Analyzing and Correcting Capitalized Assets

Kevin notices that his former colleague has scrapped the wrong cleaning robot.

He needs to correct his mistake.

He asks Lisette what to do now.

As an example, you post an acquisition and then post a credit memo (negative transaction).

If you then reverse the acquisition posting, you must also reverse the credit memo. If you only reverse the acquisition, the credit memo would remain, and a negative net book value would occur. In this case, the system would issue an error message.

Watch the video to see an example of an asset reversal.

You must choose between two reversal reasons:

• Reason 1

  If you recognize your error in a timely manner and make the correction quickly, you can choose reversal reason 1.

  The reversal is carried out with the same posting date as the posting date of the incorrect transaction. The prerequisite for month-end closing is not performed and postings to this posting period are possible.

• Reason 2

  You choose reversal reason 2 if you don't notice the error until after month-end closing. You cannot use the original posting date. You use the current posting date and posting period. The asset value date of the original transaction is set automatically.

After checking the asset portfolio, Kevin found that a company car was unfortunately capitalized under asset class machinery in the previous year. Lisette explains that a reversal is not possible, as the error occurs only in Asset Accounting. But Kevin can make a transfer posting to fix the error.

For asset transfers within the company code, only the postings of the current accounting year can be adjusted. The earliest asset value date is the first day of the first period of the current fiscal year.

Lisette illustrates her explanation in an example:

At the beginning of August, Kevin determines that the company car (acquired on January 1st of the previous year) was posted to the wrong asset class and also has the wrong useful life of ten years instead of five. The decision is made to transfer the asset to the correct asset class and to correct the useful life.

The earliest asset value date is January first of the current fiscal year. This is because the posting date and asset value date must be in the same fiscal year.

The system automatically determines the value adjustments and posts the transfer posting after saving.

The following transaction types are used for transfer postings:

• 300 Retirement transfer of prior-year acquisition from capitalized asset
• 310 Acquiring transfer of prior-year acquisition from capitalized asset
• 320 Retirement transfer of current year acquisition
• 330 Acquiring transfer of current year acquisition

After the transfer and adjustment of the useful life, the depreciation is recalculated and finally corrected with the next depreciation run.

The Bike Company generates balance sheets by profit center or segment. The two segments are Segment A, Bikes and Segment B, Cargo Bikes.

Kevin now wants to use a 3D printer assigned to the Bikes segment for the Cargo Bikes segment. The aim is to be able to use the same asset master record. Kevin decides to update the assignment in the master record of the 3D printer.

As of the first of August, the 3D printer will be assigned to a new cost center. Kevin creates a corresponding time interval in the asset master record. He enters then assigns the new cost center, B.

This cost center is assigned to a different profit center and segment.

When he saves the master record, a transfer posting takes place.

Cost center A derives profit center YA. Profit center YA derives segment A. Cost center B derives profit center YB. Profit center YB derives segment B. Changes to data that is relevant to the balance sheet must lead to a transfer posting. Otherwise, only the depreciation is posted to the new cost center profit center segment. Also, the net book value must be transferred to the new profit center segment. The net book value must be credited in segment A. And segment B must be debited.

After you save the change in the asset master record, the system automatically posts the transfer posting of the balance sheet accounts.

The master data change has a forward effect. The future depreciation is posted with the new cost center and, therefore, to the new profit center segment.

The €100 depreciation from January to July (7 months) was posted with cost center A.

The €100 depreciation from August to December (5 months) is posted with the new cost center B.