SAP S/4HANA: Asset Accounting for SAP S/4HANA Finance [1 ed.] 1493219405, 9781493219407

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SAP PRESS is a joint initiative of SAP and Rheinwerk Publishing. The know-how offered by SAP specialists combined with the expertise of Rheinwerk Publishing offers the reader expert books in the field. SAP PRESS features first-hand information and expert advice, and provides useful skills for professional decision-making. SAP PRESS offers a variety of books on technical and business-related topics for the SAP user. For further information, please visit our website: http://www.sap-press.com. Tritschler, Walz, Rupp, Mucka Financial Accounting with SAP S/4HANA: Business User Guide 2020, 604 pages, hardcover and e-book www.sap-press.com/4938 Paul Ovigele Material Ledger in SAP S/4HANA: Functionality and Configuration 2019, 540 pages, hardcover and e-book www.sap-press.com/4857 Stoil Jotev Configuring SAP S/4HANA Finance 2019, 756 pages, hardcover and e-book www.sap-press.com/4857 Anup Maheshwari Implementing SAP S/4HANA Finance (2nd Edition) 2018, 570 pages, hardcover and e-book www.sap-press.com/4525

Stoil Jotev

Asset Accounting with SAP S/4HANA®

Dear Reader, We’ve all heard that it’s not nice to have favorites, but sometimes it can be hard to resist. Stoil first became an author with us last year, publishing Configuring SAP S/4HANA Finance in the summer of 2019. At 756 pages, it was a huge undertaking for a first-time author, but Stoil never wavered in his commitment to the project. He delivered every chapter on schedule, and when the page count initially came in short, worked with me to add additional detail throughout. We even managed to publish a month earlier than planned! As we started his second book on a more specialized topic, Stoil remained steadfast. Despite new work commitments and increases in travel, he found the time to finish the book two months early, allowing us get it out to readers like you that much more quickly! Throughout both projects, his quality of his work remained incredibly high, and it was a genuine delight for me to edit his work and shepherd it through the publishing process. What did you think about Asset Accounting with SAP S/4HANA? Your comments and suggestions are the most useful tools to help us make our books the best they can be. Please feel free to contact me and share any praise or criticism you may have. Thank you for purchasing a book from SAP PRESS! Meagan White

Editor, SAP PRESS [email protected] www.sap-press.com Rheinwerk Publishing • Boston, MA

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Imprint This e-book is a publication many contributed to, specifically: Editor Meagan White Acquisitions Editor Emily Nicholls Copyeditor Yvette Chin Cover Design Graham Geary Photo Credit Shutterstock.com/1441376222/© Balazs Toth Production E-Book Hannah Lane Typesetting E-Book SatzPro, Krefeld (Germany) We hope that you liked this e-book. Please share your feedback with us and read the Service Pages to find out how to contact us. The Library of Congress has cataloged the printed edition as follows: LCCN: 2020933005

ISBN 978-1-4932-1940-7 (print) ISBN 978-1-4932-1941-4 (e-book) ISBN 978-1-4932-1942-1 (print and e-book) © 2020 by Rheinwerk Publishing, Inc., Boston (MA) 1st edition 2020

I would like to thank my wonderful family for their love and continuous support, which made possible the completion of this book.

Contents Preface .....................................................................................................................................................

15

Introduction ..........................................................................................................................................

21

1

31

1.1

1.2

1.3

Organizational Structures Company Codes ....................................................................................................................

32

1.1.1 1.1.2 1.1.3

Company Codes in the Organizational Structure ...................................... Defining Company Codes .................................................................................. Company Code Settings .....................................................................................

32 32 35

Charts of Depreciation ......................................................................................................

39

1.2.1 1.2.2

40 40

Charts of Depreciation in the Organizational Structure ......................... Configuring the Chart of Depreciation .........................................................

Depreciation Areas ..............................................................................................................

44

1.3.1 1.3.2

Portraying Valuation Frameworks .................................................................. Depreciation Area Settings ...............................................................................

44 45

Asset Classes ..........................................................................................................................

55

1.4.1 1.4.2

Structuring Asset Classes ................................................................................... Configuring Asset Classes .................................................................................

56 58

1.5

Summary .................................................................................................................................

71

2

Master Data

73

2.1

Screen Layouts ......................................................................................................................

73

2.1.1 2.1.2 2.1.3

Screen Layout Definition .................................................................................... Field Control ........................................................................................................... Layout for Depreciation Areas ..........................................................................

74 76 79

Account Determination ....................................................................................................

81

2.2.1 2.2.2

81 82

1.4

2.2

Account Determination Definition ................................................................. Assigning General Ledger Accounts ...............................................................

9

Contents

2.3

Number Ranges ....................................................................................................................

89

2.4

Asset Hierarchy ....................................................................................................................

90

2.4.1 2.4.2 2.4.3

Asset Numbers ...................................................................................................... Asset Subnumbers ............................................................................................... Asset Group Numbers ........................................................................................

91 99 103

User Fields in Asset Master Records ...........................................................................

106

2.5.1 2.5.2

Four-Character User Fields ................................................................................ Eight-Character User Fields ..............................................................................

106 107

2.6

Asset Super Numbers ........................................................................................................

109

2.7

Display Asset Master Worklist App .............................................................................

111

2.8

Summary .................................................................................................................................

115

3

Asset Valuation

117

3.1

Parallel Valuation ...............................................................................................................

117

3.1.1 3.1.2

118 119

2.5

3.2

3.3

3.4

10

Accounting Principles ......................................................................................... Configuring Multiple Valuation ......................................................................

Currencies in Asset Accounting ....................................................................................

122

3.2.1 3.2.2

Currency Types ...................................................................................................... Depreciation Area Currency Settings ............................................................

123 126

Real-Time Integration with the General Ledger ...................................................

129

3.3.1 3.3.2 3.3.3 3.3.4 3.3.5 3.3.6

130 131 133 134 136 136

General Ledger Posting Control ...................................................................... Technical Clearing Account for Integrated Asset Acquisition .............. Alternative Document Type for Integrated Asset Acquisition .............. Specifying the Posting Key for Asset Posting ............................................. Assigning an Input Tax Indicator for Non-Taxable Acquisitions ......... Posting of Depreciation in the General Ledger ..........................................

Additional Valuation Settings .......................................................................................

141

3.4.1 3.4.2 3.4.3

141 142 142

Defining a Depreciation Area for Quantity Update ................................. Defining the Transfer of APC Values ............................................................. Defining the Transfer of Depreciation Terms ............................................

Contents

3.4.4 3.4.5

Determining Depreciation Areas in the Asset Class ................................. Maximum Amount for Low-Value Assets ....................................................

143 146

3.5

Summary ................................................................................................................................. 148

4

Business Transactions

4.1

Acquisitions ............................................................................................................................ 151 4.1.1 4.1.2 4.1.3 4.1.4

4.2

Configuring Transfers ......................................................................................... Transferring Assets within a Company Code .............................................. Intercompany Asset Transfers .........................................................................

193 198 201

Configuring Asset Retirement .......................................................................... Asset Sales with a Customer ............................................................................ Asset Sales without a Customer ...................................................................... Asset Retirement by Scrapping ........................................................................

203 206 209 211

Manual Value Corrections ............................................................................................... 213 4.5.1 4.5.2 4.5.3 4.5.4 4.5.5

4.6

179 183 187 190

Retirement .............................................................................................................................. 203 4.4.1 4.4.2 4.4.3 4.4.4

4.5

Configuring Assets Under Construction ....................................................... Capitalization of Assets Under Construction .............................................. Assets Under Construction with Investment Management .................. Assets Under Construction with Project System .......................................

Transfers .................................................................................................................................. 193 4.3.1 4.3.2 4.3.3

4.4

152 159 171 177

Assets Under Construction .............................................................................................. 179 4.2.1 4.2.2 4.2.3 4.2.4

4.3

Configuring Acquisitions ................................................................................... Acquisitions with a Vendor ............................................................................... Acquisitions with Automatic Offsetting Entries ........................................ Acquisitions from Affiliated Companies ......................................................

151

Configuring Manual Asset Value Corrections ............................................. Write-Ups ................................................................................................................ Write-Downs .......................................................................................................... Manual Depreciation .......................................................................................... Unplanned Depreciation ....................................................................................

213 214 215 217 218

Summary ................................................................................................................................. 219

11

Contents

5

Periodic Processing

221

5.1

Depreciation ..........................................................................................................................

221

5.1.1 5.1.2 5.1.3 5.1.4

Configuring Depreciation .................................................................................. Executing Depreciation Runs ........................................................................... Displaying Logs ..................................................................................................... Analyzing Errors ....................................................................................................

222 236 241 242

Revaluation ............................................................................................................................

243

5.2.1 5.2.2 5.2.3

Configuring Revaluation ................................................................................... Posting a Revaluation Run ................................................................................ Inflation ...................................................................................................................

244 247 248

5.3

Year-End Closing ..................................................................................................................

251

5.4

Summary .................................................................................................................................

251

6

Asset Reporting

253

6.1

Asset Overview ....................................................................................................................

253

6.1.1 6.1.2

Asset Explorer ........................................................................................................ Asset Accounting Overview App .....................................................................

253 258

Asset Balances ......................................................................................................................

262

6.2.1 6.2.2

262 265

5.2

6.2

6.3

SAP GUI Report ...................................................................................................... Asset Balances App ..............................................................................................

Asset History Sheet ............................................................................................................

267

6.3.1 6.3.2 6.3.3

Configuration ........................................................................................................ SAP GUI Report ...................................................................................................... Asset History Sheet App ....................................................................................

267 271 274

Asset Transactions ..............................................................................................................

279

6.4.1 6.4.2

SAP GUI Report ...................................................................................................... Asset Transactions App ......................................................................................

279 283

6.5

Display Asset Master Worklist App .............................................................................

285

6.6

Depreciation Lists App ......................................................................................................

287

6.7

Summary .................................................................................................................................

289

6.4

12

Contents

7

Migrating Asset Data

7.1

Migration Process in SAP S/4HANA ............................................................................ 291 7.1.1 7.1.2 7.1.3

7.2

292 296 307

Migrating Fixed Asset Data ............................................................................................. 308 7.2.1 7.2.2 7.2.3

7.3

Migration Checks and Prerequisites .............................................................. Migration Tools ..................................................................................................... Migration Execution ............................................................................................

291

Configuration Activities Prior to Migration ................................................. Performing Manual Migration ......................................................................... Automated Migration Process .........................................................................

309 311 318

Summary ................................................................................................................................. 320

Appendices

323

A

Obsolete and New Transaction Codes and Tables in SAP S/4HANA ............ 323

B

The Author .............................................................................................................................. 329

Index ........................................................................................................................................................

Service Pages ..................................................................................................................................... Legal Notes .........................................................................................................................................

331

 I  I

13

0

Preface

Asset accounting represents a fundamental part of all accounting processes. Asset accounting records and reports fixed asset transactions and valuates fixed assets. Fixed assets are assets used over the long term and have special accounting and valuation requirements, since their costs typically are recognized over the course of the asset’s useful life, as opposed to being recognized immediately, which would be the case, for example, when purchasing inventory or stationery supplies. This distinction leads to an additional level of complexity and added responsibility for organizations that manage fixed assets. SAP S/4HANA is the latest-generation enterprise resource planning (ERP) system, which has taken the business world by storm by revolutionizing how enterprise data is being managed. The financial process area of SAP S/4HANA has been fundamentally improved, and in particular, asset accounting has benefited greatly from the new state-of-the-art SAP HANA database. In fact, for SAP S/4HANA, SAP completely redesigned its asset accounting solution, which we’ll refer to as the new asset accounting.

Objective of This Book Asset Accounting with SAP S/4HANA is the ultimate guide on asset accounting in SAP S/4HANA. The objective of this book is to provide a comprehensive guide both to customizing and to using asset accounting in SAP S/4HANA. This book should benefit both SAP consultants and finance users. The objective of this book is to provide integrated content as we walk you through all asset accounting processes. We’ll explain how you can identify and confirm your business requirements, configure the relevant functionalities, and functionally use them in your day-to-day business operations. If this is your first book on SAP S/4HANA Finance, we hope this book also helps you jumpstart your SAP S/4HANA journey. We aim to provide concise but nevertheless robust knowledge on how the SAP HANA database works; how it benefits financial processes, in particular asset accounting processes; and how the new asset accounting can help you streamline your fixed asset processes.

15

Preface

This book is a combination of a technical guide describing how to configure all relevant processes and reporting requirements in asset accounting and a process manual describing how to effectively use SAP S/4HANA to manage your fixed assets. Therefore, we have the ambitious goal of being equally interesting and beneficial for both technical experts and financial professionals. In this book, we’ll use the latest and greatest SAP S/4HANA 1909 system. You’ll learn how to use both the traditional SAP GUI (graphical user interface) interface and the latest asset accounting SAP Fiori apps. SAP Fiori provides a beautiful, user-friendly, web-based interface. Many asset accounting apps are already available, thus enabling you to run day-to-day operations and to generate asset reports using this powerful new technology. This book also aims to share our enormous experience in asset accounting garnered from many projects delivered in the last twenty years. You’ll benefit from best practices derived from projects in various industries as they pertain to asset accounting. You’ll learn how to properly organize fixed asset master data, how to prove various asset business transactions, how to valuate assets based on multiple valuation frameworks, and how to get the most out of the powerful asset reporting capabilities that SAP S/4HANA offers. Asset accounting is a process area that relates to virtually every organization that is implementing or using SAP S/4HANA. Companies of every size—small, medium, and large—need to manage fixed assets. Valuation and reporting requirements in asset accounting could be paramount especially in businesses spread around the world, in multiple regions. Therefore, we felt compelled to provide a comprehensive guide on asset accounting in SAP S/4HANA to help organizations of all sizes and in all industries manage their asset accounting processes. Therefore, this book aims to be a blend of technical guide and business process textbook, which will hopefully serve as your ultimate resource for your exciting journey into the fascinating world of asset accounting in SAP S/4HANA!

Note This book is not the only book on SAP S/4HANA Finance. We also offer a comprehensive configuration book called Configuring SAP S/4HANA Finance, available from SAP PRESS at https://www.sap-press.com/4857.

16

Target Audience

Configuring SAP S/4HANA Finance covers the setup of all finance process areas, including asset accounting. However, asset accounting is so complex and important that it deserves a book in its own right—the one you hold in your hands now!

Target Audience The target audience for this book includes various categories of professionals. We hope this book will equally benefit SAP consultants, SAP project managers, finance managers, asset accounting business process owners, and asset accounting users. Even beginners in the SAP world should find a lot of useful information to jumpstart their SAP careers, either as users or as consultants. Beginner readers will gain fundamental business process knowledge in asset accounting. We’ll cover the whole configuration process in SAP S/4HANA asset accounting; therefore, this book should be invaluable help for senior and junior asset accounting consultants alike. For consultants that are just starting out with asset accounting, this book will reveal the secrets of asset accounting in SAP S/4HANA and will guide you through every step of the way in implementing asset accounting. Senior consultants who already have a few asset accounting projects in SAP ERP under their belt should also find this book beneficial for learning the differences between new asset accounting in SAP S/4HANA and the traditional classic asset accounting in SAP ERP. These more experienced consultants will also learn about great advancements in the SAP HANA technology and how these advancements benefit the asset accounting processes. We’ll also provide you with a list of obsolete and new transaction codes in SAP S/4HANA that pertain to asset accounting. This resource should be a useful cross-reference for asset consultants, especially those coming from an SAP ERP background. We hope this book will also be invaluable not only during implementation, but also during production to support asset accounting processes. In this book, we’ll acquaint you with typical problems and issues that you may encounter in asset accounting and recommend best practices for resolving them. Another major target audience for this book consists of asset accounting business process owners and users of the system. Many SAP books on the market focus either on the technical side of implementing specific SAP process areas or on the functional side of using these solutions. This book provides unique blend of both approaches, as not only will we teach you how to configure and support the new asset accounting in SAP S/4HANA but also how to use all asset accounting processes in your day-to-day

17

Preface

business operations. Asset accounting business process owners and users will learn how to manage asset master data, how to properly record asset processes, and how to execute and analyze various asset reports. We’ll show you both traditional SAP GUI transactions and reports and the newly available asset accounting SAP Fiori apps. After reading this book, even beginner asset users should feel fairly confident about how to perform their asset accounting functions in SAP S/4HANA. Asset users in SAP S/4HANA will need a good understanding of the myriad of functions in asset accounting, which we’ll explain in detail throughout this book, including maintaining master data; posting asset business transactions (such as acquisitions, retirements, and transfers); and performing various period-end closing activities, such as depreciation and revaluation. This book also targets middle and high-level management interested in asset accounting and the powerful asset reporting capabilities of SAP S/4HANA. Without a doubt, asset accounting is extremely important, as these processes provide vital information about the assets of the enterprise. Management should be constantly informed about the current state of the assets of the company, especially since some of these assets could represent huge portions of the value held by your company. SAP S/4HANA features tools to provide this data in an effective way. By learning the capabilities of asset accounting in SAP S/4HANA, managers will have an invaluable advantage and be able to stay ahead of the challenges in today’s highly competitive business environment. Especially with the new and beautiful SAP Fiori interface, managers can access state-of-the-art reporting capabilities at their fingertips on any device—desktop or mobile. This book will teach you how to utilize these capabilities in the most effective way. Finally, this book’s target audience includes project managers in SAP S/4HANA implementations. Implementing SAP S/4HANA is a complex undertaking. Project managers must be strong from a technical point of view and must understand the functionalities being implemented. Asset accounting is one of the most important financial process areas. As such, project managers will hopefully find this book useful, as they will learn to handle complexity in the fixed assets area and learn how to avoid typical project pitfalls. We’ll also teach you the typical tasks that must be performed to implement asset accounting and how these tasks fit into the overall SAP S/4HANA implementation project plan. Thus, project managers will be able to properly assess the required effort for implementing asset accounting and can set realistic expectations among asset consultants and users involved in the project. Special attention

18

Structure of This Book

will be dedicated to the migration of fixed asset data. We’ll discuss in detail, in Chapter 7, how to properly manage the migration of fixed asset data into SAP S/4HANA, which is an area of particular importance for project managers.

Structure of This Book In this book, we’ll teach you how to configure and use asset accounting in SAP S/4HANA. The book is organized into the following chapters: 쐍 Introduction We’ll start with an introduction to SAP S/4HANA in which you’ll learn how the SAP

HANA database works, how SAP S/4HANA was developed, and what SAP Fiori is. You’ll also learn how the new asset accounting differs from the classic asset accounting in SAP ERP and how it supports multiple valuation principles and realtime integration with the general ledger. 쐍 Chapter 1: Organizational Structures In this chapter, you’ll learn how to set up the organizational structures of asset

accounting including the company code, the chart of depreciation, and depreciation areas. We’ll also configure some example asset classes. 쐍 Chapter 2: Master Data In this chapter, you’ll learn how to configure asset master data including account

determinations, screen layout rules, and number ranges. Then, you’ll build an asset master data hierarchy using asset super numbers, group numbers, main numbers, and subnumbers. You’ll also learn how to set up user fields in asset master records. 쐍 Chapter 3: Asset Valuation

In this chapter, we’ll explain in detail how to value fixed assets according to multiple valuation frameworks. You’ll learn how to set up accounting principles and ledgers and how to configure asset accounting’s real-time integration with the general ledger. 쐍 Chapter 4: Business Transactions

This chapter is the most extensive chapter in our book. We’ll teach you how to configure and use every business process available in asset accounting, such as acquisitions, transfers, retirements, and manual value corrections.

19

Preface

쐍 Chapter 5: Periodic Processing

In asset accounting, periodic processes are executed as part of the period-end and year-end closing. You’ll learn how to conduct asset depreciation, revaluation, and year-end closing. 쐍 Chapter 6: Asset Reporting

In this chapter, you’ll learn how to use the extensive and powerful asset accounting information system. We’ll examine asset overview and balance reports as well as history sheet and asset transactions reports. We’ll teach you how to use both SAP GUI and SAP Fiori reports. 쐍 Chapter 7: Migrating Asset Data

This chapter will teach you how to migrate your legacy asset data into SAP S/4HANA. You’ll learn the various checks and tools that SAP S/4HANA provides to facilitate the migration process. You’ll learn the configuration activities required in the migration process. We’ll examine how the SAP S/4HANA migration cockpit and the SAP S/4HANA migration object modeler work. We’ll also demonstrate both manual and automated migration processes. 쐍 Appendix A: Obsolete and New Transaction Codes and Tables in SAP S/4HANA

In the appendix, we’ll provide a list of the obsolete and new transaction codes and tables. Without further ado, let’s start our SAP S/4HANA asset accounting journey!

20

0

Introduction

This introduction covers the basics of SAP S/4HANA Finance and explains the core changes that arrived with the new asset accounting, which first appeared in SAP ERP and is the default in SAP S/4HANA.

We’ll start our exciting journey into the fascinating world of asset accounting in SAP S/4HANA with an overview of what SAP S/4HANA is and how it revolutionizes finance processes, particularly how it has revolutionized asset accounting. SAP’s flagship product, SAP S/4HANA is the latest release of their enterprise resource planning (ERP) system, SAP ERP, which has been a popular ERP system in the last 25 years. Introduced in 2015, SAP S/4HANA is the successor of SAP’s previous ERP suites—SAP R/3 and SAP ERP. SAP S/4HANA is based on the SAP HANA database, which is an in-memory, column-oriented, relational database developed by SAP in 2011. In this introduction, we’ll introduce you to the SAP S/4HANA system, particularly the SAP S/4HANA Finance solution. In the process, you’ll learn the fundamentals of SAP HANA databases. Then, we’ll introduce you to asset accounting in SAP S/4HANA.

SAP S/4HANA Finance In this section, we’ll provide an overview of the SAP S/4HANA system and show you what it can do for finance. We’ll start with a discussion of the SAP HANA database, then we’ll introduce you to the SAP S/4HANA system and also discuss the new SAP Fiori user interface.

SAP HANA Database The SAP S/4HANA system is based on the SAP HANA database. A database is a system to organize a collection of data that stores data and provides access to that data electronically from a computer system. All ERP systems need a database, in which enterprise data is stored.

21

Introduction

For many years, SAP didn’t provide its own database system. Customers who implemented SAP ERP had to also choose a database system from a different provider, such as Oracle, IBM, or Microsoft. For many years, this solution worked well for most SAP customers. The SAP ERP system, which consisted of applications to manage financial, human resources, sales, purchasing, and manufacturing processes, ran well on any third-party database system. But as the global economy evolved, so have the needs and requirements for business information. In recent years, businesses around the globe have become increasingly globalized and interrelated. Today, high-level management needs accurate and up-to-date information about the business from all over the world to make sound, well-informed decisions. Thus, SAP saw an opportunity to revolutionize the world of business information. Let’s first start with some history, starting with SAP’s development of a new database called SAP HANA in 2011. SAP HANA stands for “high-performance analytic appliance” and is a fundamentally new type of database that uses in-memory database technology, which enables the processing of vast amounts of data in real time. Traditionally, ERP systems are known as online transaction processing (OLTP) systems, which means they are mainly designed to record and process vast amounts of enterprise data. Additionally, a separate class of analytical and reporting system could use this data to perform complex and resource-intensive analysis, known as online analytical processing (OLAP) systems. SAP’s goal had always been to provide a single system that covers both needs; however, the core SAP ERP solution prior to SAP S/4HANA focused on OLTP applications. OLAP applications were provided as separate data warehouse systems, for example, SAP Business Warehouse (SAP BW) and later SAP BusinessObjects Business Intelligence (BI). To solve this disconnect, SAP developed the SAP HANA database, which takes advantage of advancements in processing power and the lower cost of memory to combine both goals within the SAP S/4HANA system. But let’s see what makes the SAP HANA database so special. To start, SAP HANA is an in-memory database. An in-memory database stores data online in its memory. In traditional databases, the data is stored in hard disk storage devices and must be accessed for every read and write operation. SAP HANA stores data in random access memory (RAM). RAM access is much faster, which makes SAP HANA a much faster database than a traditional database. Another key advantage of SAP HANA is its column store database design. Traditionally, databases store data in rows. In this case, each data record is essentially stored as a row, and the fields in these rows are grouped into columns. To access records, the

22

SAP S/4HANA Finance

database searches by specific field, for example, a vendor number, and thus must check all rows to find that particular vendor number. In a column store database, each column in the table represents a separate table and is stored individually. As a result, each column can be indexed and compressed separately. Thus, each column would contain only unique records, without duplicates. To illustrate, let’s show you the design of a column stare database graphically. Figure 1 shows raw data in Excel related to asset accounting, including asset numbers and their related cost centers, serial numbers, and acquisition values.

Figure 1 Asset Raw Data

In traditional databases, each data record will be represented as a separate row, as shown in Figure 2.

Figure 2 Row-Oriented Database View

In column-oriented databases like SAP HANA, the values of a field are serialized into separate columns, which are followed by the values of the next column, and so on, as shown in Figure 3.

23

Introduction

Figure 3 Column-Oriented Database View

The advantage of this column-based orientation is that, when the system needs to find database records with, for example, asset number 700003, the system will only search in the asset number column. The ID number for that asset will be checked, and the system will retrieve the rest of the data from the rest of the columns. Thus, the system won’t search through all the data records in the table, whereas a system working with a traditional row-based database would.

SAP S/4HANA SAP S/4HANA is the latest ERP system from SAP. Released in 2015, SAP S/4HANA is the successor to previous SAP ERP systems like SAP R/3 and SAP ERP. SAP S/4HANA is fully integrated and optimized with the SAP HANA database. Many applications and programs in the system have been changed or completely redesigned to fully benefit from the SAP HANA database. With SAP S/4HANA, using the SAP HANA database is mandatory. SAP S/4HANA provides two editions: SAP S/4HANA (by default, this label refers to the on-premise edition) and SAP S/4HANA Cloud. SAP S/4HANA Cloud enables faster implementation in the cloud but lacks the full functionalities of SAP S/4HANA. As a software-as-a-service (SaaS) offering, SAP S/4HANA Cloud is suitable if you’re looking for a solution that is easier and quicker to deploy than a traditional on-premise implementation. SAP continues to improve and develop the SAP S/4HANA system and delivers onpremise releases once a year, usually in the fall, whereas SAP S/4HANA Cloud’s releases are quarterly. The following list summarizes the on-premise releases of SAP S/4HANA:

24

SAP S/4HANA Finance

쐍 SAP S/4HANA Finance 1503: March 2015 쐍 SAP S/4HANA 1511: November 2015 쐍 SAP S/4HANA Finance 1605: May 2016 쐍 SAP S/4HANA 1610: October 2016 쐍 SAP S/4HANA 1709: September 2017 쐍 SAP S/4HANA 1809: September 2018 쐍 SAP S/4HANA 1909: September 2019

From the beginning of SAP S/4HANA, the finance area has been paramount. In finance, SAP provided the first SAP HANA-based applications, and thus, the finance solution is quite mature. After the first release, with every release, SAP has continuously improved and expanded on finance functionalities. This book is based on SAP S/4HANA 1909, the latest release at the time of this writing, and will teach you all about the latest and greatest functionalities in asset accounting.

SAP Fiori SAP Fiori is a user interface and user experience approach that provides a beautiful, web-based interface for SAP S/4HANA that is optimized to run on any type of device—whether desktop or mobile. The word fiori comes from the Italian language and means flowers. By naming the new user interface SAP Fiori, SAP’s goal was to emphasize beauty and ease of use. Figure 4 shows the SAP Fiori logon screen. Even from the initial logon screen, you can see the beauty of the interface.

Figure 4 SAP Fiori Logon Screen

25

Introduction

Prior to SAP S/4HANA, SAP users had complained that the traditional SAP GUI was not catching up with the latest web-based interfaces, which could run equally well on desktops and on mobile devices. SAP Fiori is SAP’s answer to that need, providing access to the full functionalities of SAP S/4HANA applications but in a web-based, user-friendly environment. Users familiar with previous releases of SAP will be familiar with the transaction concept, where each function, whether for data recording, reports, or configuration, is accessed via a transaction. An associated transaction code serves as shortcut to access the transaction/function. In SAP Fiori, each function is accessed via an SAP Fiori app. Not all functions in SAP S/4HANA are available via SAP Fiori apps, but with each new release, SAP continuously expands the available SAP Fiori apps. You can check the currently available SAP Fiori apps in the SAP Fiori apps reference library, available at: https://fioriappslibrary.hana.ondemand.com/sap/fix/externalViewer/ Search by application component FI-FIO-AA to see the available SAP Fiori apps for asset accounting, as shown in Figure 5.

Figure 5 Asset Accounting SAP Fiori Apps

Throughout this book, we’ll teach you how to use both the relevant SAP Fiori apps and their corresponding SAP GUI transactions, as we walk you through the various asset accounting functionalities.

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New Asset Accounting

New Asset Accounting Asset accounting is a functional area that handles complex reporting and valuation requirements, which often differ from country to country and from industry to industry. Therefore, over the years, SAP has improved its asset accounting-related functionalities to comply with ever-changing requirements. With the SAP HANA database, SAP provided a redesigned asset accounting solution that dramatically improved the system’s valuation and reporting capabilities and is thus called the new asset accounting. This solution had first become available even before SAP S/4HANA, where it could be activated on SAP ERP running on SAP HANA database. With SAP S/4HANA, using the new asset accounting is mandatory. In this section, we’ll introduce you to the new asset accounting, explaining its underlying concepts, how it supports multiple valuation principles, and how its real-time integration with the general ledger works.

The New Asset Accounting Concept SAP has provided a solution for multiple valuation principles for quite some time. Originally, multiple valuation was handled by the Special Purpose Ledger (SPL) functionality, where dedicated special-purpose ledgers were set up to represent alternative valuation approaches. The next step was the development of the new general ledger, where these additional ledgers were fully integrated into general ledger accounting. From an asset accounting point of view, this development was major step forward because various depreciation areas could now be mapped with general ledgers. Still, the solution in asset accounting was not perfect because postings to the leading ledger were replicated throughout the other, non-leading ledgers. Thus, periodic adjustment programs had to be run to accommodate the differences in accounting principles. Such programs would generate delta postings in the non-leading ledgers only. The new asset accounting was built around the concept that all postings to leading and non-leading ledgers should be fully integrated and performed in real time. Using the enormous capabilities of the SAP HANA database, SAP redesigned the asset accounting solution to fully be integrated with the general ledger. All asset accounting information should be available in the general ledger as well, and all valuation principles should generate the required postings without the need for periodic adjustment.

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Introduction

Multiple Valuation Principles Most SAP customers are global companies operating in multiple regions and numerous countries. Typical requirements for asset accounting include the ability to valuate assets according to all relevant valuation principles. For example, a US company operating globally would want to represent the value of assets in asset accounting following US Generally Accepted Accounting Principles (US GAAP) as well as following International Financial Reporting Standards (IFRS), which are required in many countries. The company might also need to follow local GAAP and local tax rules. All these valuation principles could be set up as separate depreciation areas in SAP S/4HANA, which either post depreciation into the general ledger or are for reporting purposes only. Usually, the same fixed asset would be treated differently based on different valuation principles. For example, the useful life or the method of depreciation for certain categories of assets could be different. The same asset class may need to depreciated via the straight-line method of depreciation (where a fixed depreciation expense is recognized each year) in some countries, but in others using the accelerated depreciation method (where a larger depreciation expense is recognized at the beginning of the asset’s useful life). Even when the method of depreciation is the same, specifics like the depreciation start date (start of the month of acquisition or start of the following month) or other depreciation parameters. For example, in the US, the halfyear convention of depreciation is used where the depreciation for half a year is taken in the year of acquisition of the asset and in the year of its retirement, regardless of when the asset is acquired. When you set up asset accounting in SAP S/4HANA, you’ll always be required to specify your leading valuation principle, which is linked with the main book depreciation area, which in turn is integrated with the leading general ledger. For US companies, in most cases, that leading valuation principle would be US GAAP, although some companies may choose IFRS. Then, you can set up multiple depreciation areas to handle the other valuation principles. On the country level and also on the asset level, you could then specify which depreciation areas should be active for which assets. You can also make depreciation area-specific postings that post to assets only in specific depreciation areas. Thus, if you need to recognize an additional manual value adjustment for local tax purposes in a specific country, you can easily do that in SAP S/4HANA without affecting the leading ledger or the other depreciation areas. Users experienced in SAP ERP will appreciate how easy SAP has made handling these multiple valuation requirements with SAP S/4HANA.

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New Asset Accounting

Real-Time Integration with the General Ledger One of the main benefits of the new asset accounting is its real-time integration with the general ledger. This integration means that all asset postings are immediately transferred to the general ledger from all depreciation areas and no periodic posting programs are required to complete valuation postings. The periodic posting run (Transaction ASKB) from classic asset accounting is now obsolete. In SAP S/4HANA, in the general ledger, the new table ACDOCA integrates all finance-relevant data into a single table. This table, which is also called the Universal Journal, is one of the most fundamental advancements in SAP S/4HANA in the area of finance. The Universal Journal can serve as the single source of truth for the system because now every financial query would look for data in one place. All financial and controlling fields, such as fixed assets, cost centers, internal orders, profit centers, are part of this table. Figure 6 shows the asset fields in the ACDOCA table relevant for fixed assets, including the ACDOC_SI_FAA field.

Figure 6 Table ACDOCA Asset Fields

As a result, many asset accounting tables from SAP ERP are now obsolete. Asset line items are posted to the Universal Journal, and the old asset tables ANEA, ANEK, ANEP,

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Introduction

ANLC, and ANLP are redundant in SAP S/4HANA. As with other obsolete tables, SAP

S/4HANA provides compatibility views, so that custom programs continue to work after migrating to SAP S/4HANA.

Summary In this introduction, you learned what an SAP HANA database is and why it is such a breakthrough technology that has enabled major advancements in the ERP systems world. We provided you with an overview of the way in-memory, columnar databases like SAP HANA work. We introduced you to the SAP S/4HANA system and provided a brief history and summary of its releases so you could see how SAP S/4HANA has evolved from its origins in SAP R/3 and SAP ERP to become the state-of-the-art system that it is today. You also learned about the new beautiful SAP Fiori interface, which provides users both easy access on both desktop and mobile devices and a great user experience in a web-based format. We then discussed the new asset accounting in SAP S/4HANA. Asset accounting is a functional area that benefits the most from advancements in SAP S/4HANA. Now, you should understand the great benefits SAP S/4HANA offers compared to the classic asset accounting in SAP ERP. You also learned how the new asset accounting supports multiple valuation principles in real time, without redundant entries and periodic adjustment postings. Finally, you learned how the new asset accounting is fully integrated with the general ledger, and we provided you with an overview of the Universal Journal—the single source of truth in your new SAP S/4HANA system.

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Chapter 1 Organizational Structures This chapter explains how to organize your fixed asset structures in an SAP S/4HANA system. We’ll explain the main organizational objects relevant to financial accounting, and relevant to fixed assets specifically, and show you how these objects are integrated. Using best practice examples, we’ll teach you how to define the optimal structure for your organization.

Asset accounting is tightly integrated with the other process areas in financial accounting and is based on the financial accounting organizational structure. On top of the financial accounting organizational structure, asset accounting adds several unique organizational structures such as the chart of depreciation, depreciation areas, and asset classes. Properly setting up your organizational structure is the core foundation for asset accounting in SAP S/4HANA and a prerequisite for correctly representing your assets in your business processes. Therefore, in this chapter, we’ll explain in detail the configuration steps for setting up the organizational structure and share best practices to guide you through fulfilling the business needs of your organization. We’ll start by defining company codes, which represent the legal entities of your organization being represented in the system. A company code is the main organizational object in financial accounting. Then, we’ll set up a chart of depreciation, which defines the valuation for your fixed assets. You’ll learn best practices in setting up charts of depreciation relative to company codes and the legal structure of your organization. Later in this chapter, we’ll configure depreciation areas for a chart of depreciation. Depreciation areas define various valuation principles under which fixed assets must be valuated.

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We’ll conclude this chapter with a definition of asset classes, which classify assets into groups. You’ll learn best practices in structuring asset classes based on your business requirements.

1.1 Company Codes A company code is the main organizational unit in financial accounting. All business transactions that post in financial accounting are posted with a company code. In this section, we’ll teach you how a company code fits into the overall organizational structure of SAP S/4HANA. Then, you’ll learn how to define and configure new company codes.

1.1.1 Company Codes in the Organizational Structure In most cases, a company code is used to represent a legally independent unit within an organization. But sometimes a company code could represent a dependent commercial entity. For example, a company code could be used for an office in foreign country that is not set up as a legal entity in that country. However, this office fulfills its reporting needs in the local currency and according to local accounting and tax frameworks. The company code is the organizational object for which the full set of financial statements are produced to satisfy both the external reporting requirements and internal reporting requirements. Therefore, defining your company codes carefully so they correctly represent the legal structure of your organization is important. In this book, we’ll use examples involving a major global company with headquarters in the US. This company has representations in all major regions and in multiple countries across the globe. Often with companies like this, more than one legal entity exists in many of the countries in which it operates. To represent such an organization, each legal entity should be set up as a company code, including the main holding company based in the US.

1.1.2 Defining Company Codes Now, let’s create a company code for a trading company in the US that owns a lot of fixed assets. We’ll use this example company throughout the book to illustrate various asset accounting processes and transactions.

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Company Codes

To create a company code, you’ll access the configuration menu in SAP S/4HANA. To access the configuration menu, enter Transaction SPRO and then follow the menu path Enterprise Structure • Definition • Financial Accounting • Edit, Copy, Delete, Check Company Code. You can also access the menu directly with Transaction EC01, after which you’ll see the screen shown in Figure 1.1.

Figure 1.1 Company Code Activities

Double-click the Copy, delete, check company code activity, which opens the screen shown in Figure 1.2.

Figure 1.2 Organizational Object: Company Code

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Click on in the top menu, which enables you to copy one company code to another, as shown in Figure 1.3.

Figure 1.3 Copying a Company Code

When creating a new company code, we always recommend copying an existing company code with similar parameters so that the important control parameters are always copied but can be changed as needed. In our example, we’ll copy the SAPprovided country template for the US (company code US01) to a new company code, which we’ll call US10. Click the button to proceed. The system will display a warning message, as shown in Figure 1.4.

Figure 1.4 Copy General Ledger Account Message

A convenient approach is to also copy the general ledger accounts from the source company code to the new company code, but only if the two company codes are assigned to the same chart of accounts. In our example, we want to copy the general ledger accounts too, so we’ll click the Yes button. The system will issue the message shown in Figure 1.5, which gives you the option to assign the same controlling area.

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Company Codes

Figure 1.5 Controlling Area Assignment Message

In our example, we’ll use the standard controlling area delivered for the US—US01, so we’ll confirm this selection by clicking the Yes button. In practice, you’ll usually keep the assignment to the existing controlling area as well, since the source and target company often share important control parameters, such as the controlling area. At the end, the system will issue a confirmation message, shown in Figure 1.6, confirming that the company code has been successfully copied.

Figure 1.6 Company Code Confirmation

1.1.3 Company Code Settings After creating the company code, go back to the previous screen, shown earlier in Figure 1.1, and select the Edit Company Code Data activity. In this transaction, we’ll review and change the basic controlling parameters of the company code and its name. On the initial screen of the configuration transaction, shown in Figure 1.7, you’ll see a list of the company codes already defined in the system. Double-click on the company code we just created, US10. The next screen, shown in Figure 1.8, enables you to change the name of the company code and its basic parameters.

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Figure 1.7 Company Codes List

Figure 1.8 Editing a Company Code

Since this company code is a US company code, we’ll leave the country code as “US”, the currency as “USD”, and the language as “EN”. We’ll enter “US Corp.” as the company name and “New York” as the city, as shown in Figure 1.9. Finally, save the entry by clicking the Save button.

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Company Codes

Figure 1.9 Updated Company Code

Let’s now review other various control settings for company codes by following the menu path Financial Accounting • Financial Accounting Global Settings • Global Parameters for Company Code • Enter Global Parameters. Alternatively, you can enter Transaction OBY6. The first screen of the transaction provides a list of already defined company codes, as shown in Figure 1.10.

Figure 1.10 Company Code Selection

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Double-click on the company code we just created, US10, which allows you to review and edit the company code’s global settings, as shown in Figure 1.11.

Figure 1.11 Company Code Global Settings

Let’s look briefly at the most important settings you can configure: 쐍 Chart of Accts

The chart of accounts is a defined list of general ledger accounts used and maintained at a global level (for settings that are valid for all company codes) and at the company code level (for settings that are applicable only to a particular company code). In our example, the chart of accounts is CANA, which is the standard chart of accounts provided by SAP for North America. 쐍 Company

In this field, you can assign a group company, which is the parent company of the company code.

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Charts of Depreciation

쐍 Credit control area

The credit control area configures credit management for the company code. This field defines the available credit limits for customers in each company code. 쐍 Fiscal Year Variant

The fiscal year variant defines the fiscal periods and calendar assignments used to post documents in financial accounting. In our example, we assigned the standard SAP fiscal year variant K4, which matches the calendar periods (period 01 corresponds to January; period 02, to February; period 03, to March, and so on). 쐍 Pstng period variant

The posting period variant defines which periods are open and closed for postings in financial accounting. This collection of settings define open and closed periods for various types of accounts such as the general ledger and the customer, vendor, asset, and material accounts. 쐍 Field status variant

The field status variant defines which fields are required, optional, or suppressed during posting of financial documents. Adapt the settings as required and save these settings by clicking the Save button.

1.2 Charts of Depreciation Depreciation is the decrease of the fair value of an asset over time. Most assets decrease in value over time through use and because of advances in technology. Therefore, the value of the asset must be reduced in the balance sheet through depreciation, which is an accounting process that reduces the value of the asset (by crediting the asset balance sheet account) and simultaneously records a depreciation expense (by debiting the depreciation expense account). A chart of depreciation is an organizational object in SAP S/4HANA that manages the depreciation and other valuation requirements. This object contains one but usually multiple depreciation areas, each providing different valuation options for fixed assets. In this section, we’ll first analyze how a chart of depreciation fits into the overall organizational structure of SAP S/4HANA. Then, you’ll learn how to configure a chart of depreciation.

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1.2.1 Charts of Depreciation in the Organizational Structure A chart of depreciation is the highest organizational object in asset accounting. Company codes are assigned to a chart of depreciation. In most cases, the company codes within a country are each assigned to the same chart of depreciation. Figure 1.12 shows how a chart of depreciation fits into the overall financial organizational structure.

Client

Chart of Depreciation

Chart of Accounts

Asset Classes

Company Code

Asset Master Records

Figure 1.12 Chart of Depreciation in the Organizational Structure

The chart of depreciation is positioned centrally because all asset processes are based on it. The chart of depreciation is defined at the client level, and company codes are assigned to it. Then, asset master records are created for each company code and thus inherit the chart of depreciation and related chart of accounts. Asset master records are organized in asset classes, which we’ll examine in detail in Section 1.4.

1.2.2 Configuring the Chart of Depreciation Now, let’s configure a chart of depreciation for our example company code, US10. A new chart of depreciation should be created by copying an already existing chart of depreciation, such as the SAP-provided reference chart of depreciation, which contains predefined depreciation areas able to meet many local, country-specific requirements. To configure a chart of depreciation, follow the menu path Financial Accounting • Asset Accounting • Organizational Structures • Copy Reference Chart of Depreciation/Depreciation Areas. You’ll see the screen shown in Figure 1.13.

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Charts of Depreciation

Figure 1.13 Chart of Depreciation Activities

Double-click on the first option, Copy Reference Chart of Depreciation. You’ll see the blank screen shown in Figure 1.14.

Figure 1.14 Copying a Chart of Depreciation: Initial Screen

Click on the in the top menu, which opens a dialog box where you can choose a source chart of depreciation and specify a target company code, as shown in Figure 1.15.

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Figure 1.15 Copying a Chart of Depreciation: Dialog Box

In our example, we’ll copy from the SAP reference chart of depreciation provided for the US, which is called 0US. To create our target, we’ll enter “US01” as the name of our new chart of depreciation. Click the button to proceed. The system will issue an information message, shown in Figure 1.16, confirming that the chart of depreciation has been successfully copied. Click the button to proceed.

Figure 1.16 Copying a Chart of Depreciation: Information Message

The next screen, shown in Figure 1.17, provides you with a log of the copy. In our example, the system indicates that the copy was performed from chart of depreciation 0US.

Figure 1.17 Copying a Chart of Depreciation: Copy Log

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Charts of Depreciation

Click on the Completed activities tab to see what the system accomplished, as shown in Figure 1.18.

Figure 1.18 Copying a Chart of Depreciation: Copy Log Activities

Go back by clicking the

button.

Now, in the screen shown earlier in Figure 1.13, select the Specify Description of Chart of Depreciation activity to modify the description of the new chart of depreciation, as shown in Figure 1.19.

Figure 1.19 Copying a Chart of Depreciation: Description

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In our example, we named this chart of depreciation USA chart of depreciation. We’ll use this chart of depreciation for all US company codes. Save the entry by clicking the Save button.

1.3 Depreciation Areas A depreciation area is an organizational structure object that defines the area for the valuation of fixed assets, based on specific sets or rules. Depreciation rules and the useful life of assets are maintained on the depreciation area level. In this section, we’ll start by explaining the process of defining various valuation frameworks. Then, we’ll show you how to configure valuation frameworks using different depreciation areas.

1.3.1 Portraying Valuation Frameworks Each chart of depreciation represents a collection of depreciation areas, which define an asset valuation based on various requirements in the country. Usually, more than one depreciation area is needed because your organization will probably need to comply with multiple valuation principles in several countries. For example, in the US, companies must valuate their assets based on US Generally Accepted Accounting Principles (US GAAP). Additionally, big international companies will need to valuate their assets according to International Financial Reporting Standards (IFRS). In many other countries, valuation must be performed based on the relevant local accounting standards. These local accounting standards may differ from valuation from a tax point of view, which would be set up as an additional depreciation area. Therefore, when you set up depreciation areas in your SAP S/4HANA system, you’ll need to confirm the local legal and tax requirements, as well as the international reporting requirements, that apply to your organization. Then, you should define your depreciation areas accordingly. Let’s discuss this further using a real-life example. We worked on a project for a global manufacturing company headquartered in the US with a global presence across all major regions. For a rollout in Poland, we determined that three valuation areas were needed, starting with one to represent US GAAP, which would be the group valuation of the company. A second depreciation area was required to handle IFRS. Then, two more depreciation areas for local purposes in Poland had to be defined—one to represent local accounting principles and another to represent local tax rules. To

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complicate things further, this project was running on SAP ERP, before the great advancements that SAP S/4HANA brought to financial accounting and to asset accounting specifically. Prior to SAP S/4HANA, maintaining all these parallel valuation frameworks was a cumbersome process that required running periodic programs that would post the differences between the non-leading and leading valuation in even further delta depreciation areas. Now, with SAP S/4HANA at your disposal, particularly with the new asset accounting, setting up so many depreciation areas is unnecessary! SAP S/4HANA has significantly improved the process of reporting multiple parallel valuations in asset accounting. The postings occur in real time in all depreciation areas, and no delta depreciation areas are needed to post differences. Let’s delve into how you can set up depreciation areas in your chart of depreciation.

1.3.2 Depreciation Area Settings In this section, we’ll first show you how to set up a chart of depreciation. Then, you’ll learn how to define depreciation areas. Then, we’ll configure the transfer of acquisition and production costs (APC) values and depreciation terms. Finally, you’ll learn how to assign a chart of depreciation to a company code.

Setting Up a Chart of Depreciation Depreciation areas are dependent on the chart of depreciation. When you configure depreciation area settings, the system will default to the last-used chart of depreciation. However, a useful configuration transaction is available for setting the desired chart of depreciation. Start by following the menu path Financial Accounting • Asset Accounting • General Valuation • Set Chart of Depreciation. The system will open the popup window shown in Figure 1.20.

Figure 1.20 Chart of Depreciation Selection

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Enter the new chart of depreciation we created in Section 1.2.2, US01. Confirm your selection by clicking the button. The system will display the message Chart of depreciation US01 was set.

Defining Depreciation Areas To configure depreciation areas, follow the menu path Financial Accounting • Asset Accounting • General Valuation • Depreciation Areas • Define Depreciation Areas. The system will display several activity options, as shown in Figure 1.21.

Figure 1.21 Depreciation Area Activities

Double-click on the first option, Define Depreciation Areas, which will show you the depreciation areas already defined in the system, as shown in Figure 1.22. These areas have been copied from our source chart of depreciation 0US. Delivered by SAP, these areas are based on the requirements for US GAAP. Notice how some depreciation areas are already available to handle tax requirements in the US such as the Accelerated Cost Recovery System/Modified Accelerated Cost Recovery System (ACRS/MACRS) and the alternative minimum tax. Therefore, a good practice is to copy standard SAP-delivered objects such as 0US to quickly adopt a configuration that is based on the best practices gathered by SAP over the years.

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Depreciation Areas

Figure 1.22 Depreciation Area Definition

In this configuration transaction, you can modify existing depreciation areas and create new areas. Let’s create a new depreciation area for handling local tax reporting requirements. Again, we’ll copy an existing depreciation area and modify it instead of starting from scratch. Let’s copy depreciation area 1, which represents book depreciation in local currency. Select the depreciation area by selecting its checkbox on its left and then clicking on the in the top menu, which opens a screen displaying the details of the depreciation area. Only the top part of this lengthy screen is shown in Figure 1.23. The following configuration fields can be maintained on this screen: 쐍 Depreciation Area

Number of the depreciation area. Typically, a two-digit code is used, except for the main book depreciation area, which normally is 1. The numbering of your depreciation areas should be meaningful; for example, areas for local GAAP purposes could start with 2, while areas for local tax purposes could start with 3, and so on.

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Figure 1.23 Depreciation Area Details 쐍 Description

Meaningful long and short descriptions of the depreciation area. 쐍 Real Depreciation Area

This indicator determines whether the system will store the values of the depreciation area in the database. If so, the area is not a derived depreciation area. 쐍 Accounting Principle

In this field, you’ll link the depreciation area with an accounting principle, which is a method of valuation, such as IFRS or local GAAP. Based on the accounting principle, the system will automatically populate the target ledger group, which is linked to the accounting principle. 쐍 Alternative Depreciation Area

In this field, you can enter a depreciation area, the account determination of which the system will use when posting to parallel accounting.

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Depreciation Areas

쐍 Cross-Syst. Depreciation Area

A cross-system depreciation area is used to combine depreciation areas. This field consists of a key and a description without control parameters. Note that, with SAP S/4HANA, posting both APC and depreciation in real time makes sense because then you won’t need to run periodic programs to post adjustment entries to nonleading depreciation areas. 쐍 Posting in the General Ledger

This indicator controls how the depreciation area posts to the general ledger. The following options are available: – Area Does Not Post In this case, the depreciation area does not post to the general ledger; therefore, the depreciation area is for information purposes only. – Area Posts in Real Time All postings in the depreciation area are posted to the general ledger. – Area Posts Depreciation Only Only the depreciation postings in the depreciation area are posted to the general ledger. – Area Posts APC Immediately, Deprecation Periodically Only the APC postings in the depreciation area are posted to the general ledger in real time. Scroll down to see the remaining fields, as shown in Figure 1.24. The following configuration fields can be maintained on this screen: 쐍 Value Maintenance

In this section, you’ll configure whether all, only positive, or only negative values are allowed for the various value categories, such as acquisition value, ordinary depreciation, net book value, and so on. 쐍 Entries for Derived Depreciation Area

These settings are applicable only for derived depreciation areas. In this section, you can set the depreciation area for reporting purposes only and define it as a derived depreciation area. In this case, you’ll need to define how it derives its values by entering the depreciation areas from which it takes values with positive signs and areas from which it takes values with negative signs. For example, you can define an area that is equal to a specific area minus another area.

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Figure 1.24 Depreciation Area Details, Continued

Now that you’re familiar with the various settings that can be maintained, let’s define our local GAAP depreciation area. We’ll call it area 21, as shown in Figure 1.25. Maintain the long and short descriptions and map the depreciation area with an accounting principle that represents local GAAP valuation. These accounting principles are maintained in the financial accounting global settings, and their configuration lies outside of the scope of this book. But in asset accounting, you can choose from several already defined accounting principles based on the valuation framework you want to portray.

Note More information about the configuration of accounting principles can be found in the book Configuring SAP S/4HANA Finance, available at: https://www.sap-press.com/4857

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Figure 1.25 Defining Depreciation Area Local GAAP

You’ll also need to go through the other depreciation areas that were copied from chart of depreciation 0US. Right now, these areas are not assigned to a ledger group, which defines in which ledgers they post in the general ledger. Go back to the previous screen, shown earlier in Figure 1.22, and select each depreciation area you would like to keep by double-clicking on it. For example, let’s start with area 10 Federal Tax ACRS/MACRS. In the Accounting Principle field, enter “GAAP,” which represents US GAAP valuation, as shown in Figure 1.26. You can also remove depreciation areas that are not needed by selecting them on the button to delete them. screen shown earlier in Figure 1.22 and then clicking the Now that you’ve defined your depreciation areas, you’ll need to specify their types. Go back to the screen earlier in Figure 1.21 and select the Specify Area Type activity. You’ll see the configuration screen shown in Figure 1.27.

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Figure 1.26 Mapping Depreciation Area and Accounting Principle

Figure 1.27 Depreciation Area Types

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On this screen, each depreciation area has a specified area type. The type defines the purpose of the depreciation area. These types have been copied from the standard depreciation area that served as the basis for our depreciation area. Depreciation area 01, which is the main book depreciation area is linked with area type 01, which represents valuation for the trade balance sheet. Other commonly used types are 06 for group valuation and 03 valuation for the trade balance sheet. Notice also special depreciation area types for specific US tax purposes, such the alternative minimum tax and adjusted current earnings. In our example, we won’t change the proposed standards.

Specifying the Transfer of APC Values Now, let’s continue with some further configuration transactions for depreciation areas. You’ll also need to specify how depreciation areas receive their acquisition and depreciation values. To configure the transfer of APC values, follow the menu path Financial Accounting • Asset Accounting • General Valuation • Depreciation Areas • Specify Transfer of APC Values. On the configuration screen, shown in Figure 1.28, you can specify a source depreciation area for the APC values for each depreciation area.

Figure 1.28 Transfer of APC Values

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In our example, areas 10, 32, 40, and 80 take their APC values from the main area 01. However, tax depreciation areas such as 11, 12, and 13 take their APC values from area 10, which serves to provide the valuation from a federal tax point of view.

Specifying the Transfer of Depreciation Terms In a similar fashion, you’ll have to configure the transfer of depreciation values. To configure the transfer of depreciation values, follow the menu path Financial Accounting • Asset Accounting • General Valuation • Depreciation Areas • Specify Transfer of Depreciation Terms. On the configuration screen, shown in Figure 1.29, you can specify a source depreciation area for the depreciation values for each depreciation area.

Figure 1.29 Transfer of Depreciation Values

The logic is the same as with APC value—the depreciation area specified in the TTr column provides the source values for depreciation. When no depreciation area has been specified in this column, no depreciation values are transferred from another area.

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Asset Classes

Assigning a Chart of Depreciation to a Company Code In the next step, you’ll assign a company code to the chart of depreciation by following the menu path Financial Accounting • Asset Accounting • Organizational Structures • Assign Chart of Depreciation to Company Code. The configuration screen, shown in Figure 1.30, lists the company codes available in the system.

Figure 1.30 Assigning a Chart of Depreciation to a Company Code

Now, assign the chart of depreciation we created (US01) to our new company code (also US01). Then, save the entry by clicking the Save button. With this step, you’ve completed the setup of depreciation areas as organizational objects.

1.4 Asset Classes An asset class is the main master data object that forms the organizational structure of asset accounting. This object serves to classify together assets that have a similar

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function and purpose. Think of an asset class as a grouping of similar assets that provide numerous controlling characteristics to its member assets, such as the number ranges within which they are created, the accounts that they post to, the fields available in their master records, and so on. In this section, we’ll start our discussion of asset classes with the best practices in structuring asset classes and describe how you can most effectively organize your assets into asset classes. Then, we’ll teach you how to configure asset classes step-bystep.

1.4.1 Structuring Asset Classes Asset classes are the foundation of asset master data in SAP S/4HANA. Therefore, structuring your asset classes well is of paramount importance. To define your asset classes appropriately, you must understand the functions of an asset class. Figure 1.31 shows a graphical summary of the functions of an asset class. Account determination

Screen layout

Number assignment

Asset class

Additional features

Default values

Selections

Account determination Balance sheet items

Assets Create Asset

Asset portfolio Vehicles Machinery ... Equipment ... Intangible assets ...

Figure 1.31 Asset Class Functions

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Liabilities 02300000 1000 02225000 1000

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Therefore, assets should be grouped in the same asset class when they have similar properties like the following: 쐍 Account determination 쐍 Screen layout 쐍 Number range assignment 쐍 Additional features 쐍 Default values 쐍 Selections

Note that the asset class is not dependent on a company code or a chart of depreciation. Therefore, when you create them, asset classes can be available to all countries and company codes. However, you can still decide which asset classes will be enabled in each chart of depreciation and depreciation area and which classes will not be active at that level. From our experience, around 20 to 30 asset classes should fulfill the needs of most global companies. All different groups of assets should be covered, but you shouldn’t also fall trap to expanding the number of asset classes beyond what you need. Many times, we’ve seen that, when the system is being rolled out to new country, the local team may push to create new asset classes that currently do not exist in the template. You must carefully consider whether these new asset classes are needed; perhaps assets could still be classified under an existing class. Creating new asset classes just for the needs of one country should be a rare exception that occurs only in really strong business cases. Based on our experience, some sample asset classes that could apply for many companies include the following: 쐍 Land 쐍 Buildings 쐍 Leasehold improvements 쐍 Vehicles 쐍 IT equipment 쐍 IT infrastructure 쐍 Communication systems 쐍 Tools

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쐍 Furniture and fixtures 쐍 Warehouse equipment 쐍 Office equipment 쐍 Software licenses 쐍 Trademarks 쐍 Goodwill 쐍 Investments in affiliates 쐍 Assets under construction

Even this concise list includes most main types of tangible assets (buildings, vehicles, tools, etc.); intangible assets (trademark, goodwill, etc.); and assets under construction (assets being produced internally). Now, let’s delve into the details of configuring an asset class.

1.4.2 Configuring Asset Classes An asset class is a configuration object that combines various other configuration objects, such as account determinations, screen layouts, number range assignments, and so on, as shown in Figure 1.31. In this section, we’ll create these configuration objects so we can include them in asset classes, but we’ll configure these objects in detail later in Chapter 2.

Specifying the Account Determination The first step is to create the account determinations. To create an account determination, follow the menu path Financial Accounting • Asset Accounting • Organizational Structures • Asset Classes • Specify Account Determination. The screen shown in Figure 1.32 displays existing account determinations, including several provided by SAP. To create a new account determination, click the New Entries button in the top menu. On the blank screen, enter an account determination code and a description, as shown in Figure 1.33.

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Figure 1.32 Account Determinations

Figure 1.33 Creating an Account Determination

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You’ll need to come up with a naming convention for your account determination codes. A good practice to use the same number of digits for all account determinations. In our example, we used seven digits. You can use consecutive numbering such as 1000000, 2000000, and 3000000 or 1000010, 1000020, and so on. Or another good idea to base the numbering of account determinations on the main general ledger account numbers on which the acquisition costs are booked. For example, if the general ledger acquisition account for buildings is 10000020 (eight digits), we would name the account determination for buildings 1000020 (since we decided that account determinations will use seven digits but with the same numbering as the general ledger account). This convention will help asset accountants reconcile asset accounting with the general ledger. After maintaining all the needed account determinations, save your entries by clicking the Save button.

Creating Screen Layout Rules In the next step, you’ll create screen layout rules. Start by following the menu path Financial Accounting • Asset Accounting • Organizational Structures • Asset Classes • Create Screen Layout Rules. The screen shown in Figure 1.34 will list screen layouts already defined in the system.

Figure 1.34 Screen Layouts

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To create a new screen layout, choose an existing layout by selecting the checkbox to its left and then clicking on the button in the top menu. On the next screen, shown in Figure 1.35, enter a screen layout code and a description.

Figure 1.35 Creating a Screen Layout

As with the account determinations, you’ll need to come up with a naming convention for the screen layout codes. To distinguish these screen layouts from the standard SAP-created screen layouts, we recommend starting them with Z or Y in the reserved customer number range. Some reference to the related account determination should also be used, for example, the number 2 shown in Figure 1.35. After maintaining all the needed screen layouts, save your changes by clicking the Save button.

Defining Number Range Intervals In the next step, you’ll define the number range intervals that you’ll use in your asset classes. Start by following the menu path Financial Accounting • Asset Accounting • Organizational Structures • Asset Classes • Define Number Range Interval. In the initial screen, shown in Figure 1.36, enter a company code, for example, “US10.”

Figure 1.36 Number Range Intervals

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Click the Change intervals button, which opens a blank screen, shown in Figure 1.37, where you can enter the new intervals.

Figure 1.37 Creating Number Range Intervals

Normally, you would need to create separate number ranges for each asset class. In some cases, this separation may be useful if more than one asset class shares the same number range. For example, for legal or internal reasons, a certain group of assets may need to be created in a consecutive number range but still need to be treated separately, in separate asset classes. To create several new number ranges, click Insert Line from the top menu. A blank line will appear where you can define as many new number ranges and intervals as you need. Then, you can enter new number range intervals, as shown in Figure 1.38. In the No column, enter the two-digit code that identifies the number range. This code is what you’ll subsequently enter when defining the asset class. Then, in the From No. and To Number columns, define the limits of the number range. For example, in range 03, we defined numbers from 3000000 to 3999999; the first asset within the range will be created with number 3000000, the second 3000001, the third 3000002, and so on. In our example, we’re using 7-digit asset numbers, which can accommodate up to 1 million assets in this number range alone. Of course, if you think you may run over 1 million assets, you could define number ranges using up to 12 digits.

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Figure 1.38 New Number Range Intervals Defined

When you save your changes by clicking the Save button, the system will display the information message shown in Figure 1.39.

Figure 1.39 Number Range Transport Message

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Thus, number ranges must be maintained separately in each client of the system and are not included in a transport. This restriction is valid for all number ranges objects in the system, not only in asset accounting, and is enforced to avoid the inconsistencies often caused by transporting number ranges. Confirm the message by clicking the button. Go back to the screen shown earlier in Figure 1.36. From this screen, you can also modify the current number within a range by clicking on the NR Status button, which opens the screen shown in Figure 1.40.

Figure 1.40 Number Range Status

In the NR Status column, enter a number that will become the current number within the range. For example, if you enter “3000005” in range 03, the next asset created will have the number 3000006. In the NR Status field, the system stores the current number within a range.

Creating Asset Classes Finally, you’re ready to create an asset class. Start by following the menu path Financial Accounting • Asset Accounting • Organizational Structures • Asset Classes •

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Define Asset Classes. In the initial screen, shown in Figure 1.41, you’ll see a list of defined asset classes, along with the names of their account determinations and screen layouts.

Figure 1.41 Asset Classes

SAP provides several standard example asset classes. As with account determinations and screen layouts, you’ll need to define a naming convention for asset classes. Using the naming convention already used for account determinations makes sense. In our example, we based the naming convention for the account determination from the main general ledger acquisition account numbers, which is also what we’ll use for our asset classes, but with 7 digits codes. You can use up to 8 digits for asset class codes. To create a new asset class, click on the New Entries button in the top menu and enter the required information, as shown in Figure 1.42. On this screen, you should maintain the following configuration fields: 쐍 Asset Class

This field is the numeric code representing the asset class. 쐍 Description

In this field, you can add a meaningful long description for the asset class. 쐍 Short Text

In this field, you can add a meaningful short description for the asset class.

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Figure 1.42 Creating an Asset Class 쐍 Account determ.

In this field, you can map the asset class with an existing account determination to define which general ledger accounts will be posted with the various asset transactions. 쐍 Scr.layout rule

In this field, you can map the asset class with an existing screen layout to define which fields are required, optional, and suppressed when creating assets within this asset class. 쐍 Number range

In this field, you can map the asset class with an existing number range to define the numbers assigned when creating assets within this asset class. 쐍 Status of AuC

In this field, you can define whether the asset class manages assets under construction (internally produced) and, if so, how the settlement of the related line items is performed.

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쐍 Lock status

Select this checkbox to block the asset class; new assets cannot be created with this asset class. Scroll down to reveal the remaining configuration fields on this screen, as shown in Figure 1.43.

Figure 1.43 Creating an Asset Class, Continued

The following fields are available: 쐍 Manage historically

This indicator defines whether the asset should be managed with a history, which means that the asset is displayed in an asset chart. The asset and its values and transactions also cannot be reorganized until the asset is deactivated. 쐍 Technical information

With this section, the system stores administrative information about the creation of the asset class, such as: – Created on – Created by – Changed on – Changed by After entering all the required information, save your changes by clicking the Save button. In this way, define all the asset classes required by your organization.

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Modifying Settings for Country-Specific Requirements Now that you’ve completed the organizational setup for fixed assets, you can further fine-tune the settings to accommodate country-specific requirements. As mentioned earlier, asset classes are independent of charts of depreciation, which means that, once created, asset classes are available throughout the system. However, in some cases, you may want to use different a screen layout and/or account determination for each chart of depreciation. Fortunately, SAP provides mechanism for that through standard configuration. As a result, you can use the same asset classes throughout your organization, while also defining country-specific settings for account determinations and screen layouts. To configure chart of depreciation-specific screen layouts and/or account determinations, follow the menu path Financial Accounting • Asset Accounting • Organizational Structures• Asset Classes • Specify Chart-of-Dep.-Dependent Screen Layout/Acct Assignment. In the initial screen, shown in Figure 1.44, you’ll see a list of defined asset classes on the right. On the left is a navigation menu, which you can use to specify chart of depreciation-dependent settings, after selecting an asset class.

Figure 1.44 Chart of Depreciation Settings

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Select an asset class by selecting the checkbox on its left and double-clicking on Chart-of-depreciation-dependent data from the navigation menu on the left. Initially, the screen will be blank, as shown in Figure 1.45.

Figure 1.45 Creating Chart of Depreciation-Dependent Data

Click on the New Entries button in the top menu. Now, on the right, you’ll see chart of depreciation-dependent data already defined, and on the left, you can enter a different screen layout and account determination for the specified chart of depreciation, as shown in Figure 1.46.

Figure 1.46 Chart of Depreciation-Dependent Data Changed

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In our example, we specified that, for chart of depreciation US01, we’ll use screen layout Z010 (instead of Z020) and account determination 1000010 (instead of 1000020). After maintaining the asset classes as needed with your chart of depreciation-specific settings, save your changes by clicking the Save button. Recall that the asset class determines the number range. These numbers are assigned from within the assigned number range and also within the company code. In other words, for example, the first asset created in number range 03 will be 3000000 in company code US10. However, if we create the first asset in the same number range in another company code, that number will also be 3000000. Therefore, all asset numbers are uniquely identified with a combination of asset number and company code. Additionally, the configuration transaction enables you to define cross-company code asset number assignments. In this way, for every company code, you can determine a company code from which the number assignment should be taken. Thus, more than one company code can share consecutive asset number assignments. To configure cross-company code asset number assignments, follow the menu path Financial Accounting • Asset Accounting • Organizational Structures • Specify Number Assignment Across Company Codes. In the screen shown in Figure 1.47, specify a company code for the number assignment.

Figure 1.47 Cross-Company Code Number Assignment

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Summary

In the No. CoCd field, enter the company code to be used for the assignment of numbers to asset master records. The number range from this company code will be used for number assignments across company codes assigned to it. In our example, we’ll specify that US10 will use numbers from the number ranges of company code US20. With this step, we’ve completed the setup for asset classes in our organizational structure.

1.5 Summary In this foundational chapter, we laid the groundwork for the proper organization and functioning of asset accounting. You learned how to define your requirements and set up the organizational structure for asset accounting. We covered how to activate company codes for asset accounting. Then, you learned how to properly define other organizational objects in asset accounting, such as charts of depreciation, depreciation areas, and asset classes. You learned some best practices on effectively organizing your assets in well-structured asset classes. We provided some sample asset classes that cover many common business requirements. In the process, we also created account determinations, screen layouts, and number ranges, all of which control how assets are created and transacted. At this point, you’ve defined a basic organizational structure for handling fixed assets. In the next chapter, we’ll further develop our configuration for master data and teach you how create asset master data in SAP S/4HANA.

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Chapter 2 Master Data In this chapter, we’ll provide step-by-step instructions for structuring fixed asset master data in SAP S/4HANA. We’ll use real-life scenarios to demonstrate how you can best define asset classes and how to configure all aspects of asset master data. This chapter will provide indepth user instructions on how to maintain various levels of fixed asset master data.

Correctly setting up your asset master data is the basis for the proper functioning of asset accounting. Each asset in your organization must be set up as asset master data. The system offers a high degree of flexibility, allowing you to create not only asset numbers, but also asset subnumbers, which can represent a lower level of asset master data. Additionally, you can also set up asset group numbers, which can represent a higher level of asset master data than the main asset numbers. Asset super numbers can be used to further group assets. With so many options, you’ll need to understand various scenarios to choose the most optimal options for your organization. In this chapter, we’ll examine the relevant configuration steps for setting up asset master data such as screen layouts, account determinations, number ranges, and asset classes. We’ll then teach you how to use the system to create various levels of asset master data such as asset numbers, subnumbers, group numbers, and super numbers. We’ll also show you how to set up user fields in asset master records to further classify your assets.

2.1 Screen Layouts A screen layout defines which fields are required, optional, and suppressed when a user creates an asset master record. A screen layout is assigned to an asset class, and then assets created in this asset class will use the assigned screen layout.

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You’ll configure the screen layout for asset master data in two steps—first, you’ll define the screen layout as a configuration object and then define the field control for each field. Then, you’ll configure the screen layout for the fields relevant for depreciation areas.

2.1.1 Screen Layout Definition To configure screen layout fields for asset master data, follow the menu path Financial Accounting • Asset Accounting • Master Data • Screen Layout • Define Screen Layout for Asset Master Data. The system will prompt you to choose an activity, as shown in Figure 2.1.

Figure 2.1 Screen Layout Fields for Asset Master Data Activities

Let’s briefly look at each activity: 쐍 Define Screen Layout for Asset Master Data

With this activity, you can configure the fields in each screen layout. 쐍 Create Screen Layout Rules for Asset Master Record

This activity links to the transaction for creating screen layout rules. 쐍 Configurable Entry Screen for Creating Multiple Assets

With this activity, you can configure the entry screen for creating multiple assets at the same time.

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Click on the Create Screen Layout Rules for Asset Master Record activity. The screen shown in Figure 2.2 will display screen layouts already defined in the system.

Figure 2.2 Screen Layouts

A good practice is to create a separate screen layout for each asset class. You can create a new screen layout first by selecting an existing layout by selecting its checkbox on the left and then clicking the in the top menu. Then, on the next screen, shown in Figure 2.3, specify a screen layout code and add a description.

Figure 2.3 New Screen Layout

As with other custom configuration objects, naming these objects starting with Z or Y, which are reserved for custom name ranges, makes sense. Next, click on the Apply button in the lower right to adopt these new settings and then save by clicking the Save button.

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2.1.2 Field Control To configure the various fields associated with the screen layouts, on the screen shown earlier in Figure 2.1, click on Define Screen Layout for Asset Master Data. The first screen, shown in Figure 2.4, displays a list of already defined screen layouts on the right, and on the left, you’ll see a navigation menu that helps you work through the layouts.

Figure 2.4 Defining a Screen Layout

Select screen layout rule Z020 Buildings by selecting its checkbox on the left and then clicking on Logical field groups on the left. The next screen, shown in Figure 2.5, lists the various logical groups under which the fields of the asset master record are grouped.

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Figure 2.5 Logical Field Groups

You’ll see groups like General data, Posting information, Allocations, and so on. Throughout this chapter, as we create asset master records, you’ll see that these logical groups correspond to tabs and areas in the asset master record. Now, you can select each logical field group and modify its fields. For example, select General data by selecting its checkbox on the left and then clicking on Field group rules on the left. On the next screen, shown in Figure 2.6, you’ll see the rules for each field that is part of this group. In the Field group name column, you’ll see the various fields provided by SAP that can be included in the asset master record General tab. Then, you must choose from the radio buttons in the Req., Opt., and No columns, which define whether the field should be required to fill when creating assets, optional to enter, or hidden, respectively.

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Figure 2.6 Field Group Rules

Using the Class, MnNo., and Sbno. checkboxes, you can define which level is the maintenance level for the respective field: the asset class, the asset main number, or the subnumber. For example, if the maintenance level is the main asset number, the field will receive a default value from the asset class, but you have the option of changing the value when maintaining the main asset number. The Copy checkbox indicates that, when creating an asset using another asset as a reference, the value of the field is provided from the reference asset, but the user can change this value. Modify the rules as required and save by clicking the Save button. Make sure that the important fields, those that should not be missed by users, are marked as required. For example, a description should be required, so each asset has a description. Also, the cost center field, which is part of the time-dependent data logical field group, shown earlier in Figure 2.5, should be set as required. This is necessary because the asset master record provides the cost center to which the costs are posted during the depreciation. The cost center is also derived from the profit center, which is assigned

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in the cost center master record. Thus the system determines the profit center, which should be present in each financial line item posted. Using this logic, go through all the logical field groups to maintain the fields. A good practice is to hide fields that are not needed so users are not overburdened.

2.1.3 Layout for Depreciation Areas You’ll also need to configure the screen layout for the fields that appear under the Depreciation tab of the asset master record. Start by following the menu path Financial Accounting • Asset Accounting • Master Data • Screen Layout • Define Screen Layout for Asset Depreciation Areas. The screen shown in Figure 2.7 displays two existing layouts: 쐍 1000 for depreciation on main asset level 쐍 2000 for depreciation on asset subnumber level

Figure 2.7 Screen Layout Depreciation

Using the layouts on main number and subnumber level, you can control which fields should be available for maintenance whether at the main asset level or at the asset subnumber level. To modify the fields, select one of the layouts by selecting the radio button to its left and then clicking on Field group rules on the far left. The next screen, shown in Figure 2.8, lists all the fields that could be available in the Depreciation tab when creating an asset master record.

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Figure 2.8 Depreciation Field Group Rules

Select from the radio buttons in the Req., Opt., and No, columns to define which fields should be required, optional, or hidden. Select one of the Class, MnNo., or Sbno checkboxes to define which level is the maintenance level for the field—the asset class, the asset main number, or the asset subnumber. Using the Copy checkbox, you specify that, when you create an asset using another asset as a reference, the value of the field will be provided from the reference asset. The Depreciation keys should be set as required since every asset should have defined depreciation terms, even if no depreciation is required, such as for example, for land. In this case, a depreciation key will still be used, usually the standard depreciation key 0000 (no depreciation). The Useful life should be set to optional since an asset without depreciation won’t have a useful life. Most of the other fields should be set to optional as well, as shown in Figure 2.8, although of course which fields depends on the requirements of your asset class.

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After modifying these fields as needed, save these settings by clicking the Save button.

2.2 Account Determination The account determination defines which general ledger accounts will be posted to during various asset-related business transactions, such as acquisitions, retirements, and transfers, as well as valuation processes like depreciation and revaluation. Similar to the screen layout we just configured, an account determination is first created as a configuration object, and then for the defined account determination, you’ll assign general ledger accounts.

2.2.1 Account Determination Definition An account determination is a configuration object that you’ll assign in the asset class. A good practice is to create separate account determinations for each asset class. However, if you foresee that some asset classes will need exactly the same general ledger accounts, you could use the same account determination in multiple asset classes. To define an account determination, follow the menu path Financial Accounting • Asset Accounting • Organizational Structures • Asset Classes • Specify Account Determination. On the first screen, shown in Figure 2.9, you’ll see list of account determinations already defined in the system.

Figure 2.9 Account Determination

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Let’s create new account determination by copying an existing one. Select 30000 Fixtures and Fittings by selecting its checkbox on the left and then clicking on the . On the next screen, shown in Figure 2.10, enter new an account determination code and add a description.

Figure 2.10 Copying an Account Determination

As with the screen layouts, a good practice is to not directly use the standard account determinations but to copy and modify them as needed for your custom objects. Also, another good practice is to name them starting with Z or Y in the custom name range. Confirm your entries by clicking the Apply button, and then save by clicking the Save button.

2.2.2 Assigning General Ledger Accounts Now that you’ve created the account determination as a configuration object, you’re ready to assign the relevant accounts. Start by following the menu path Financial Accounting • Asset Accounting • Integration with General Ledger Accounting • Assign G/L Accounts or enter Transaction AO90. On the first screen, shown Figure 2.11, the system prompts you to select a chart of depreciation to work with. Let’s use the chart of depreciation we created in Chapter 1, Section 1.2, by entering “US01” in the ChDep field. Then, confirm by clicking the button. The next time you enter this or another configuration transaction, the system will remember this choice and will not ask you again.

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Figure 2.11 Selecting a Chart of Depreciation

Note As a side note, we should also mention an important configuration transaction to set the chart of depreciation. If you want to work with a different chart of depreciation the next time, since the system will not ask you again, you can follow the menu path Financial Accounting • Asset Accounting • General Valuation • Set Chart of Depreciation. In this transaction, select the chart of depreciation, as shown in Figure 2.12.

Figure 2.12 Setting the Chart of Depreciation

Now, back to assigning general ledger accounts. After selecting a chart of depreciation US01 (using either method), you’ll see the screen shown in Figure 2.13.

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Figure 2.13 Assigning General Ledger Accounts

On the right, you’ll see the chart of accounts, determined via the assignment of the company code. On the left is a navigation menu, which you can use to assign general ledger accounts to various business processes. Select the chart of accounts CANA by selecting the checkbox to its left and then clicking on Account Determination in the navigation menu. You’ll see the list of account determinations, as shown in Figure 2.14.

Figure 2.14 Selecting an Account Determination

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Select the new account determination we created (Z0003 Fixtures and Fittings) and then click on Balance Sheet Accounts in the navigation menu. Next, we’ll assign the relevant balance sheet general ledger accounts. On the next screen, shown in Figure 2.15, select the depreciation area to assign accounts to.

Figure 2.15 Selecting a Depreciation Area

In each depreciation area, you can assign the same or different accounts, which gives you flexibility to represent different accounting principles with different accounts. Double-click on area 1 to assign accounts for the book depreciation area. On the next screen, shown in Figure 2.16, enter the balance sheet accounts for the depreciation area. The types of accounts that should be assigned are described in the following list: 쐍 Bal.Sh.Acct APC:

This account is the main general ledger account that receives the acquisition and production costs (APC) of your assets. This general ledger account is represented on the balance sheet as the gross value of the asset.

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Figure 2.16 Assigning Balance Sheet Accounts 쐍 Contra account: Acquisition value

Usually, when you acquire an asset, the posting will be against a vendor account or against an expense account (in the case of assets under construction). In this field, you can configure a contra account for an asset acquisition posting when the posting is not an integrated acquisition posting with a vendor. In this case, the account configured here is credited against the asset. 쐍 Acquisition from affiliated company

This account is posted to if no contra account has been entered for an acquisition from an affiliated company. 쐍 Loss Made on Asset Retirement w/o Reven.

This account is posted to for losses made from asset retirement by scrapping. 쐍 Clearing Acct Revenue from Asset Sale

This account is posted to offset the net revenue that results from an asset sale. 쐍 Gain from Asset Sale

This account is posted with the calculated gain from an asset sale.

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쐍 Loss from Asset Sale

This account is posted with the calculated loss from an asset sale. 쐍 Clear.revenue sale to affil.company

This account is posted to for clearing the revenue from an asset sale to affiliated companies. Maintain the accounts for all depreciation areas, then click on Depreciation in the navigation menu on the left. Then, select a depreciation area from the screen shown in Figure 2.17.

Figure 2.17 Selecting Depreciation Areas for Depreciation Accounts

As with balance sheet accounts, you’ll need to maintain the depreciation accounts for each depreciation area. Double-click on area 1 and enter the relevant accounts, as shown in Figure 2.18. You can enter accounts for ordinary, special, and unplanned depreciation. You must assign accounts for ordinary depreciation for asset classes that are depreciated, which represents regular depreciation that usually runs on a monthly basis. Unplanned depreciation is used in cases of asset deterioration or obsolescence. Special depreciation is used when government policy allows you to depreciate more than normal.

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Figure 2.18 Assigning Depreciation Accounts

The following accounts should be assigned: 쐍 Acc.dep.accnt.for ordinary depreciation

The balance sheet account against which the expense for depreciation is posted. 쐍 Expense account for ordinary depreciat.

This expense account receives postings of depreciation costs. Optionally, you can configure also the following accounts: 쐍 Expense account for ord. dep. below zero

This expense account is posted to when there is a case of depreciation below zero. Depreciation below zero is used when you have assets that continue to be used after the net book value reaches zero. Once that happens, no more depreciation booking is possible for legal reporting. But from a cost accounting point of view, the depreciation needs to be included in the cost estimation to ensure that the product cost estimate includes the depreciation cost. 쐍 Loss from Asset Sale

This account is posted to with the revenue from a correction of ordinary depreciation in the case of a write-up, which is explained in Chapter 4, Section 4.5.2.

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Maintain the required accounts for all relevant depreciation areas and save these settings by clicking the Save button.

2.3 Number Ranges When you create an asset, the system needs to know how to assign a number to the asset master record or whether the number will be entered manually by the user creating the asset. This numbering is achieved through number ranges, which are assigned to the asset classes. Number ranges are defined as two-character codes, typically consisting of two numbers, such as 01, 02, 03, and so on. To create a number range interval, follow the menu path Financial Accounting • Asset Accounting • Organizational Structures• Asset Classes • Define Number Range Interval. On the initial screen, shown in Figure 2.19, enter the company code and click on the Change intervals icon (pencil, not glasses) to maintain various asset number ranges.

Figure 2.19 Asset Number Range

On the next screen, shown in Figure 2.20, you’ll see number ranges already defined in the system. In the No column are two-character codes, which are used to assign the number range to an asset class. Then, in the From No. and To Number columns are the starting and ending numbers for the interval. In the NR Status column, the system shows the currently assigned number assigned to the last asset created using the range; a value of 0 indicates that no assets have been created so far in this number range. If you select the Ext checkbox, the number range will use external number assignments; the user will have to enter an asset number within this range when creating an asset.

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Figure 2.20 Defining Asset Number Ranges

You can create a new number range by clicking the button in the top menu. A blank line will open where you can enter a new number range. Save your entries by clicking the Save button. Now that all prerequisites have been set up and your asset master data is complete, you can create your first assets. We showed you how to configure the asset class itself in Chapter 1, Section 1.4.2, so won’t repeat those steps here.

2.4 Asset Hierarchy Asset master data can be organized in a hierarchy—you can have main asset numbers that contain asset subnumbers, and you can also have higher-level asset group numbers. When you create a main asset number, the system automatically assigns subnumber 0 to it. You can further subdivide the asset into other subnumbers as needed. Additionally, you can optionally group several assets under a group asset number. In this section, we’ll teach you how to create asset master records at various levels.

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2.4.1 Asset Numbers Let’s start by creating a main asset number. Now, we’ll use the SAP application menu, instead of the configuration menu that we’ve been using through the first two chapters. The application menu is organized in a tree-like structure, and the section relevant to asset accounting is located under Accounting • Financial Accounting • Fixed Assets, as shown in Figure 2.21.

Figure 2.21 SAP Application Menu

Now, to create a main asset number, under Fixed Assets, follow the menu path Asset • Create • AS01 – Asset. Figure 2.22 shows the initial screen for asset creation. Select the asset class in the Asset Class field. Each asset is created with an asset class and inherits its configuration parameters, such as account determination, screen layout, number range, and depreciation terms from the asset class. You’ll also need to enter a company code in the Company Code field.

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Figure 2.22 Create Asset Initial Screen

In the Number of Similar Assets field, you can specify the number of assets to be created simultaneously. The default is 1, but if you select more, you can save time creating multiple assets with similar characteristics. In the Reference section of the screen, you can provide existing assets from which the new asset can be copied. You’ll still have the opportunity to modify the fields as required during the creation process. If you select the Post-capitalization checkbox, you must manually set the capitalization date and the acquisition date in the asset master record, since you are essentially creating an asset that has already been capitalized. Proceed by clicking the Master data button, found in the lower right corner. Then, you’ll see the General tab of the master record, as shown in Figure 2.23. The asset master record is organized into tabs, which group fields with similar purposes. You can navigate between these tabs on the top of the master record. In our example, you’ll see the General, Time-dependent, Assignments, Origin, Net Worth Tax, Leasing, and Deprec. Area tabs. Which tabs are displayed depends on the screen layout rule. Under the General tab, you’ll see the following fields: 쐍 Description

You can add a meaningful description of the asset to this field.

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Figure 2.23 Asset General Data 쐍 Acct determination

This field shows the account determination configured for the asset class, for your information. 쐍 Inventory Number

Some assets may require inventory numbers be recorded. Typically, this case applies to smaller assets such as computer hardware, for example. 쐍 Quantity and Unit of Measure

For some assets, their quantity and unit of measure will need to be recorded. 쐍 Manage historically

With this indicator, the system will manage the asset with a history. This means that the asset will be included in the asset history sheet report and its values and transactions cannot be reorganized until the asset is deactivated. 쐍 Last Inventory On

This field displays the date of the last inventory. You can enter here the last date on which an inventory check on the asset was performed. 쐍 Include asset in inventory list

This indicator enables the asset to be included in an inventory list report. An inventory check is used to count the assets and cross-check with the assets recorded in the system. Checking this indicator enables the asset to be included in the inventory list report provided by SAP.

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Scroll down to see remaining fields in the General tab, as shown in Figure 2.24.

Figure 2.24 Asset General Data, Continued

The following fields are available on this tab: 쐍 Capitalized On

The asset value date of the first posting that capitalizes the asset. You must enter this date manually in the case of post-capitalization. Otherwise, the system populates this date automatically after the first acquisition, along with the First Acquisition On and Acquisition Year fields, which currently are grayed out. 쐍 Deactivation on

The value date of the retirement posting that results in full retirement. This field is also normally filled automatically after retirement. 쐍 Plnd Retirement On

Date of planned retirement. This field could be used in simulation reports to show the asset as being retired as of this date. Click on the Time-dependent tab, as shown in Figure 2.25. Under this tab, frequently the following fields are maintained (as with the other tabs, you may see different fields, depending on the screen layout): 쐍 Business Area

The business area is the organizational unit in financial accounting that represents separate areas of responsibilities within an organization.

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Figure 2.25 Asset Time-Dependent Data 쐍 Cost Center

A cost center is the organizational unit that represents where costs are incurred. The assigned cost center in the asset master receives cost during depreciation runs. 쐍 Activity Type

The activity type describes the activity produced by a cost center, measured in units of time or quantity. 쐍 Internal Order

An internal order is used to monitor costs like the cost center but represents a less permanent cost unit. For example, an internal order could represent a temporary project that incurs costs. 쐍 Plant

The plant where the asset is located. 쐍 Location

A defined location within a plant. 쐍 Room

The specific room where the asset is located. Click on the Assignments tab, shown in Figure 2.26.

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Figure 2.26 Asset Assignments Data

Under this tab, you can optionally enter evaluation group fields and an asset super number. These fields are used to further classify assets, which we’ll discuss in detail in Section 2.5 and Section 2.6, respectively. Click on the Origin tab, as shown in Figure 2.27.

Figure 2.27 Asset Origin Data

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Under this tab, you can optionally enter information regarding the origin of the asset, such as the vendor that supplied the asset and the Manufacturer of the asset. Also, you can enter a country of origin for the asset and its original asset number, in case the asset was transferred from another asset. Click on the Net Worth Tax tab, as shown in Figure 2.28.

Figure 2.28 Asset Net Worth Tax Data

Net worth tax is applicable in countries where net worth tax laws require a separate valuation of assets. In this case, you’ll enter a Classification key, which classifies the property for asset net worth tax purposes and sets a manual net worth value. Click on the Leasing tab, as shown in Figure 2.29. Under this tab, you can enter leasing data if creating a leased asset using the Leasing company, the leasing Agreement Number and Agreement Date, Lease start date, and other relevant fields. Click on the Deprec. Areas tab, as shown in Figure 2.30.

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Figure 2.29 Asset Leasing Data

Figure 2.30 Asset Depreciation Areas Data

Under this tab, you’ll enter the depreciation terms of the asset. The depreciation areas are defaulted from the chart of depreciation. You can deactivate some of the depreciation areas for the asset by selecting checkboxes in the Deact. column.

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In the DKey column is the default depreciation key, and the UseLife and Prd columns represent the default useful life in years and months. These default settings are maintained on the asset class level, which we’ll review in Chapter 3. So, in our example, we specified that, in depreciation area 01, straight-line depreciation (equal depreciation over the useful life of the asset) is used, which is defined using the standard SAP depreciation key for straight-line depreciation LINR. The useful life is defined as 5 years and 0 months. In the ODep Start column is defined the start date of the ordinary depreciation. This field is filled automatically after the first capitalization of the asset. However, you can also manually enter a start date in this field. In this case, a manually entered date has priority over the asset value date of the acquisition posting. After filling the desired data in the various tabs of the asset master record, save your settings by clicking the Save button. The system will assign the asset’s next available number from the number ranges assigned to the asset class and provides a notification message with the assigned number, as shown in Figure 2.31.

Figure 2.31 Asset Number Created

In our example, 61000000 is the main asset number. After the interval, the 0 represents subnumber 0, which is the default when creating an asset.

2.4.2 Asset Subnumbers You can now create now subnumbers for this asset. Start by following the menu path Accounting • Financial Accounting • Fixed Assets • Asset • Create • Subnumber • AS11 – Asset or entering Transaction AS11. On the initial screen, shown in Figure 2.32, enter the main asset number, company code, and number of similar subnumbers required. In our example, we entered asset number “61000000,” which we just created. In the Number of similar subnumbers field, we entered “2” to create two subnumbers at the same time. As with creating main asset numbers, you can select the Post-capitalization checkbox to create asset subnumbers that have been already been capitalized.

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Figure 2.32 Create Asset Subnumber: Initial Screen

Proceed by pressing (Enter). The next screen, shown in Figure 2.33, transfers you to the General data tab of the asset subnumber.

Figure 2.33 Create Asset Subnumber: General Data

Notice the data is being transferred from the main asset number. You have the option of maintaining some of the fields and changing their descriptions. Recall that we defined these settings in the screen layout, as shown earlier in Figure 2.6, when we specified the maintenance level of the asset—main number, subnumber, or asset class.

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Notice that the system now proposes the next available subnumber—61000000 1 in the Asset field. We recommend going through the remaining tabs—in each, the information is defaulted from the asset main number, and you can only change the fields for which the asset subnumber is defined as the maintenance level. For example, as shown in Figure 2.34, we can’t change any depreciation terms, and their rows are grayed out.

Figure 2.34 Create Asset Subnumber: Depreciation Data

This restricting on changing depreciation terms makes sense, because usually asset subnumbers should have the same depreciation terms. Now, after pressing the Save button, you’ll see the message shown in Figure 2.35. Since we chose to create multiple assets, the system will ask whether these assets should be identical with the information already entered or whether we want to maintain some of the fields manually. Click on the Maintain button and maintain the required fields, as shown in Figure 2.36.

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Figure 2.35 Create Multiple Assets Message

Figure 2.36 Maintaining Multiple Asset Subnumbers

Let’s change the description of the second subnumber and confirm these changes by clicking the button. The system will transfer us back to the multiple assets message screen, shown earlier in Figure 2.35, where we’ll click the Create button. The system will create the two asset subnumbers and provide you the numbers in the success message shown in Figure 2.37.

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Figure 2.37 Asset Subnumbers Created

2.4.3 Asset Group Numbers An asset group number is used to combine a number of assets for the purposes of a common calculation of depreciation. This number represents another level of asset hierarchy, above the main asset number. Before creating group assets, you’ll need to configure the combination of company code and depreciation areas that allow group assets. Start by following the menu path Financial Accounting • Asset Accounting • General Valuation • Group Assets • Specify Depreciation Areas for Group Assets. On the initial screen, shown in Figure 2.38, select the company code for which you want to manage group assets.

Figure 2.38 Selecting a Company Code for Group Assets

Click on Group assets in the navigation menu on the left. In the next screen, shown in Figure 2.39, select which areas should allow group assets. Enable all the depreciation areas by selecting checkboxes in the Grp. Asset column. Then, save your changes by clicking the Save button. With another configuration transaction, you can define that certain asset classes consist entirely of group assets. Start by following the menu path Financial Accounting • Asset Accounting • General Valuation • Group Assets • Specify Asset Classes for Group Assets. On the screen, shown in Figure 2.40, specify which assets should consist entirely of group assets, by selecting the checkbox under the Class consists entirely of group assets column.

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Figure 2.39 Depreciation Areas for Group Assets

Figure 2.40 Asset Classes Only for Group Assets

Now, let’s create a group asset. Start by following the application menu path Accounting • Financial Accounting • Fixed Assets • Asset • Create • AS21 - Group Asset. On the initial screen, shown in Figure 2.41, enter the Asset Class and Company Code. Optionally, you can enter an existing group asset in the Reference section. Proceed by pressing (Enter). Then, you’ll see the tab-organized structure of the group asset, as shown in Figure 2.42.

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Figure 2.41 Create Group Asset

Figure 2.42 Group Asset General Data

These tabs and the fields are the same as when creating a main asset number in the corresponding asset class, as explained in Section 2.4.2. After maintaining the data, save the group asset by clicking the Save button. The system will display a message with the group asset number created, as shown in Figure 2.43.

Figure 2.43 Asset Group Number Created

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2.5 User Fields in Asset Master Records At this point, you learned how you can organize an asset hierarchy flexibly using group assets, main asset numbers, and subnumbers. However, you may also need to further classify your assets based on various user parameters, which vary from company to company. SAP provides a flexible mechanism for setting up user fields in the asset master records. These fields in the asset master record can have values defined in customizing based on the needs of your company. SAP provides several four-character user fields and one eight-character user field.

2.5.1 Four-Character User Fields Four-character user fields are defined as four-character codes. Four groups are available for you to use for different purposes. For example, using one group, you can define asset types; using another, asset managers; and so on. To define four-character user fields, follow the menu path Financial Accounting • Asset Accounting • Master Data • User Fields • Define 4-Character Evaluation Groups. The screen shown in Figure 2.44 will open.

Figure 2.44 Four-Character Evaluation Groups

Then, click New Entries in the top menu. On the next screen, shown in Figure 2.45, you’ll define the groups. In the No column, select one of the four provided groups. Each group should serve a specific type of classification. In our example, we’ll use group 1 to define the names of asset managers, and in group 2, we’ll define regions to which the assets belong. In the No Evalat.grps 1-4 columns, we’ll define the codes within the group, and in the

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Description column, we’ll provide a freely definable description for each classification. After creating these values, save your entries by clicking the Save button.

Figure 2.45 Defining Four Characters Evaluation Groups

2.5.2 Eight-Character User Fields Similarly, you can create eight-character evaluation groups, but only one eight-character evaluation group is allowed. Start by following the menu path Financial Accounting • Asset Accounting • Master Data • User Fields • Define 8-Character Evaluation Groups. The screen shown in Figure 2.46 will open.

Figure 2.46 Eight-Character Evaluation Groups

Click New Entries in the top menu. On the next screen, shown in Figure 2.47, you can define the group values.

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Figure 2.47 Creating Eight-Character Evaluation Group Values

In the Evaluation Group 5 column, you can define group values, and in the Name column, you can add descriptions for them. In our example, we defined a list of employees, but you can use the evaluation group to define any list where using more than 4 characters for the values makes sense. Let’s see how you can use these groups by changing the asset we created previously. Start by following the menu path Accounting • Financial Accounting • Fixed Assets • Asset • Change AS02 – Asset. On the initial screen, shown in Figure 2.48, enter the asset number and company code and proceed by pressing (Enter).

Figure 2.48 Change Asset

Now, in the Assignments tab, you can select from the values of the created user groups, as shown in Figure 2.49.

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Figure 2.49 Enter User Fields in Asset Master Record

After updating the asset, save your changes by clicking the Save button. Now, these assignments can be used in reporting. For example, you can run asset report for the assets in the North West region.

2.6 Asset Super Numbers Asset super numbers are another mechanism for classifying assets for reporting purposes. As with asset user fields, you can configure a list of values that can then be assigned to asset master records. To configure asset super numbers for use in asset master records, follow the menu path Financial Accounting • Asset Accounting • Master Data • User Fields • Define Asset Super Number. On the initial screen, shown in Figure 2.50, click on New Entries in the top menu to create new asset super numbers. Enter the asset super numbers, as shown in Figure 2.51. In the AssetSup.No. field, enter an alphanumeric number, up to twelve characters long. (This length provides additional flexibility to the user fields, which can be up to four and eight characters long.) In the Name field, enter a description for the asset super number.

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Figure 2.50 Asset Super Numbers: Initial Screen

Figure 2.51 Asset Super Numbers: Creation

Save your entries by clicking the Save button. Now, let’s see how you can use asset super numbers in asset master records. To assign a super number to an existing asset, follow the menu path Accounting • Financial Accounting • Fixed Assets • Asset • Change AS02 – Asset or enter Transaction AS02. (You can also assign a super number when creating a new asset.) On the initial screen, shown in Figure 2.52, enter the asset number and company code and proceed by pressing (Enter).

Figure 2.52 Change Asset Initial Screen

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Click on the Assignments tab, and you’ll see the asset super number field. You can select an existing values by pressing (F4) when the cursor is positioned in the field, as shown in Figure 2.53.

Figure 2.53 Selecting an Asset Super Number

After assigning the asset super number, save the asset by clicking the Save button.

2.7 Display Asset Master Worklist App SAP offers a number of useful SAP Fiori apps for asset accounting, which enable easy user interaction and fast reporting on fixed assets. One such app is the Display Asset Master Worklist app, which offers simple navigation and quick analysis of the assets created in the system. Upon opening the application, in your SAP Fiori launchpad, you’ll see the apps that your user is authorized to use, based on your configuration and requirements. Figure 2.54 shows some of the most useful asset accounting-related SAP Fiori apps on the SAP Fiori launchpad.

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Figure 2.54 SAP Fiori Asset Apps

Click on the Display Asset Master Worklist app. The initial screen is shown in Figure 2.55.

Figure 2.55 Display Asset Master Worklist: Initial Screen

You can enter various search criteria such as company code, asset class, cost center, and so on. The app will display the created assets based on these criteria. Click on the Go button. In the resulting list, shown in Figure 2.56, you’ll see a list of asset numbers and their fields.

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Figure 2.56 Display Asset Master Worklist: Result List

The system shows 42 active assets in the system based on the filter criteria. The system also shows how many assets are capitalized, how many retired, and if any assets are incomplete. Scrolling to the right, you’ll see more fields from the asset master records. If you click on the button, you can choose which fields from the asset master record should be displayed. Figure 2.57 shows the settings screen, where you can choose which fields should be displayed (by selecting its checkbox on the left) and which should not be displayed. If you double-click on an asset on the screen shown earlier in Figure 2.56, you can perform various actions with that asset using other linked SAP Fiori apps, as shown in Figure 2.58.

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Figure 2.57 Select Asset Fields

Figure 2.58 Link to Other SAP Fiori Apps

We’ll examine these apps further as we review other asset accounting functionalities throughout this book.

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2.8 Summary In this chapter, we extensively discussed both how to configure SAP S/4HANA asset master data and how to use it most effectively to structure and manage your fixed assets. Now, you should be well prepared to set up your own asset master data, the foundation of asset accounting. You learned how to set up screen layouts, account determinations, and number ranges and learned how to map these objects in asset classes. You learned how to effectively organize asset master data using various hierarchy options such as asset group numbers, main numbers, and subnumbers. You also learned how to classify assets for reporting purposes using techniques provided by SAP, such as asset user fields and asset super numbers. We also started our exciting journey into the beautiful world of SAP Fiori by explaining how to navigate in the SAP Fiori launchpad and how to use the Display Asset Master Worklist app. In the next chapter, we’ll discuss in detail one of the most important topics in asset accounting—asset valuation.

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Chapter 3 Asset Valuation In this chapter, we’ll provide you with step-by-step instructions for configuring various asset valuation techniques. Using these different techniques, you’ll be able to represent your fixed assets objectively and meet all global and local legal requirements.

Asset valuation is one of the most important components of asset accounting. A central and fundamental requirement in asset accounting is to properly valuate fixed assets. This requirement can be quite complex, but most companies that run SAP have a global presence in multiple countries and regions and thus need to valuate their assets according to multiple valuation frameworks. In this chapter, we’ll examine in detail how to define these valuation requirements and how to configure your SAP S/4HANA system to handle multiple valuation requirements and to post all valuation documents in real time into the general ledger. We’ll start this chapter by defining accounting principles and multiple valuation approaches. Then, we’ll configure the various currencies used in asset accounting. Finally, we’ll configure real-time integration with the general ledger, setting up the ledgers and fiscal year settings.

3.1 Parallel Valuation Parallel valuation is the process of valuating fixed assets according to more than one valuation framework. A valuation framework is a set of accounting principles that provide guidance on how to valuate different types of transactions. For example, a valuation framework would contain specific rules on how to treat financial and operational leases of assets, including setting value thresholds on fixed assets, setting up different kinds of depreciation depending on the type of asset, and so on.

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Since accounting principles differ from region to region and from country to country, a longstanding goal for most countries has been to standardize their accounting principles to facilitate global trade and businesses. The result is the International Financial Accounting Standards (IFRS), which have been adopted by many countries in the world. Still, in some countries, local accounting standards, which we’ll refer to as local Generally Accepted Accounting Principles (local GAAP) have a strong enough influence that they also must be used in an SAP S/4HANA system. Notably, in the US, the US Generally Accepted Accounting Principles (US GAAP) must be followed. Therefore, the typical valuation landscape of a global company with a presence in all major regions would involve US GAAP, IFRS, and whatever local GAAP is required in the respective countries. To make things more complicated, in some countries, you must also valuate assets according to local tax rules, which may be different than local GAAP rules. Let’s now configure accounting principles and multiple valuation approaches in asset accounting.

3.1.1 Accounting Principles An accounting principle is a configuration object in SAP S/4HANA, which represents certain valuation framework such as IFRS, US GAAP, or local GAAP. To configure accounting principles, follow the menu path Financial Accounting • Financial Accounting Global Settings • Ledgers • Parallel Accounting • Define Accounting Principles. On the screen shown in Figure 3.1, we already defined the accounting principle GAAP to represent US Generally Accepted Accounting Principles.

Figure 3.1 Defining Accounting Principles

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Click on New Entries in the top menu to create new accounting principles. On the next screen, we’ll define two new accounting principles to represent local GAAP (LOCL) and local tax requirements (TAX), as shown in Figure 3.2.

Figure 3.2 Creating New Accounting Principles

Save your entries by clicking the Save button.

3.1.2 Configuring Multiple Valuation Now that you’ve created the accounting principles, you’ll configure the multiple valuation functionality in the system, which is managed through the ledger concept. In the general ledger, we have multiple ledgers, and various accounting principles have dedicated ledgers. A leading ledger always exists, which is called 0L and which should represent the leading valuation framework. For a US company, this ledger will typically be for US GAAP, whereas for a European company and in most other regions the ledger would be for IFRS. In addition to the leading ledger, you’re free to define as many ledgers as you need to represent the various accounting principles your company uses. We recommend having a ledger to represent local GAAP and a ledger to represent local tax rules. Any given non-leading ledger might be used in some countries but not in others. So, a good practice is to define a local tax ledger even if this ledger would only be used in few countries. Based on the regional presence of your, company you may need ledgers for both US GAAP and IFRS or for one of them only.

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Now, let’s configure your ledgers. Start by following the menu path Financial Accounting • Financial Accounting Global Settings • Ledgers • Ledger • Define Settings for Ledgers and Currency Types. You’ll see a list of ledgers defined in the system, as shown in Figure 3.3.

Figure 3.3 Ledger Settings Initial Screen

Initially, only ledger 0L, which is the standard and mandatory leading ledger, is defined in the system. Click on New Entries in the top menu to create new ledgers. In the following screen, enter ledger codes and descriptions, as shown in Figure 3.4.

Figure 3.4 Defining New Ledgers

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A good practice is to name your ledgers in the custom name range, starting with Z or Y. In our case, we called our local GAAP ledger Z1 and called our local tax ledger Z2. Save your entries by clicking the Save button. Now, you’ll need to assign the accounting principles we created earlier to the ledger group. Why assign accounting principles to a ledger group, you may ask, since we just created ledgers, not ledger groups? Note that, every time you create a ledger, the system also creates a ledger group with the same code in the background. Thus, now, the system also has ledger groups Z1 and Z2. This duplication is because ledger postings in the system are always done on the ledger group level. When you make ledger-specific posting, you would choose a ledger group. In addition to the ledger groups automatically created when you create a ledger, you can also create a new ledger group. Then, you can assign multiple ledgers to a ledger group, and they will be posted together when posting to that ledger group. To create new ledger group, follow the menu path Financial Accounting • Financial Accounting Global Settings • Ledgers • Ledger • Define Ledger Group. You’ll see a list of ledger groups defined in the system, as shown in Figure 3.5.

Figure 3.5 Defining a Ledger Group

You can create a new ledger group by clicking the New Entries button in the top menu. Create new ledger group LA to combine our local ledgers Z1 and Z2, as shown in Figure 3.6.

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Figure 3.6 Creating a New Ledger Group

Save the new entry by clicking the Save button. In the next configuration activity, you’ll assign accounting principles to ledger groups. Start by following the menu path Financial Accounting • Financial Accounting Global Settings • Ledgers • Parallel Accounting • Assign Accounting Principle to Ledger Groups. Assign the newly created ledger groups to the newly created accounting principles, as shown in Figure 3.7.

Figure 3.7 Assigning Ledger Groups to Accounting Principles

3.2 Currencies in Asset Accounting Currencies in asset accounting are vitally important because the valuation of asset accounting normally will be carried out in multiple currencies based on the requirements of several valuation principles. A typical global company would manage its fixed assets in the group currency into which all financial statements must be translated. Assets also must be valuated in the

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local currency of the country in which the asset is held. Assets could also have transactions in a different transaction currency (for example, if a company in the US buys an asset from Mexico, the transaction currency would be the Mexican peso). When the company is operating in countries with high inflationary environments, you may also need to valuate assets in hard currency. Let’s now configure currencies in asset accounting. We’ll start by configuring the currency types. Then, we’ll define the currency settings on the depreciation area level.

3.2.1 Currency Types A currency type defines the purpose of a currency. The standard currency types defined in SAP S/4HANA include the following: 쐍 10: Company code currency 쐍 30: Group currency 쐍 40: Hard currency 쐍 50: Index-based currency 쐍 60: Global company currency

The configuration of currencies in the system is performed for each currency type. Settings are maintained on the ledger level and the company code level. To define currency types for each ledger and company code, follow the menu path Financial Accounting • Financial Accounting Global Settings • Ledgers • Ledger • Define Settings for Ledgers and Currency Types. On the initial screen, shown in Figure 3.8, you’ll see a list of ledgers defined in the system.

Figure 3.8 Ledger Currency Settings Initial Screen

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Review existing currency types by clicking on Currency Types in the navigation menu on the left, as shown in Figure 3.9.

Figure 3.9 Currency Types

You can create a new currency type by clicking the New Entries button in the top menu if needed; however, in most cases, standard currency types should suffice. To define currency type settings for the ledger, select the Ledger option from the navigation menu and then select the 0L ledger by selecting its checkbox on its left. Next, click on Company Code Settings for the Ledger in the navigation menu on the left. You’ll see the company codes assigned to the ledger, as shown in Figure 3.10. When you create a new company code, by default, this code is always assigned to the ledger 0L, the leading ledger.

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Figure 3.10 Company Code Settings for Ledger

In the Local Curr. Type column, you’ll assign the currency type of the local currency and assign, in the Global Curr. Type column, the currency type of the global currency. Then, in the remaining columns on the right, you can assign up to eight additional freely defined currency types. Double-click on company code US10 to explore further settings. In the screen shown in Figure 3.11, you must assign a fiscal year variant for the company code and ledger and assign a posting period variant for the company code and ledger. On this screen, you’ll also see the assigned currency types for the local currency, the global currency, and the controlling object currency. Now, click on Accounting Principles for Ledger and Company Code in the navigation menu on the left to review the accounting principles assigned to the ledger. As shown in Figure 3.12, the GAAP accounting principle is assigned to the leading ledger 0L, which makes sense since GAAP is our leading valuation framework. You can also assign more than one accounting principle, but doing so doesn’t make sense for the leading ledger (only for non-leading ledgers, when more than one accounting principle should be managed in the same ledger). Save your entries by clicking the Save button.

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Figure 3.11 Further Company Code Settings for Ledger

Figure 3.12 Accounting Principles Assignment for Ledger

3.2.2 Depreciation Area Currency Settings Next, you’ll need to define the currencies in which depreciation areas will valuate the assets. Start by following the menu path Financial Accounting • Asset Accounting • General Valuation • Currencies • Define Depreciation Areas for Foreign Currencies. On the first screen, shown in Figure 3.13, select a company code and then click on Depreciation area currency.

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Figure 3.13 Company Code Selection

On the next screen, shown in Figure 3.14, you can change the currency of each depreciation area where valuation must be performed in a different currency.

Figure 3.14 Depreciation Area Currency Settings

For example, if you have a US company in the book depreciation area, valuation must be performed in US dollars (USD). But the depreciation area that represents local GAAP should be set to the local currency in the country of the company code. If you use parallel currencies, you’ll also need to specify the currency type in depreciation areas that manage different currencies. Start by following the menu path Financial Accounting • Asset Accounting • General Valuation • Currencies Specify the Use of

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Parallel Currencies. Initially, the system will prompt you to confirm the chart of depreciation, as shown in Figure 3.15.

Figure 3.15 Selecting the Chart of Depreciation

After confirming the chart of depreciation by clicking the button, you may get the message shown in Figure 3.16 if your depreciation area does not manage parallel currencies (as in our example). In that case, proceed by clicking the button again.

Figure 3.16 Parallel Currencies Message

As a result, the currency type options will be grayed out, as shown in Figure 3.17. When depreciation areas manage parallel currencies, the currency type must be set, as shown in Figure 3.18. In our example, we’ve selected currency type 30: Group Currency. In the ValAd column, you’ll need to select a depreciation area from which values are adopted that will be converted in different currency. As shown in Figure 3.18, area 2 takes values from area 1 and converts these value into the group currency, area 22 takes values from area 21, and so on. Selecting the IdIPC checkbox ensures that the system transfers all acquisition and production cost (APC)-relevant posting values to this depreciation area from the transferring depreciation area without the option to change them. In the TTr column, select a depreciation area from which the depreciation terms should adopted and which contains values to be converted into different currency. Selecting the checkbox in the IdntTrm column indicates that no changes to these depreciation terms are allowed.

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Figure 3.17 Parallel Currency Types

Figure 3.18 Defining Parallel Currency Types

3.3 Real-Time Integration with the General Ledger As discussed earlier, one of the main benefits of the new asset accounting in SAP S/4HANA is its real-time integration with the general ledger. Let’s see what configuration activities are required to enable and optimize that integration.

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Every general ledger posting is done on the ledger level, and the foundation of the asset accounting’s integration with the general ledger is also done on the ledger level. Recall that we’ve already defined our ledgers in Section 3.1.2, where we assigned accounting principles and fiscal year variants to ledgers. Now, you’ll need to maintain a few more settings to define how the integration of asset accounting with the general ledger works.

3.3.1 General Ledger Posting Control First, you’ll need to define how depreciation areas post to the general ledger. Start by following the menu path Financial Accounting • Asset Accounting • Integration with General Ledger Accounting • Define How Depreciation Areas Post to General Ledger. Enter the chart of depreciation “US01,” as shown in Figure 3.19.

Figure 3.19 Selecting a Chart of Depreciation

Confirm the selection by clicking the button. On the next screen, shown in Figure 3.20, you’ll see the depreciation areas of the selected chart of depreciation and how these depreciation areas post to the general ledger. Selecting the checkbox in the Real column indicates that the values of the depreciation area are posted directly and are not received as calculation from other depreciation areas. In the Acc. Princ. column, you’ll see the assigned accounting principle, which you can also change on this screen. In the G/L column, you’ll see the posting control, which defines how the depreciation area posts into the general ledger. Areas that do not post to the general ledger are for informational/reporting purposes only. You also have the option of only posting the depreciation. The most common option is to post both the APC cost and the depreciation in real time. Notice that the option to post periodically to the general ledger, as in the classic asset accounting in SAP ERP, is no longer available since the new asset accounting is fully integrated with the general ledger and posts in real time.

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Figure 3.20 Depreciation Areas Posting Control

3.3.2 Technical Clearing Account for Integrated Asset Acquisition A new topic in the new asset accounting in SAP S/4HANA is the use of technical clearing accounts for integrated asset acquisition. When posting an integrated asset acquisition, the system divides the business transaction in two parts: operational and valuating. The operational part is the vendor invoice, for which the system posts a document valid for all accounting principles against new configuration object: the technical clearing account for integrated asset acquisitions. Then, for each accounting principle, the system generates a separate document, which is also posted against the technical clearing account for integrated asset acquisitions. Each document is specific to a combination of ledger and accounting principle. At the end, the technical clearing account for integrated asset acquisitions should always have a balance of zero. To define a technical clearing account for integrated asset acquisitions, follow the menu path Financial Accounting • Asset Accounting • Integration with General Ledger Accounting • Technical Clearing Account for Integrated Asset Acquisition • Define Technical Clearing Account for Integrated Asset Acquisition. Enter a technical clearing account for integrated asset acquisitions, as shown in Figure 3.21. Now, this account will be debited and credited with the two valuation parts of the integrated asset acquisition posting, at the end having a net 0 financial result.

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Figure 3.21 Defining the Technical Clearing Account for Integrated Asset Acquisitions

You can also specify a different technical clearing account for integrated asset acquisitions for each account determination. Start by following the menu path Financial Accounting • Asset Accounting • Integration with General Ledger Accounting • Technical Clearing Account for Integrated Asset Acquisition • Define Different Technical Clearing Account for Required Field Control. Enter a chart of accounts in the ChAc column, enter an account determination in the Acct.det column, and enter an account in the Account column, as shown in Figure 3.22.

Figure 3.22 Defining the Technical Clearing Account per Account Determination

Now, assets from asset classes using these account determinations will use these different technical clearing accounts.

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3.3.3 Alternative Document Type for Integrated Asset Acquisition For the ledger-specific part of integrated asset acquisition, you can also specify an alternative document type. This option is useful when, for specific accounting principles, you require a specific, dedicated number range, for example. To define an alternative document type, follow the menu path Financial Accounting • Asset Accounting • Integration with General Ledger Accounting • Integrated Transactions: Alternative Doc. Type for Acctg-Princpl-Spec. Docs • Specify Alternative Document Type for Acctg-Principle-Specific Documents. As shown in Figure 3.23, for various document types (specified in the Original Doc. Type column), you can define a derived document type in the Derived Doc. Type column (in our example, AA).

Figure 3.23 Defining Alternative Document Types

As a result, the ledger-specific part of a document will be posted with this derived document type. You can also specify alternative document types for each company code. Start by following the menu path Financial Accounting • Asset Accounting • Integration with General Ledger Accounting • Integrated Transactions: Alternative Doc. Type for Acctg-Princpl-Spec. Docs • Define Separate Document Types by Company Code. As shown in Figure 3.24, add a company code as a parameter. As shown in Figure 3.24, we specified that, for company code US20, the derived document type will be AB.

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Figure 3.24 Defining Alternative Document Types per Company Code

3.3.4 Specifying the Posting Key for Asset Posting In the next configuration activity, you can specify the posting keys used in asset accounting postings in the general ledger. A posting key controls whether the posting is a debit or credit and what kind of account is being posted to (asset, vendor, general ledger account, and so on). To specify a posting key for asset posting, follow the menu path Financial Accounting • Asset Accounting • Integration with General Ledger Accounting • Specify Posting Key for Asset Posting. Initially, you’ll only see the automatic transactions in asset accounting, as shown in Figure 3.25.

Figure 3.25 Asset Accounting: Automatic Postings

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Double-click on Asset posting (ANL). As shown in Figure 3.26, you’ll specify one posting key for debits to asset accounts and one posting key for credits to asset accounts.

Figure 3.26 Asset Accounting: Posting Keys

The standard keys are 70 for debit and 75 for credit. You would change these keys only if you have defined custom-specific posting keys. Go back to the screen shown earlier in Figure 3.25 and double-click on G/L account posting from asset posting (ANS). On the next screen, shown in Figure 3.27, configure the posting keys used to post to general ledger accounts against asset accounts.

Figure 3.27 Asset Accounting: General Ledger Posting Keys

Normally, the standard posting keys 40 (for debit) and 50 (for credit) should be used.

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3.3.5 Assigning an Input Tax Indicator for Non-Taxable Acquisitions In this configuration activity, you’ll specify which tax codes should be used when you post acquisitions that are not subject to taxes but that are posted to accounts that are tax relevant. To assign an input tax indicator for non-taxable acquisitions, follow the menu path Financial Accounting • Asset Accounting • Integration with General Ledger Accounting • Assign Input Tax Indicator for Non-Taxable Acquisitions. The configuration table, shown in Figure 3.28, lists the available company codes.

Figure 3.28 Assigning an Input Tax Indicator for Non-Taxable Acquisitions

Enter input and output tax codes with a 0% rate in the Input Tax and Output Tax columns, then save your entries by clicking the Save button.

3.3.6 Posting of Depreciation in the General Ledger In the next few configuration activities, you’ll define how depreciation is posted in the general ledger. First, you’ll define the document type used to post depreciation. Start by following the menu path Financial Accounting • Asset Accounting • Integration with General

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Ledger Accounting • Post Depreciation to General Ledger Accounting • Specify Document Type for Posting of Depreciation. The system will display the activity screen, as shown in Figure 3.29.

Figure 3.29 Document Type Configuration Activities

The first activity, Define Document Types, provides a link to the configuration activity to define document types, as shown in Figure 3.30.

Figure 3.30 Document Types

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On this screen, you can define a custom depreciation document type if needed. We recommend copying a standard document type for depreciation posting AF by selecting its checkbox on its left and clicking the button in the top menu. Then, you can name the new document type (ZF, as shown in Figure 3.31).

Figure 3.31 New Depreciation Document Type

After saving the entry, go back to the activities screen, shown earlier in Figure 3.29, and double-click on Specify Document Type for Posting of Depreciation. In this configuration transaction, you’ll see the company codes assigned to the last-used chart of depreciation and the depreciation document type assigned to them, as shown in Figure 3.32. The standard document type for depreciation is AF, which is assigned by default. In this step, change the document type to your custom depreciation document type ZF. Then, save your entries by clicking the Save button.

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Figure 3.32 Assigning a Depreciation Document Type

Finally, you’ll need to define the posting rules for depreciation, such as whether depreciation should be posted monthly, annually, or by some other interval, and also define whether revaluation and interest should be posted in the depreciation areas for the company code. Start by following the menu path Financial Accounting • Asset Accounting • Integration with General Ledger Accounting • Post Depreciation to General Ledger Accounting • Specify Intervals and Posting Rules. In the initial screen, shown in Figure 3.33, select a company code by selecting its radio button on its left and then clicking on Posting rules in the navigation menu on the left.

Figure 3.33 Depreciation Posting Rules: Company Code Selection

On the next screen, shown in Figure 3.34, you’ll see a list of the depreciation areas active for the company code. Posting rules must be defined separately for each depreciation area that posts to the general ledger.

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Figure 3.34 Selecting a Depreciation Area

Double-click on depreciation area 01 to define its settings. On the next screen, shown in Figure 3.35, choose the control settings that manage the posting of depreciation in the depreciation area.

Figure 3.35 Depreciation Area Posting Rules

As shown in Figure 3.35, for our example, we chose Monthly posting, which is the most common period control for posting depreciation. But you can choose also other posting intervals such as bi-monthly, quarterly, semi-annual, or annual. If you activate the Enter in expert mode radio button, you’ll be able to select a specific period for the depreciation in the Period interval field.

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In the Other posting settings section, you have the option of enabling the posting of interest and revaluation in the depreciation area and also to allow the posting of depreciation for the depreciation area after the useful life of an asset has expired. Confirm the settings for all depreciation areas and, if making any changes, save your changes by clicking the Save button.

3.4 Additional Valuation Settings In this section, we’ll examine some further settings for asset valuation such as defining depreciation areas for quantity updates, defining the transfer of APC values and depreciation terms, determining depreciation areas in asset classes, and configuring the maximum value of low-value assets.

3.4.1 Defining a Depreciation Area for Quantity Update You must define which depreciation areas will update quantities. In other words, the depreciation area will store not only asset amounts, but also quantities. This information is especially important for low-value assets, which are often managed on a quantity basis. To define depreciation areas for quantity updates, follow the menu path Financial Accounting • Asset Accounting • General Valuation • Depreciation Areas • Define Depreciation Area for Quantity Update. After selecting a chart of depreciation, you’ll see the screen shown in Figure 3.36.

Figure 3.36 Depreciation Area for Quantity Update

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On this screen, select only one depreciation area to store asset quantities. Typically, this selection is your book depreciation area.

3.4.2 Defining the Transfer of APC Values In the next configuration activity, you’ll define how the various depreciation areas receive their APC values. Start by following the menu path Financial Accounting • Asset Accounting • General Valuation • Depreciation Areas • Specify Transfer of APC Values. Then, you’ll see a list of depreciation areas for the last chart of depreciation you worked with, which is shown in Figure 3.37. (If you started a new system session, you may be prompted to select a chart of depreciation, as earlier.)

Figure 3.37 Defining the Transfer of APC Values

Enter the depreciation area from which the APC values should be transferred in the ValAd column. As shown in Figure 3.37, notice that areas 11 and 12 adopt values from area 10, whereas many depreciation areas adopt values from the book depreciation area 01 (which is the most common source depreciation area). Selecting the checkbox in the Ident. column ensures that the transferred APC values to this depreciation area cannot be changed.

3.4.3 Defining the Transfer of Depreciation Terms In this configuration activity, you’ll define whether depreciation terms should be transferred from one depreciation area to another. To configure this transfer, follow

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the menu path Financial Accounting • Asset Accounting • General Valuation • Depreciation Areas • Specify Transfer of Depreciation Terms. In the resulting configuration screen, shown in Figure 3.38, you’ll see the available depreciation areas for your chart of depreciation.

Figure 3.38 Defining the Transfer of Depreciation Terms

If you enter a depreciation area in the TTr column, its depreciation terms will be transferred to the specified depreciation area. In this example, area 31 gets its depreciation terms from area 30, and area 01 provides depreciation terms to areas 30, 32, and 80. Selecting the checkbox in the Identical column ensures that the transferred depreciation terms to this depreciation area cannot be changed.

3.4.4 Determining Depreciation Areas in the Asset Class In this important configuration activity, you’ll set default depreciation terms on the asset class level. Thus, when creating assets, their depreciation terms and useful lives will be defaulted from the settings maintained on the asset class level, with the opportunity to change them on the individual asset number or subnumber level. This configuration will save a lot of manual work and help avoid errors, since usually assets from the same asset class would have the same depreciation terms.

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To set default depreciation terms on the asset class level, follow the menu path Financial Accounting • Asset Accounting • General Valuation • Determine Depreciation Areas in the Asset Class. On the first screen, shown in Figure 3.39, select an asset class to configure by selecting its checkbox on its left.

Figure 3.39 Selecting an Asset Class

Let’s select class 1000020 Buildings. Then, click on Depreciation areas in the navigation menu on the left. On the next screen, shown in Figure 3.40, maintain the default depreciation terms for this class.

Figure 3.40 Defining Default Depreciation Terms

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In the DepKy column, enter a default depreciation key. Now, all assets created in this asset class will use, by default, depreciation area 01 key LINA (which is the standard depreciation key for straight-line depreciation), ACE in area 12, and so on. In the Use column, enter the default useful life of the asset in years. For example, in area 01, we entered “50” for 50 years. In the Per column, you can enter months if the useful life is not expected to be a round number of years. For example, if you enter “3” in this field for area 01, the useful life is 50 years and 3 months. In the Layout column, you can choose whether the depreciation terms will be maintained on the main asset number level or the subnumber asset level by choosing one of the following options: 쐍 1000: Depr. on main asset no. level 쐍 2000: Depr. on asset sub-no. level

Double-click on a depreciation area to reveal further settings. If you double-click on area 01, you’ll see the screen shown in Figure 3.41.

Figure 3.41 Other Depreciation Area Settings

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On this screen, the following additional fields can be configured: 쐍 LVA check

For asset classes that manage low-value assets, in this field, you can define how checks on low-value assets should be performed—only on the amount level or on both the amount and quantity levels. 쐍 Minimum Life

A minimum useful life in years that is permitted for assets in this asset class. 쐍 Min.Life Period

A minimum useful life in periods that is permitted for assets in this asset class. 쐍 Max Useful Life

A maximum useful life in years that is permitted for assets in this asset class. 쐍 Max.Life Period

A maximum useful life in periods that is permitted for assets in this asset class. 쐍 Area Deact.

Deactivates the depreciation area for this asset class. Maintain all asset classes and depreciation areas as required and save your entries by clicking the Save button.

3.4.5 Maximum Amount for Low-Value Assets As discussed earlier, low-value assets are assets that do not exceed certain threshold amounts, which vary from country to country. These assets are subject to specific valuation rules and should be contained in their own asset classes. To configure which asset classes represent low-value assets, follow the menu path Financial Accounting • Asset Accounting • General Valuation • Amount Specifications (Company Code/Depreciation Area) • Specify Max. Amount for Low-Value Assets + Asset Classes. Initially, you’ll see the configuration activities screen, as shown in Figure 3.42. The first activity, Specify LVA asset classes, transfers you to the screen for determining depreciation areas in asset classes, which we reviewed in the previous section. Recall that, at the asset class and depreciation area level, you can assign an LVA check rule, as shown in Figure 3.41. Double-click on the second activity, Specify amount for low value assets. On the initial screen, shown in Figure 3.43, select company code US10.

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Figure 3.42 Low-Value Assets: Configuration Activities

Figure 3.43 Selecting a Company Code for Low-Value Assets

Double-click on Amount for low-value assets, and you’ll see the configuration screen shown in Figure 3.44.

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Figure 3.44 Defining Maximum Amounts for Low-Value Assets

In the LVA Amount column, for each depreciation area, define the maximum value of an asset that can be considered a low-value asset. In the MaxLVA Pur column, define the maximum amount for a purchase order of a low-value assets. In this example, we defined 500 USD as the maximum threshold for low-value assets and 550 USD as the maximum purchase order amount for low-value assets. Then, save your entries by clicking the Save button.

3.5 Summary In this chapter, you learned how asset accounting can support multiple valuation principles. You should now be familiar with the various valuation techniques for portraying the valuation frameworks that your organization may need to use. After reading this chapter, you should understand the most common requirements for conducting asset valuations in different regions of the world. You should know how to set up asset accounting in SAP S/4HANA to represent these requirements. You learned how to configure multiple valuation frameworks for asset accounting using the integration between asset accounting and the general ledger related to depreciation.

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You also learned how to set up currencies in SAP S/4HANA and how to use them in asset accounting. You should be well positioned now to properly configure currency settings on the depreciation area level. In another crucial section, you learned about the integration between asset accounting and the general ledger. You learned how the real-time integration works, and we explored the tightly interconnectedness between ledgers, accounting principles, and depreciation areas. Finally, we covered many other important valuation configuration activities, such as defining depreciation areas for quantity updates, defining the transfer of APC values and depreciation terms, configuring default depreciation terms in asset classes, and configuring maximum amounts for low-value assets. Next, we’ll teach you in detail how to configure and use the various asset accounting business transactions available in SAP S/4HANA.

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Chapter 4 Business Transactions In this chapter, we’ll provide you with step-by-step instructions for configuring and performing the various fixed asset transactions you’ll encounter every day.

So far, you’ve designed and configured the organizational structure, master data, and valuation settings for asset accounting in SAP S/4HANA. Now, you’ll learn how to configure and use the system to perform various business transactions with your fixed assets. In this chapter, we’ll examine in detail all the business transactions used in asset accounting, including the following: 쐍 Acquisitions 쐍 Assets under construction 쐍 Transfers 쐍 Retirements 쐍 Manual value corrections

For each business transaction, we’ll start with the configuration steps you’ll need to perform to set up the process according to your business requirements. Then, you’ll learn how to use the transactions in the system, with a focus on the specific details you’ll need to pay attention to in order to make the correct postings in the system. Let’s start with the asset acquisition process.

4.1 Acquisitions An asset acquisition is the process of acquiring fixed assets. In most cases, assets are acquired by a purchase from a vendor. In some cases, the asset acquisition may need to be posted against a general ledger account. Specific steps are required when acquiring assets from an affiliated company. Another common method of acquiring assets

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is via the assets under construction process, where you build the asset internally. We’ll cover the assets under construction process in Section 4.2. Let’s start by teaching you how to configure the asset acquisition processes. Then, we’ll examine in detail how to perform asset acquisitions in SAP S/4HANA using different types of acquisitions.

4.1.1 Configuring Acquisitions To configure asset acquisitions, you must first check the asset transaction types for acquisition. An asset transaction type is a configuration object. Every asset transaction is posted with a specific asset transaction type, which defines many important control indicators. To define the asset transaction types for an acquisition, follow the menu path Financial Accounting • Asset Accounting • Transactions • Acquisitions • Define Transaction Types for Acquisitions. On the configuration screen, shown in Figure 4.1, you’ll only see the transaction types relevant for acquisitions.

Figure 4.1 Asset Transaction Types for Acquisitions

On this screen, you’ll see standard SAP asset transaction types for acquisitions, each represented by a three-digit code that starts with 0 or 1, following the standard SAP

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number allocation. Later, you’ll see that standard retirement asset transaction types start with 2, for example. However, when creating your own custom transaction type, we highly recommend starting the name with the letter Z or Y to fall in the custom name range for configuration objects. In this way, you can ensure your asset transaction types are not accidently overwritten in the future by a new SAP-provided transaction type. Objects starting with Z or Y are reserved for custom use and will never be used by SAP-provided objects. The most common standard transaction type used for asset acquisition with a vendor is 100 External asset acquisition. This transaction type should cover most of your asset acquisitions transactions; however, in some cases, you may need to set up own transaction types. Consider the following scenario: let’s say we are required to post acquisitions with a vendor to a specific depreciation area. This requirement may exist, for example, if you only need to recognize an asset using US Generally Accepted Accounting Principles (US GAAP). In this case, you’ll want a unique acquisition transaction type limited to posting only in a specific depreciation area. Select standard transaction type 100 by selecting its checkbox on its left and then clicking on the in the top menu. Then, you’ll see the detailed configuration screen, as shown in Figure 4.2.

Figure 4.2 Acquisition Transaction Type Configuration

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Enter a transaction type code, for example, “Z01” in the custom name range, in the Trans. Type field. Then, in the description field on the right, enter a description like “Acquisition US GAAP only.” Below that field you’ll see the Transaction Type Grp field, which displays the value 10 and is grayed out. Each asset transaction type is part of a transaction type group, which are predefined by SAP and not changeable. The transaction type group for acquisitions is 10, and every transaction type we create for acquisitions will be assigned to this group. You’ll also need to configure the following fields: 쐍 Account assignment

In this section, you must choose whether this transaction is a Debit Transaction or Credit Transaction for the asset. For acquisition transaction types, choose the Debit Transaction option. 쐍 Capitalize Fixed Asset

Selecting this checkbox capitalizes the fixed asset, which is required for transaction types for vendor acquisitions. But for transaction types in the assets under construction process, you wouldn’t want to immediately capitalize the asset. 쐍 Document Type

This field is for the SAP document type to be used when posting documents with this transaction type. The default is the standard document type for asset postings, AA, which is usually is used for any acquisition postings with vendors, although in some cases you may want to define a specific document type, for example, if a local ledger requires documents to use a specific number range. 쐍 Post To Affiliated Company/Do Not Post To Affiliated Company

Using these radio buttons, you can define whether this transaction type is used to post to an affiliated company (within the group) or not. In this case, we’re defining a transaction type for acquisitions from external vendors, so we select not to post to an affiliated company. 쐍 Post Gross/Post Net

Using these radio buttons, you can define whether this transaction posts gross value or net value. This choice is applicable only for intercompany asset transfers, so it works only in conjunction with the Post To Affiliated Company indicator. With the Gross indicator, the system will post the acquisition together with the already posted depreciation for the asset in the selling affiliated company. With the Net indicator, only net depreciation will be posted.

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쐍 Can Not Be Used Manually

Selecting this indicator precludes you from using the transaction type manually, which is not relevant for asset acquisitions with vendors. 쐍 Call up individual Check

This checkbox enables you to define custom checks for the asset transaction. It allows you to program your own logic using user exits to perform custom logic check when posting with this transaction type. 쐍 Set Changeover Year

With this indicator, the system sets the changeover year in the asset master record when relevant acquisition is posted to the asset. Also, an automatic depreciation recalculation is triggered for the asset to recalculate depreciation based on the changeover. 쐍 Trans. Type Obsolete

Select this checkbox for transaction types that will no longer be used, to prevent further postings of this type. 쐍 Consolidation Transaction Type

Each asset transaction type is mapped in this section to a consolidation transaction type for the purposes of performing consolidation. 쐍 Asset History Sheet Group

In this section, each asset transaction type is mapped to a history sheet group, which is used in the asset history sheet report, where all asset transactions are reported. We’ll discuss this report further in detail in Chapter 6, Section 6.3. After modifying the transaction type, save your settings by clicking the Save button. You’ll also need to check the assignment of general ledger accounts relevant for acquisitions. Although we covered this configuration activity in Chapter 2, Section 2.2.2, we’ll still revisit it for every process we cover to make sure the proper accounts have been assigned. To assign general ledger accounts for acquisitions, follow the menu path Financial Accounting • Asset Accounting • Transactions • Acquisitions • Assign Accounts. Initially, the system will prompt you to enter a chart of depreciation, as shown in Figure 4.3. The general ledger account assignments are chart of depreciation-independent, but you’ll need to select a chart of depreciation now so the system can display the depreciation areas for which you need to maintain accounts.

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Figure 4.3 Selecting a Chart of Depreciation

After selecting chart of depreciation US01, on the next screen, shown in Figure 4.4, select the chart of accounts CANA.

Figure 4.4 Selecting a Chart of Accounts

Click on Account Determination, and you’ll see the list of the available account determinations, as shown in Figure 4.5. Let’s configure our acquisition accounts for account determination 30000 Fixtures and Fittings. Select the account determination and then click on Balance Sheet Accounts. On this configuration screen, you may recognize that the depreciation account option is not available, since we’re only configuring acquisition accounts. On the next screen, shown in Figure 4.6, you’ll see the available depreciation areas for which you need to assign general ledger accounts.

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Figure 4.5 Selecting an Account Determination

Figure 4.6 Selecting a Depreciation Area

You’ll need to maintain the assignments separately for each depreciation area. Subsequently, you’ll also maintain the accounts in the other depreciation areas. First, double-click on area 1.

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On the next screen, shown in Figure 4.7, maintain the acquisition account assignments. Again, this screen is just subsection of the configuration screen shown in Chapter 2, Section 2.2.2, since in this step, we’re dealing only with the assignment of acquisition accounts.

Figure 4.7 Defining Acquisition Accounts

The following accounts should be configured: 쐍 Bal. Sh. Acct ARC

The main general ledger account to which the acquisition and production costs (APC) of the asset are posted. 쐍 Contra account: Acquisition value

This account is not relevant for acquisitions with vendors. In this field, you would configure a contra account for an asset acquisition posting, when the posting is not an integrated posting but instead is offset against the general ledger account specified in this field. 쐍 Acquisition from affiliated company

This account is posted if no contra account has been entered for acquisition from an affiliated company. Maintain all relevant account determinations and depreciation areas and save your entries.

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4.1.2 Acquisitions with a Vendor An acquisition with a vendor is the most common way of acquiring an asset. This process involves purchasing an asset from a vendor who sends an invoice for the acquired asset. In the following sections, we’ll first create an asset master record. Then, we’ll post a vendor invoice to acquire the asset.

Creating Asset Master Records Let’s examine a scenario where our company wants to purchase a new desk from an external vendor. We received the invoice from the vendor for 800 USD. In the first step, the asset master record must be created for the new desk. Start by following the application menu path Accounting • Financial Accounting • Fixed Assets • Asset • Create • AS01 – Asset. Alternatively, you can enter Transaction AS01 directly. On the initial screen, shown in Figure 4.8, enter the asset class we defined earlier for furniture and fixtures “1000070,” enter the company code “US10,” and proceed by pressing (Enter).

Figure 4.8 Create Asset: Initial Screen

Under the General tab, shown in Figure 4.9, enter a description of the asset.

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Figure 4.9 Asset Master Data: General Tab

Click on Time-dependent tab to enter the cost center, as shown in Figure 4.10.

Figure 4.10 Asset Master Data: Time-Dependent Tab

Click on Deprec. Areas tab to enter the depreciation terms, as shown in Figure 4.11.

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Figure 4.11 Asset Master Data: Depreciation Terms

After making sure the depreciation terms are correct, save the asset by clicking the Save button.

Posting a Vendor Invoice for the Acquisition Now that we’ve created the asset master record as a shell, we can post the vendor invoice for its acquisition. Start by following the application menu path Accounting • Financial Accounting • Fixed Assets • Posting • Acquisition • External Acquisition • F-90 - With Vendor. Alternatively, you can enter Transaction F-90 directly. On the first screen, shown in Figure 4.12, enter the document header data.

Figure 4.12 Asset Acquisition with Vendor Header Screen

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The document header data applies to the whole document. On this screen, maintain the following fields: 쐍 Document Date

The date of the document, which is the date of the vendor invoice. 쐍 Posting Date

This date is the date on which the document is posted in the system and therefore is the date that determines the posting period in which the document has been posted and will appear in financial statements and reports. 쐍 Type

This field contains the document type of the document. For standard vendor invoices, you would enter “KR.” 쐍 Company Code

The company code of the document; in our example, we entered our company code US10. 쐍 Currency/Rate/Translation Dte

In this field, enter the currency of the document. The local currency of our company code is USD; if we enter a different currency in this field, you also have the option of entering an exchange rate. If not, the system will determine the rate from predefined exchange rates in the system, based on the entered translation date. If a rate is not available, the system will issue an error message prompting you to enter an exchange rate or to maintain an exchange rate in configuration. 쐍 Period

The posting period of the document. You can maintain this information directly on this screen, or the system will determine the period from the posting date. Notice that we entered a posting date in September but left December as period. (The default is the current period when entering the document, which happened to be December when writing this book). You’ll see how this period changes as we continue to the next screen. 쐍 Document Number

This number is the document number under which the invoice will be stored in the system. Usually, you’ll leave this field blank, and the system will assign a document number from the predefined number range assigned to the document type. For some document types, you may configure an external number assignment; in this case, the field would be mandatory. But vendor invoices are usually automatically numbered.

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쐍 Reference

This field contains a reference description of the document. This field could be a required field, depending on the settings of the document type. For vendor invoices, this field should be required, and often, you would enter a vendor invoice number from the paper (or scanned) invoice document you received from the vendor. 쐍 Doc. Header Text

This field is another text field description field, where you can enter additional details about the document. This field is longer than the reference field. Now, scroll down to the end of the screen to enter information about the first line item, as shown in Figure 4.13.

Figure 4.13 First Line Item Information

For our example, on this screen, we’ll only select the type of account and the account number, but you can maintain any of the following fields: 쐍 Pst Ky

Enter the posting key of the line item. Each line item in a financial document in SAP S/4HANA is identified with a posting key. The posting key determines whether the posting is a debit or a credit and specifies the type of account from among the following options: – General ledger account – Vendor – Customer – Asset – Material For the first line item, we’ll select 31, which is the standard posting key for crediting a vendor account.

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쐍 Account

Enter the account number. In this case, we’ll enter a vendor number, which has already been defined in the system. 쐍 SGL Ind

This field is the special general ledger indicator, which is used when posting a transaction to a vendor or customer account that should post to a different general ledger reconciliation account than the main reconciliation account specified in the business partner master record. For example, a vendor down payment should post to a different accounts payable account. 쐍 T Type

This field contains the asset transaction type, which is applicable only to asset accounts. We’ll enter a transaction type for our next line item. Proceed by pressing (Enter). The system will issue the warning message shown in Figure 4.14, which notifies you that the period was automatically changed to the period determined from the posting date.

Figure 4.14 Period Changed Message

Proceed by pressing (Enter) again. On the next screen, shown in Figure 4.15, enter the required information for the first line item as well as the account for the next line item. You can maintain the following fields on this screen: 쐍 Amount

The amount of the first line item in the currency entered on the header. 쐍 Tax Amount/Calculate Tax/Tax Code

If an applicable tax must be applied on the document, in this field, you’ll specify how the system should determine the tax. You can directly enter a tax amount or alternatively enter a tax code and select Calculate Tax so the system will calculate the tax based on the tax rate of the tax code. 쐍 Payt Terms

The payment terms determine when the vendor’s open items are due. For example, if you select immediately due as your payment terms, the invoice will be due upon posting. But if you select payment due net in 30 days as your payment terms,

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then the item will not be due (and thus will not be selected by the automatic payment program) for another 30 days.

Figure 4.15 Enter Line Item Information 쐍 Bline Date

The baseline date determines the date on which payment terms start calculating. How the baseline is determined is configurable but usually is the same as the posting date. 쐍 Pmnt Block

In this field, you can set a payment block, which blocks the open item from payment until the block is removed. 쐍 Assignment

This text field is applicable only to line items. Here you can enter text that would help identifying and sorting the line item in reports. In the Next line item section at the bottom of the screen, enter the posting key and account number for the second line item. In our example, we selected posting key 70, which means a debit to the asset account (a credit to asset account would be posting key 75). Then, enter the asset created in the previous step, 68000000. Proceed by pressing (Enter).

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On the next screen, shown in Figure 4.16, enter the information for the second line item, which is the asset line item. As you’ll see in the Amount field, we entered an asterisk (*), which just means that the amount is the same and thus saves time. Of course, you can also enter the amount “1000.”

Figure 4.16 Second Line Item Information

Now, before saving the document, you can review it by following the menu path More • Document • Simulate, as shown in Figure 4.17.

Figure 4.17 Simulating the Document

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You’ll see the proposed document that the system will post, as shown in Figure 4.18.

Figure 4.18 Document Overview

Notice that the vendor account will be credited (as indicated by the minus sign after the amount), and the asset will be debited. Now, post the document by clicking the Post button in the lower right corner. The system will issue the information message shown in Figure 4.19 with the document number posted.

Figure 4.19 Document Posted Message

Displaying a Posted Document To see the posted document, follow the application menu path Accounting • Financial Accounting • General Ledger • Document • FB03 - Display. Alternatively, you can enter Transaction FB03 directly. On the initial screen, shown in Figure 4.20, enter the document number, company code, and fiscal year.

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Figure 4.20 Displaying a Document: Initial Screen

Proceed by pressing (Enter). On the next screen, you’ll see the vendor invoice document, as shown in Figure 4.21.

Figure 4.21 Displaying a Document

This view is the data entry view. Click on the Asset Accounting button in the top menu to display the detailed asset view, as shown in Figure 4.22. Notice that, in the asset accounting view, two documents exist for the one document in the entry view. This feature in the new asset accounting in SAP S/4HANA is new. Now, every asset acquisition is posted in two parts offsetting the technical clearing account for asset acquisitions we configured earlier in Chapter 3, Section 3.3.2. This duplication is because, from a valuation point of view, you could have different accounting postings in different accounting principles. Thus, the valuation part of the document (debiting the asset account and crediting the technical clearing account) is posted separately in each ledger group.

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Figure 4.22 Asset Accounting View

Now, go back by clicking the button and then click on General Ledger View button in the top menu. This step opens the general ledger view, shown in Figure 4.23.

Figure 4.23 General Ledger View

Notice that now, below the header data of the document, you’ll see the Ledger 0L section. In the general ledger view, you’ll see the documents posted per ledger. By default, you’ll see the documents posted in the leading ledger 0L. Now, click on Other

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Ledger button in the top menu, which allows you to choose a different ledger, as shown in Figure 4.24.

Figure 4.24 Ledger Selection

Select Z1 and then click the button. You’ll see that the document has been posted in the local GAAP ledger Z1, as shown in Figure 4.25.

Figure 4.25 Local Ledger View

In this way, you can navigate through the various ledgers set up in your system and compare differences in acquisitions with vendors.

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4.1.3 Acquisitions with Automatic Offsetting Entries In some cases, you may acquire an asset without a vendor. In this case, no invoice document will be available to be posted. Still, you’ll need to make a posting in SAP S/4HANA to capitalize the asset. To post an asset acquisition with an automatic offsetting entry, follow the application menu path Accounting • Financial Accounting • Fixed Assets • Posting • Acquisition • External Acquisition • ABZON - Acquis. w/Autom. Offsetting Entry. Alternatively, you can enter Transaction ABZON directly. Then, you’ll see the entry screen, shown in Figure 4.26, which is organized into a header and three tabs.

Figure 4.26 Asset Acquisition with Automatic Offsetting Entries

In the header of the document, enter the already created asset number in the Existing asset field or select the New Asset radio button and create a new asset by clicking the Master Data button on the right.

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Then, under the Transaction data tab, you can maintain the following fields: 쐍 Accounting Principle

In this field, you can select an accounting principle and thus limit the posting to this accounting principle only. 쐍 Depreciation Area

In this field, you can select a depreciation area and thus limit the posting to this depreciation area only. 쐍 Document Date

In this field, enter the date of the document. 쐍 Posting Date

In this field, you’ll see the date on which the document is posted in the system, which determines the posting period in which the document will be placed. 쐍 Asset Value Date

This date determines the start of the depreciation calculation in asset accounting and can be a date in a closed accounting period. 쐍 Amount Posted

The amount of the asset acquisition. 쐍 Quantity

In the case of a quantity-based asset, you’ll need to enter the quantity acquired. 쐍 Text

In this field, enter a text description for the transaction. Now, click on the Additional Details tab, which opens the screen shown in Figure 4.27. Under this tab, you can maintain the following optional fields: 쐍 Posting period

In this field, you can enter a different posting period. 쐍 Document type

In this field, you can enter a different document type. 쐍 Offsetting Account

In this field, you can enter an offsetting general ledger account different than the configured one.

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Figure 4.27 Additional Details Tab 쐍 Transaction Type

In this field, you can enter a transaction type different than the configured one. 쐍 Reference

In this field, you can provide reference text for the transaction. 쐍 Assignment

Another text field for the transaction, which can be used in reporting. Click on the Note tab. Under this tab, you can enter longer text notes, as shown in Figure 4.28. When you’re ready with the entry, you can simulate the document by clicking the Simulate button in the lower right corner, as shown in Figure 4.29.

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Figure 4.28 Note Tab

Figure 4.29 Simulating Asset Acquisition with Automatic Offsetting Entries

Notice that the asset has been debited, and the credit has been posted to the asset acquisition contra account 1000999. Now, save by clicking the Post button in the lower right corner. Then, you’ll see the screen shown in Figure 4.30, which displays the document numbers posted for each accounting principle. Notice we have separate documents in separate document number ranges posted for each accounting principle and, therefore, in different ledger groups.

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Figure 4.30 Documents Posted

You can obtain further information about the posted ledger by clicking the button to the right of each document, which opens a screen displaying further information, as shown in Figure 4.31.

Figure 4.31 Ledgers Posted Information

Now, if you want to review the documents posted, you can follow the application menu path Accounting • Financial Accounting • General Ledger • Document • FB03 Display. Alternatively, you can enter Transaction FB03 directly, as we did for the asset acquisition with vendor posting. In this case, however, note that you have three different document numbers, and you’ll need to enter these numbers separately in Transaction FB03. If you want to see the local ledger document, you would enter document “800000002,” as shown in Figure 4.32. At this point, let’s check the Universal Journal table ACDOCA to see how all these documents have been posted. Enter Transaction SE16N, which is the table data browser (Figure 4.33). Then, enter “ACDOCA” in the Table field, press (Enter), and enter the asset number in the Asset field.

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Figure 4.32 Displaying the Local Ledger Document

Figure 4.33 Table Data Browser

Proceed by clicking the button in the top menu. Then, you’ll see the documents relevant for this asset, as shown in Figure 4.34. Notice how we have documents with separate document numbers for the different ledgers, which in our case have the same amounts.

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Figure 4.34 Table ACDOCA Asset Documents

4.1.4 Acquisitions from Affiliated Companies In this process, we aren’t acquiring an asset from an external vendor, but from an affiliated company. This company is a different legal entity but in the same group. For example, if our US company buys an asset from the French branch of our parent holding company, that process would be an acquisition from an affiliated company. This acquisition is posted with a special transaction type, so that later in the consolidation process the acquisition is recognized as an intercompany transaction. To post an acquisition from an affiliated company, follow the application menu path Accounting • Financial Accounting • Fixed Assets • Posting • Acquisition • External Acquisition • ABZP - From Affiliated Company. Alternatively, you can enter Transaction ABZP directly. On the initial screen, shown in Figure 4.35, enter the company code, the already created asset number, and transaction type 150, which is for gross intercompany asset acquisition from an affiliated company. (Gross includes already posted depreciation, as opposed to net, where only the net book value is being capitalized.)

Figure 4.35 Acquisition from an Affiliated Company: Initial Screen

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Proceed by clicking the button. On the next screen, shown in Figure 4.36, enter the required posting parameters, as discussed earlier in Section 4.1.3.

Figure 4.36 Acquisition from an Affiliated Company: Transaction Data

When you’re ready with the data, click the Simulate button in the lower right corner to simulate the document, as shown in Figure 4.37.

Figure 4.37 Acquisition from an Affiliated Company: Simulating the Document

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Then, save the document by clicking the Post button in the lower right corner. The system will open the screen shown in Figure 4.38, which displays the document numbers posted according to the various accounting principles.

Figure 4.38 Acquisition from an Affiliated Company: Document Numbers

4.2 Assets Under Construction Assets under construction is a process when your company is building/constructing/ producing/developing an asset internally instead of purchasing an already made asset. In this section, we’ll examine assets under construction in detail, starting with the required configuration in the asset accounting. Then, we’ll show you how to use the process in the system to capitalize assets under construction directly and then in integration with investment management and project system.

4.2.1 Configuring Assets Under Construction Asset classes that will manage assets under construction need special configuration steps. You could have one or more asset classes that manage assets under construction. To create an asset class for assets under construction, follow the menu path Financial Accounting • Asset Accounting • Organizational Structures • Asset Classes • Define Asset Classes. The system will display asset classes already defined, as shown in Figure 4.39.

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Figure 4.39 Asset Classes List

Now, to create a new asset class, click on New Entries in the top menu or copy an existing asset class and configure the new class, as shown in Figure 4.40.

Figure 4.40 Creating an Asset Under Construction Class

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In this example, we’ll create an asset class for software to be produced internally and managed as an asset under construction. We’re already familiar with most of the settings in the asset class definition screen, as explained in Chapter 1, Section 1.4.2. What is important in this scenario is the Status of AuC section. For the other, regular asset classes, we selected No AuC or Summary management of AuC. However, for assets under construction, you’ll need to select one of the following two options: 쐍 Line item settlement

With this option, the asset under construction is settled to fixed assets. 쐍 Investment Measure

With this option, the asset under construction is not posted directly but is posted via a work breakdown structure (WBS) element (in the case of integration with project system) or an investment order (in the case of integration with investment management). For our example class, we selected Line Item Settlement and then saved our changes by clicking the Apply and then Save buttons. In a similar fashion, we’ll create a new asset class for fixtures used as investment measures, as shown in Figure 4.41.

Figure 4.41 Creating an Asset Under Construction Class as an Investment Measure

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This class we’ll use later in integration with project system in SAP S/4HANA. We’ll also create another class for buildings, which we’ll use for assets under construction in integration with investment management, as shown in Figure 4.42.

Figure 4.42 Creating the Building Assets Under Construction Class

Save your entries by clicking the Apply and then Save buttons. You’ll also need to assign a settlement profile to your company code. A settlement profile defines the valid and default receivers when settling assets under construction costs and defines other control parameters. To assign a settlement profile to a company code, follow the menu path Financial Accounting • Asset Accounting • Transactions • Capitalization of Assets under Construction • Define/Assign Settlement Profiles. The system will display the activities screen, as shown in Figure 4.43. We won’t define a new settlement profile, just assign an existing, standard profile. Double-click on the Assign Settlement Profile to Company Code activity. Then, assign settlement profile 50 to company code US10, as shown in Figure 4.44, which enables you to use assets under construction when integrating with investment management and project system.

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Figure 4.43 Settlement Profile Activities

Figure 4.44 Assigning a Settlement Profile

Save your entry by clicking the Save button. Now, let’s look at how you can use the various assets under construction processes with and without investment management or project system.

4.2.2 Capitalization of Assets Under Construction In this section, we’ll examine the process of capitalizing assets under construction without integration with investment management or project system. In this case,

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we’ll accumulate costs directly on the asset under construction and once the asset is completed, we’ll settle these costs to the final asset. Let’s look at an example where a company is developing a software system internally. We would first create an asset in s new assets under construction asset class created for software assets under construction. Then, we would post costs to that assets under construction, using one of the methods already discussed in the previous section on acquisitions. Finally, when the software is ready, we would create an asset master record in the regular software asset class and define a distribution rule to specify the receiver of the settlement. To enter distribution rules for the asset under construction, follow the application menu path Accounting • Financial Accounting • Fixed Assets • Posting • Capitalize Asset u. Const. • AIAB - Distribute. Alternatively, you can enter Transaction AIAB directly. On the initial screen, shown in Figure 4.45, enter the company code and the asset number of the asset under construction for which costs need to be settled.

Figure 4.45 Assets Under Construction Distribution Rules: Initial Screen

Proceed by clicking the Execute button. On the next screen, shown in Figure 4.46, you’ll see the line items posted on the asset under construction for each ledger. You can select items only for specific ledgers and accounting principles. Select items by selecting their checkboxes on their left, or you can select all items by selecting the checkbox at the top of the column. Then, follow the menu path More • Edit • Enter Distribution Rules. On the resulting screen, shown in Figure 4.47, enter the receiver of the settled costs, which is the final asset.

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Figure 4.46 Assets Under Construction Distribution: Selecting Line Items

Figure 4.47 Entering Distribution Rules

Go back by clicking the button. Now, all the line items are marked as green, as shown in Figure 4.48. Save by clicking the Save button. To execute the settlement, follow the application menu path Accounting • Financial Accounting • Fixed Assets • Posting • Capitalize Asset u. Const. • AIBU - Settle. Alternatively, you can enter Transaction AIBU directly.

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Figure 4.48 Maintained Distribution Rules

On the initial screen, shown in Figure 4.49, enter the company code and the asset under construction to be settled and then maintain the Document Date, Posting Date, and Asset Val. Date fields.

Figure 4.49 Assets Under Construction Settlement: Initial Screen

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You can first run the transaction in test mode to simulate the document to be posted and then execute in real mode by selecting/deselecting the Test Run checkbox. On the next screen, shown in Figure 4.50, you’ll see the line items settled for each ledger and accounting principle.

Figure 4.50 Assets Under Construction Settlement

4.2.3 Assets Under Construction with Investment Management Investment management is a process area in SAP S/4HANA that manages, controls, and budgets investments. While configuring and using investment management lies outside of the scope of this book, you’ll need to know that sometimes the assets under construction process is managed in integration with investment management. This case occurs when assets are being capitalized as part of a major project that is budgeted and executed within an investment program. The typical process of capitalizing assets under construction when integrating with investment management involves creating investment orders, which accumulate costs, which are settled to assets under construction. When creating an investment order, assets under construction could be automatically created. To create investment order, follow the application menu path Accounting • Investment Management • Internal Orders • Master Data • Special Functions • Order • KO01 Create. Alternatively, you can enter Transaction KO01 directly. On the initial screen, shown in Figure 4.51, enter a controlling area and the order type for investment orders.

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Figure 4.51 Create Investment Order Initial Screen

The order is organized into tabs. Under the Investments tab, shown in Figure 4.52, you’ll need to enter investment data such an investment profile and an investment program.

Figure 4.52 Investment Order: Investment Data

Click on Settlement Rule in the top menu to maintain the rule for settlement for the order, as shown in Figure 4.53. Enter receiving category FXA in the Cat. column, which indicates that the receiver is a fixed asset. Enter an existing asset as the receiving asset. You can also enter multiple asset receivers, but in this case, you must specify

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the percentage of costs each will receive in the % column. If you have one receiver, that receiver will receive 100% of the costs.

Figure 4.53 Investment Order: Settlement Rule

Save the order and then release it by clicking the Release button, as shown in Figure 4.54.

Figure 4.54 Releasing an Investment Order

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Next, you’ll accumulate various costs on the order. After the asset is ready to be capitalized, you’ll perform the settlement of the order by following the application menu path Accounting • Investment Management • Internal Orders • Period-End Closing • Single Functions • Settlement • KO88 - Individual Processing. Alternatively, you can enter Transaction KO88 directly. Then, enter the order number and settlement period, as shown in Figure 4.55.

Figure 4.55 Order Settlement

Execute the settlement by clicking the Execute button. This step settles the investment order cost to the linked asset.

4.2.4 Assets Under Construction with Project System In complex projects, you can (and we recommend) capitalizing assets under construction in integration with project system. Project system is a process area in SAP S/4HANA for managing big, complex projects. You would define a project, and in its hierarchical structure, you would define the various tasks that comprise that project. The main building block of the project is a work breakdown structure (WBS) element. Similar to investment orders, you can accumulate costs on the WBS element level, and then the WBS element is settled to the asset under construction. When you create a WBS element, you can automatically create an asset under construction, and you can maintain the settlement rule of an asset.

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To create a WBS element, follow the application menu path Accounting • Project System • Project • Special Maintenance Functions • Work Breakdown Structure (WBS) • Single Element • CJ11 - Create. Alternatively, you can enter Transaction CJ11 directly. On the initial screen, shown in Figure 4.56, select an already defined project and enter the WBS element to be created. The names of WBS elements usually start with the project name, followed by an agreed-upon coding mask that reveals the hierarchy of elements. For example, INST-01 is on a higher level than INST-01-01, and then, the level of INST-01-01 may have other WBS elements such as INST-01-02, INST-01-03, INST-01-04, and so on.

Figure 4.56 Create WBS Element Initial Screen

The WBS element is organized into tabs. As shown in Figure 4.57, the Assignments tab contains important control parameters, such as the company code, business area, profit center, and so on.

Figure 4.57 WBS Element: Assignments Data

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Click on the Settlement Rule in the top menu to enter the settlement receiver(s), as shown in Figure 4.58. Go back and save the WBS element.

Figure 4.58 WBS Element: Settlement Rule

To settle the costs accumulated on a WBS element to an asset, follow the application menu path Accounting • Project System • Financials • Period-End Closing • Single Functions • Settlement • CJ88 - Individual Processing. Alternatively, you can enter Transaction CJ88 directly. Enter the WBS element to settle and the period of the settlement, as shown in Figure 4.59.

Figure 4.59 WBS Element: Settlement

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Execute by clicking the Execute button. Costs will be settled on the asset from the settlement rule of the WBS element. With this step, you’ve completed the asset capitalization process, and now we’ll examine the asset transfer process.

4.3 Transfers An asset transfer is the process of transferring value from one asset to another. This transfer could occur within a single company code or between company codes. We’ll start by teaching you how to configure the processes and then guide you on how to post asset transfers in SAP S/4HANA.

4.3.1 Configuring Transfers An asset transfer represents the acquisition of one asset and the retirement of another asset. Therefore, you’ll need to configure asset transaction types for acquisitions and retirements that will be used during the transfer process. To configure transaction types for transfers, follow the menu path Financial Accounting • Asset Accounting • Transactions • Transfer Postings • Define Transaction Types for Transfers. On the first screen, shown in Figure 4.60, choose between asset transaction types for acquisitions and retirements.

Figure 4.60 Transfer Transaction Types Activities

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Double-click on Define Transaction Types for Retirement Transfers see a list of the standard retirement transaction types for transfers, as shown in Figure 4.61.

Figure 4.61 Retirement Transaction Types for Transfers

You’ll see various transaction types that have been defined for various situations, such as prior-year or current-year acquisitions, assets under construction, and so on. Double-click transaction type 300 Retirmt transfer of prior-yr acquis. frm cap.asset to review its settings. Its configuration details are shown in Figure 4.62. Notice that we’ve selected the Deactivate Fixed Asset checkbox because this transaction type is for retirements. Also, this transaction is a credit transaction because the retirement process credits the fixed asset. Notice also that the transaction type does not post to an affiliated company as indicated in the Do not post to affiliated co. radio button since this transaction type is intended for transfers within the same company code. Also important is transaction types 310, assigned as the offsetting transaction type, and transaction type 320, assigned as the transaction type to be used for acquisitions in the same year. Also, this transaction type posts a net value, which means that no accumulated depreciation will be transferred. If you need to make any changes to this or other standard transaction types, copy the standard transaction type that most closely meets your needs and create a new transaction type in the custom name range, starting with Z or Y.

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Figure 4.62 Retirement Transaction Types for Transfers: Details

Going back to the choose activities screen, shown earlier in Figure 4.60, double-click on Define Transaction Types for Acquisition Transfers. Then, you’ll see defined transaction types for acquisitions in the transfer process, as shown in Figure 4.63.

Figure 4.63 Acquisition Transaction Types for Transfers

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Double-click on type 310 Acquirg transfer of prior-yr acquis. frm cap.asset revelas to review its settings, as shown in Figure 4.64.

Figure 4.64 Acquisition Transaction Type for Transfers: Details

Notice that we have a debit transaction type, and the Capitalize Fixed Asset checkbox is selected. This transaction type doesn’t post to the affiliated company and posts net, which means that no accumulated depreciation will be transferred. For intercompany asset transfers, you’ll need to define a transfer variant, which determines which transaction types are used in the sending and receiving company codes and the transfer method. Start by following the menu path Financial Accounting • Asset Accounting • Transactions • Transfer Postings • Intercompany Asset Transfers • Automatic Intercompany Asset Transfers • Define Transfer Variants. On the activities selection screen shown in Figure 4.65, double-click on Define Transfer Variant.

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Figure 4.65 Transfer Variant: Select Activity

You’ll see a list of the defined transfer variants, as shown in Figure 4.66. Notice that various transfer variants have been defined, for example, for the gross method, where depreciation values will also be transferred, and the net method, where only the net book value of the asset will be transferred.

Figure 4.66 Transfer Variants

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Select variant 1 and click on Maintain allowed entries, which takes you to the variant configuration screen, shown in Figure 4.67.

Figure 4.67 Transfer Variant: Configuration Screen

Two separate sets of entries are based on the Rel. Type field, depending on whether the company codes involved in the transfer are independent units or not, as follows: 쐍 01: Legally independent units 쐍 02: Legally one unit

The Trans. Method field defines the method of transfer, such as gross, net, with adoption of values, and so on. In the Retirement tr. type and Acq. Trans.typ. fields, enter the transaction types for retirement and acquisition during the transfer. If you’re going to make changes to the standard transfer variants, again a best practice is to copy them to create new custom-made variant in the custom name range.

4.3.2 Transferring Assets within a Company Code You’ll need to post an asset transfer within a company code when transferring from one asset to another asset within the same legal entity , for example from one business unit to another Start by following the application menu path Accounting • Financial Accounting • Fixed Assets • Posting • Transfer • ABUMN - Transfer within Company Code. Alternatively, you can enter Transaction ABUMN directly.

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Initially, the system will prompt you to enter a company code. Enter “US10,” as shown in Figure 4.68.

Figure 4.68 Entering a Company Code

Proceed by clicking the button. On the next screen, shown in Figure 4.69, enter the asset to be transferred in the Asset field.

Figure 4.69 Entering the Asset to Transfer

You have the option of entering a specific accounting principle and depreciation area for the transfer. If you leave these fields empty, the transfer will be valid for all accounting principles and depreciation areas.

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In the Transfer To section, you can enter an existing asset master record to which to transfer the asset, or you can select the New Asset radio button and then click the Master Data button to the right to create a new asset master to receive the transfer. If you need to post a partial asset transfer, click on the Partial Transfer tab, shown in Figure 4.70.

Figure 4.70 Partial Transfer

On this screen, you can enter a specific amount to be transferred in the Amount Posted field, enter a percentage from the asset value in the Percentage Rate field, or enter a particular asset quantity for quantity-managed assets in the Quantity field. Once ready to complete the data entry, click on Simulate to display the proposed document, as shown in Figure 4.71. Save the document by clicking the Post button. Then, the system will show you a screen with the posted document numbers, as shown in Figure 4.72. Notice that the system posts separate documents for each accounting principle.

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Figure 4.71 Asset Transfer: Simulation

Figure 4.72 Asset Transfer: Posted Documents

4.3.3 Intercompany Asset Transfers You would perform an intercompany asset transfer when you need to transfer an asset from one company code to another. This process is needed, for example, when the ownership of an existing asset is changed between legal entities of the same group. To post an intercompany asset transfer, follow the application menu path Accounting • Financial Accounting • Fixed Assets • Posting • Transfer • ABT1N - Intercompany Asset Transfer. Alternatively, you can enter Transaction ABT1N directly.

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Enter the required data, as shown in Figure 4.73. Similar fields are available when transferring within a company code as discussed in the previous section. Again, you can enter an existing receiving asset or create a new one.

Figure 4.73 Intercompany Asset Transfer

As the sale is being transacted from one company code to another, you’ll need to choose an option in the Specifications for Revenue section. You can select No Revenue, enter a particular revenue amount in the Manual Revenue field, or enter a depreciation area in the Rev. from NBV field. From your settings, the system will determine the revenue based on the net book value of the asset. You can also make partial transfer using the Partial Transfer tab, shown in Figure 4.74. You can enter a particular amount to be transferred in the Amount Posted field, enter a percentage rate from the asset value in the Percentage Rate field, or enter a specific asset quantity for quantity-managed assets in the Quantity field. Once satisfied with the data you’ve entered, post the document by clicking the Post button.

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Figure 4.74 Intercompany Asset Transfer: Partial Transfer

4.4 Retirement Asset retirement is the process of disposing an asset either by selling it or by scrapping it (retirement without revenue). Before learning how to use these processes, let’s make the necessary configuration settings.

4.4.1 Configuring Asset Retirement You’ll need to assign further general ledger accounts for the asset retirement process. To assign accounts for retirement, follow the menu path Financial Accounting • Asset Accounting • Transactions • Retirements • Assign Accounts. Select a chart of accounts by selecting its checkbox, as shown in Figure 4.75.

Figure 4.75 Selecting a Chart of Accounts

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Click on Account Determination. Then, choose an account determination by selecting its checkbox, as shown in Figure 4.76. You can select only one entry at a time.

Figure 4.76 Selecting an Account Determination

Click on Balance Sheet Accounts. Then you will see the screen where you assign balance sheet accounts, as shown in Figure 4.77.

Figure 4.77 Selecting a Depreciation Area

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As with other account assignments, you’ll need to define the accounts separately for each depreciation area that posts in the general ledger. Double-click on each depreciation area to maintain their accounts. Figure 4.78 shows the accounts you’ll need to configure.

Figure 4.78 Assigning Retirement Accounts

On this screen, you’ll need to fill out the following fields: 쐍 Loss Made on Asset Retirement w/o Reven.

This field is the loss account posted in case of scrapping. 쐍 Clearing Acc. Revenue from Asset Sale

This account is used to clear the net revenue from an asset sale. 쐍 Gain From Asset Sale

This account is posted in case of gain from an asset sale. 쐍 Loss From Asset Sale

This account is posted in case of loss from an asset sale. 쐍 Clear.revenue sale to affil.company

This account is used to clear the net revenue from an asset sale to an affiliated company. Assign accounts for all these fields in all depreciation areas and save your entries.

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4.4.2 Asset Sales with a Customer Retiring an asset by selling the asset is a common process. You’ll need to post a customer invoice and, at the same time, retire the asset. To post an asset sale with a customer, follow the application menu path Accounting • Financial Accounting • Fixed Assets • Posting • Retirement • Retirement w/Revenue • F-92 - With Customer. Alternatively, you can enter Transaction F-92 directly. On the first screen, shown in Figure 4.79, enter the document header information and enter, as first line item, posting key 01 for customer debit. Next, select the customer account number.

Figure 4.79 Asset Sale with a Customer

Proceed by pressing (Enter). On the next screen, shown in Figure 4.80, enter amount for the customer line item; enter, as a second line item, posting key 50 for general ledger account credit; and enter a revenue account. Proceed by pressing (Enter). On the next screen, shown in Figure 4.81, enter the amount for the second line item. Note that you shouldn’t enter an asset number on this screen. Instead, select the Asset retirement checkbox.

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Figure 4.80 Asset Sale: First Line Item

Figure 4.81 Asset Sale: Second Line Item

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Proceed by pressing (Enter). Now, the system opens a popup window where you’ll need to enter the asset’s information, as shown in Figure 4.82.

Figure 4.82 Asset Sale: Entering Asset Information

Enter an asset number and a value date, but don’t change the standard transaction type proposed. If you select the Compl. Retirement checkbox, the whole asset will be retired. You can also enter a specific amount, percentage, or quantity to be retired. Proceed by pressing (Enter). Then, post the document by clicking the Post button. Now, you can display the document by the following the path More • Document • Display in the top menu, which displays the document, as shown in Figure 4.83.

Figure 4.83 Asset Sale with Customer: Invoice

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Note that this document is just the customer invoice document, which credits the revenue and debits the customer account. To see the asset retirement document, click on Asset Accounting from the top menu. Then, you’ll see both the asset retirement document and the customer invoice, as shown in Figure 4.84.

Figure 4.84 Asset Sale with Customer: Asset Accounting View

As you’ll see, the system creates two separate documents: 쐍 1800000000 for the customer invoice 쐍 100000016 for the asset retirement

4.4.3 Asset Sales without a Customer You can also post an asset sale without a customer against the predefined clearing account we configured earlier in Figure 4.78. Start by following the application menu path Accounting • Financial Accounting • Fixed Assets • Posting • Retirement • Retirement w/Revenue • ABAON - Asset Sale Without Customer. Alternatively, you can enter Transaction ABAON directly. On the screen shown in Figure 4.85, which should already be familiar from other asset transactions, enter the asset to be sold and specify dates. Then, select a depreciation area from which to determine the revenue or enter manual revenue in the Manual Revenue field.

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Figure 4.85 Asset Sale without a Customer

Post the document by clicking the Post button. The system displays the posted document numbers in the screen shown in Figure 4.86.

Figure 4.86 Asset Sale without Customer: Document Numbers

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Display the document with Transaction FB03, which shows the document posted, as shown in Figure 4.87.

Figure 4.87 Asset Sale without Customer: Document Display

4.4.4 Asset Retirement by Scrapping When an asset is deemed no longer useful, you may want to post an asset retirement by scrapping. In this case, no revenue is generated, and any remaining net book value on the asset goes to the loss from asset retirement account. To post an asset retirement by scrapping, follow the application menu path Accounting • Financial Accounting • Fixed Assets • Posting • Retirement • ABAVN - Asset Retirement by Scrapping. Alternatively, you can enter Transaction ABAVN directly. On the screen shown in Figure 4.88, enter the asset to be scrapped and specify the relevant dates. Under the Partial retirement tab, shown in Figure 4.89, you can enter a specific amount, quantity, or percentage from the asset to be retired.

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Figure 4.88 Asset Retirement with Scrapping

Figure 4.89 Asset Retirement with Scrapping: Partial

Post the document by clicking the Post button. As shown in Figure 4.90, the document has been posted in the leading ledger. The remaining net book value is posted to the loss from asset retirement account.

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Figure 4.90 Asset Retirement with Scrapping: Document Display

4.5 Manual Value Corrections Sometimes, you’ll need to manually change the value of an asset to reflect changes in its condition or its usability or changes in the economic conditions that affect its use. Such changes could increase or decrease the value of the asset. In this section, we’ll examine the process of writing up and writing down the value of an asset and the process of posting manual and unplanned depreciation. As usual, we’ll start by showing you the required configuration steps.

4.5.1 Configuring Manual Asset Value Corrections Posting various manual value correction transactions requires the use of different transaction types. You’ve already seen how to configure asset transaction types throughout this chapter. Now, you’ll see how you can configure default transaction types to be used in manual value correction processes. To configure default transaction types, follow the menu path Financial Accounting • Asset Accounting • Transactions • Specify Default Transaction Types. You’ll see a list of various asset processes and the default transaction types to use, as shown in Figure 4.91.

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Figure 4.91 Configuring Default Transaction Types

Notice that, for example, unplanned depreciation uses transaction type 640, writeups use 700, and so on. Recall also that we used transaction type 210 for asset sales with customers, which was also set up with this configuration transaction. Unless you have created specific custom transaction types for these processes, leave the assignments as they are.

4.5.2 Write-Ups A write-up is a process to manually increase already posted depreciation. To post a write-up, follow the application menu path Accounting • Financial Accounting • Fixed Assets • Posting • Manual Value Correction • ABZU - Write-Up. Alternatively, you can enter Transaction ABZU directly. Enter the header data for the posting, as shown in Figure 4.92. Enter a company code and an asset number, while leaving the proposed transaction type 700 unchanged. On the next screen, shown in Figure 4.93, enter the dates and the write-up amount of the ordinary and/or special depreciation posted.

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Figure 4.92 Write-Up Header Data

Figure 4.93 Write-Up Data Entry

Post the document by clicking the Post button.

4.5.3 Write-Downs A write-down is a process to manually reduce the value of an asset. You can adjust both the acquisition value and the posted depreciation.

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To post a write-down, follow the application menu path Accounting • Financial Accounting • Fixed Assets • Posting • ABAW - Bal. Sheet Revaluation. Alternatively, you can enter Transaction ABAW directly. With this transaction, not only can you post write-down but also perform other manual value correction transactions, based on the transaction type chosen. On the header screen, shown in Figure 4.94, enter a company code and an asset number and enter transaction type “897,” which indicates that the write-down is for the current year.

Figure 4.94 Write-Down Header Data

On the next screen, shown in Figure 4.95, enter the date specifications and the writedown acquisition and depreciation values.

Figure 4.95 Write-Down Data Entry

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Post the document by clicking the Post button. This step posts the asset accounting document, and the relevant financial document will be posted with the next depreciation run.

4.5.4 Manual Depreciation Posting depreciation is an automatic, periodic process—usually monthly. However, for some assets, you may need to manually post depreciation. Manual depreciation uses the special depreciation key MANU. In this case, no automated depreciation has been calculated on the asset. You’ll calculate the depreciation by yourself manually and post the depreciation to the asset by following the application menu path Accounting • Financial Accounting • Fixed Assets • Posting • Manual Value Correction • ABMA - Manual Depreciation. Alternatively, you can enter Transaction ABMA directly. On the header screen, shown in Figure 4.96, enter a company code and asset number while leaving transaction type as “600,” which indicates that this post is for manual ordinary depreciation on a prior-year acquisition.

Figure 4.96 Manual Depreciation Header Data

On the next screen, shown in Figure 4.97, enter the dates and the manual depreciation value. Post the document by clicking the Post button.

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Figure 4.97 Manual Depreciation Data Entry

4.5.5 Unplanned Depreciation Unplanned depreciation is used when you need to post depreciation amounts to an asset that are additional to the ordinary depreciation calculated by the system. This capability is needed, for example, when a government allows additional depreciation expenses for certain assets. To post unplanned depreciation, follow the application menu path Accounting • Financial Accounting • Fixed Assets • Posting • Manual Value Correction • ABAA Unplanned Depreciation. Alternatively, you can enter Transaction ABAA directly. On the header screen, shown in Figure 4.98, enter a company code and an asset number while leaving the transaction type as “640,” which indicates that this post is for unplanned depreciation on a prior-year acquisition. On the next screen, shown in Figure 4.99, enter the dates and manual depreciation value. Post the document by clicking the Post button.

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Figure 4.98 Unplanned Depreciation Header Data

Figure 4.99 Unplanned Depreciation Data Entry

4.6 Summary In this chapter, we covered a lot of ground. You learned how to configure and use all the relevant transactions you’ll encounter in your day-to-day work with asset accounting. You learned all asset acquisition processes, such as acquisitions from external vendors, acquisitions with automatic offsetting entries, and acquisitions from affiliated

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companies. Then, we taught you how to configure and use the assets under construction functionality and showed you how it integrates with investment management and project system. You also learned how to configure and use two kinds of asset transfers—within a single company code and through an intercompany transfer. Then, we discussed various ways you can retire an asset—through a sale with a customer, a sale without a customer, and through asset retirement by scrapping. Finally, you learned about several asset manual value correction processes, such as write-ups, write-downs, manual depreciation, and unplanned depreciation. Now that you’re fully familiar with all the possible day-to-day asset transactions, in the next chapter, you’ll learn how to configure and use the periodic processing functionality in asset accounting.

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Chapter 5 Periodic Processing In this chapter, we’ll provide step-by-step instructions for configuring various periodic processes based on multiple valuation concepts in asset accounting. We’ll also explain how you can avoid common errors that may occur in the periodic processing of fixed assets.

So far, you’ve learned how to create assets and post various business transactions to them. But the valuation of fixed assets is performed by periodic processing procedures, which are important because they enable you to value your assets according to multiple valuation frameworks and in line with legal and business requirements. In this chapter, you’ll learn in detail how to configure and use the periodic processing capabilities of asset accounting. You’ll learn how to configure and use the depreciation and revaluation programs. Finally, we’ll examine the year-end closing process in asset accounting in detail.

5.1 Depreciation Depreciation is a method of allocating the cost of a fixed asset over its useful life. Every asset has some value. When you acquire an asset, you incur a certain expense, which for many assets could be quite significant. But you’re not allowed to immediately expense that cost in your financial statements, like you would do with the purchase of materials, for example. Instead, the cost of the asset is recognized in your financial statements gradually over the course of its useful life. Different categories of assets have different useful lives. In many countries, the government prescribes the useful life of the asset, for example, 5 years for cars, 10 years for machinery, and so on. Several methods of depreciation exist. The straight-line method of depreciation depreciates the same value from the asset each year, while in the accelerated depreciation method you would depreciate more in the beginning of the useful life of the

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asset. Various other methods exist, but the goal of all of them is to represent fairly the current value of the asset. In SAP S/4HANA, depreciation is accomplished with the depreciation posting program. This program is an automatic process that depreciates all relevant assets based on the configuration of the system and the depreciation terms of the assets. In this section, we’ll first examine the various configuration transactions and techniques and show you how to properly configure your depreciation process. Then, we’ll show you how to execute and analyze depreciation.

5.1.1 Configuring Depreciation You’ll need to maintain a number of settings at the depreciation area level and at the depreciation key level. We’ll examine these settings in detail in this section, starting with configuring the depreciation areas to post depreciation.

Depreciation Area Configuration for Depreciation Posting Let’s start the depreciation configuration process by defining which depreciation areas should post depreciation. We’ll define depreciation areas for ordinary, special, and unplanned depreciation. Ordinary depreciation is planned depreciation during the normal use of an asset. Special depreciation is a deduction on an asset from a tax-based point of view. This kind of depreciation is based on tax percentages provided by tax authorities, usually without considering the normal use of the asset. Unplanned depreciation is used to account for unusual circumstances, such as unexpected damage that leads to a permanent decrease in the value of the asset. To define depreciation areas for posting unplanned depreciation, follow the menu path Financial Accounting • Asset Accounting • Depreciation • Ordinary Depreciation • Determine Depreciation Areas. On the screen shown in Figure 5.1, indicate the depreciation areas in which ordinary depreciation should be posted by selecting the checkboxes in the Ord. depr. column. Similarly, you’ll need to define depreciation areas in which special depreciation should be posted. Start by following the menu path Financial Accounting • Asset Accounting • Depreciation • Special Depreciation• Determine Depreciation Areas. On the screen shown in Figure 5.2, select the checkboxes under the Spec. depr. column for the depreciation areas in which special depreciation should be posted.

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Figure 5.1 Depreciation Areas for Ordinary Depreciation

Figure 5.2 Depreciation Areas for Special Depreciation

Then, to configure which depreciation areas should receive unplanned depreciation posts, follow the menu path Financial Accounting • Asset Accounting • Depreciation • Unplanned Depreciation• Determine Depreciation Areas.

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On the screen shown in Figure 5.3, select the checkboxes under the Udep. column for the depreciation areas that may receive unplanned depreciation posts.

Figure 5.3 Depreciation Areas for Unplanned Depreciation

In the next configuration activity, you’ll assign depreciation accounts. Start by following the menu path Financial Accounting • Asset Accounting • Depreciation • Ordinary Depreciation • Assign Accounts. On the first screen, shown in Figure 5.4, select the checkbox of a chart of depreciation and then click on Account Determination.

Figure 5.4 Select Chart of Depreciation

On the next screen, shown in Figure 5.5, you’ll see a list of already defined account determinations. For each account determination, you’ll need to define depreciation accounts.

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Figure 5.5 Selecting an Account Determination

Let’s select the account determination for furniture and fixtures by selecting the checkbox next to the appropriate entry and clicking on Ordinary Depreciation. On the next screen, shown in Figure 5.6, you’ll see the depreciation areas that post to the general ledger, to which we need to assign accounts.

Figure 5.6 Selecting a Depreciation Area

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You must make assignments separately for each depreciation area. Double-click on an area to assign accounts, as shown in Figure 5.7.

Figure 5.7 Assigning Depreciation Accounts

At a minimum, you must assign the following accounts on this screen: 쐍 Acc.dep. accnt.for ordinary depreciation

This account is the balance sheet account to which the accumulated depreciation is posted. 쐍 Expense account for ord.deprec.

This account is the expense sheet account to which the depreciation cost is posted. Optionally, you can also assign accounts for the following: 쐍 Revenue from write-up on ord.deprec.

This account is posted for revenue from corrections of ordinary depreciation through write-ups. 쐍 Reval. accumulated ord.depreciation

This account is the balance sheet account for revaluations of accumulated ordinary depreciation from previous years. 쐍 Offsetting accnt: Reval. ordinary deprc.

This account is the offsetting account for revaluations of accumulated ordinary depreciation from previous years.

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Go through all depreciation areas and account determinations and assign accounts as needed. For account determinations for asset classes that don’t post depreciation (such as land, for example, since land is not a depreciable asset), you don’t need to assign depreciation accounts. Similarly, if you’re going to post special or unplanned depreciation, you’ll also need to assign accounts for them. To assign accounts for special depreciation, follow the menu path Financial Accounting • Asset Accounting • Depreciation • Special Depreciation • Assign Accounts. Figure 5.8 shows the assignment for special depreciation accounts. These special accounts could be the same as the ordinary depreciation account or a different depreciation account, depending on your requirements.

Figure 5.8 Assigning Special Depreciation Accounts

Note that, in our example, we only have depreciation area 10, since this depreciation area is the only one configured to post to the general ledger and to post special depreciation. To assign accounts for unplanned depreciation, follow the menu path Financial Accounting • Asset Accounting • Depreciation • Unplanned Depreciation • Assign Accounts. Assign the accounts as shown in Figure 5.9. You’ll need to assign balance sheet and expense accounts to which the unplanned depreciation will be posted in the general ledger. You may want to assign different accounts from the ordinary depreciation accounts if your company requires that unplanned and ordinary depreciation should be posted to different general ledger accounts.

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Figure 5.9 Assigning Unplanned Depreciation Accounts

Depreciation Key Configuration A depreciation key controls how the depreciation is calculated. This key is a collection of various configuration settings, such as valuation methods and period control methods. Each asset has a depreciation key assigned on the depreciation area level. Different depreciation areas for the same asset could have different depreciation keys, which provides for different valuations on the depreciation area level. Before configuring the depreciation key, you’ll need to configure the various calculation methods assigned to it. A calculation method determines how depreciation is calculated. The following calculation methods are available: 쐍 Base methods 쐍 Declining-balance methods 쐍 Maximum amount methods 쐍 Multi-level methods 쐍 Period control methods

We’ll start with the definition of base calculation methods, which are independent of the chart of depreciation. To define base methods, follow the menu path Financial Accounting • Asset Accounting • Depreciation • Valuation Methods • Depreciation Key • Calculation Methods • Define Base Methods. On the screen shown in Figure 5.10, you’ll see the standard base methods provided by SAP. Normally, these base methods will be sufficient for most companies, but if

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needed, you can copy one to create your own custom base method in the custom name range.

Figure 5.10 Defining Base Methods

Double-click on the 0009 Ordinary: percentage from life (curb) method to examine its properties. Figure 5.11 shows the configuration of the base method.

Figure 5.11 Base Method Configuration

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The following fields are configured on this screen: 쐍 Type Of Depreciation

In this field, choose between ordinary, special tax, or interest depreciation. 쐍 Dep. Method

In this field, select the depreciation method from those provided by SAP, such as percentage from useful life. 쐍 Treatment of end of depreciation

These settings define what happens when the end of an asset’s useful life is reached. In the next step, you can define declining-balance methods by following the menu path Financial Accounting • Asset Accounting • Depreciation • Valuation Methods • Depreciation Key • Calculation Methods • Define Declining-Balance Methods. On the screen shown in Figure 5.12, you’ll see already defined declining-balance methods.

Figure 5.12 Defining Declining Balance Methods

In the Dec. Factor column, you can enter a multiplication factor to determine the depreciation percentage rate for declining-balance depreciation. Then, the system multiplies by this factor the depreciation percentage rate determined by the total useful life. You can also define upper and lower limits for the depreciation percentage rate in the Max. Perc. and Min. Perc. columns. You can also configure maximum amount methods. These methods contain maximum depreciation amounts that should not be exceeded before a certain calendar date.

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To configure maximum amount methods, follow the menu path Financial Accounting • Asset Accounting • Depreciation • Valuation Methods • Depreciation Key • Calculation Methods • Define Maximum Amount Methods. The screen shown in Figure 5.13 shows you the methods already defined in the system.

Figure 5.13 Defining Maximum Amount Methods

Let’s examine the US1 Limits Referring to Luxury Cars method. Select the checkbox next to the method and click on Maximum Amounts. On the next screen, shown in Figure 5.14, define the maximum amount that should not be exceeded by the Valid To date.

Figure 5.14 Maximum Amount Configuration

You can also configure multi-level methods. These methods have more than one level, with different depreciation calculation methods during the life of an asset.

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To configure multi-level methods, follow the menu path Financial Accounting • Asset Accounting • Depreciation • Valuation Methods • Depreciation Key • Calculation Methods • Define Multi-Level Methods. The screen shown in Figure 5.15 shows you the methods already defined in the system.

Figure 5.15 Defining Multi-Level Methods

Select method 002 by selecting the checkbox next to it and then click on Levels. On the next screen, shown in Figure 5.16, you’ll define the levels of the method.

Figure 5.16 Multi-Level Configuration

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As shown in Figure 5.16, we defined different depreciation percentage rates for each level. The next step is to check the period control methods. The period control method defines the time periods that determine the start and end dates for depreciation. To define period control, follow the menu path Financial Accounting • Asset Accounting • Depreciation • Valuation Methods • Period Control • Maintain Period Control. On the screen shown in Figure 5.17, you’ll define the period control methods only as configuration objects.

Figure 5.17 Maintaining Period Control

SAP provides many period control methods out of the box that should meet most business requirements. If you need another method, you can create one on this screen. In the next step, you’ll define the calendar assignments for each period control method. Start by following the menu path Financial Accounting • Asset Accounting • Depreciation • Valuation Methods • Period Control • Define Calendar Assignments. As shown in Figure 5.18, for each period control and period, define the starting date for depreciation calculation in the Mo and Dy columns.

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Figure 5.18 Period Control Calendar Assignments

Finally, it is time to configure our depreciation keys with the methods we defined so far. To configure depreciation keys, follow the menu path Financial Accounting • Asset Accounting • Depreciation • Valuation Methods • Depreciation Key • Maintain Depreciation Key. The first screen, shown in Figure 5.19, provides a list of already defined depreciation keys. SAP provides numerous standard depreciation keys, which could be used out of the box.

Figure 5.19 Configuring Depreciation Keys

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If you need a custom depreciation key, a best practice is to copy the standard key that most closely fulfills your requirements and to name the new key in the custom name range starting with Z or Y. Double-click on LINA Str.-line frm acq.value pro rata w/curb + intrst, which is a standard depreciation key for straight-line depreciation, to review its properties, as shown in Figure 5.20.

Figure 5.20 Depreciation Key Properties

You can configure various settings on this screen, such as allowing acquisitions only in the capitalization year, setting up period control according to fiscal years, barring ordinary depreciation with special depreciation, and so on. Click on Assignment of Calculation Methods to check the assignment of the calculation methods. As shown in Figure 5.21, we assigned calculation methods to the depreciation key base method, declining-balance method, period control method, and multi-level method. In the Class field, we’ll select straight-line depreciation, as this method should depreciate based on the straight-line method of depreciation. Check all the depreciation keys to be used for your assets and make changes in custom depreciation keys if needed.

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Figure 5.21 Assignment of Calculation Methods

5.1.2 Executing Depreciation Runs The depreciation run is a periodic processing program in asset accounting that posts planned depreciation to all relevant assets. Most companies execute the depreciation run every month, although you could run this program on a quarterly or yearly basis. To execute a depreciation run, follow the application menu path Accounting • Financial Accounting • Fixed Assets • Periodic Processing • Depreciation Run • AFAB - Execute. Alternatively, you can enter Transaction AFAB directly. On the selection screen shown in Figure 5.22, enter the company code, fiscal year, and posting period for which to run the depreciation. You can optionally specify an accounting principle if you want to limit the run to one or more specific accounting principles. You can choose the Totals Log radio button if you want to see only the depreciation totals or choose the Detailed Log radio button to see the depreciation for each asset. For our example, select the Detailed Log radio button and select the Test Run checkbox, so you can see the results and possible errors before actually executing the run. Proceed by clicking the Execute button.

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Figure 5.22 Execute Depreciation Run Selection Screen

The system issues the message shown in Figure 5.23, which notifies you that, in online mode, you can process only up to 1,000 assets. This limitation is in place because the depreciation program consumes a great deal of resources, so if you have more than 1,000 assets, even in test mode, you should run the program in background mode.

Figure 5.23 Online Processing Message

Proceed by clicking the Yes button. On the next screen, shown in Figure 5.24, you’ll see the proposed depreciation amounts for each asset.

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Figure 5.24 Depreciation Testing Run

Click on the button in the top menu to access the message log, as shown in Figure 5.25. If any errors arose during the depreciation run, you’ll see text in red.

Figure 5.25 Message Log

If you’re satisfied with the depreciation test results, go back, deselect the Test Run checkbox, and execute the program in real mode. The program must run in the background. Start by following the top menu path More • Program • Execute in Background.

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Then, the system will prompt you to specify background print parameters, as shown in Figure 5.26.

Figure 5.26 Background Print Parameters

You can specify the printer on which depreciation results should be printed in the Output Device field. Continue by pressing (Enter). Then, you’ll see the screen shown in Figure 5.27, where you must specify the start time for executing the program in the background.

Figure 5.27 Start Time

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You can enter specific time and date with the Date/Time button, schedule the run after another job or event, or execute the run immediately with the Immediate button. Save your settings by clicking the Save button. On the bottom of the screen, you’ll see the information message shown in Figure 5.28. This message lets you know that program FAA_DEPRECIATION_POST, which is the depreciation run program, has been scheduled.

Figure 5.28 Background Job Scheduling Message

You can also check the status of the background execution with Transaction SM37. In this transaction, you can select the background job scheduled by user name and date, as shown in Figure 5.29.

Figure 5.29 Job Selection

Proceed by clicking the Execute button. You’ll see the job name and its status, as shown in Figure 5.30. Once the job has finished, the status will change to Finished and be displayed in green.

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Figure 5.30 Job Status

Note that most companies schedule their depreciation runs in the background and to run on specific dates based on the month-end schedule, rather than manually executing Transaction AFBP at the end of each month. Then, you could monitor the job status, as shown in Figure 5.30, to analyze errors, which we’ll discuss next.

5.1.3 Displaying Logs You can display the logs for already executed depreciation runs, which is useful for analyzing depreciation. To display the depreciation log, follow the application menu path Accounting • Financial Accounting • Fixed Assets • Periodic Processing • Depreciation Run • AFBP - Display Log. Alternatively, you can enter Transaction AFBP directly. On the selection screen shown in Figure 5.31, enter the company code, fiscal year, posting period, and (optional) accounting principle for the log you would like to check. Proceed by clicking the Execute button. Next, you’ll see the posting log for the selected period. As shown in Figure 5.32, three separate entries are displayed on the left, which correspond to the three accounting principles for which depreciation has been executed.

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Figure 5.31 Posting Log Selection Screen

Figure 5.32 Displaying the Posting Log

Once you click on one of the entries on the left, on the right, you’ll see the document(s) posted for that accounting principle and any relevant messages.

5.1.4 Analyzing Errors When you perform a depreciation run, you may run into some errors. Some common causes of error include the following: 쐍 Missing general ledger accounts for depreciation 쐍 Missing or wrong cost center assignments 쐍 Missing or wrong profit center assignments

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쐍 Not maintained number ranges 쐍 Wrong depreciation terms (For example, if the asset should not be depreciated but

has depreciation terms that require depreciation, the system will try to depreciate the asset but won’t find any depreciation accounts.) If you’ve scheduled your depreciation run as a background job for each month, you’ll find errors by analyzing the log in Transaction SM37, as shown in Figure 5.30. In this transaction, click the Job Log button in the top menu to check the log, as shown in Figure 5.33.

Figure 5.33 Background Job Log

Since the depreciation run was successful, you’ll see the document numbers posted, but if any errors arose, the system would display the errors. If you run the depreciation online in test mode, you’ll see the errors when checking the message log, as shown earlier in Figure 5.25.

5.2 Revaluation Another periodic processing option in asset accounting is revaluation. This process is used when you need to revalue all or many assets periodically. This process might be required in a country with high inflation or when your assets must revaluated due to

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a business sale or merger. We’ll examine the revaluation and inflation periodic processing programs in this section, starting with the required configuration.

5.2.1 Configuring Revaluation First, you’ll define the depreciation areas where revaluation can be performed. Start by following the menu path Financial Accounting • Asset Accounting • Special Valuations • Revaluation of Fixed Assets • Indexed Replacement Values • Determine Depreciation Areas. On the screen shown in Figure 5.34, select the depreciation areas for which revaluation should be performed, using the RevlAPC checkbox for APC and the RevlDep checkbox for depreciation values.

Figure 5.34 Depreciation Areas for Revaluation

In the next step, you’ll define your index series, which will serve as the revaluation factor in the revaluation process. Start by following the menu path Financial Accounting • Asset Accounting • Special Valuations • Revaluation of Fixed Assets • Indexed Replacement Values • Define Index Series. On the first screen, shown in Figure 5.35, define indexes based on the type of assets that will be revaluated. Select 00010 Steel Engineering Products by selecting the checkbox next to it and clicking on Index figures. Then, define index values for each year, as shown in Figure 5.36. You must enter years and their corresponding index values.

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Figure 5.35 Defining an Index Series

Figure 5.36 Index Figures

By clicking the New Entries button in the top menu, you can create further years. In the next step, you’ll define revaluation measures. Start by following the menu path Financial Accounting • Asset Accounting • Special Valuations • Revaluation of Fixed Assets • Revaluation for the Balance Sheet • Define Revaluation Measures. On the initial screen, shown in Figure 5.37, so far, no entries exist.

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Figure 5.37 Defining Revaluation Measures

Click on New Entries in the top menu. In the configuration screen shown in Figure 5.38, enter a revaluation measure code, a name, a revaluation date, a base area, and a revaluation depreciation area. The base area is the area based on which the values are revalued, and the revaluation area is the depreciation area in which the revaluation values are calculated and posted.

Figure 5.38 Revaluation Measure Settings

Click on Depreciation Areas. You’ll see the assigned revaluation area, as shown in Figure 5.39. Save your entry by clicking the Save button.

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Figure 5.39 Revaluation Area Assignment

5.2.2 Posting a Revaluation Run To post a revaluation run, follow the application menu path Accounting • Financial Accounting • Fixed Assets • Periodic Processing • Revaluation for the Balance Sheet • AR29N - Post Revaluation and New Valuation. Alternatively, you can enter Transaction AR29N directly. On the selection screen shown in Figure 5.40, enter the company code. You can also restrict the program by asset number, asset class, and cost center.

Figure 5.40 Post Revaluation Selection Screen

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In the Revaluation Measure field, enter the revaluation measure we created earlier in Section 5.2.1. You can also enter a specific index (percentage) in the in the Index for New Valuat. of Assets field, with which the system will revalue the assets in the Index-Based New Valuation tab, as shown in Figure 5.41.

Figure 5.41 Index-Based New Valuation

Execute the revaluation by clicking the Execute button. The system will revalue the assets in scope based on already defined parameters.

5.2.3 Inflation For companies operating in high-inflation environments, a periodic processing program for inflation is provided. To execute this program, follow the application menu path Accounting • Financial Accounting • Fixed Assets • Periodic Processing • Revaluation for the Balance Sheet • J1AI - Inflation. Alternatively, you can enter Transaction J1AI directly. On the selection screen shown in Figure 5.42, enter the company code. You can also limit the selected assets by asset number and asset class. Executing this program will revalue your assets based on already defined inflation index factors. Inflation indexes are maintained by following the menu path Financial

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Accounting • Asset Accounting • Special Valuations • Revaluation of Fixed Assets • Revaluation for the Balance Sheet • Inflation Accounting • Maintain Inflation Indexes.

Figure 5.42 Asset Inflation Revaluation

On the screen, shown in Figure 5.43, you’ll see defined inflation indexes per country. These inflation indexes are provided by SAP, but you can create your own indexes if needed.

Figure 5.43 Inflation Indexes

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Select CL01 Inflation index (Chile) and then click on Versions to examine its configuration. On the next screen, shown in Figure 5.44, you’ll see one or more versions defined for the inflation index.

Figure 5.44 Inflation Index Versions

Select version 1 and click on Values. On the screen, shown in Figure 5.45, you’ll see the values defined for each index date.

Figure 5.45 Inflation Index Values

Notice how the inflation procedure has been used in high-inflation countries like Chile, Venezuela, Turkey, and so on but normally not used in more stable economies like the US and Europe.

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5.3 Year-End Closing In asset accounting in SAP S/4HANA, you’ll perform technical steps to execute yearend closing once a fiscal year is completed. People familiar with older SAP ERP releases will be accustomed to performing two steps in this year-end closing process—executing the fiscal year-end change and executing the year-end closing. Now, in SAP S/4HANA, the process has been simplified, and the fiscal year-end change transaction (Transaction AJRW) is obsolete. To execute year-end closing, follow the application menu path Accounting • Financial Accounting • Fixed Assets • Periodic Processing • Year-End Closing • AJAB - Execute. Alternatively, you can enter Transaction AJAB directly. On the selection screen shown in Figure 5.46, select one or more company codes and the fiscal year to be closed.

Figure 5.46 Execute Year-End Closing

You can first execute the program in test mode to check for potential errors by selecting the Test run checkbox. Then, execute the program in the background by following the top menu path More • Program • Execute in Background.

5.4 Summary In this chapter, you learned how to configure and use the periodic processes in asset accounting for depreciation, revaluation, and year-end closing. Asset depreciation is by far the most common asset periodic process. This process, which valuates your assets according to the requirements of multiple valuation

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frameworks, posts the required postings to the general ledger. In this chapter, you learned how to properly configure depreciation, how to execute the process, and how to analyze the results and solve potential errors. You also learned how to set up and use the asset revaluation functionality, which is an optional process for revaluating multiple assets in an automatic fashion, using predefined parameters such as revaluation measures and inflation indexes. Finally, you learned how to execute year-end closing for fixed assets, which in SAP S/4HANA has been simplified since SAP ERP. Now that you’ve learned how to perform periodic processing in asset account, let’s explore how you can use asset accounting’s reporting capabilities.

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Chapter 6 Asset Reporting In this user-focused chapter, we’ll provide you step-by-step instructions for reporting on fixed assets in SAP S/4HANA using the rich fixed assets information system. We’ll cover both simple and complex asset reports in SAP GUI and SAP Fiori.

Asset accounting offers an extensive information system that enables you to perform reporting on fixed assets that can meet all statutory and management requirements. Asset reporting fully benefits from the power of SAP Fiori, and most important asset reports are also available as SAP Fiori apps. Thus, all asset accounting information is available at your fingertips, on any device and at any time. In this chapter, you’ll learn in detail how to use asset reporting using both the traditional asset reports available through the SAP GUI and the new state-of-the-art assetrelated SAP Fiori reports. We’ll examine asset overview reports, asset balance reports, asset history sheets, and asset transactions reports. We’ll also highlight the Display Asset Master Worklist app and the Depreciation Lists app.

6.1 Asset Overview In this section, we’ll examine reports to help you analyze in detail your assets one by one. These reports provide the most detailed information on the individual asset level. We’ll start with the classic asset explorer transaction and then move on to the new Asset Accounting Overview app.

6.1.1 Asset Explorer The asset explorer is a user-friendly, interactive SAP GUI transaction that’s been around for a long time. The asset explorer is still the first choice for reports that

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analyze the value, the transactions, and the master data of a single asset using the SAP GUI. To access the asset explorer, follow the application menu path Accounting • Financial Accounting • Fixed Assets • Asset • AW01N - Asset Explorer. Alternatively, you can enter Transaction AW01N directly. The screen shown in Figure 6.1 will initially be blank.

Figure 6.1 Asset Explorer: Initial Screen

Enter a company code; asset number (and possibly subnumber; otherwise, the default subnumber 0 will be used); and fiscal year and then press (Enter). Then, you’ll see the asset explorer screen filled with values for the selected asset, as shown in Figure 6.2. The asset explorer report is structured into a few sections. In the upper left, you’ll see a tree-like list that displays the active depreciation areas for the asset, grouped by the assigned accounting principle. Below that list, in the Objects related to asset section, you’ll see related objects, such as the vendor from whom the asset was acquired, the assigned cost center, and the general ledger acquisition and production costs (APC) account. You can double-click any of these objects, and you’ll be transferred to the master record of that object. On the right, you’ll see the asset’s values, which are separated into the Planned Values, Posted Values, Comparisons, and Parameters tabs. Underneath, in the Transactions section, you’ll see all posted transactions for the asset. Double-clicking on a transaction will direct you to the posted document.

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Figure 6.2 Asset Explorer: Planned Values

The Planned Values section contains the planned values for the selected year (in our example, 2019). You’ll see the acquisition value minus the planned depreciation for the year, which provides the planned net book value at the end of the year. Click on the Posted Values tab. The screen shown in Figure 6.3 is similar to the previous screen, which displayed planned values; however, on this screen, we’re looking at actually posted values. In our example, depreciation started in the last period of the year, in December; therefore, the planned and posted depreciation match. Below, in the Depreciation posted/planned section, you’ll see the depreciation planned or posted per month. The green rectangle on the left in Figure 6.3 shows that the depreciation has already been posted. Double-clicking on a line leads you to the depreciation log for the period. Click on the Comparisons tab. In the screen shown in Figure 6.4, you’ll see a comparison of the planned depreciation values per year until the end of the useful life of the asset.

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Figure 6.3 Asset Explorer: Posted Values

Figure 6.4 Asset Explorer: Comparisons

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In our example, we’re looking at the planned depreciation values for depreciation area 01. You can add more depreciation areas to the analysis by clicking on the rectangles with the numbers 10, 11, 12, and so on. If you click on areas 10 and 40, you’ll see the analysis is now extended for areas 01, 10, and 40, as shown in Figure 6.5.

Figure 6.5 Asset Explorer: Comparisons with Multiple Depreciation Areas

Note that, in the row with rectangles with depreciation area numbers, now areas 01, 10, and 40 are shown in angle brackets < >, which indicates that they are displayed in the analysis. Click on the Parameters tab. On the screen shown in Figure 6.6, you’ll see the depreciation parameters for the selected depreciation area. You can also navigate to another depreciation area on the left to then display its values and parameters on the right. You can also click on the button in the top menu to display the related master data by transferring you to the asset master record.

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Figure 6.6 Asset Explorer: Parameters

6.1.2 Asset Accounting Overview App The asset explorer is a useful report when you need an overview of an asset, but often management will need an overview of all fixed assets in the organization. To meet this need, SAP offers the Asset Accounting Overview SAP Fiori app. Figure 6.7 shows the initial screen of this app. The fields marked with red boxes and asterisks are mandatory. On this screen, you must maintain the Display Currency, Company Code, Depreciation Area, and Ledger fields. Optionally, you can enter an asset class and an accounting principle to restrict the selection. You can also enter multiple values. You can type these values in directly or click on the button to the right of the field. A selection search screen will appear, as shown in Figure 6.8. On this screen, you can search for possible values.

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Figure 6.7 Asset Accounting Overview App: Initial Screen

Figure 6.8 Selection Search Screen

After entering the filter fields, click the Go button to display the results, as shown in Figure 6.9.

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Figure 6.9 Asset Accounting Overview Result

The app provides a snapshot of all fixed assets, selected based on the filter criteria. The report provided by the app is organized into multiple areas, which provide various information such as asset balances, depreciation values, transactions per period, depreciation to be posted, and so on. For example, as shown in Figure 6.10, you can see the chart view of the asset balances, where you can use the convenient layout to quickly check the values of each asset class.

Figure 6.10 Asset Balances Chart View

Another useful view is the asset master worklist, shown in Figure 6.11. This report shows you a chart of how many assets are capitalized, in process, and retired.

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Figure 6.11 Asset Master Worklist

The Asset Transactions section, shown in Figure 6.12, shows the asset transactions for each asset class. You can toggle the display to show the asset transactions by cost center, profit center, account determination, and so on.

Figure 6.12 Asset Transactions

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Double-clicking on any part of a graph or asset summary item in the app opens a more detailed view of the relevant transactions.

6.2 Asset Balances Asset balance reports provide summaries or detailed lists that can show you asset balances, sorted and filtered based on various criteria. A number of asset balance reports are available in the SAP GUI, and SAP also offers the Asset Balances SAP Fiori app. We’ll discuss both these reports and the app in this section.

6.2.1 SAP GUI Report Let’s start by examining some of the most useful asset balances reports available through the classic SAP GUI. To run an asset balance report by asset number, follow the application menu path Accounting • Financial Accounting • Fixed Assets • Information System • Reports on Asset Accounting • Asset Balances • Asset Lists • Asset Balances • S_ALR_87011963 - ... by Asset Number. On the selection screen shown in Figure 6.13, enter a company code and a report date, which should be the last date of a fiscal year. You can also limit selections by asset number by entering a range of asset numbers in the Asset number fields.

Figure 6.13 Asset Balances by Asset Number: Selection Screen

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If you select the List assets radio button, the report will provide detailed information for each asset number. If you select …or group totals only, the results will be grouped by asset class and other characteristics. Proceed by clicking the Execute button. The output screen, shown in Figure 6.14, provides a detailed list by asset number.

Figure 6.14 Asset Balances by Asset Number: Output Screen

In the Aquis. val, Accum. dep., Book val. columns, you’ll see the acquisition value, accumulated depreciation, and net book value, respectively, for each asset. You can run similar reports that show assets by cost center, business area, plant, and so on. All these reports are available by following the application menu path Accounting • Financial Accounting • Fixed Assets • Information System • Reports on Asset Accounting • Asset Balances • Asset Lists • Asset Balances. Figure 6.15 shows the selection screen for an asset balance report by asset class. As a shortcut, if you follow the menu path More • Edit • All Selections, on the selection screen, you’ll see all possible selections such as asset number, asset class, cost center, and so on, as shown in Figure 6.16. Then, you can combine these characteristics to produce more refined asset balances lists that match your specific reporting requirements.

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Figure 6.15 Asset Balances by Asset Class: Selection Screen

Figure 6.16 Asset Balances by Asset Class: All Selections

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6.2.2 Asset Balances App The Asset Balances app is an SAP Fiori app that provides asset balance information, which you can slice and dice using various criteria. Initially, you’ll need to enter general selections, such as company code, depreciation area, fiscal year, and period, as shown in Figure 6.17.

Figure 6.17 Asset Balances App: Selections

Proceed by clicking the OK button. On the right side of the resulting screen, shown in Figure 6.18, you’ll see the asset balances.

Figure 6.18 Asset Balances App: Output

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The default view is the table view:. You can also display chart view by clicking on the button, as shown in Figure 6.19.

Figure 6.19 Asset Balances App Chart View

Alternatively, you can combine both the chart and table views by clicking on the button, as shown in Figure 6.20.

Figure 6.20 Asset Balances App: Chart and Table View

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On the left, you’ll see a list of available fields in the Dimensions section. You can drag and drop these fields into the Columns and Rows sections and thus add them in the display fields on the right either in the rows or in the columns of the report.

6.3 Asset History Sheet The asset history sheet is an important report that shows the beginning and closing balances of your asset accounts as well as the various transactions grouped together by type of transaction such as acquisition, retirement, revaluation, and so on. This report is a legal requirement in some countries such as Germany but is also widely used by management since this report provides valuable summary information. The asset history sheet has both SAP GUI and SAP Fiori versions, and we’ll examine both versions, but first, let’s start with the configuration steps required to run asset history sheet reports.

6.3.1 Configuration Asset history sheet reports use history sheet groups to define how various transactions and balances are grouped together in the report. To define asset history sheet groups, follow the menu path Financial Accounting • Asset Accounting • Information System • Asset History Sheet • Define History Sheet Versions. On the initial screen shown in Figure 6.21, you’ll see a number of standard history sheet versions provided by SAP. Standard versions should suffice for most requirements, but if needed, you can copy a standard history sheet version and modify it to meet your requirements. Let’s examine the history sheet version settings. Double-click on version 0001. On the screen shown in Figure 6.22, you’ll see how the various asset transactions and balances are grouped together when displayed in the columns and rows of the report.

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Figure 6.21 Asset History Sheet Versions

Figure 6.22 History Sheet Version Settings

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Double-click, for example, on Acquisition. On the screen shown in Figure 6.23, you’ll see how history sheet groups are allocated to that cell of the report.

Figure 6.23 Allocation of History Sheet Positions

In the Grp column, you’ll see various history sheet groups. Transactions posted with transaction types that are linked to those history sheet groups will appear in the report when an X appears in the fields to the right, according to the following definitions: 쐍 Trn indicates transaction values. 쐍 Ord indicates ordinary depreciation. 쐍 Spc indicates special depreciation. 쐍 Upl indicates unplanned depreciation. 쐍 6B indicates a transfer of reserves.

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In the App section, you can select transaction types according to the following definitions: 쐍 Trn indicates revaluation. 쐍 Ord indicates revaluation depreciation. 쐍 IGr indicates investment support.

A history sheet group is assigned to each transaction type. Let’s check the assignments for our example acquisition transaction types. To define asset transaction types for acquisitions, follow the menu path Financial Accounting • Asset Accounting • Transactions • Acquisitions • Define Transaction Types for Acquisitions. Then, doubleclick on a transaction type. On the configuration screen shown in Figure 6.24, you’ll see the history sheet group 10 Acquisition has been assigned in the Asst Hist Sheet Grp field.

Figure 6.24 History Sheet Group in Transaction Type

History sheet groups are defined by following the menu path Financial Accounting • Asset Accounting • Information System • Asset History Sheet • Define History Sheet Groups.

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On the screen shown in Figure 6.25, review and confirm the history sheet groups, which are assigned in the asset transaction type.

Figure 6.25 Defining History Sheet Groups

Now, we’re ready to run the history sheet report.

6.3.2 SAP GUI Report To run the classic history sheet report using the SAP GUI, follow the application menu path Accounting • Financial Accounting • Fixed Assets • Information System • Reports on Asset Accounting • Notes to Financial Statements • International • S_ALR_ 87011990 - Asset History Sheet. On the selection screen shown in Figure 6.26, you can make the usual selections, such as company code, asset class, and report date, and select whether to list individual assets or group balances. Scroll down to see further selections, as shown in Figure 6.27. In the History sheet version field, select the history sheet version we defined in the previous section.

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Figure 6.26 Asset History Sheet: Selection Screen

Figure 6.27 Asset History Sheet: Selection Screen, Continued

Proceed by clicking the Execute button. The screen shown in Figure 6.28 is the output screen of the report, which is using asset history sheet version 0001, which we checked previously. Since we chose to list assets individually, you’ll can see the values

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displayed for each asset separately. Double-clicking on a line transfers you to the asset explorer report for the selected asset.

Figure 6.28 Asset History Sheet: Output Screen

If you scroll down to the end of the report, you’ll see the totals for each company code, as shown in Figure 6.29.

Figure 6.29 Asset History Sheet: Totals

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6.3.3 Asset History Sheet App A history sheet report is also available in SAP Fiori called the Asset History Sheet app. This app provides similar information to the SAP GUI report but using the convenient and flexible SAP Fiori interface and options. You can configure the app report layout using the SAP GUI configuration menu by following the menu path Financial Accounting • Asset Accounting • Information System • Asset History Sheet • Define Key Figure Groups for Asset History Sheet (Fiori). On the screen shown in Figure 6.30, you’ll see predefined key figure groups provided by SAP, which you can select when running the SAP Fiori app. You can also create your own key figure groups.

Figure 6.30 Key Figure Groups SAP Fiori History Sheet

Select key figure group AHS Asset History Sheet (Posted Values, No Hierarchy) and then click on Create/Change Key Figure Groups of Asset Accounting. As shown in Figure 6.31, key figures have been assigned to the key figure group. Key figures are defined by following the menu path Financial Accounting • Asset Accounting • Information System • Display Key Figures for Asset Accounting (Fiori). Figure 6.32 shows the standard key figures provided by SAP.

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Figure 6.31 Key Figures Assignment

Figure 6.32 Defining Key Figures

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Select key figure 1700000 Acquisition (Gross) – APC and then click on Assigned Business Transactions to check the assignment of business transactions to the key figure. Figure 6.33 shows the business transactions assigned to the key figure. These transactions are defined using subledger line item types assigned to transaction type category 11 Acquisitions.

Figure 6.33 Assigned Business Transactions

Similarly, you can review how the other sections of the report are defined. Go back to the screen shown earlier in Figure 6.32 and select another key figure. Then, click on Assigned Business Transactions to check the assignment of business transactions to that key figure. Now, let’s start using the Asset History Sheet app. As shown in Figure 6.34, in the selection screen of the app, you can select a key figure group and one or more company codes, ledgers, depreciation areas, periods, and currency types. Proceed by clicking the OK button. Figure 6.35 shows the resulting screen. On the left, you can choose from multiple dimensions to be displayed in the columns and rows of the report.

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Figure 6.34 History Sheet SAP Fiori App: Selection Screen

Figure 6.35 History Sheet SAP Fiori App: Result Screen

On the right are the results based on the selected filters. This view is the table display, and you can switch to chart display by clicking the button, as shown in Figure 6.36.

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Figure 6.36 History Sheet SAP Fiori App: Chart View

You can also combine both the chart and table views by clicking on the shown in Figure 6.37.

Figure 6.37 History Sheet SAP Fiori App: Chart and Table View

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You can also drag and drop fields from the Dimensions section in the Columns and Rows sections and add them in the display fields on the right either in the rows or in the columns of the report. For example, Figure 6.38 shows the report output with the posting period added in the rows.

Figure 6.38 Report Output with Added Posting Period

6.4 Asset Transactions The next group of asset reports are reports on asset transactions. Again, both an SAP GUI report and an SAP Fiori app called the Asset Transactions app are available, both of which we’ll discuss in this section.

6.4.1 SAP GUI Report The SAP GUI report functionality for asset transactions is available by following the application menu path Accounting • Financial Accounting • Fixed Assets • Information System • Reports on Asset Accounting • Day-to-Day Activities • International.

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On this screen, you’ll find multiple reports that focus specifically on certain transactions such as acquisitions, retirements, and so on. The most universal asset transaction report, which includes all transactions, can be run by following the application menu path Accounting • Financial Accounting • Fixed Assets • Information System • Reports on Asset Accounting • Day-to-Day Activities • International • S_ALR_ 87012048 - Asset transactions. Figure 6.39 shows the selection screen for the report, where you’ll select company code(s) and other selections such as asset classes, cost centers, and so on.

Figure 6.39 Asset Transactions: Selection Screen

Note the Sort Variant field, which is also available in the other SAP GUI asset reports. This field determines which fields will be used to sort the report output. You can choose from a number of standard sort variants or create your own by following the menu path Financial Accounting • Asset Accounting • Information System • Define Sort Versions for Asset Reports. Figure 6.40 shows sort versions defined in the system. SAP provides numerous standard sort versions that sort the reports by various criteria.

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Figure 6.40 Defining Sort Versions

Let’s create a sort version that will sort by company code and evaluation group by following these steps: 1. Select the sort version 0013 Company code and then click on the top menu.

button in the

2. Next, on the configuration screen shown in Figure 6.41, add the field ANLAVORD41 for evaluation group 1 and name the sort version starting with Z in the custom name range. 3. Confirm and save the entry by clicking the Apply button and then the Save button. 4. Now, let’s go back to the report selection screen shown earlier in Figure 6.39. This time, select the new sort version Z013 we just created. Execute the report by clicking the Execute button. 5. The output screen is shown in Figure 6.42. Every asset transaction is listed in this report, for the assets selected based on the selection criteria.

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Figure 6.41 Sort Version Configuration

Figure 6.42 Asset Transactions: Output Screen

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6.4.2 Asset Transactions App SAP Fiori also offers the Asset Transactions app to report on asset transactions. Similar to the history sheet app, a configuration activity is used to define key figure groups for this report. Start by following the menu path Financial Accounting • Asset Accounting • Information System • Define Key Figure Groups for Asset Transactions (Fiori). Figure 6.43 shows standard key figure groups defined for transactions.

Figure 6.43 Defined Key Figure Groups for Asset Transactions

To check the assignment of key figures, select, for example, TRANS_ACQ Acquisitions and then click on Key Figures. Figure 6.44 shows the assigned key figures for the acquisitions key figure group.

Figure 6.44 Key Figure Assignments

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On the selection screen shown in Figure 6.45, select company codes, ledgers, depreciation areas, fiscal years, and key figure groups.

Figure 6.45 Asset Transactions: Selection Screen

Now, let’s run the Asset Transactions app by clicking the Go button. Figure 6.46 shows the result screen where all transactions are listed (since we selected a key figure group for all transactions), grouped by transaction type.

Figure 6.46 SAP Fiori Asset Transactions App: Result Screen

As with the other SAP Fiori apps, notice that you can toggle between table, chart, and combined table and chart views.

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Display Asset Master Worklist App

6.5 Display Asset Master Worklist App The Display Asset Master Worklist app is another important SAP Fiori app that provides a snapshot of the current status of all fixed assets in the system. Even on the SAP Fiori launchpad, on the app tile, you’ll see if any assets are incomplete, as shown in Figure 6.47.

Figure 6.47 Display Asset Master Worklist Tile

When you open the app, you’ll see the selection screen shown in Figure 6.48, where you can restrict your selections by company code, asset class, cost center, and so on. Alternatively, you can leave the fields empty to see all fixed assets in the system.

Figure 6.48 Display Asset Master Worklist: Selection Screen

Proceed by clicking the Go button. On the results screen shown in Figure 6.49, you can easily see how many assets are incomplete, capitalized, retired, and so on. Click on one of the statuses, such as In Process, Capitalized, Retired, or so on, and then click the Capitalized button to display only assets with that status. For example, Figure 6.50 shows only capitalized assets.

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Figure 6.49 Display Asset Master Worklist: Result Screen

Figure 6.50 Display Asset Master Worklist: Capitalized Assets

You can choose which fields should be displayed in the report by clicking the ton, as shown in Figure 6.51.

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Depreciation Lists App

Figure 6.51 Field Settings

6.6 Depreciation Lists App The Depreciation Lists app is an SAP Fiori app that reports on posted depreciation. With this app, you can analyze the depreciation posted for each asset and depreciation area. When you open the app, you’ll see the selection screen shown in Figure 6.52, where you can choose company codes, fiscal year, periods, depreciation areas, and depreciations. You can also restrict by asset class and depreciation key.

Figure 6.52 Depreciation Lists: Selection Screen

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Proceed by clicking the Go button. You’ll see the results for each asset, as shown in Figure 6.53.

Figure 6.53 Depreciation Lists: Results

If you click on the button to the right of an asset, you’ll see that asset’s depreciation parameters, as shown in Figure 6.54.

Figure 6.54 Asset Depreciation Parameters

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Summary

6.7 Summary In this chapter, we examined in detail the capabilities of the asset information system with both SAP GUI and SAP Fiori. You learned how to use powerful asset reports like the asset overview report, the asset balances report, the asset history sheet, the asset transactions report, the asset worklist, and the depreciation list. You also learned how to configure some reporting parameters, such as sort versions, that enable you to sort and summarize your asset reports by various criteria. You also learned how to use key figure groups to define the data that is selected in various SAP Fiori asset apps. The asset accounting-related SAP Fiori apps provide asset accounting information in a user-friendly manner and are flexible in addition to being easily accessible on any device, at any time. In the final chapter, we’ll teach you how to migrate your existing fixed asset data into your new SAP S/4HANA system.

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Chapter 7 Migrating Asset Data In this chapter, we’ll explain how best to migrate your legacy asset data from an SAP ERP or third-party ERP system to a new SAP S/4HANA system. This chapter begins by introducing the various migration tools available in SAP S/4HANA and then explains how to migrate your fixed asset data.

Data migration is the process of transferring legacy data into your new SAP S/4HANA system. As this process relates to assets, the goal is to have an automated process that can transfer existing asset master records and values from a legacy system, an older SAP system, or perhaps an Excel spreadsheet or Access database, if assets are not managed in a system. Regardless of the source, after completing the migration process, you should have clean and correct asset data in SAP S/4HANA. In this chapter, you’ll learn how to plan and execute the asset migration process in SAP S/4HANA. We’ll start with an overview of the migration process in SAP S/4HANA, and you’ll learn the tools and programs used to check your data and facilitate the migration process. Then, you’ll learn in detail how to migrate your fixed asset data.

7.1 Migration Process in SAP S/4HANA Migration paths differ depending on whether you’re converting from an older SAP system (known as a brownfield implementation) or deploying a whole new implementation of SAP S/4HANA (known as a greenfield implementation). For greenfield implementations, the source system containing legacy data could be an SAP system or a non-SAP system or even data stored in an Excel spreadsheet. In this section, we’ll examine in detail the migration checks you’ll perform and the prerequisites you’ll need to fulfill for a brownfield system conversion. You’ll then learn the migration tools you can use when migrating legacy data in a greenfield

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implementation. We’ll also guide you on executing the migration process using the SAP S/4HANA migration cockpit tool.

7.1.1 Migration Checks and Prerequisites If you’re already running an SAP ERP system and don’t want to deploy a new SAP S/4HANA system, you’ll have to perform a system conversion, which is called a brownfield implementation. A number of migration checks and tools can help you in this process, the most important of which we’ll discuss in the following sections.

Prerequisite Check for the New Asset Accounting As mentioned in previous chapters, SAP S/4HANA is mandatory for using the new asset accounting. You should run program RASFIN_MIGR_PRECHECK to confirm that the prerequisites for the new asset accounting have been met. This program should be installed using SAP Note 1939592. To execute program RASFIN_MIGR_PRECHECK, enter Transaction SE38, which is used to run programs in SAP S/4HANA. Enter “RASFIN_MIGR_PRECHECK” into the screen shown in Figure 7.1.

Figure 7.1 Running a Program

Execute the program by clicking the button in the top menu. On the next screen, shown in Figure 7.2, you’ll see the following two options: 쐍 SAP Simple Finance Add-On 쐍 SAP Simple Finance/SAP S/4HANA

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Figure 7.2 Asset Prerequisite Check

SAP Simple Finance was the first application SAP wrote for the SAP HANA database, and this solution was supplied as an add-on for SAP ERP. SAP Simple Finance has since been renamed SAP S/4HANA Finance. This program also checks for compliance with this solution, but if you’re implementing SAP S/4HANA, select the second option for SAP Simple Finance/SAP S/4HANA and continue by clicking the Execute button. On the next screen, shown in Figure 7.3, you’ll see a list of errors to resolve before you can convert your asset data to SAP S/4HANA.

Figure 7.3 Asset Prerequisite Check: Log

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Different types of errors might need to be addressed since the system performs various checks to make sure all prerequisites are met. Some errors could be technical issues, for which you’ll need to contact your system administrators, and other errors could be financial issues. Using the knowledge gained in this book, you should be able to resolve the financial issues that arise.

Migrating Charts of Depreciation If you’re already using the classic asset accounting, as a prerequisite, you must migrate charts of depreciation from the classic asset accounting to the new asset accounting. Start by following the menu path Financial Accounting • Asset Accounting • Migration: Asset Accounting (New) • Migration from Classic to New Asset Accounting • Migration for New Asset Accounting • Migrate Charts of Depreciation. Select your chart of depreciation or a range of charts of depreciation and execute the transaction by clicking the Execute button, as shown in Figure 7.4.

Figure 7.4 Migrating Charts of Depreciation

You can check the migration log by following the menu path Financial Accounting • Asset Accounting • Migration: Asset Accounting (New) • Migration from Classic to New Asset Accounting • Migration for New Asset Accounting • Display Migration Log. This transaction will show you the migration log, as shown in Figure 7.5.

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Figure 7.5 Migration Log

Activating the New Asset Accounting Finally, before you start migrating your asset data, you must activate the new asset accounting. (If you’re deploying a new greenfield implementation of SAP S/4HANA, the new asset accounting is already active.) First, follow the menu path Financial Accounting • Asset Accounting • Migration: Asset Accounting (New) • Migration from Classic to New Asset Accounting • Migration for New Asset Accounting • Check Prerequisites for Activating Asset Accounting (New). Check that all prerequisites to activate the new asset accounting have been met in the screen shown in Figure 7.6.

Figure 7.6 Checking Prerequisites to Activate the New Asset Accounting

Execute the check by clicking the Execute button, and you should see a message that all prerequisites have been met. To activate the new asset accounting, follow the menu path Financial Accounting • Asset Accounting • Migration: Asset Accounting (New) • Migration from Classic to New Asset Accounting • Activate Asset Accounting (New).

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Set the new asset accounting to active, as shown in Figure 7.7.

Figure 7.7 Activating the New Asset Accounting

7.1.2 Migration Tools SAP S/4HANA provides new tools specifically designed to execute migration projects: the SAP S/4HANA migration cockpit and the SAP S/4HANA migration object modeler. With the migration cockpit, you can work with various data migration objects and generate Excel templates that can be easily populated with legacy data. The migration object modeler allows you to modify the predefined structure of the data files to be migrated or to create new migration objects. We’ll cover these two tools in the following sections.

Migration Cockpit The migration cockpit is a migration tool specifically designed to perform migrations to SAP S/4HANA. The migration cockpit works with a number of predefined standard migration objects such as assets, general ledger accounts, cost centers, and so on. Using the migration cockpit, you can work with several standard Excel templates, provided by the system, that you can conveniently fill with your legacy data. To start the migration cockpit, enter Transaction LTMC. You must have authorization role SAP_ CA_DMC_MC_USER to access this transaction. The transaction is webbased and opens a web browser, as shown in Figure 7.8. In the migration cockpit, you’ll define migration projects for your various migration objects. Normally, you will have a separate migration project for your fixed asset migration.

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Figure 7.8 Migration Cockpit

The migration cockpit is not the only migration option in SAP S/4HANA but is the recommended one. You can also the Legacy System Migration Workbench (LSMW), which was the migration tool of choice for many SAP ERP projects in the past. However, SAP doesn’t recommend using the LSMW for migrating to SAP S/4HANA, as explained in SAP Note 2287723: The Legacy System Migration Workbench (LSMW) should only be considered as a migration tool for SAP S/4HANA for objects that do not have interfaces or content available after carefully testing for each and every object. The use of LSMW for data load to SAP S/4HANA is not recommended and at the customer’s own risk. Additionally, for small-scale asset migrations with no more than a few hundred assets, you can use a convenient Excel-based tool by following the menu path Financial Accounting • Asset Accounting • Asset Data Transfer • Legacy Data Transfer using Microsoft® Excel. Enter an Excel input file, as shown in Figure 7.9.

Figure 7.9 Legacy Transfer with Excel

SAP provides more information about the format of the Excel file at http://s-prs.co/ v502800.

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Migration Object Modeler With the migration object modeler, you can define the structure of the migration objects you want to migrate. You’ll need authorization role SAP_CA_DMC_MC_ DEVELOPER to access this transaction. Start the migration object modeler by entering Transaction LTMOM. On the initial screen, shown in Figure 7.10, choose Migration Object from the dropdown.

Figure 7.10 Migration Object Modeler

You can create a new user-defined migration object or create a new migration object by copying a template. SAP provides several templates for various migration objects, and you can expand on these templates by copying and modifying them. To create a new migration object for your assets, in the top menu, navigate to More • Migration Object Modeler • Create Migration Object • From Template, as shown in Figure 7.11.

Figure 7.11 New Migration Object from Template

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On the next screen, shown in Figure 7.12, provide a name for your project in the custom name range starting with Z or Y. You should have separate projects that group together similar migration objects.

Figure 7.12 Creating a Migration Object from a Template

Continue by clicking the Next button. On the next screen, shown in Figure 7.13, select the migration object template Fixed asset (incl. balances and transactions).

Figure 7.13 Selecting a Migration Object Template

You can also click on the information button to the right of a migration object to read its documentation, as shown in Figure 7.14. The standard migration object for fixed assets is SIF_FIXED_ASSET.

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Figure 7.14 Fixed Assets Migration Object Information

Close the information window and proceed by clicking the button. The next screen, shown in Figure 7.15, is the definition screen, where you’ll adapt the migration object to meet your requirements. The migration object is organized in a tree-like structure, and you can define the global data, source and target structures, and structure and field mappings. Click Global Data. As shown in Figure 7.16, you’ll see technical data related to the migration object. In our example, we can see that the migration process uses function module BAPI_FIXEDASSET_OVRTAKE_CREATE, which may be familiar if you’ve already completed an asset migration before, because this function module was also used in migrating fixed asset data in LSWM.

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Figure 7.15 Fixed Assets Migration Object Definition

Figure 7.16 Global Data

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Click on Source Structures. Now, you’ll see the source fields for the migration, grouped into various structures, as shown in Figure 7.17.

Figure 7.17 Source Structures

The fields on the right are fields that can provide data in the legacy data file on the master data level. You’ll see a number of substructures in the main structure S_KEY, each of which serve different purposes. For example, click on S_CUM_VAL, which transfers cumulative values for assets. As shown in Figure 7.18, you’ll see the fields that should provide the data that loads cumulative asset values. Click on Target Structures. The target structures shown in Figure 7.19 are tables that need to be filled in during the migration.

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Figure 7.18 Cumulative Values

Figure 7.19 Target Structures

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Each substructure corresponds to a specific area with fields that serve a similar purpose. For example, click on R_GENERALDATA, which contains the fields of the General data tab in the asset master record, as shown in Figure 7.20.

Figure 7.20 General Data Target Structures

Click on Structure Mapping. As shown in Figure 7.21, you’ll see how the source and target structures are mapped together. On the left are the source structures, and on the right are the target structures so you can see how source structures have been assigned to target structures. For example, source structure S_POSTINGINFORMATION is assigned to target structure R_POSTINGINFORMATION, as indicated by the