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It is not always that xed assets are acquired in their complete form, sometimes they are built progressively over a period of time. When Fixed Assets are being built over time, they
are treated as assets under construction, and then they are capitalized or settled to a xed asset (s) or other settlement objects, upon completion.
In this posts we will discuss the whole cycle of an AUC in SAP (including its settlement to an asset) end to end, except the capitalization of AUC Down Payment (this will be
discussed in another post).
Characteristics of an AUC
1. They are built over time and settled to a Fixed Asset (s) or other settlement objects (Internal others, WBS, etc.) upon completion.
2. Mostly not depreciated during the AUC stage. This is true for most countries.
3. You can have a collective master record for all AUCs. However, the best approach is to have a separate asset class for assets under construction and maintain an asset
master record for each AUC.
Steps to follow
The following steps will be followed in the post:
1) Con guration of a separate asset class (with other related settings) for the Assets under
Construction.
We follow the steps below for the settings of the asset class:
IMG — Asset Accounting — Organizational Structures — Asset Classes – Specify Account Determination
“The account determination determines the reconciliation accounts in the general ledger, as well as their o setting accounts, that are to be posted when certain business
transactions are carried out”.
Whichever account determination you specify here will be entered in the asset class.
IMG — Asset Accounting — Organizational Structures — Asset Classes – Create Screen Layout Rules
c) De ne Number Range Interval, if you plan to assign a new number range to AUC.
To de ne number range interval for your AUC, use the menu path:
IMG — Asset Accounting — Organizational Structures — Asset Classes – De ne Number Range Interval
d) De ne asset class
To de ne asset class, use the menu path:
Account Determination. Enter the account determination key you de ned in 1 a) above.
Screen layout rule: Enter the Screen layout rule you de ned in 1 b) above.
Number Range: Enter the number range de ned in 1 c) above.
Line Item Settlement: For our example we will use line item settlement approach in settling our AUC to the target/receiver asset.
Other options
No AUC or Summary management of AUC: If you check this option, it means that assets under construction assigned to this asset class are managed without the option of line-
item settlement.
Investment Measure: “Speci es that the assets under construction in this asset class can be created solely in relation to capital investment measures (internal orders or WBS
elements)”.
As I mentioned, we will use the line item settlement option in our example
After selecting all necessary elds, save your settings and go back
3) De ne and assign settlement pro le for the AUC and other related settings
a) De ne Transaction Types
Follow the menu path
IMG — Financial Accounting (New) — Asset Accounting – Transactions — Capitalization of Assets under Construction — De ne Transaction Types
We will use the standard SAP Transaction types, they are more than su cient for our purpose.
Note: From the side of the Source asset (AUC), the system is treating this as a retirement:
Transaction types “340” and “345” are normally used for the “line item settlement” scenario (for settlement of prior year and current year acquisitions respectively).
Transaction types “348” and “349” are normally used for the “summary settlement” scenario (for settlement of prior year and current year acquisitions respectively).
Note: From the side of the Receiver asset (AUC) the system is treating this as an acquisition:
Transaction type “341” is the o setting transaction type for Transaction types “340” and “348” on the receiver assets (acquisition) side of the transaction, irrespective of whether it is
line item settlement scenario or not.
Transaction type “346” is the o setting transaction type for Transaction types “345” and “349” on the receiver assets (acquisition) side of the transaction, irrespective of whether it is
line item settlement scenario or not.
Select your transaction type group and double click on speci cation of asset classes.
Enter your asset class here.
Adopt/copy/de ne a new settlement pro le.
Double click on your settlement pro le and make the necessary settings.
By our settings, any AUC under a Company code assigned to this settlement rule, can be settled on a cost center, Internal Order, WBS element and Fixed Asset. In our example we
will only settle to AUC to another Fixed Asset.
Next we assign the settlement pro le de ne above to our company code.
Double click on assign settlement pro le to company code.
Enter your AUC
Highlight the line item you want to settle and click on Enter icon to enter the distribution rule. This should be repeated for all the line items you want to settle.
Enter your distribution rules as above.
Click on the check button to check your entry
Proceed by clicking on the back button, if there is no error
Repeat this process for all the line items you want to settle.
Note: You can execute the settlement within this same screen by clicking on Settlement, or proceed to the second step with transaction AIBU. They all take you to the same
step.
ii. Process the settlement of the asset under construction (use transaction AIBU).
The system used transaction type “340” for the retirement transaction of the AUC, because it is a line item settlement of a prior year transaction.
Press Enter and continue.
Click on execute.
As you can see, the system used transaction type “341” for the acquisition transaction in the Target Asset.
Now go back and remove the test run and execute the actual run.
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(http://sapgurus.com/category/uncategorized/) and tagged Capitalization of Asset Under Construction (http://sapgurus.com/tag/capitalization-of-asset-under-construction/), SAP Fixed assets
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Best Regards,
Ebrima
Reply (http://sapgurus.com/treatment-of-assets-under-construction-in-sap-from-creation-to-settlement/?replytocom=20#respond)
2. Nica Chua says:
November 24, 2016 at 8:45 am (http://sapgurus.com/treatment-of-assets-under-construction-in-sap-from-creation-to-settlement/#comment-21)
Hello,
I really like your blog ’cause i learn a lot especially in con gurations since i am a sap co practitioner. i hope you will post more about Controlling part of SAP.
Regarding “Treatment of Assets under Construction in SAP – from creation to settlement” i just want to ask if after Settlement AuC, will the source asset be automatically
deactivated?
Reply (http://sapgurus.com/treatment-of-assets-under-construction-in-sap-from-creation-to-settlement/?replytocom=21#respond)
1. admin_sg (http://www.sapgurus.com) says:
November 24, 2016 at 9:49 am (http://sapgurus.com/treatment-of-assets-under-construction-in-sap-from-creation-to-settlement/#comment-22)
Hello Nica,
As for the deactivation of the AUC, standard SAP behavior is that the AUC is automatically deactivated after the settlement process is completed. However, if for any
reason you do not want the settled AUC to be deactivated, you can control this in con guration.
If you go back to the second screen shot of para 3 (a) of this particular post, you will see that the deactivate check box is by default “checked”. All you have to do is to
uncheck that to avoid the AUC from being deactivated. I produce the screen shot below:
Best Regards
Reply (http://sapgurus.com/treatment-of-assets-under-construction-in-sap-from-creation-to-settlement/?replytocom=22#respond)
3. Barrett (http://www.perlwiz.biz/author/david/) says:
August 20, 2017 at 3:50 pm (http://sapgurus.com/treatment-of-assets-under-construction-in-sap-from-creation-to-settlement/#comment-236)
Thanks or sharding your thoughts. I truly apprecoate your
e orts and I am waiting for your next post thank you
once again.
Reply (http://sapgurus.com/treatment-of-assets-under-construction-in-sap-from-creation-to-settlement/?replytocom=236#respond)
4. Siphelele says:
November 8, 2017 at 7:43 am (http://sapgurus.com/treatment-of-assets-under-construction-in-sap-from-creation-to-settlement/#comment-577)
Hello,
We have been having a problem with settling Investment Orders where there are more than one Receivers which have a Pro t Centre di erent from the Investment Order. We
get the “Balancing eld ‘pro t center’ in line item 001 not lled” error GLT2201. Even thought the Asset Master and the Investment Order have the pro t center lled in.
Reply (http://sapgurus.com/treatment-of-assets-under-construction-in-sap-from-creation-to-settlement/?replytocom=577#respond)
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