Kevin was commissioned by his manager to prepare the bike company for the year-end closing in Asset Accounting. His task is to check the valuation of the fixed assets and to change them if necessary. His mentor, Lisette, supports him by showing him the tasks in fixed asset accounting at year-end closing.
At Bike Company, the following closing steps take place:
- Check the asset values for correctness
We make corrections, such as revaluations, impairments, or retirements of asset portfolios.
- Physical verification
We conduct a physical review of the assets to ensure that the assets recognized in the books are present at the actual locations. This helps to detect deviations and take corrective action.
- Check the asset under construction (AuC)
We settle all investment projects or WBS elements to AuC. All completed AuC must be transferred from the AuC to fixed assets.
- Check the asset master records for completeness
We ensure that all asset master records are complete and correct, including useful life, depreciation key, and cost center.
- Execute the depreciation run
We recalculate the depreciation. Then, we perform the depreciation run for all assets in the last period of the fiscal year. This ensures that all depreciation has been calculated correctly and posted to the general ledger. All errors must be corrected.
- Prepare the asset history sheet
We create the asset history sheet that contains details such as asset description, acquisition date, acquisition costs, accumulated depreciation, and net book value.
- Execute a year-end closing program
The program checks whether all required year-end closing activities have been performed in Asset Accounting. When the year is successfully completed in Asset Accounting, the depreciation calculations are frozen. Changes to the asset do not affect the closed year.
Note
The year-end closing of Asset Accounting must happen before closing the fiscal year in the general ledger.