ASSET ACCOUNTING Setup and Configuration
- 1. ASSET ACCOUNTING ASSET ACCOUNTING THIS COMPONENT IS USED TO PROCESS THE BUSINESS THIS COMPONENT IS USED TO PROCESS THE BUSINESS TRANSACTIONS RELATING TO ASSETS TRANSACTIONS RELATING TO ASSETS THE FOLLOWING ARE THE ASSET TRANSACTIONS THE FOLLOWING ARE THE ASSET TRANSACTIONS ACQUISITION OF ASSETS ACQUISITION OF ASSETS SALE OF ASSETS SALE OF ASSETS TRANSFER OF ASSETS TRANSFER OF ASSETS SCRAPPING OF ASSETS SCRAPPING OF ASSETS CALCULATION OF DEPRECIATION AND BALANCE SHEET CALCULATION OF DEPRECIATION AND BALANCE SHEET VALUES VALUES ASSET ACCOUNTING IS ALSO MAINTAINED ON THE ASSET ACCOUNTING IS ALSO MAINTAINED ON THE PRINCIPLES OF SUBSIDIARY LEDGERS PRINCIPLES OF SUBSIDIARY LEDGERS THE PURPOSE OF THE ASSET ACCOUNTING IS TO CALCULATE THE PURPOSE OF THE ASSET ACCOUNTING IS TO CALCULATE AND POST THE DEP AND TO FIND THE VALUES OF ASSETS TO AND POST THE DEP AND TO FIND THE VALUES OF ASSETS TO BE REPRESENTED IN THE BALANCE SHEET BE REPRESENTED IN THE BALANCE SHEET
- 2. DEPRECIATION DEPRECIATION IT IS THE REDUCTION IN THE VALUE IT IS THE REDUCTION IN THE VALUE OF ASSET DURING THE EXPECTED OF ASSET DURING THE EXPECTED USEFUL LIFE OF THE ASSET DUE TO USEFUL LIFE OF THE ASSET DUE TO NORMAL WEAR AND TEAR NORMAL WEAR AND TEAR SCHEME OF ENTRIES SCHEME OF ENTRIES DEPRECIATION A/C DR 100000 TO ACC DEP ON ASSET A/C 10000 PROFIT AND LOSS A/C DR 100000 TO DEPRECIATION A/C 100000
- 3. ASSET CLASSES ASSET CLASSES IT IS THE CRIETERIA FOR CLASSIFYING THE IT IS THE CRIETERIA FOR CLASSIFYING THE ASSETS OF THE COMPANY ACCORDING TO ASSETS OF THE COMPANY ACCORDING TO MANAGEMENT AND LEGAL REQUIREMENTS MANAGEMENT AND LEGAL REQUIREMENTS ASSET CLASSES PROPOSE THE DEFAULT ASSET CLASSES PROPOSE THE DEFAULT VALUES FOR ASSET MASTER RECORDS AND VALUES FOR ASSET MASTER RECORDS AND DEPRECIATION CALCULATION ON THE DEPRECIATION CALCULATION ON THE ASSETS CREATED UNDER THE RESPECTIVE ASSETS CREATED UNDER THE RESPECTIVE CLASS CLASS
- 4. ASSET CLASSES LAND BUILDINGS PLANT MACHINERY F AND F VEHICLES ASSETS UNDER CNSTRUCTION NO RANGE 01 02 03 04 05 06 VALUES 1 TO 100000 100001 TO 200000 200001 TO 300000 300001 TO 400000 400001 TO 500000 500001 TO 600000 Master record for main asset plant and machinery 200001-0 Master record for sub asset generator 200001-1 Master record for sub asset tool kit 200001-2
- 5. RULES FOR CREATION OF RULES FOR CREATION OF ASSET MASTER RECORDS ASSET MASTER RECORDS 1. 1. MAIN ASSET MASTER RECORDS ARE MAIN ASSET MASTER RECORDS ARE CREATED WITH REFERENCE TO CREATED WITH REFERENCE TO ASSET CLASS ASSET CLASS 2. 2. SUBASSET MASTER RECORDS ARE SUBASSET MASTER RECORDS ARE CREATED WITH REFERENCE TO THE CREATED WITH REFERENCE TO THE MAIN ASSET MASTER RECORD MAIN ASSET MASTER RECORD
- 6. DEPRECIATION AREA DEPRECIATION AREA IT IS THE AREA SHOWING THE IT IS THE AREA SHOWING THE VALUATION OF FIXED ASSETS FOR VALUATION OF FIXED ASSETS FOR PARTICULAR PURPOSE SUCH AS PARTICULAR PURPOSE SUCH AS INDIVIDUAL FINANCIAL INDIVIDUAL FINANCIAL STATEMENTS,BALANCE SHEET FOR STATEMENTS,BALANCE SHEET FOR TAX PURPOSE,OR MANAGEMENT TAX PURPOSE,OR MANAGEMENT ACCOUNTING VALUES ACCOUNTING VALUES
- 7. CHART OF DEPRECIATION CHART OF DEPRECIATION A LIST OF DEPRECIATION AREAS A LIST OF DEPRECIATION AREAS EACH COMPANY CODE IS ALLOCATED TO ONE EACH COMPANY CODE IS ALLOCATED TO ONE CHART OF DEPRECIATION CHART OF DEPRECIATION A CHART OF DEPRECIATION CAN BE USED BY A CHART OF DEPRECIATION CAN BE USED BY SEVERAL COMPANY CODES SEVERAL COMPANY CODES THE CHART OF DEPRECIATION AND CHART OF THE CHART OF DEPRECIATION AND CHART OF ACCOUNTS ARE INDEPENDENT TO EACH OTHER ACCOUNTS ARE INDEPENDENT TO EACH OTHER THE CHART OF DEPRECIATION IS ALWAYS TO BE THE CHART OF DEPRECIATION IS ALWAYS TO BE COPIED FROM REF CHART OF DEPRECIATIONS COPIED FROM REF CHART OF DEPRECIATIONS DEFAULTLY DELIVERED WITH THE SOFTWARE DEFAULTLY DELIVERED WITH THE SOFTWARE
- 8. DEPRECIATION TYPES IN SAP DEPRECIATION TYPES IN SAP 1. ORDINARY DEPRECIATION 1. ORDINARY DEPRECIATION THE PLANNED DESTRIBUTION OF THE THE PLANNED DESTRIBUTION OF THE ACQUISITION COST OF THE AN ASSET OVER ACQUISITION COST OF THE AN ASSET OVER THE COURSE OF ITS USE FUL USING A THE COURSE OF ITS USE FUL USING A DEPRECIATION METHOD. THE ORDINARY DEPRECIATION METHOD. THE ORDINARY DEPRECIATION DEPICTS THE VALUE DEPRECIATION DEPICTS THE VALUE REDUTION CASUED BY THE NORMAL WEAR REDUTION CASUED BY THE NORMAL WEAR AND TEAR. AND TEAR.
- 9. SPECIAL DEPRECIATION SPECIAL DEPRECIATION THE DEPRECIATION PROVIDED FOR THE THE DEPRECIATION PROVIDED FOR THE TAX REASONS . TAX REASONS . THIS IS ALSO CALLED TAX THIS IS ALSO CALLED TAX DEPRECIATION DEPRECIATION
- 10. UNPLANNED DEPRECIATION UNPLANNED DEPRECIATION THE REDUCTION IN THE VALUE OF THE REDUCTION IN THE VALUE OF THE ASSET DUE TO AN EVENT WHOSE THE ASSET DUE TO AN EVENT WHOSE EFFECT IS PERMANENT EFFECT IS PERMANENT THA UNPLANNED DEPRECIATION IS THA UNPLANNED DEPRECIATION IS ALWAYS TO BE POSTED MANUALLY. ALWAYS TO BE POSTED MANUALLY.
- 11. EXAMPLE EXAMPLE BOOK VALUE OF ASSET AS ON 1.4.2007 100000 BOOK VALUE OF ASSET AS ON 1.4.2007 100000 FIRE ACCIDENT OCCURRED ON 25.7.2007 FIRE ACCIDENT OCCURRED ON 25.7.2007 THE ASSET WAS REVALUED AFTER ACCIDENT THE ASSET WAS REVALUED AFTER ACCIDENT AS INR 60000 AS INR 60000 SO THE DIFF OF 40000 IS CALLED UNPLANNED SO THE DIFF OF 40000 IS CALLED UNPLANNED DEPRECIATION DEPRECIATION
- 12. ACCOUNT DETERMINATION ACCOUNT DETERMINATION IT IS THE KEY USED TO IDENTIFY THE IT IS THE KEY USED TO IDENTIFY THE ASSET CLASSES AND THE RELEVANT ASSET CLASSES AND THE RELEVANT GL ACCOUNTS TO BE UPDATED FOR GL ACCOUNTS TO BE UPDATED FOR THE ASSET TRANSACTIONS I.E THE ASSET TRANSACTIONS I.E ACQUISITIION OF ASSET,SALE OF ACQUISITIION OF ASSET,SALE OF ASSET,SCRAPPING OF ASSET ,TRANSFER ASSET,SCRAPPING OF ASSET ,TRANSFER OF ASSET AND DEPRECIATION ON THE OF ASSET AND DEPRECIATION ON THE ASSET ASSET
- 13. SCREEN LAY OUT RULE SCREEN LAY OUT RULE A GROUP OF SETTINGS THAT A GROUP OF SETTINGS THAT SPECIFIES: SPECIFIES: THE FIELDS THAT SHOULD BE THE FIELDS THAT SHOULD BE MAINTAINED IN THE ASSET MASSTER MAINTAINED IN THE ASSET MASSTER RECORD RECORD WHETHER THE FILEDS ARE REQUIRED WHETHER THE FILEDS ARE REQUIRED ENTRY FIELDS OR OPTIONAL ENTRY ENTRY FIELDS OR OPTIONAL ENTRY FIELDS FIELDS
- 14. Multi level methods Using the different combinations of method and rate of depreciation during the Different phases of expected useful life of the asset
- 15. Multilevel methods Multilevel methods cost of the asset Rs.100000 purchased on 1.4.2009 Expected useful life 10 years From 1.4.2009 to 31.3.2012 for 3 years slm+5% From 1.4.2012 to 31.3.2016 for 4 years wdv+5% From 1.4.2016 to 31.3.2019 for 3 years slm +4%
- 16. Sale of asset Acq. Cost of the asset 500000 Less: acc. Dep 40000 ------------ Net book value of asset 460000 Less: sale proceeds 450000 ------------ Loss on sale of asset 10000 ------------
- 17. Journal entry in normal accounting Bank/customer a/c dr 450000 Acc dep on asset a/c dr 40000 Loss on sale of asset a/c dr 10000 to asset a/c 500000
- 18. Journal entry in sap Bank/customer a/c dr 450000 to sale of asset a/c 450000 Acc dep on asset a/c dr 40000 Sale of asset a/c dr 450000 Loss on sale of asset a/c dr 10000 to asset a/c 500000
- 19. Transfer of asset In the normal accounting there will be No journal entry sap entry New asset a/c dr 200000 to old asset a/c 200000 Acc dep on old asset a/c dr 10000 to acc dep on new asset a/c 10000
- 20. Scrapping of asset Acq cost of asset 100000 Less: acc dep 2000 ----------- Net book value of 98000 asset ------------
- 21. Jouranl entry Acc dep on asset a/c dr 2000 Loss due to scrapping a/c dr 98000 to asset a/c 100000 In sap also same entry is posted.