have to copy either Germany Chart of Depreciation or Indian Chart of
Depreciation and make changes according to our company Porocedure.

Depreciation Areas: We have many areas of Depreciation like

1. Book Depreciation
2. Depreciation as per Income Tax Rules
3. Costing Depreciation as mentioned in Schedule 14 of Companies Act
4. Group Depreciation

Postings to Books of Accounts will be done only Book Depreciation, others

are for information purpose only.
Depreciation Methods:
There are So many Depreciation methods recognised by SAP. But in India
we use either 1. Straight Line Method ( SLM) 2. Written Down Value ( WDV)

Depreciation Keys: Depreciation Keys are nothing but Rate+ Method say
5% SLM or 5%WDV
Posting Keys: We use the Following Posting Keys in Asset Accounting

Posting Key: 70 for Asset Debit

Posting Key: 75 for Asset Credit
Transaction Types:
100 → External Asset Acquisition
110 → In House Production
210 → Retirement with Revenue(
Consideration) Assets can be acquired from Outside Purchases/ InHouse
Production/
Inter Unit Transfers/ Inter Company Transfers. So, when we are posting the
Debit Entry, by mentioning the Transaction Type we can come to know what
type to transaction it is.

Asset Accounting is based on 4 Rules:

[A] Sub Asset Master is to be created with reference to the Main Asset Master
[B] Main Asset Master is to be created with Asset Class
[C] Account Determination is specified in Asset Class
[D] For Account Determination we Assaign G L Account based on Nature of
Transaction
We will create the Accounts and Determine Accounts like below for Asset Accounting
Testing Purpose

A/c to Account Asset Main Asset Sub Asset

Create Determination Class Master Master
A. Purchases a. Land a. Free Hold
200000 P& b. Lease Hold
M
b. Buildings a. Factory
B. Sale of Asset b. Admin

C. Profit on Sale c. P& M a. Dept-A Mach.No1 Motor (29.08.09)

of Asset b. Dept-B ( Cap. On 15.04.05)
c. Dept-C Mach.No2
D. Loss on Sale ( Cap. On 20.06.06)
of Asset d. F & F a. F& F
b. O/ Equip
E. Loss Dut to
Scrapping e. Vehicles a. Heavy
b. Others
F. Depreciation
f. Capital WIP a. General
b. Expansion 1
G. Acc.Depreciation c. Expansion2

Additions to the Main Asset will be created as Sub Asset Master

Account Determination :- The Items will determine the GL Accounts to be Posted Automatically
Main Asset Will have always Subnumber ZERO
Depreciation will be calculated at the Sub Asset Master Level, from the date of Capitalization of
Sub Assets.

CUSTOMIZATION :

Step1. Copy Reference Chart of Depreciation/ Depreciation Areas:

PATH: SPRO----> Financial Accounting ---->Asset Accounting--->Organizational
Structures- ->Copy Reference Chart of Depreciation / Depreciation Areas
Double Click on Copy Reference Chart of Depreciation (TC= EC08)
Menu----> Organizational Object--->Copy Organizational Object

From Chart of Dep: ODE ( Max Valuation : Germany)

To Chart of Dep: PSL (Text Field) → ENTER
Ignore Warning Messgae → ENTER
Select Creat Request Button
Shot Description : Asset Customization for PSL → ENTER
→ ENTER to save in your request.
We will get a Message Chart of Depreciation Copied to PSL → ENTER
 Select Back Arrow
Double Click on Specify Description of Chart of Depreciation
Select Position Button
Chart of Depreciation PSL → ENTER
Change Description to : Chart of Description for
PSL
Select SAVE or CTRL + S → ENTE to save in your
request. Select Back Arrow
Double Click on Copy / Delet Depreciation Areas
Give Chart of Depreciation PSL → ENTER
Select Depreciation Areas 3,10,15,20,31,32,41 & 51
From MENU---->EDIT----->DELET SAVE
Ignore Warning Messgae → ENTER
→ ENTER to save in your request.

Step 2. Asaign Chart of Depreciaton to Company Codes :

Same Path (TC=OAOB
) Select Position Button
Company Code: PSL → ENTER
for Company Code PSL Assaign Chart of Dep PSL
Select SAVE or CTRL+S
→ ENTER to save in your request.

Step 3. Specify Account Determination

Upto Organizational Structure Path is Same -----> Asset Class-- ->Specify Account
Determination
Select New Entries Button
A/c Detrmination Name for Account Determination
PSL10000 Land
PSL11000 Buildings
PSL20000 Plant & Machinery
PSL30000 Funiture & Fittings
PSL31000 Vehicles
PSL40000 Capital Work In Progress

SAVE → ENTER to save in your request.

Step 4. Create Screen Layout rules :
Same Path
Select Layout 1000, 1100,2000,2100,2500,3000
Select Copy as Button

Change Screen Change the Name to

Layout
1000 to PSL1 Land
1100 to PSL2 Buildings
2000 to PSL3 Plant & Machinery
2100 to PSL4 Furniture & Fittings
2500 to PSL5 Vehicles
3000 to PSL6 Capital WIP → ENTER
SAVE → ENTER to save in your request.

Step 5. Define Number Range Interval: Same Path ( TC=AS08)

Company Code: PSL Select Change Interval Button
Select Interval Button
No. Range : 01
From No: 1
To No: 100000 → ENTER
Select Interval Button once Again
No. Range : 02
From No: 100001
To No: 200000 → ENTER
Select Interval Button once Again
No. Range : 03
From No: 200001
To No: 300000 → ENTER
Select Interval Button once Again
No. Range : 04
From No: 300001
To No: 400000 → ENTER
Select Interval Button once Again
No. Range : 05
From No: 400001
To No: 500000 → ENTER
Select Interval Button once Again
No. Range : 06
From No: 500001
To No: 600000 → ENTER & SAVE

→ ENTER to save in your request.

Step 6. Define Asset Class:
Path is Same (TC=OAOA)
Select New Entries Button
1st Asset: Asset Class: PSL1000 ( Text Field)
Description : Free Hold Land
Short Text: Free Hold Land
A/c Determination: Select PSL10000 (LAND)
Screen Layout Rule: Select PSL1 (LAND)
No. Range: 01
** Select Include Asset and Inventory Data Check Box
Select No AUC or Summary Management of AUC Radio Button
(AUC Stands for Asset Under Construction)
Select SAVE or Ctrl +S → ENTER to save in your request.

Select Next Entry Button

2nd Asset: Asset Class: PSL1100 ( Text Field)

Description : Factory Buildings
Short Text: Factory Buildings
A/c Determination: Select PSL11000 (BUILDINGS)
Screen Layout Rule: Select PSL2 (BUILDINGS)
No. Range: 02
Select Include Asset and Inventory Data Check Box
Select No AUC or Summary Management of AUC Radio Button
Select SAVE or Ctrl +S → ENTER to save in your request.
Select Next Entry Button

3rd Asset: Asset Class: PSL2000 ( Text Field)

Description : Dept-A
Short Text: Dept-A
A/c Determination: Select PSL20000 (PLANT & MACHINERY)
Screen Layout Rule: Select PSL3 (PLANT & MACHINERY)
No. Range: 03
Select Include Asset and Inventory Data Check Box
Select No AUC or Summary Management of AUC Radio Button
Select SAVE or Ctrl +S → ENTER to save in your request.
Select Next Entry Button
4th Asset: Asset Class: PSL2001 ( Text
Field) Description : Dept-B
Short Text: Dept-B
A/c Determination: Select PSL20000 (PLANT & MACHINERY)
Screen Layout Rule: Select PSL3 (PLANT & MACHINERY)
No. Range: 03
Select Include Asset and Inventory Data Check Box
Select No AUC or Summary Management of AUC Radio Button
Select SAVE or Ctrl +S → ENTER to save in your request.
Select Next Entry Button
5th Asset: Asset Class: PSL3000 ( Text Field)
Description : Furniture & Fixtures
Short Text: Furniture & Fixtures
A/c Determination: Select PSL30000 (FUNITURE & FIXTURES)
Screen Layout Rule: Select PSL4 (FUNITURE & FIXTURES)
No. Range: 04
Select Include Asset and Inventory Data Check Box
Select No AUC or Summary Management of AUC Radio Button
Select SAVE or Ctrl +S → ENTER to save in your request.
Select Next Entry Button

6th Asset: Asset Class: PSL3100 ( Text Field)

Description : Vehicles Others
Short Text: Vehicles Others
A/c Determination: Select PSL31000 (VEHICLES)
Screen Layout Rule: Select PSL5 (VEHICLES)
No. Range: 05
Select Include Asset and Inventory Data Check Box
Select No AUC or Summary Management of AUC Radio Button
Select SAVE or Ctrl +S → ENTER to save in your request.
Select Next Entry Button

7th Asset: Asset Class: PSL4000 ( Text Field)

Description : Capital Work In Process
Short Text: Capital Work In Process
A/c Determination: Select PSL40000 (CAPITAL WIP)
Screen Layout Rule: Select PSL6 (CAPITAL WIP)
No. Range: 06
De-Select Include Asset and Inventory Data Check Box
Select Line Items Settlement Radio Button
Select SAVE or Ctrl +S

** WHY WE SELECTED " INCLUDE ASSET INVENTORY" CHECK BOX

Here inventory means Fixed Assets Inventory List. Once we select the Check box,
what ever asset we creat under this asset class, will be included in Fixed Assets
Inventory List
As per Companies Auditors Report Order ( CARO), Auditor should specify in his
report wether the Fixed Assets have been physically verified by the Management or
Not
In Big Companies , Physical Verification will be done in a Phased Manner.
When we create an asset master , there is a field called Last Verification date.
Asset Master Last Verification Date
1 31.03.2009 In the report if we give the verification date
2 31.03.2008 01.04.08 to 31.03.09 we will get the list of
3 31.03.2009 assets physically verified between those days
4 31.03.2009 like 1,3&4
5 31.03.2008
Step7. Select Line Item Settlement for Capital Work in Progress:
on 01.08.09 Machinery Purchased xxxxx
Add: on 05.08.09 Freight Charges paid xxxx
Add: on 31.08.09 Commission Charges paid xxxx
on 02.09.09 Asset Commissioned as Mach. No 1 xxxxx
Settle CWIP to Machine No 1. Line Item Wise
De select Include Asset Check Box under Inventory Data.

Step8. Define Screen Layout for Asset Master Data:

PATH: SPRO---->Financial Accounts---->Asset Accounting---->Master Data- ->Screen Layout
---->Define Screen Layout for Asset Master Data
Double Click on Define Screen Layout for Asset Master Data
Select Positon Button
Give Screen Layout: PSL1 → ENTER
Select PSL1 Land
Double Click on Logical Field Groups
Folder Select 2 Positing Information
Double Click on Field Group Rules Folder
Capitalization Field Required ¥ We have created PSL1 Land Layout
Select Main No Check Box by Copying Layout 1000 Land . Afterwards if we are
Select Sub No Check Box creating Layout XYZ by copying Layout PSL1, what
¥ Select Copy Check Box ever fields we have choosen for PSL1, will be copied to
XYZ only if we select Copy Check BOX
Select SAVE or Ctrl +S → ENTER to save in your request.
Select Back Arrow
Select 3 Time Dependent Data
Double Click on Field Group Rules
Folder Cost Centre Mate it Optional Entry
Field Select Main No Check Box
Select Sub No Check Box
Select Copy Check Box
Bussiness Area Make it Required Entry
Field Select Main No Check Box
Select Sub No Check Box
Select Copy Check Box
SAVE----> Selecgt Back Arrow 2 Times

NOTE: SAME PROCEDURE TO BE FOLLOWED FOR LAYOUTS PSL2-BUILDINGS, PSL3-

PLANT & MACHINERY, PSL4-FURNITURE& FIXTURES, PSL5-VEHICLES,
PSL6- CAPITAL WIP.
Step 9. Define Screen Layout for Asset Depreciation Areas:
Same Path
Select Screen Layout 2000- Depreciation on Asset Sub No Level
Double Click on Field Group Rules Folder
Dep Key make it Required Entry Field
Deselect Class Check Box
Select Main No Check
Box Select Sub No Check Box
Select Copy Check Box
SAVE----> Selecgt Back Arrow 2 Times

Step 10. Determine Depreciation Areas in Asset Class:

SPRO---->Financial Accounting ---->Asset Accounting ---->Valuation- - -> Determine
Depreciation Areas in Asset Class
Chart of Dep: PSL → ENTER (TC== OAYZ)
Select Asset Class : PSL1000 (Free Hold Land)
Double Click on Depreciation Areas Folder
De-select De-Activation Check Box for Area 01 ( Book Depreciation)
Area Layout
for 01 Select 2000 ( Dep on Asset Sub No Level)
02 Select 2000
30 Select 2000
Select SAVE or Ctrl +S → ENTER to save in your request.
Select Back Arrow

NOTE: SAME PROCEDURE TO BE FOLLOWED TO ASSET CLASS PSL1100-FACT

BUILD, PSL2000- DEPT A, PSL2001-DEPTB,PSL3000-FURNITURE & FIXTURES,
PSL3100- VEHILES OTHERS & PSL4000- CAPITAL WIP.

Why we have to De-select Deactivation Check Box for Land and Capital WIP even though
there is no Depreciation on Land and Capital WIP. At the time of Creating Land Master we give
Capitalization Date which would be Purchase Date of Land or Registration Date and Rate of
Depreciation as "0%"
Layout of 2000 - Depreciation on Asset Sub No Level will be like below
Asset No Main No Sub No Captalization
Date
Mach.1 1 0 20.04.2005
Motor 1 1 02.09.2009

Sub Number for Main Asset No will always be ZERO. Depreciation will be calculated based on
Capitalization Date. Depreciation will be calculated at Sub Number Level.
Step 11. Creation of 15 GL Masters ( FS00)
Create 15 GL Masters as mentioned below under the TC=FS00

A/c to Description A/c to Parameters to Maintain

Create Copy
200000 Land 200110
200005 Buildings 200000 Group- Fixed Assets
200010 Plant & Machinery 200000 Reconciliation A/c Type- Assets
200015 Furniture & Fixtures 200000 Sort Key- 018 ( Asset No)
200020 Vehicles 200000 Field Status Group: G067 ( Reco Account)
200025 Capital WIP 200000
100200 Acc. Dep Buildings 200000 Group- Accumulated Depreciation
100205 Acc. Dep P & M 100200 Reconciliation A/c Type- Assets
100210 Acc. Dep F & F 100200 Sort Key- 018 ( Asset No)
100215 Acc. Dep Vehicles 100200 Field Status Group:G067 ( Reco Account)
300102 Asset Sale A/c 300100 ( Exchange Gain A/c)
Group- Other Income Sork Key-018
Field Status Group-G052
300103 Profit on Asset Sale 300100 Field Status Group-G001 Others as above
400302 Loss on Asset Sale 300103 Group- Admn Sork Key-
018 Field Status Group-G001
400303 Loss Due to Scrap 400302 ------> Like Above <------
400500 Depreciation A/c 400302 Group- Depreciation Sork Key-018
Field Status Group-G001

Step 12. Assaignment of Accounts for Automatic Postings:

SPRO---->Financial Accounting ---->Asset accounting---->Integration with the
General Ledger- - ->Assaing GL Accounts
Select Position Button (TC==AO90)
Chart of Depreciation : PSL → ENTER
Seelct Chart of Accounts PSL
Double Click on Account Determination Folder
Select Account Determination PSL10000 ( Land )
Double Click on B/S Accounts Folder
A/c to Determine
Acquisition: Acquisition & Production Costs 200000 ( Land)
Loss Made on Asset Retirement w/o Revenue 400303 ( Loss due to Scrap)
Clearing Account Revenue from Asset Sale 300102 ( Asset Sale A/c)
Gain from Asset Sale 300103 ( Profit on Asset
Sale)
Loss from Asset Sale 400302 ( Loss on Asset Sale)
→ ENTER & SAVE Ignore Warning Message and Press Enter
→ ENTER to save in your request.
Double Click on Account Determination Folder
Select Account Determination PSL11000 ( Buildings
) Double Click on B/S Accounts Folder
A/c to Determine
Acquisition: Acquisition & Production Costs 200005 ( Buildings)
Loss Made on Asset Retirement w/o Revenue 400303 ( Loss due to Scrap)
Clearing Account Revenue from Asset Sale 300102 ( Asset Sale A/c)
Gain from Asset Sale 300103 ( Profit on Asset
Sale)
Loss from Asset Sale 400302 ( Loss on Asset Sale)
→ ENTER & SAVE Ignore Warning Message and Press Enter
Double Click on Depreciation Folder
Accumulated Dep A/c for Ordinary Depr. 100200 (Acc. Dep Buildings
A/c) Exp. A/c for Ordinary Depreciation 400500 ( Depreciation A/c)
SAVE--> Ignore the Warning Message

Double Click on Account Determination Folder

Select Account Determination PSL20000 (Plant & Machinery )
Double Click on B/S Accounts Folder
A/c to Determine
Acquisition: Acquisition & Production Costs 200010 ( Plant &
Machinery) Loss Made on Asset Retirement w/o Revenue 400303 ( Loss due to Scrap)
Clearing Account Revenue from Asset Sale 300102 ( Asset Sale A/c)
Gain from Asset Sale 300103 ( Profit on Asset
Sale)
Loss from Asset Sale 400302 ( Loss on Asset Sale)
→ ENTER & SAVE Ignore Warning Message and Press Enter
Double Click on Depreciation Folder
Accumulated Dep A/c for Ordinary Depr. 100205 (Acc. Dep P & M
A/c) Exp. A/c for Ordinary Depreciation 400500 ( Depreciation A/c)
SAVE--> Ignore the Warning Message

Double Click on Account Determination Folder

Select Account Determination PSL30000 (Furniture & Fixtures )
Double Click on B/S Accounts Folder
A/c to Determine
Acquisition: Acquisition & Production Costs 200015 ( Furniture &
Fixtures) Loss Made on Asset Retirement w/o Revenue 400303 ( Loss due to Scrap)
Clearing Account Revenue from Asset Sale 300102 ( Asset Sale A/c)
Gain from Asset Sale 300103 ( Profit on Asset Sale)
Loss from Asset Sale 400302 ( Loss on Asset Sale)
→ ENTER & SAVE Ignore Warning Message and Press Enter
Double Click on Depreciation Folder
Accumulated Dep A/c for Ordinary Depr. 100210 (Acc. Dep F & F
A/c) Exp. A/c for Ordinary Depreciation 400500 ( Depreciation A/c)
SAVE--> Ignore the Warning Message
 Double Click on Account Determination Folder
Select Account Determination PSL31000 (Vehicles )
Double Click on B/S Accounts Folder
A/c to Determine
Acquisition: Acquisition & Production Costs 200020 (Vehicles)
Loss Made on Asset Retirement w/o Revenue 400303 ( Loss due to Scrap)
Clearing Account Revenue from Asset Sale 300102 ( Asset Sale A/c)
Gain from Asset Sale 300103 ( Profit on Asset
Sale)
Loss from Asset Sale 400302 ( Loss on Asset Sale)
→ ENTER & SAVE Ignore Warning Message and Press Enter
Double Click on Depreciation Folder
Accumulated Dep A/c for Ordinary Depr. 100215 (Acc. Dep Vehicles
A/c) Exp. A/c for Ordinary Depreciation 400500 ( Depreciation A/c)
SAVE--> Ignore the Warning Message

Double Click on Account Determination Folder

Select Account Determination PSL40000 (Capital WIP )
Double Click on B/S Accounts Folder
A/c to Determine
Acquisition: Acquisition & Production Costs 200025 (Capital
WIP)
Loss Made on Asset Retirement w/o Revenue 400303 ( Loss due to Scrap)
Clearing Account Revenue from Asset Sale 300102 ( Asset Sale A/c)
Gain from Asset Sale 300103 ( Profit on Asset
Sale)
Loss from Asset Sale 400302 ( Loss on Asset Sale)
→ ENTER & SAVE Ignore Warning Message and Press Enter

NOTE: No Depreciation for Capital WIP

Step 13. Specify Document Type for posting of Depreciation:

SPRO----->Financial Accounting--->Asset Accounting--->Integration with the General
Ledger---->Post Depreciation to the General Ledger- - -> Specify Document Types for
Posting of Depreciation (TC===OBA7)
Double click on Define Document Types
Select Type AF ( Depreciation
Postings) Select Details Button
No. Range: 04
Select No Range Information Button
Company Code: PSL
Select Change Interval Button
Select Interval Button
Number Year From No To No External
Range Chk Box
04 2009 700001 800000 √ → ENTER & SAVE
Ignore Warning Message and Press Enter
**** As per ECC 6.0 of SAP Documentation , we should not select External Check Box at
the time of Number Range Intervals. Upto Version 4.7EE selection is required. When
we select the External Check Box, at the time of posting the document , we have to
specify what should be the document number. There is an exception to this for
Depreciation Documents Postings.
IN F-02, when we are posting a Document, We can post one document at a time.
Where as for Depreciation Postings systme will post Number of Documents at a time
based on the Account Determination.
PSL10000 Land
PSL11000 Buildings
PSL20000 P&M → System Will generate 4 documents at a time
monthly
PSL30000 F&F as Account Determinations are 4
PSL31000 Vehicles
PSL40000 CapitalWIP

Step 14. Specify Intervals and Posting Rules: Same Path (TC== OAYR)
Select Company Code: PSL
Doubel Click on Posting Rules Folder
Select Monthly Posting Radio Button
SAVE → ENTER to save in your request.

Step 15. Specify Rounding Off Net Book Valeu and/ or Depreciation:
PATH: SPRO---->Financial Accounting---->Asset Accounting---->Valuation- ->
Amount Specifications(Comp.Code/Dep.Area)---->Specify Rounding off Net Book
Value and /or Depreciation (TC===OAYO)
Ignore Message and Press Enter
Company Code: PSL
Double Click on Rounding Specifications
Folder Select Area: 01 ( Book Depreciation)
Select Details Button
Select Automatically Calculated Depreciation Check Box
Select Rounding Radio Button
SAVE → ENTER to save in your request.

Step 16. Creation of Depreciation Keys:

In Creation of Depreciation Keys we have 5 steps.
Step 1. Define Base Methods
Step 2. Define Declining Balance Method All the 4 steps will be assaigned in Step 5
Step 3. Define Multilevel Methods
Step 4. Maintain Period Control Method
Step 5. Maintain Depreciatio Key 5th Step will be assaigned in Asset Master

Customization of 5 steps is detailed below

Step 1. Define Base Methods
SPRO----> Financial Accounting ----> Asset Accounting ---->Depreciation
--->Valuation Methods---->Depreciation Key---->Calculation Methods >Define
Base Methods
0014 Ordinary:Explicity Percentage( after end of life)

* Ordinary -- Means Ordinary Depreciation

Explicit Percentage--- We follow percentages specified in Com. Act Schedule 14.
After End of Life---No depreciation should be calculated if Net Book Value =
ZERO

Step 2. Define Declining Balance Method: Same Path (TC==AFAMD)

Chart of Depreciation : PSL → ENTER
Note Down the Number '001 ( in this Step Nothing to
save)
We will mention this number in 5th Step

Step 3. Define Multilevel Methods: Same Path (TC==AFAMS)

Select New Entries Button
Multilevel Method P1 Description: 5% SLM
Validity Satart: Select from Ordinary Depreciation Date
SAVE → ENTER to save in your request.
Double Click on Levels
Folder Select New Entries
Button
Acquisition Year Period Base Value Percent
Year
9999 999 12 01 5 → SAVE

Double Click on Multilevel Method Folder

Select Next Entry Button
Multilevel Method P2 (Text Field)
Description : 5% WDV
Validity Satart: Select from Ordinary Depreciation Date
SAVE → ENTER to save in your request.
Double Click on Levels Folder
Select New Entries Button
Acquisition Year Period Base Value Percent
Year
9999 999 12 24 5 → SAVE
(N.B.V)
Note: Some of the Fields in above steps are briefed below for information.
Point 1. Validity Start From : Ordinary Depreciation Start Date
Here Ordinary Depreciation Date means , the date from which system should calculate
depreciation. Normally it should be the Capitalization Date. In some Countries it will be
from 1st of Next month of Capitalization .
Asset Master in India Some other Countries
A. Capitalization DT: 05.09.2009 05.09.2009
B. Ordinary Dep DT: 05.09.2009 01.10.2009

Point 2. Levels
Acquisition Year: 9999 . If we give Acquisition Year as 2009. 5% depreciation
Rate is applicable to only for the assets purchased in 2009. If we mention 9999 , 5%
is applicable to any asset acquired in any year.
Years: 999 (Maximum No. of Years)
If the Depreciation Method is Straight Line Method and Dep Rate is 5% - Life of asset
can be assuemed as 20 Years, if rate is 1% Life would be 100 Years. But in Written
Down value Method Life of the Asset is difficult to calculate as there would always be
some remining value. If we select 999 for Years, it will calculate upto any number of
Years.
Period: 12 Means the number of Months
Basic Value: 01 - Acquisition Value-- it is applicable to Straight Line Method.
In SLM, Dep will be calculated always on Acquisition Value
24- Net Book Value-- it is applicable to Written Down Method.
in WDV dep will be calculated on the Net Book value.
Percent: Rate of Depreciation
Reduction: Ex: Acquisition Value of the Asset: 100000
Less: Estimated Scrap Value at the end of the
Life of the Asset. 1000
Actual Asset Value for Depreciation Purpose 99000
If we are following 5% Dep Rate in Reduction Method, Dep will be calculated
on 99,000 but not on 100,000. In India this method is not applicable.
Rem Life: Depreciation will be calculated in 2 ways. One is Percentage Method
Second One is Useful Life Method. In India at Present 2nd Method is not
using by most of the Companies. For Example. If an Asset is Purchased in
2004 for Rs. 100,000 which is having Useful Life of 20 Years. So
Depreciation Per Anum is Rs. 5,000. If this Company is Implementing SAP
from 2009
onwards. Already 5years accounting was done in Other Accounting Software.
AT the time of Creation of Asset Master in SAP we should mention like
Acquisiton Value : 100,000 , Acc. Depreciation : 25,000. Select Remaining
Life check Box. System will Know Raining Life of Asset is 15 years.
System will calculate depreciation for 15 years only. This system is applicable
if Depreciation Method is Straight Line Method in which life of asset can be
assumed. In WDV it is not possible.
Step 4. Maintain Period Control Methods: Same Path (TC== AFAMP)
Chart of Depreciation: PSL → ENTER
Select New Entries Button
Period Description Acq. Additions Retirement Transfers
Control Year
Method
006 PSL Period Control 01 01 01 01
Method ( Prorata at Period Start Date)
SAVE → ENTER to save in your request.

Step 5. Maintain Depreciation Keys: Same Path (TC==AFAMA)

Select New Entries Button
Dep. Key : PSL1
Description: 5% Straight Line Method
Select Period Control According to Fiscal Year √
Select Depreciation to the Day √
SAVE → Ignore Warning Message → ENTER
→ ENTER to save in your request.
Double Click on Assaignment of Calculation Methos Folder
Select New Entries Button
Depreciation Type: Ordinary Depreciaton ( Select from Drop Down
Phase: From the Start of Depreciation Button)
Base Method: 0014
Decl.Bal Method: 001
Period Control Method: 006
Multilevel Method: P1
Class: Straight Line Depreciation ( Select from DD
Button) SAVE → Select Back Arrow 4 times
Select Depreciation Key: PSL1
Select Activate Button → SAVE

Select New Entries Button

Dep. Key : PSL2
Description: 5% Written Down Value Method
Select Period Control According to Fiscal Year √
Select Depreciation to the Day √
SAVE → Ignore Warning Message → ENTER
→ ENTER to save in your request.
Double Click on Assaignment of Calculation Methos Folder
Select New Entries Button
Depreciation Type: Ordinary Depreciaton ( Select from Drop Down
Phase: From the Start of Depreciation Button)
Base Method: 0014
Decl.Bal Method: 001
Period Control Method: 006
Multilevel Method: P2
 Class: Declining Balance Depr. ( Select from DD Button)
SAVE → Select Back Arrow 4 times
Select Depreciation Key: PSL2
Select Activate Button → SAVE
Select First Page/ Control +Page Up Button on Top Right Side
Select Depreciation Key: 0000 ( No Depreciation & No Interest) and Select
Activate Button
Note: Activation of Depreciation Key '0000 is necessary for Land and Capital WIP as
there is no Depreciation on these 2 assets.

END USER AREA:

Step 1. Creation of Main Asset Master:

Accounting---->Financial Accounting---->Fixed Assets----->Assets---->Create--->
Asset (TC==AS01)
Asset Class: PSL2000 ( Dept A)
Comp. Code: PSL
Description: Machine No 1
Capitalized on : 10.04.2009
Select Time Dependent Tab
Business Area: PSLH
Select Depreciation Areas
Tab
Depreciation Key: PSL1 ( 5% Straight Line Mehtod)
Useful Life 15 Yrs } This is only of Information purpose
Period 6 Months } Not to Calculate Dep. Based on this.
Ordinary Dep.
Start Date: 10.04.2009
SAVE → System Will give a Message Asset No 200001 Sub No. 0
created ( Main Asset No always will have Sub Number ZERO)

Step 2. Creation of Sub Asset Master:

Upto Create Path is Same---->Sub number---->Asset (TC==AS11)

Asset Number: 200001

Company Code: PSL
Description : Motor
Capitalized on : 07.09.2009
Select Time Dependent Tab
Business Area: PSLH
Select Depreciation Area Tab
Depreciation Key : PSL2 ( 5% Written Down Value Method)
Useful Life 15 Yrs } This is only of Information purpose
Period 6 Months } Not to Calculate Dep. Based on this.
Ordinary Dep.
Start Date: 07.09.2009
SAVE → System Will give a Message Asset No 200001 Sub No. 1 created
Step 3. Posting of Main Asset Purchase :
Accounting----->Financial Accounting---->Fixed Assets---->Posting---->Acquisition- ->
External Acquisition---->With Vendor (TC==F-90)

Doc. Dt: 10.04.09 Type: KR Comp. Code: PSL

Post. Dt: 10.04.09
Post Key: 31 A/c: 4400001 → ENTER
Ignore Warning Message → ENTER
Amount: 500000 Business Area: PSLH
Text: Machinery Purchase Posting
Post Key: 70 (Debit Asset) A/c: 200001-0
Transaction Type: 100 ( External Acquisition of Asset) → ENTER
Remove TDS Codes → ENTER
Amount: * Text: +
From MENU----> DOCUMENT---->SIMULATE----> SAVE

Asset No 200001-0 updates GL account No 200010 Plant & Machinery

Automatically Because of :
2nd Rule: Main Asset Master to Create With Reference to the Asset Class 200001-
0 created with reference to Asset Class PSL2000( Dept A).
3rd Rule: Account Determination is specified in Asset Class. Account Determination
PSL20000 P& M specified in Asset Class PSL2000 ( Dept-A)
4th Rule: For Account Determination we assaign GL Account Based on the Nature of
Transaction. For Account Determination PSL2000 in case of Acquisition , we have
given GL A/c 200010 Plant & Machinery.

Step 4. Posting of Sub Asset Purchase ( F-90)

Doc. Dt: 07.09.09 Type: KR Comp. Code: PSL

Post. Dt: 07.09.09
Post Key: 31 A/c: 4400001 → ENTER
Ignore Warning Message → ENTER
Amount: 60000 Business Area: PSLH
Text: Motor Purchase Posting
Post Key: 70 (Debit Asset) A/c: 200001-1
Transaction Type: 100 ( External Acquisition of Asset) → ENTER
Remove TDS Codes → ENTER
Amount: * Text: +
From MENU----> DOCUMENT---->SIMULATE----> SAVE

Note 1st Rule: Sub Asset Master is to Create with reference to the Main Asset Master.
200001-1 created with reference to Main Asset 200001 Machine No 1.
The other Rules 2nd, 3rd & 4th are same as above .
Report1: Report to view Each Sub Asset Wise , Year-wise Values:
Accounting---->Financial Accounting---->Fixed Assets---->Asset- ->Asset Explorer
(TC==AW01N)
Give Asset No: 200001-0 → ENTER
To view Depreciation Calculations
Select Display Dep. Calculation Button
Select Period Information Button
We can see the Report of Depreciation Calculation
Select Back Arrow
Select Comparisions Tab
Change the Asset to 200001-1
We can see the Depreciation for Sub Number 1
Select Planned Values Tab
Change the Fiscal Year to 2010 → ENTER
Select Display Dep. Calculation Button
We can see the Report of Depreciation Calculation
Select Back Arrow
Report2: Report to view All Assets for a Particular Period
Accounting---->Financial Accounting--->Fixed Assets--->Information Systems--->
Report on Asset Accounting --->Asset Balances---->Balance Lists--->Asset
Balances---> By Business Area (TC==S_ALR_87011965)

Press All Selections Button

Give the Company Code: PSL
Change Report Date: 30.09.09
Select Execute Button
We can see Summary Report for all assets
Double Click on Dept-A, we can see for that particular area
Double Click on Machine No 1, we can see the report for Machine No 1
Select Back Arrow 3 times
Give Report Date 30.04.09
Select Execute Button
Double Click on Dept-A

Step 5. Depreciation RUN:

Accounting--->Financial Accounting---->Fixed Assets---->Periodic Processing- >
Depreciation Run---->Execute (TC==AFAB)
Comp. Code: PSL
Fiscal Year: 2009
Posting Period: 01
Select Planned Posting Run Radio Button
Select Test Run Check Box
Select Execute Button
Ignore Warning Message and Select "YES" to the Message
If any Errors has come, to View the Errors
Select Eroor Lists Button ( F7)
Select Back Arrow
 Deselect Test Run Check Box
From Menu- - ->Program Execute in Background
Output Device: LP01 → ENTER → ENTER once again

Depreciation Run Programme will take some time to Compleate. In Live Environment
where Assets are more, it take much time. So SAP has given an option to keep the
programme scheduled to run in nights when no data entry will take place. Dep run
programme will take place in Server system not at User System level. To make
Schedules , follow the below process.
Select Date and Time Button
Schedule Start Date: 08.09.09 Time : 23hrs 00 min 00ss
SAVE
To Run Immediately, Select Immediate Button
Select Save or Ctrl+S
We get a Message " Background Tab was scheduled for Programme :"RAPOST2000"

To Check the Job is Processed or Not:

from Menu---->System---->Servicess---->Jobs- >Job Overview
Select Execute Button

To View the Document Posted (TC==FB03)

To view the Document posted by System for Depreciation use TC=FB03.
Select Document List Button
Comp. Code: PSL
Doc. Type: AF (depreciation Document type)
Select Execute Button
Double Click on Document Number for Drilldown and see the Entry for the Doc. Posted
Double Click on Document Number for Drilldown and see the Entry for the Doc. Posted

In Depreciation Run Screen WE have 4 options for Depreciation Calculation( AFAB)

1. Planned Posting Run
Comp. Code: PSL
Fiscal Year : 2009
Posting Period: 02 (May)
Select Planned Posting Run Check Box
Before Executing depreciation run for May and after Eexuting Depreciation Run for
April , if we commissioned New Asset with April Date. Ex: Mach. No 2 dated 25.04.09
if we run Depreciation Programme for May system will calculated Dep like below
For Asset 200001-0: Dep from 01.05.09 to 31.05.09 ( As for Apr dep already
calculated) For Asset 200002-0: Dep from 25.04.09 to 31.05.09 ( As for Apr dep Not
calculated)
2. Repeat Run :
Instead of Selecting Planned Posting like in Earlier Case for Asset No 200002-0, we
can Select Repeat Run for April. If we selected Repeat Run, System will check the
Assets for which Depreciation is not calculated in April and post the Depreciation in
that Period.
Repeate Run is possible only for the Latest Planned Run i.e, in this case for April only
Before Repeat Run, there should be Planned Posting Run for that Period.
 Period for which Repeat Run is going on should be in Open .
In the Present Example. When we Selected Repeat Run System will calculate Depre.
for Machine No 200002-0 from 25.04.09 to 30.04.09 and post in April Month
When we run for May , we have to choose Planned Posting then system will consider
For Asset 200001-0: Dep from 01.05.09 to 31.05.09
For Asset 200002-0: Dep from 01.05.09 to 31.05.09

3.Restart :
This Option is useful when we have Scheduled Depreciation Run and because of any
Reasons ( Either Technical or Power Problems) the scheduled Job is not Finished,
System gives a Message that Job is not Completed. Select the Restart Radio Button

4 Unplanned Posting :
This option is to be selected when the Depreciation Posting is not as per Planned one
In Live Environment, monthly we pass a Provisional Entry in F-02 in stead of Running
Depreciation Programme in SAP. Entry will be like below

Depreciation Provision A/c Dr

to Accumulated Depreciation Provision Account
Once Audit is over, we will reverse the manual Entries and Run Depreiciation in SAP
Comp. Code: PSL
Fiscal Year: 2009
Period : 12 (upto March)
Select Unplanned Psting Run

SALE OF ASSET: When we sale the Asset , we will transfer the Acc. Depreciation to the
Particular Asset and transfer the Proft or Loss on sale of Asset to P& L A/c
Ex: Suppose if we sold Asset No: 200001-0
Acquistion Value 500000
Less: Accumulated Dep upto 30.04.09 1438
Net Book Value as on 30.04.09 498562
Asset Sale on 01.05.09 501000
Profit on Sale of Asset ( 501000-498562) 2438

Step 1. To Make Asset Retirement Field as Required Field for Field Status Group G052
( Accounts for Fixed Assets Retirement ) (TC==OBC4)

Select Field Status Variant: PSL

Double Click on Field Satus Group Folder
Double Click on Field Satus Group G-052
Double Click on Asset Accounting
Make Asset Retirement as Required Entry Field
SAVE or Ctrl+S → ENTER to save in your Request.
 Step 2. Asset Sale:
Accounting --->Financial Accounting--->Fixed Assets---->Posting---->Retirement- ->
Retirement with Revenue---->With Customer (TC==F-92)
Doc.Dt: 01.05.09 Type : DR Comp. Code: PSL
Post Dt: 01.05.09
Post Key: 01 A/c: 3000001 → ENTER
Amount: 501000 Buss. Area: PSLH Text: Asset Sale Posting
Post Key: 50 A/c: 300102 (Asset Sale a/c) → ENTER
Amount: * Buss. Area: PSLH Text: +
From Menu----> Document- - ->Simulate
Select Asset Retirement Check Box → ENTER
Asset Number: 200001 } Asset Number which is Selling
Sub Number: 0}
Transaction Type: 210 ( this will come by
Default) Asset Value Date: 01.05.09
Select complete Retirement Check Box → ENTER
Double Click on Blue Font Line Items → SAVE
Eventhough We posted only 2 Entries , System will generate 6 postings automatically
like below
Post Key A/c Amount
01
Dr Dr Dr Cr Cr Cr Customer 501000
70 We give Acc.
In Normal Account Dep
Credit to P& M & Machinery
Plant 1438
40 Asset Sale 501000
IN SAP by using the method of Asset Sale, Posting will be done Automatically when
50 the Asset. Asset Sale
we Sale 501000
75 P& M 200001-0 500000
NOTE: It the Asset is sold on 12.05.09 instead of 01.05.09, at the time of Asset sale we do not
50 Profit on Sale of Asset 2438
run Depreciation Programme in SAP. We will run the programme as usual at the end
of the month or end of the year. Eventhough we do not run the depreciation programe
systeme will calculate the depreciation upto the date of Sale of Asset and calculate the
Profit on Sale of Asset. On the day when we run the Depreciation Programme, system
will calculate depreciation for the sold asset upto the date of Sale of Asset and post
the entry on the Programme Run Date.

TRANSFER OF ASSET:
We have Asset No 200001-0, we want to transfer this asset from Hyd unit to Bangalore
Unit. In this type of Transfers we have to transfer the Asset at Cost price. There will be
no change in the Life of the Asset as it is transferred within the Company Code Level.
When we are transferring the Asset within 2 units of the same Company Code,there
will be No PROFIT or NO LOSS. We have to transfer both Acquisition Value(Gross
Value) and Accumulated Depreciation on that Asset. Eventhough Dep Programme is
not run, upto the date of transfer depreciation will be considered in sending unit. From
the date of Transfer Depreciation will be considered in Receiving Unit.
 There are 2 types in Asset Transfers
Two Step Transfer Procedure One Step Transfer Procedure
In this Method first we have to In this method we will create Asset
1 Create Asset Master in Receiving Master and Transfer Values in One
Unit (AS01) Step only
2 Transfer the Asset Values

Two Step Transfer Procedure is followed when we want to Transfer Number of Assets
at a Single Time or Asset which is going to Transferred will be the Sub Asset Master
in the Receiving Unit.
For Testing Purpose we are Covering One Step Procedure
PATH: Accounting----->Fianancial Accounting----->Fixed Assets---->Posting--->
Transfer--->Transfer within Company Code (TC==ABUMN)
Asset No: 200001 Sub No: 0 Doc. Date: 01.05.09
Post.Dt: 01.05.09 Asset Value Dt: 01.05.09
Text : Asset Transfer
Select New Asset Radio Button
Description: Machine No 75 ( No of Receiving
Unit) Asset Class: PSL2001 (Dept-B)
Select Master Data Button
Business Area: PSLH
Select Additional Data Button
Capitalized on : 01.05.09
Select Depreciation Area Tab
Dep Key: PSL1 (Dep Key should be same as in Sending Unit)
Useful Life: 15 } Only for Informaion purpose
Period: 5 }
Ord. Dep. Date: 01.05.09 ( From date of Dep in receiving Unit)
Select Back Arrow → ENTER & SAVE
We can see the message that Document Posted.

To View the Posted Document Use TC=FB03

Document No: 35 (Document Number is that which it posted earlier)
→ ENTER We can see the Document which SAP Posted for Transfer of Asset

SCRAPPING OF ASSET:
We have so many assets, out of that Asset Motor 200000-1 is one Asset. If we are
not able to Use/Sold/Trnasfer the asset, we will Scrap it. The Net Book Value of
Asset will be charged to P& L Account.
As per Accounting Standard 28-Impairment of Assets: If the realisable value of the
assets are less than the Net Book Value, and Future Cash Flows are Negative, then we
have to Impair the Asset.
Ex: Acquisition Value: 100000
Acc. Depreciation 20000
Net Book Value 80000
Expected Sale Price 70000
Future Cash Losses Partial Impairment 10000
 To View Motor Values as on 31.10.2009 ( S_ALR_87011965)
Press All Selections Button
Company Code: PSL
Buss. Area: PSLH
Report Date: 31.10.09
Select Execute Button ( F8)
Double Click on Dept-A
We can see Assets in Dept-A

Scrapping of Asset: PATH :-> Accounting ---->Financial Accounting---->Fixed

Assets---->Posting---->Retirement--->Asset Retirement by Scrapping (TC=ABAVN)
Asset No: 200000 Sub No: 1
2
Doc. Dt: 01.11.09 Post.Dt: 01.11.09 Asset Value DT: 01.11.09
Text: Asset Scrapping SAVE

Go and See Document Posted ( FB03)

Doc # 36 ( Last Posted Document Number of Asset Scrapping)
Comp. Code: PSL
F.Year 2009 → ENTER

CAPITAL WORK IN PROGRESS LINE ITEM SETTLEMENT:

When we purchase asset on 01.08.09 Machine No 1, we will debit it to Capital Work
in Progress account.
on 05.08.09 Freight charges Paid and Debited to CWIP A/c
on 12.08.09 Commissioning Charges Paid Debited to CWIP A/c
Asset is Capitalized on 16.08.09 as Machine No 16.
Settlement of CWIP to Machine No 1 Line Item wise is necessary.
Customization:
Step 1. Define Settlement Profile:
SPRO--->Financial Accounting---->Asset Accounting---->Business Transactions- ->
Capitalization of Assets under Construction-->Define / Assaign Settlement Profiles
Double Click on Define Settleement Profile (TC==OK07)
Settlement Profile AI ( Settlement of Asset Cost Constructions)
Select Details Button
Select " To be Settled in Full Radio Button "
Allocation Structure : 01 {Co Allocation Structure}
Default Object Type: FXA ( Assets)
Select % settlement Check Box
Select Equivalence Number check Box
Select Amount Settlement Check Box
Under Valid Receivers :
For Fixed Assets -----> Settlement Required
Doc. Type: AA ( Asset
Posting) Max. No of Distribution Rules: 999
Residence Time 12 Months → SAVE
Select Back Arrow 2 Times
 Double Click on Assaign Settlement Profile to Company Code
Select Position Button
Comp. Code: PSL → ENTER
For PSL Assaign Settlement Profile AI
SAVE → ENTER to save in your request.

END USER AREA :

Step 1: Creation of Captial Work In progress Asset Master (AS01)
Asset Class: PSL4000 (Capital WIP)
Comp. Code: PSL
Description: Capital Work In Progress
Capitalized on : 01.08.09 ( Date should be the purchased date as it is
posted to Capital WIP)
Select Time Dependent Tab
Business Area: PSLH
Select Depreciation Tab
Dep. Key: 0000 → SAVE
Asset Number : 500001-0

Step 2: Machinery Purchase Posting (F-90)

Doc. DT: 01.08.09 Type: KR Comp. Code: PSL
Post.DT: 01.08.09 Post Key: 31 Vendor A/c: 4000001

→ ENTER
Amount: 50000 Buss. PSLH
Area: Text: Machinery Purchase Posting
Post Key: 70 ( Asset Debit) A/c No: 500001-0
T. Type: 100 (External Acquisition of → ENTER
Asset)
Remove TDC Codes and → ENTER
Amount: * Text: +
From Menu----->Document----->Simulate & SAVE

Step 3: Posting of Freight on Asset Payment ( F-02)

Doc.DT: 05.08.09 Type: SA Comp. Code: PSL
Post.DT: 05.08.09
Post.Key: 70 A/c : 500001-0 T.Type: 100
Amount: 15,000 Text: Freight Payment
Post Key: 50 A/c# 200105 → ENTER
Amount: * Business Area: PSLH TEXT: +
From Menu----->Document----->Simulate & SAVE
 Step 4: Creation of Machinery Asset Master( AS01)
Asset Class: PSL2000
Comp. Code: PSL → ENTER
Description: Machine No 16
Capitalized on : 16.08.09
Select Time Dependent Tab
Business Area: PSLH
Select Depreciation Tab
Dep. Key: PSL1
Useful Life: 16 Years
Period: 6 Months
Ord. Dep Start Dt: 16.08.09 → SAVE
We will get the message that Asset Number : 200004-0 Created

Step 5: Settlement of Capital Work In Progress to Machine No 16.

Accounting---->Financial Accounting---->Fixed Assets----->Posting- ->Capitalized
Asset Under Construction---->Distribute. (TC==AIAB)

Comp. Code: PSL Asset :500001 Sub.No : 0

→ Execute (F8)
Menu--->Edit---->Select---->Select All
Select ENTER Button on Screen

Category Settlement Rec.ST %

Receiver
FXA 200004-0 Mach.#16 100 → Select Back Arrow & SAVE

select Settlement Button

Asset Value Date: 16.08.09
Text: Capital Work In progress for 16 Settlement
Deselect Test Run Check Box
Execute---> We will Get Message Transaction was Posted.

Go And See the Document Posted : Use TC=FB03

nsfering the CWIPNOTE:

Settlement, We have to Assaign Settlement Document Number Ranges in Controlling for Posting the Settlement Document. Othewise