Maintaining Fund Accounting for Fixed Assets

Public Sector Management account assignments such as Fund, Grant, and Functional Area are required fields in the asset master data. When the asset shell is created, Public Sector Management account assignments can be derived from the associated cost object, such as cost center or WBS element, or input manually.

All subsequent postings in Asset Accounting will use account assignments from the asset master record, with no exceptions. This maintains tight integrity between the asset master and its subsequent transactions.

In Asset Accounting, valuation views are defined in order to map valuations in accordance with different valuation rules, for example, according to GASB modified or full accrual accounting. Additionally, we can define rules for calculating depreciation.

You cannot create a valuation view in SAP S/4HANA Cloud. The valuation view is defined, mapped to respective accounting principles, and delivered by SAP.

Depending on ledger and accounting principles assignment, you get respective valuation view(s) for your Asset Accounting.

The figure, Valuation Views in Asset Accounting (US), shows assignment of valuation views to depreciation area based on the accounting principles to ledger assignments.

The figure, Valuation Views in Asset Accounting (US): Definition shows the definition of the depreciation terms by asset class at the level of the accounting principle and the valuation view.

Make Valuation View-Dependent Settings for Asset Class lets you define the depreciation terms that should be used in the asset class at the level of the accounting principle and the valuation view.

By default, asset classes including Land, AUC, and Leases are delivered with modified accrual valuation and accounting principle with depreciation key GWG (100% depreciation), with useful life 0, and useful period 1.

This enables 100% depreciation of asset in modified accrual accounting ledger/principle in the same period it was capitalized. This depreciation amount should be equated to the capital expenditure because assets are not carried in the balances sheet and are reported as capital expenditure in the modified accrual reporting. General ledger accounts, such as Capital Outlay, are mapped to depreciation portion and Investment in General Fixed Assets (GFA) is mapped to accumulated depreciation portion.

In this way, you can report Capital Outlay/Expenditure in Governmental Funds statement of expenditure and revenues. Capital outlay should be equal to the budget consumption portion of the asset acquisition, so capital expenditure from the financial ledger is equal to budget consumption from the budget management.

Derive Budget Account for Assets (SSCUI 180029) provides flexibility in the determination of the budget account for asset transactions.

The figure, Valuation in Asset Master (Acquisition Posting with Modified and Full Accrual Accounting), shows an asset acquisition posting with different valuations for full and modified accrual.

The figure, Valuation in Asset Master: Capital Outlay in Modified Accrual shows an asset acquisition and depreciation (capital outlay) in the modified accrual valuation.

In modified accrual, the asset is fully expended (by 100% depreciation) to report capital outlay/expenditure.

In full accrual, depreciation is performed over the useful life.

The figure, Asset Acquisition Posting in Full Accrual Accounting, shows an asset depreciation for full accrual over the useful life of the asset.

When an asset is transferred from one fund to a different fund or other account assignments, you can perform such transfer in the asset master record. In such cases, the following apply:

• You update the new account assignments in the asset master record in the time dependent tab.
• Based on the valuation of asset in respective valuation views, a financial transaction is performed immediately at the transfer to record the financial impact.