Managing Asset Accounting

For the following lessons we will focus on the Area Production Execution – Shop Floor Processing in SAP S/4HANA. The steps for Production Execution will take place in the Production (PP) Module of SAP S/4HANA.

Asset Accounting (FI-AA) is used to manage and supervise fixed assets in the SAP System.

The central task of Asset Accounting is to provide the correct acquisition costs for each fixed asset (for example, a purchased laptop for the controlling department) or the cost of goods manufactured (for example, in the case of a self-produced machine) and to document and post the value changes through the life cycle of the asset.

Due to the integration of Asset Accounting with General Ledger Accounting, the individual asset values are displayed in aggregated form in the balance sheet and profit and loss statement of the enterprise.

Assets as a whole is made up of a variety of different types of assets. The balance sheet represents this variety using the following balance sheet items:

• Intangible Assets
• Fixed assets
• Financial Assets

The following graphic shows you a sample breakdown of assets in the balance sheet. Please have a closer look at the listed categories of assets, before moving on to the next slide of the interaction.

Typically, Non-Current Asset items are usually subdivided into individual balance sheet items. The following is a sample breakdown of balance sheet item II. Fixed Assets:

1. Real Estate
2. Plants and Engines
3. Office Equipment and Other Furniture
4. Down Payments Made on Fixed Assets

This detailed information is also used in the asset history sheet, as part of the annual financial reporting. The asset history sheet provides a more accurate insight of the changes in the value of fixed assets by displaying acquisitions, retirements, transfers, depreciation, and other transactions within the reporting period.

The following graphic shows the basic life cycle of a fixed asset in Asset Accounting:

To be able to manage values in the Asset Accounting for a fixed asset, an asset master record is needed.

The asset master record consists of the following data areas:

General Master Data

This part of the master record contains concrete information about the fixed asset.

Examples:

• Description

• Account assignment information, such as Cost Center

• Posting information, such as activation date

• Physical inventory data, such as last inventory date

• Information on the origin of the asset, such as vendor and manufacturer

Asset Value Data

• Depreciation keys for controlling the valuation of the asset

• Useful life

• Expired useful life

• Starting date of depreciation

• Scrap value

The following are the methods of posting external acquisitions (acquisition of an asset from a business partner):

• In Asset Accounting:

  • Without Accounts Payable integration: The assets are posted either before the invoice is received or after the invoice is posted by the Accounts Payable department in a separate step.

  • With Accounts Payable integration: The assets and the incoming invoices are posted in one step.

• In Procurement (with reference to a purchase order):

  The assets are posted and activated in Asset Accounting during the Goods Receipt – Invoice Receipt process.

• Ordinary depreciation represents the planned depreciation of an asset when the asset is normally used. Ordinary depreciation reflects the deduction for wear and tear during the normal use of the asset.
• Unplanned depreciation covers unusual influences that lead to a permanent decrease in the value of an asset. For example, damage of a production machine.

• Special depreciation is a depreciation for wear and tear that is based solely on tax law. This type of depreciation allows you to depreciate a percentage of the asset value. The percentage rate can be scaled within a tax concession period, without taking into account the actual wear and tear of the asset.

As soon as an asset that is managed in Asset Accounting leaves the company, an asset retirement is posted in Asset Accounting. Depending on the business transaction, it can be posted in different ways:

• Retirement by Sale

  • Without Accounts Receivable integration, against a clearing account

  • With Accounts Receivable integration

  Note

  In addition to adjusting the asset balance sheet values, the system automatically calculates and posts a gain or loss from the asset retirement. This applies for retirement by sale with or without Accounts Receivable integration.

• Retirement by Scrapping

  A retirement without revenue is the removal of an asset from the asset portfolio without any revenue, for example, by scrapping.

The Bike Company has decided to manufacture some components of a new e-Bike model in-house. In this context, new machines have already been ordered for the production plant in Germany.

Information in the asset master data has a significant impact on the correct recording of its values. For this reason, the creation of an asset master record must be tested in detail.

When defining an asset account, two objects in the asset master record are of central importance:

• Asset Class

• Depreciation Areas

The asset class is the main criterion when defining the asset. Each asset must be assigned to one asset class.

• Account Determination

• Control Parameters and Default Values

In addition to these two main purposes, the asset class is responsible for assigning the asset number and controlling the master data layout.

Assets need to be valuated differently depending on the purpose of the valuation (for example, commercial, tax, or group valuation). This can result in different acquisition values or depreciation values for the identical asset, for example, according to local GAAP and international GAAP.

These different valuation approaches are displayed using depreciation areas (and ledgers) in the asset master record. For this reason, the control parameters and default values (see Asset Class) for the depreciation calculation are always displayed at the level of the depreciation area of an asset.

Note: These different fixed assets valuation approaches are represented by valuation views in the settings of Asset Accounting. A valuation view is assigned to a depreciation area within a company code.

As part of the initial implementation, the Asset Accounting department of the Bike Company will use the non-integrated asset acquisition and the integrated asset acquisition with Accounts Payable Accounting.

The non-integrated asset acquisition has already been tested successfully by the Asset Accounting department. The test of an integrated asset acquisition is now pending.

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SAP Intelligent RPA accelerates the digital transformation of business processes by automatically replicating repetitive tasks. SAP Intelligent IRPA is all about making tasks more efficient.

For example, during activity peaks, it can reduce the errors made by personnel who are under pressure to enter significant amounts of information in a short time frame.

To automate asset acquisition postings, the Asset Accounting department uses the following SAP Best Practice pre-built business content:

SAP Intelligent RPA posts acquisitions by collecting asset information and transactional data from an Microsoft Excel file and processes them automatically via SAP Fiori. It collects and classifies success and error cases that occur during the process and updates the Microsoft Excel file with the results.