Asset Transactions - Accounting Entries :

Asset Acquisition:                              F-90 - With Vendor

 

Dr.        Fixed Asset – Acquisition Cost

Cr.    Vendor (Accounts payable)

 

• Posting date of the document will be copied into the asset master as the capitalization date.
• The depreciation start date of each depreciation area will also be determined and updated in the depreciation area data tab page.
• Asset acquisition posting could also be done without PO from the MM module.  
• Posting could be done in FI posting only.

 

Asset Disposal – Sales to a Customer:            F-92 - With Customer

 

Supposed an asset with historical cost $1,000 and accumulated depreciation of $100 is being sold to a customer at a price of $1,100, the posting entries will be as follows:

 

Dr. Customer account (A/R)                    1,100  

Cr. Revenue for asset disposal                1,100-

Cr. Fixed asset – acquisition cost            1,000- 

Dr. Accumulated depreciation                    100  

Dr. Clearing account for asset disposal    1,100 

Cr. Gain/loss of fixed asset disposal          200-

 

 

The posting date of the retirement posting will also be updated into the field "deactivation date" in the asset master as the retirement date.

 

 

Asset Disposal – Scrap without Revenue            ABAVN - Asset Retirement by Scrapping

 

Instead of selling, an asset could be disposed as a scrap.  In this case, no revenue is expected and a loss will be realized in the P&L if the fixed asset being scrapped still carries a net book value.

For the same asset with historical cost $1,000 and accumulated depreciation of $100, the posting of the scrapping will be as follows:

 

Cr. Fixed asset – acquisition cost            1,000-

Dr. Accumulated depreciation                    100

Cr. Gain/loss of fixed asset disposal          900

 

 

Asset Transfer within a Company – Reclassification

 

The NBV of an existing asset master record could be transferred to another asset within the same company.  The transaction could be used in the following scenarios:

• Reclassify an existing asset to a new class or to correct an error
• Transfer an asset to a new one with the same class.  This may be necessary to execute the change of the remaining useful life of an asset but still spread the net book value evenly throughout the remaining life without allowing the system to catch up the postings of the missing or extra depreciation of the past periods

 

For an asset with historical cost $1,000 and accumulated depreciation of $100, the posting of the intra-company transfer posting will be follows:

 

Cr. Fix asset – acquisition cost (old asset)                     1,000-

Dr. Accumulated depreciation  (old asset)                        100

Dr. Fix asset – acquisition cost (new asset)                   1,000

Cr. Accumulated depreciation  (new asset)                       100-

 

The old asset being transferred will become a retired asset and the transfer posting date will be updated as the retirement date in the asset master record. 

For the new receiving asset, the transfer will be the same as if it is being acquired. 

The transfer posting date will be used as the capitalization date.

 

Month End Processing – Depreciation Run      AFAB-Depreciation Run

 

Dr. Depreciation expense

Cr. Accumulated depreciation

 

Note that the above posting to G/L will be done in a summary level by G/L accounts and cost center levels because the depreciation expense has to be charged to cost center in CO.  However, the detailed depreciation amount of each asset will also be stored in Asset Accounting such that each unique asset master record will also have its unique posted depreciation amount.  Besides, after each depreciation run, the system will issue a report which list out the depreciation posting amount of each individual assets as a record.  This is advised that this report should be kept as an additional audit trail.

 

Asset Under Construction (AUC) Config & Process Steps:

 

Internal Order as Investment Measure:

 

 

1. Define the AuC Asset Class (with investment measure) - OAOA

2. Define the Asset Class – for Main Asset - OAOA

3. Define Investment Profile - OITA

a. Assign the AuC Asset Class (Step-1) in the investment profile

4. Assign Investment Profile to Model Order - OITA

5. Define Order Type (Investment) - KOT2

a. Settlement Profile - OKO7

b. Maintain Allocation Structures - OKO6

c. Planning Profile - OKOS

            d. Budget Profile - OKOB

6. Create an Internal Order - KO01

a. With the Investment Profile (Step-2)

b. AuC automatically created by the system using Asset Class given in the Investment Profile

7. Post the amounts to IO - FB01

 

Dr. Material supplied to Asset (Expenditure)

Cr. Cash account

 

8. Settle the amounts to AuC from IO (Prcg type: Automatic) - KO88

 

Dr. Asset Under Construction account
Cr. Contra Capitalized

 

9. Create the Main Asset - AS01

10. Settle the amounts to Main Asset from AuC (Prcg type: Full) - KO88

 

Dr. Final Asset account

Cr. Asset Under Construction account

 

AuC using Line Item Settlement:

 

1. Define the AuC Asset Class (with Line Item Settlement) - OAOA

2. Define the Asset Class – for Main Asset - OAOA

3. Define Order Type (Overhead) - KOT2

4. Create an AuC-Asset (using Step-1 Asset Class) - AS01

5. Create an Internal Order - KO01

a. Assign the AuC – Asset in Settlement Rule in IO

6. Post the amounts to IO - FB01

7. Settle the amounts to AuC from IO - KO88

8. Create Main Asset (using Step-2 Asset Class) - AS01

9. Assign the Main Asset in IO (Step-5) - KO02

10. Settlement AuC – Line Item List - AIAB

11. Settlement AuC - Receiver - AIBU