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
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.
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
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:
Post the amounts to IO - FB01
Dr. Material supplied to
Asset (Expenditure)
Cr. Cash account
Settle the amounts to AuC
from IO (Prcg type: Automatic) - KO88
Dr. Asset Under Construction
account
Cr. Contra Capitalized
Settle the amounts to Main
Asset from AuC (Prcg type: Full) - KO88
Dr. Final Asset account
Cr. Asset Under Construction
account
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