ASSET ACCOUNTING

This is also a Sub Ledger (Subsidiary Ledger)

Chart of Depreciation: Asset Customization steps will be made for Chart of
Depreciation and Chart of Depreciation will be assigned to Company Code /Comp.
Codes.

In SAP we don’t have option of creating the Chart of Depreciation for our own company
But SAP has given the option to copy the Existing Chart of Accounts of Germany or
Indian. We have to copy either Germany Chart of Depreciation or Indian Chart of
Depreciation and make changes according to our company Procedure.

Depreciation Areas: We have many areas of Depreciation like

1. Book Depreciation
2. Depreciation as per Income Tax Rules
3. Costing Depreciation as mentioned in Schedule 14 of Companies Act
4. Group Depreciation

Postings to Books of Accounts will be done only Book Depreciation, others

are for information purpose only.
Depreciation Methods:
There are So many Depreciation methods recognized by SAP. But in India
we use either 1. Straight Line Method (SLM) 2. Written Down Value (WDV)

Depreciation Keys: Depreciation Keys are nothing but Rate+ Method say
5% SLM or 5%WDV
Posting Keys: We use the Following Posting Keys in Asset Accounting

Posting Key: 70 For Asset Debit

Posting Key: 75 for Asset Credit
Transaction Types:
100 → External Asset Acquisition
110 → In House Production
210 → Retirement with Revenue (Consideration)
Assets can be acquired from Outside Purchases/ In-house Production/
Inter Unit Transfers/ Inter Company Transfers. So, when we are posting the
Debit Entry, by mentioning the Transaction Type we can come to know what
type to transaction it is.

Asset Accounting is based on 4 Rules:

[A] Sub Asset Master is to be created with reference to the Main Asset Master
[B] Main Asset Master is to be created with Asset Class
[C] Account Determination is specified in Asset Class
[D] For Account Determination we Assign G L Account based on Nature of
Transaction
We will create the Accounts and Determine Accounts like below for Asset Accounting
Testing Purpose

A/c to Account Asset Main Asset Sub Asset

Create Determination Class Master Master
A. Purchases a. Land a. Free Hold
200000 P& M b. Lease Hold

B. Sale of Asset b. Buildings a. Factory

b. Admin
C. Profit on Sale
of Asset c. P& M a. Dept-A Mach.No1 Motor (29.15.09)
b. Dept-B (Cap. On 15.04.05)
D. Loss on Sale c. Dept-C Mach.No2
of Asset (Cap. On 20.06.06)
d. F & F a. F& F
E. Loss Due b. O/ Equip
to Scrapping
e. Vehicles a. Heavy
F. Depreciation b. Others

f. Capital WIP a. General

G. Acc.Depreciation b. Expansion 1
c. Expansion2

Additions to the Main Asset will be created as Sub Asset Master

Account Determination: - The Items will determine the GL Accounts to be Posted Automatically
Main Asset Will have always Sub number ZERO
Depreciation will be calculated at the Sub Asset Master Level, from the date of Capitalization of
Sub Assets.
 Creation of 15 GL Masters (FS00)
Create 15 GL Masters as mentioned below
TCODE=FS00

A/c to Description A/c to Parameters to Maintain

Create Copy
200000 Land 200110
200005 Buildings 200000 Group- Fixed Assets
200010 Plant & Machinery 200000 Reconciliation A/c Type- Assets
200015 Furniture & Fixtures 200000 Sort Key- 018 ( Asset No)
200020 Vehicles 200000 Field Status Group: G067 ( Recon Account)
200025 Capital WIP 200000
100200 Acc. Dep Buildings 200000 Group- Accumulated Depreciation
100205 Acc. Dep P & M 100200 Reconciliation A/c Type- Assets
100210 Acc. Dep F & F 100200 Sort Key- 018 ( Asset No)
100215 Acc. Dep Vehicles 100200 Field Status Group:G067 ( Recon Account)
300102 Asset Sale A/c 300100 ( Exchange Gain A/c)
Group- Other Income Sort Key-018
Field Status Group-G052
300103 Profit on Asset Sale 300100 Field Status Group-G001 Others as above
400302 Loss on Asset Sale 300103 Group- Admn Sort Key-018
Field Status Group-G001
400303 Loss Due to Scrap 400302 ------> Like Above <------
400500 Depreciation A/c 400302 Group- Depreciation Sort Key-018
Field Status Group-G001
 CASH JOURNAL

We can get Daily Cash positions by Opening

Balance + Receipts-Payments
Some Companies will use this for Petty Cash purpose
Cash Journal will not accept Negative Cash Balance