Integrating PSM with Asset Accounting

Unlike corporate organizations, for public sector organizations some asset accounting operations have a budgetary impact and need to be recorded using budget consumption documents. For asset accounting, all transactions refer to an asset master. The asset master must be linked to PSM dimensions, which are derived in the postings.

This lesson will focus mainly on the budgetary handling in asset accounting; it will not cover specific rules for the public sector accounting principles (for example US modified/full accrual according to GASB).

This learning chapter will refer to other generic chapters such as master data, derivations, actual/commitment updating. There are also links to procurement, finance, project, and CLM integration.

Fund, functional area, and grant need to be assigned to each asset and sub-asset master.

The assignment can be time-dependent - that is, entered through time intervals.

Within the asset master, the PSM account assignments can be derived (overwritten if needed) from cost center and WBS elements (fixed assignment flags are considered).

The following applies to actual and commitment updating:

• All rules regarding actual and commitment updating (see separate chapters) apply.
• Document lines for which contain the asset master, follow the derivation rules described below in this chapter.
• Asset acquisitions might be posted via procurement document chains (purchase requisition/order, goods/invoice receipt) or through asset management-specific apps.
• Asset acquisitions can be considered as expenditure from a budgetary perspective, although they post to a balance sheet account. In this case, an expenditure budget account is derived on the asset acquisition balance sheet line.

The following applies to derivations for asset transactions:

• All PSM account assignments are only derived (not entered) during asset postings.
• Cost center, WBS elements, fund, functional area, and grant are always derived from the asset master. There is no deviation possible from this rule.
• The budget period is derived using the generic derivation rules (described in the derivation chapter).
• A budget account can be derived using a special asset account specific configuration activity. This allows a derivation of a different budget account deviating from the G/L account. This can also switch a line from not budget to budget relevant (and vice versa).

  An example of this is as follows: an asset acquisition posts to a balance sheet account (not budget relevant), but an expenditure account (consuming budget) is being derived as the budget account.

Budget accounts can be exceptionally derived using the following configuration.

Purchase requisitions/orders line items are using the account assignment category A for assets. When this account assignment category is chosen and the asset/sub asset is entered, all PSM account assignments are derived.

The purchase requisitions/orders use the transaction type, 120, (goods receipt) in order to derive the budget account through the configuration table ("Maintain budget account derivation for assets").

Asset acquisitions are posted depending on the GR/IR settings either using a valuated goods receipt or supplier invoice (for example, for non-valuated goods receipts).

For technical reasons, during the acquisition a clearing account is being used. Technical clearings and asset balance accounts need to carry the same PSM account assignments.

For all other rules described in the chapter. procurements apply.

Note the following in relation to acquisitions:

• Asset acquisitions can also be posted without procurement.
• Asset management provides apps to post acquisitions that are integrated or non-integrated with accounts payable.
• All rules described before apply during acquisitions postings without procurement.

Settlement is the process whereby the actual costs incurred for a WBS element (sender) are allocated (in whole or in part) to one or more assets (receivers). The following is as follows:

• Costs are settled usually over time onto a temporary asset under constructions (AuC) account, before the final settlement to the assets.
• The budgetary impact is on the original project costs only. All other settlement postings are important for fund accounting, but are usually not budget relevant (this is configured using the configuration step, Budget Relevance of CO Processes).
• WBS elements from a capital project must have default PSM account assignments assigned to them. When the projects are released, the system generates a main AuC and the PSM account assignments from the WBS element are transferred onto the AuC.
• The cost on WBS elements and AuCs are posted on the same PSM account assignments. As each asset can only store one combination of PSM account assignments, a sub asset for each PSM account assignment combination is automatically created during settlement.
• Settlements can also be done without the use of AuC. Here, the final assets with the PSM account assignment must be created manually.

• Depreciations are posted through periodic jobs.
• Depreciations are typically not budget relevant (G/L account setting set as not budget relevant), but need to carry fund, grant, and profit center (derived from the asset master) in order to adjust balances (for fund accounting).

• Asset transfers are posted through a change of account assignments within the same asset (adding a time interval) or through an asset to asset transfer (separate posting app).
• In case of transfers crossing balancing entities (such as profit center, fund, or grant) adjustments postings are generated automatically (see fund accounting).
• Depreciations are adjusted automatically during the transfers.
• Transfers are usually not budget relevant. This is the default delivered setting, which can be changed via the configuration Budget Account Derivations for Assets.

• Retirements can be posted with or without integration of accounts receivable.
• The asset lines for these postings are usually not budget relevant (unless revenue increasing budget is being used).
• Gain and loss lines are by default not budget relevant, but can be changed through G/L account settings.