Posting Acquisitions for Fixed Assets

Kevin has created the master data for the new assets. Eager to move forward, he needs guidance on what to do next. He approaches Lisette to learn about his options for capitalizing external assets. Lisette tells him that there are different ways to post the acquisition of an asset from a business partner.

This method is used if there is an incoming invoice without reference to a purchase order.

In this method, you post an automatic offsetting entry to a clearing account (but without reference to a purchase order or supplier). This method if either of the following situations:

• The invoice has not yet been received, but you must post the acquisition.
• The invoice was posted against a clearing account in accounts payable, without assignment to an asset.

This method is performed in procurement with reference to a purchase order. The assets are posted and capitalized during the Goods Receipt – Invoice Receipt process.

When posting the acquisition of an asset by settlement of a work breakdown structure (WBS) element, costs are first posted to an expense account with the account assignment WBS element. When the project is complete or at period end, the WBS element is settled: the WBS element is credited with the asset capitalization costs and the relevant asset is debited.

Kevin has received the invoice for the 3D printer. He now needs to post the invoice. In this case, the asset and vendor are to be entered in one transaction. Therefore, Kevin wants to analyze the posted FI document.

Watch him navigate through the system.

After performing the tasks, Kevin asks Lisette what she thinks is the most important part of the FI document posting.

Lisette summarizes:

• The postings in the general ledger (in the universal journal) are always ledger-specific.
• The posting to the universal journal is always done at the time of invoice posting.
• All important information for assets, such as the asset number, asset capitalization date, and so on, is recorded in the universal journal.

Kevin wants to take a closer look at the document.

First, from the point of view of Asset Accounting.

From the point of view of Asset Accounting, the acquisition posting is debited to the asset balance sheet account and credited to the technical clearing account. The balance sheet account and the technical clearing account are reconciliation accounts. Reconciliation accounts cannot be posted directly. They are posted via the asset (for example, the 3D printer).

The determination of the balance sheet account depends on the asset class. For example, the asset class Machinery is linked to a different asset balance sheet account than the asset class Building.

Next, Kevin looks at the FI document from an account’s payable perspective.

In the context of integrated asset acquisition, the gross amount of the incoming invoice is posted to the respective supplier account within accounts payable.

In addition, there's a reconciliation account (Payables) in the balance sheet that automatically summarizes supplier postings. These reconciliation accounts are assigned in supplier master records. The offsetting entry is posted to the technical clearing account. The balance of this account is always zero. The input tax is posted directly to the input tax balance sheet account.

Kevin has realized, that when he posts an asset, a transaction type must also be entered. Otherwise he will get an error message. He asks Lisette why he needs to enter the transaction type during the acquisition posting. She tells him that the program recognizes whether the transaction is an acquisition, retirement or transfer from the transaction type. The transaction type determines how the business transaction is processed.

Within Asset Accounting, the transaction type classifies the business transaction (for example, acquisition, retirement, or transfer). Because it also controls various system actions when posting business transactions, it determines how the transaction is processed in the system.

For asset postings, the system automatically proposes a suitable transaction type. You can also override the proposed type and enter it manually.

The system positions each business transaction to a column of the asset history sheet based on the transaction type. The transaction type influences the posting made. For example, the transaction type determines whether the asset is capitalized or deactivated:

• If the asset is capitalized during the transaction, a capitalization date is entered in the master record.
• If the asset is deactivated during the transaction, a deactivation date is entered in the master record.

For retirement or transfer posting transactions, the transaction type determines whether these are posted with revenue (asset sales) or without revenue (asset scrapping).

• 100 External asset acquisition
• 105 Credit memo in invoice year
• 200 Retirement without revenue of prior-year acquisitions
• 250 Retirement without revenue of current-year acquisitions
• 210 Retirement with revenue of prior-year acquisitions
• 260 Retirement with revenue of current-year acquisitions
• 300 Retirement transfer of prior-year acquisition from capitalized asset
• 320 Retirement transfer of current year acquisition
• 330 Acquiring transfer of current year acquisitions

The asset value date is the value date of an asset transaction from an Asset Accounting point of view. It can deviate from the posting and document date and be in posting periods that are already closed for Financial Accounting. However, the posting year and asset value date year must be the same.

Because the asset value date can have a direct influence on the amount of depreciation, the system creates a default value whenever possible. For example, if the document date is older than the posting date, the document date is proposed as the asset value date.

You can enter the capitalization date manually when you create the asset master record. The system uses this date as the default asset value date when you make the first acquisition posting. If you do not enter a capitalization date in the asset master record, the system automatically adopts the asset value date of the first acquisition posting as the capitalization date.

When a capitalizing transaction type is used, the system inserts the asset value date of the first acquisition posting in the capitalization date field (Capitalized On) in the asset master record.

The date of initial acquisition on the relevant master record is also derived from the asset value date. The initial acquisition date is retained even if the first acquisition is reversed.

Further acquisitions or other transactions cannot be entered before the initial acquisition date.

The system determines the start period for depreciation calculation from the asset value date and the period control method specified in the depreciation key of the transaction category. The depreciation start date is the first day of the start period. Similarly, the system determines the book value of an asset at the point of retirement.

Each transaction on a capitalized asset triggers the automatic calculation of depreciation on the posting amount. The asset value date, corrected by the period control of the depreciation key, is the key factor in determining the depreciation start date.

For example, if the asset value date is February 5th and the period control of the depreciation key is "pro rata at period start date", the depreciation start date is set to February 1st.