Former M emb er

September 11, 2013 7 minute r ead

https://blogs.sap.com/2013/09/11/different-
methods-of-depreciation-calculation/

Different Methods of Depreciation

Calculation
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Depreciation Calculation Methods

Various depreciation calculation methods are mentioned below:

i. Base Method
ii. Declining Balance Method
iii. Maximum Amount Method
iv. Multi Level Method
v. Period Control Method

i. Base Method

Base Method- SPRO> IMG> Financial Accounting (New)> Asset Accounting>Depreciation> Valuation
Methods> Depreciation Key> Calculation Methods>Define Base Methods

Base method primarily specifies:

 The Type of depreciation (Ordinary/ Special Depreciation)
 Depreciation Method used (Straight Line/ Written Down value Method)
 Treatment of the depreciation at the end of Planned useful life of asset or
when the Net Book value of asset is zero (Explained in detail later in other
related transactions ).

Straight Line Method (SLM)

 This is the simple method of depreciation.
 It charges equal amount of depreciation each year over useful life of asset.
 It first add up all the costs incurred to bring the asset in use and then it
divides that by the useful life of asset in years to calculate the depreciation
expense.
 E.g.: Say a Computer costs Rs. 30,000 and Rs. 11,000 (as additional set-
up/installation/maintenance expenses) = Rs 41,000 and it is anticipated
that its scrap value will be Rs. 1,000 at the end of its useful life, of say, 5
yrs.

Total Cost = Cost of Computer + Installation Exp. + Other Direct Costs

Depreciable Amount over No. of years = Total Cost – Salvage Value (At end of useful life)

30,000 +11,000 =41,000 (Total cost)

41,000 – 1,000 = 40,000 as the Depreciable Amount

Depreciable Amount = Rs. 40,000, Spread out over 5 years = Rs. 40,000/5(Yrs) = Rs. 8000/- depreciation
per annum.

Written Down Value Method (WDV)

 This method involves applying the depreciation rate on the Net Book Value
(NBV) of asset. In this method, depreciation of the asset is done at a
constant rate.
 In this method depreciation charges reduces each successive period.
 This method should be used in those assets, where high depreciation
should be charged in initial years.
 Assume the price of a depreciable asset i.e. computer is Rs. 40,000 and
its salvage value after 10 years is 0.
 In this method NBV will never be zero.

Depreciation Per year = (1/N) Previous year’s value, Where N= No. of years

So in our example, the depreciation amount during the first year is

[Rs. 40,000*1/10] =Rs. 4,000

NBV of computer after 1st year= Rs 40,000- 4,000 = Rs. 36,000

Depreciation for 2nd year is

[Rs. 36,000*1/10] =Rs. 3,600

ii. Declining Balance Method

Enter Transaction code AFAMD- Change View “Declining Balance Method”

AFAMD- Change View “Declining Balance Method”- SPRO> IMG> Financial Accounting
(New)> Asset Accounting>Depreciation> Valuation Methods> Depreciation Key> Calculation
Methods> Define Declining-Balance Methods
This is the other name of Written Down Value (WDV) method as mentioned in Base method
above.
If the WDV method is specified in Base method then the following additional settings in this
method can be used:
 A multiplication factor for determining the depreciation percentage rate.
The system multiplies the depreciation percentage rate resulting from the
total useful life by this factor.
 A lower limit for the rate of depreciation. If a lower depreciation percentage
rate is produced from the useful life, multiplication factor or number of units
to be depreciated, then the system uses the minimum percentage rate
specified here.
 An upper limit for the rate of depreciation.If a higher depreciation
percentage rate is produced from the useful life, multiplication factor or
number of units to be depreciated, then the system uses the maximum
percentage rate specified here.
iii. Maximum Amount Method
Maximum Amount Method- SPRO> IMG> Financial Accounting (New)> Asset
Accounting>Depreciation> Valuation Methods> Depreciation Key> Calculation Methods>
Define Maximum Amount Method
Generally, If we uses Straight line method, then depreciation amount should be same for all
years. But depreciation on asset is subject to change due to many factors e.g. any addition to
the asset, change in estimate of useful life, change in estimate of scrap value etc.
So for maintaining better control on the amount of depreciation, SAP has provided this method
where we can specify the maximum amount that can be charged as expense in a particular
year. If this is specified, user will not be able to post depreciation exceeding the amount
specified here.
iv. Multi Level Method

Enter Transaction code AFAMS- Change View “Multilevel Method”

AFAMS- Change View “Multi Level Method”- SPRO> IMG> Financial Accounting (New)>
Asset Accounting>Depreciation> Valuation Methods> Depreciation Key> Calculation
Methods> Define Multi Level Methods

As the name itself suggests, this method provides the flexibility to specify different rate of
depreciation for different years/periods. E.g. in some cases depreciation rate required is
different in initial years and after that the rate should be changed. This can be achieved in SAP
by using Multi level Method.

In this method, SAP provides us the possibility to specify different levels during the useful life
of an asset. Each level represents the period of validity of a certain percentage rate of
depreciation. This percentage rate is then replaced by the next percentage rate when its period
of validity has expired. We can specify the validity period for the individual levels of a asset in
years and months.

It also provides the flexibility to us to choose the defined validity period, which can begins with
 The capitalization date.
 The start date for ordinary or tax depreciation.
 The original acquisition date of the asset under construction.
 The changeover year.
 v. Period Control method

Enter Transaction code AFAMP- Maintain Period Control Method

AFAMP- Maintain Period Control Methods”- SPRO> IMG> Financial Accounting (New)>
Asset Accounting>Depreciation> Valuation Methods> Depreciation Key> Calculation
Methods> Maintain Period Control Methods

It is one of the most relevant method to keep control on the calculation of depreciation. Here
we mention the different rules for periods in case of different scenarios for assets. This
method controls the period for which the depreciation is calculated on an asset during the
year.
Under this method, we can specify the period for which the depreciation should be calculated
in case of :
 Acquisition of Asset/Subsequent acquisition
 Retirements/Scrap
 Sales/Transfers
 Upward/Downward Revaluation

There are some standard methods that has been provided by SAP e.g. Pro rata at
mid period, Pro rata at period start date, at the start of year or At mid year etc. E.g., If client
requires to depreciate an asset from the First day of the year in which the asset is capitalised,
we can use the method `At the start of the Year` in case of Acquisition.
This method has been explained with the help of one comprehensive example below:

Example: A company wants to charge depreciation as follows. Client follows calendar year from
January-December 2013 as
Accounting/Fiscal year.
1. In case of Asset Acquisition: Depreciation should start from the First day of the year in which
asset is acquired.
2. In case of Asset Addition: Depreciation should start from the Ist day of period of date of addition.
3. In case of Asset retirement: Depreciation should be charged upto Mid period regardless of date
of retirement.
4. In case of Asset Transfer: Depreciation for the full year should be charged by the transferee
company.
 After having knowledge of all the depreciation calculation methods, we can assign the depreciation
calculation methods to the depreciation key.
Creation of Depreciation key:

 Asset accounting module of SAP calculates the depreciation on Assets based on the configuration
done for Depreciation key. Depreciation Key basically contains the calculation methods which in
combination control the following:
 Period for which Depreciation is charged
 Method of Depreciation
 Scrap value, if any
 Planned change in Method of Depreciation

We enter a separate depreciation key for each depreciation area in the asset masterrecord.

Creating Depreciation Key:

Enter Transaction code AFAMA- Change View “Depreciation Key”

AFAMA- Change View “Depreciation Key”- SPRO> IMG> Financial Accounting (New)>
Asset Accounting>Special Valuation> Net Worth Tax>Depreciation Key>Define Depreciation
keys

As depreciation key is Chart of Depreciation dependent, system will prompt to enterchart of Depreciation
on accessing transaction AFAMA and screen shown below will be displayed.
Here, we need to specify the following at appropriate fields\check boxes:
 No./Name of Depreciation key Numeric/Alphanumeric.
 Maximum Amount method (Discussed above in methods of depreciation)
 Cutoff value key to control the scrap value if no absolute scrap value is maintained
in the system. The cutoff percentage rate that is determined on the basis of this
cutoff value key is only used by the system when:
 There is no absolute scrap value entered in the the depreciation areas of
the asset concerned (an absolute scrap value takes precedence over a
cutoff percentage rate)
 Negative book value is not allowed for the asset
 Whether ordinary depreciation should continue to be charged in a year in which
special depriciation is also charged on the asset or not?
  Set `Depreciation to the day` indicator to allow system to calculate the depreciation
according to the number of days the asset is used.

If this indicator is set, period control method assigned to depreciation key will be ignored and
Asset value date will be considered as the depreciation start date.

Assignment of Depreciation Calculation Method to Depreciation key:

Select The depreciation key and click on Assignment of Calculation methods. Now assign different
methods to depreciation key.
http://sapconcepthub.com/what-is-the-
use-of-depreciation-key-in-asset-
accounting/

What is the use of depreciation key in

asset accounting?

Before understanding depreciation key lets understand depreciation method and period control method.
When depreciation is run end of the month then below accounting document gets posted.

In order to be able to post above document, sap software needs to calculate depreciation amount.
For sap to be able to calculate depreciation amount, below inputs needs to be provided to sap:

1.Depreciation method:
Different depreciation calculation method will lead to different depreciation amount. Below some of the
depreciation calculation methods are shown for understanding the concept:
Straight line depreciation
Declining balance method
Written down value method
Multi level method
Maximum value method
Appropriate method is used for calculation of depreciation of the asset.

2. Period control method

Consider an example: Company has fiscal year from January to December.

Asset acquisition
Asset is acquired on 7th July.
Now, when depreciation run is performed end of the month (July), what should be depreciation start date?
Should depreciation start date be 1st July and depreciation calculated for entire 1 month?
Should depreciation start date be 1st Jan of the same year and depreciation calculated for 7 month?

Addition of asset:
Asset is added on 10th August.
Should depreciation be charged starting from 1st August and depreciation calculated for entire 1 month?
Should depreciation be charged starting from 1st Jan of the same year and depreciation calculated for 7 month?

Asset retirement:
Asset is retired on 17th Sep.
Should effective date for depreciation calculation be taken 1st September?
Should effective date for depreciation calculation be taken 1st October?
Should effective date for depreciation calculation be taken 1st January?

Asset transfer:
Asset is transferred on 22nd Nov
Should effective date for depreciation calculation be taken as 1st November?
Should effective date for depreciation calculation be taken as 1st December?
Should effective date for depreciation calculation be taken as 1st January of the same year?

Effective date plays an important role in depreciation calculation. Different effective date will lead of different
depreciation amount. Hence, input (instructions) needs to be given to sap on the basis of which sap can
determine effective date for depreciation calculation.
Instruction for determination of effective date for depreciation calculation is supplied to sap in the form
of period control.

Now let us understand how instructions are captured in period control.

Period control is used for determination of effective date for depreciation calculation.
→ Depreciation calculation method and period control both are captured in depreciation key. Depreciation key
is assigned to asset class.
→Depreciation key is assigned to each depreciation area separately.
→ When an asset is created, asset automatically gets the depreciation key which is assigned to the
corresponding asset class..

Below link to help you understand depreciation key better

https://blogs.sap.com/2013/09/11/different-methods-of-depreciation-calculation/
 NEXT

https://wiki.scn.sap.com/wiki/display/ERPFI/Asset+Value+Date+and+Ordinary+Depreciation+Start+Date

Asset Value Date and Ordinary Depreciation Start

Date
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 Created by Carol Xu, last modified by Nathan Genez on Jul 24, 2015
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Purpose

The purpose of this page is to clarify the relationship between asset value date and depreciation start date, and how
they infulence the depreciation calculation.

Overview
The asset value date is the value date for Asset Accounting. It can derivate from the posting and document date and be in
posting periods already closed for Financial Accounting. However, the posting year and asset value date year must be the
same.

Depreciation start date is the key date for the begining of depreciation calculation. As a general rule, the system determines
the depreciation start date from the asset value date of the first acquisition posting. However, you can also manually enter a
calendar date in the asset master record for the start of depreciation. In that case, the system ignores the asset value date
of the acquisition posting.

The asset value date can have a direct influence on the amount of depreciation. It determines the ordinary depreciation date
with consideration of transaction type on the first transaction happen in the asset. In the case of depreciation key
use remaining useful life in multilevel method, if the ordinary depreciation start date and asset value date was in the same
fiscal year, the ordinary depreciation start date will be considered and depreciation calculation will be calculated from it. And
if the ordinary depreciation start date is at the previous year of asset value date, the depreciation calculation will take the
asset value date as the begin of depreciation.

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https://blogs.sap.com/2015/09/23/determination-of-depreciation-start-date-in-asset-accounting/

Former M emb er

September 23, 2015 3 minute r ead

Determination of Depreciation start date in

Asset accounting
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0 Li kes 4,207 Vi ews 2 C omments
In Asset accounting, the asset value date is very important value field solely because it is the main
criteria for calculating the depreciation value for the asset. Along with this, the capitalization date,
First Acquisition date fields too play important roles.

In this document, I will try to show by example how these different date fields are dependent on each
other and how system calculates these value fields.

The master data of an asset (first tab) is shown below:

Based on the screen layout and tab layout configurations the above screen may differ.

The “Capitalized On” field is ready for input. User will have two options either to fill it with particular
date or leave it blank.

Let’s consider:
Case 1: User manually entered the “Capitalized On” date

The field “Acquisition on” is read-only. Once the asset is capitalized , system will fill this value with
“Capitalized on” field value.

Now, the capitalized date is manually entered and asset is created.

The asset is still not capitalized.

The field ODepr.Start date field is still blank.

Now using external acquisition with vendor F-90 the asset is capitalized.

After Capitalization,
System copied the “Capitalized on” date to “First acquisition on” date field.

The ODep.Start date is based on asset value date and period control method in the Dkey.

Note that , there are two Depreciation keys used – LINI and MX04.

For LINI – system calculated ODep Start date as 01.02.2015 and for MX04 its 01.03.2015. (This is
due to period control method in DepKey settings , although the asset value date is same.)

In Asset values explorer: Asset value date is as below (same as manually entered “Capitalized on”
date value)

System settings of Period Control for Depreciation Keys:

Below is the system settings for Period Control keys for Acquisition transaction:
The above illustration explains the system behavior in calculating asset value date, depreciation start
date and First acquisition on date values.

Case 2: The field “Capitalized On” field is left blank during asset creation
Now using external asset acquisition transaction (F-90) the asset is capitalized:

Note the document date and posting date.

Now the system refers the earliest of document date and posting date as Capitalized on , First
acquisition on date.

Note: if posting date and document date are in different fiscal year, then posting date will be
considered.
Asset value date is,

As described above, the depreciation start date is based on asset value date and period control
method in Depreciation key(assigned to depreciation area).

system calculated the ODep Start date as mentioned above.

If in the depreciation key settings, “Depreciation to the day” check box is checked, then system
ignores the ODepStart date and considers asset value date for depreciation calculation.

For further information on the Asset dates , please refer to below link:
http://help.sap.com/saphelp_erp60_sp/helpdata/en/4f/71e122448011d189f00000e81ddfac/content.h
tm

Below is the reproduced information from above post:

system will automatically determine the value date in below scenarios (Not manually entered)

Any feedback/suggestions for improvements are most welcome.

Regards,

Ravish Prabhu
Former M emb er

June 5, 2014 5 mi nute read

NEXT
https://blogs.sap.com/2014/06/05/changes-
in-asset-accounting-for-indian-companies-
act-2013/

Changes in Asset Accounting for Indian

Companies Act 2013
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Below is the changes that will be taking place in the system due to changes in Company’s Act
2013 incorporation:

1.) If life of the asset has decreased:- e.g. there is asset for which original life is 10 years, 3 years
already completed as on 31st March 2014 and now life has decreased to 7 years. In this scenario,
WDV as on 31st March 2014 should be depreciation over the period of 4 years instead of 7 years.
How to carry out this change

1. A New Depreciation key would be created which will calculate the depreciation on the remaining
useful life of assets as maintained in the Asset Master.
2. For the New Assets, no changes are required but for Existing Assets, the changes in the Asset Master is
required to be done in the Useful Life of Asset as well as in the Depreciation Key of the
Asset. This changes will be done by the User’s.

2.) If life of the asset has increased:- e.g. there is asset for which original life is 10 years, 3 years already
completed as on 31st March 2014 and now life has decreased to 12 years. In this scenario, WDV as on 31st March
2014 should be depreciation over the period of 9 years instead of 7 years. How to carry out this change

3. This will be catered in the same way as is done for the above point (1.)

3.) If the life of the asset is already over after change in rates:- e.g. there is asset for which original life is
10 years, 7 years already completed as on 31st March 2014 and now life has decreased to 6 years. In this scenario,
WDV as on 31st March 2014 should be charged to the opening reserve. How to carry out this change

4. In this case an entry is to be posted in the system by User, for which the GL’s needs to be provided by the
business.
Below showsu the detailed example for the above mentioned points.

1. If the Life of asset has decreased:

Asset No. : 211000112

Depre key – ZS15 – which is depreciating the Asset on Useful Life basis.
The planned values for depreciation posting is as below for Fiscal year 2015 :
Now changing the useful life of assets from 4 years to 3 years. So now the Asset will be write off in 3
years as shown below:
The Comparison tab is as below:
Depreciation planned values for the year 2015 is as follows:

From above we can see that depreciation per period has changed from 415.63 to 581.88 due to
change in useful life of assets.

2. If the Life of asset has increased:

Asset No. : 211000113

Depre key – ZS15

The planned values for depreciation posting is as below for Fiscal year 2015 :
Now changing the useful life of assets from 4 years to 5 years. So now the Asset will get written off
in 5 years as shown below:

The Comparison tab is as below:

Depreciation planned values for the year 2015 is as follows:
From above we can see that depreciation per period has changed from 1607.81 to 1250.52 due to
change in useful life of assets.

3. If the life of the asset is already over after change in rates:

Asset No. : 211000038

Depre key – ZS15

The planned values for depreciation posting is as below for Fiscal year 2015 :
Now changing the useful life of assets from 4 years to 1 years. But here already the expired useful
life is of 2 years, whereas according to Company’s Act, 2013 the useful life of Asset should be 1 year
only.
The Comparison tab is as below:

Depreciation planned values for the year 2015 is as follows:

From above we can see that depreciation per period has changed from 3750.66 to 0 due to change
in useful life of assets. And the remaining NBV of the Asset of 86265.40 will be removed by
executing T-Code ABAA for this Asset as shown below:

Then press enter. After this on next screen enter the NBV of the Asset i.e. 86,265.40
After this save the Document as below:
We can check in the Asset Explorer that the above document is posted and the NBV of the Asset is
‘Nil’
Here the Document is posted in AA only and not in FI. The unplanned Depreciation entry will get
posted in FI when Depreciation Run is executed for this period through T-Code – AFAB as below:
After this Execute the same :

From above we can see that this entry will be getting posted in the system. The accounting entry for
the same is :
 This is the testing GL that we have used in posting key 40, that would be the Reserve GL that would
be provided by the Client.

After this the entry will be posted in the FI and by AA and FI will be in synchronization.

Kindly revert if any additions or changes or suggestions for the above document.

Regards,

Malhar.





 Alert Moderator

NEXT

https://wiki.scn.sap.com/wiki/display/ERPFI/Depreciation+Smoothing+and+Catch+Up

1. ERP Financials
2. …
3. Depreciation

Depreciation Smoothing and Catch Up

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 Created by Former Member, last modified by Nathan Genez on May 10, 2012
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Purpose
Explain the concept of smoothing and catch up functionality when defining depreciation posting rules via transaction
OAYR. This write up also explains the calculation of depreciation under smoothing and catch up methods of depreciation.

Overview
Typically, depreciation is posted by the system at the end of each posting period. The frequency of depreciation posting is
defined via transaction OAYR (i.e, Monthly posting, Bi-Monthly posting , quarterly posting etc..). Once the frequency for
posting depreciation is defined, the specifications are valid at the company code and depreciation area level.

In the same customizing step, there is an important option called Smoothing. This option determines how the system
behaves if settings like the depreciation key or useful life have changed in the Asset during the fiscal year, resulting in
changes in the value of depreciation ( either high or low).

If the smoothing option is activated, the difference is distributed equally among the remaining posting periods of the current
fiscal year.

If this option is not activated, the entire difference is posted to the current period which is known as catch up.

Business Scenario
Depreciation relevant parameters like depreciation key or useful life of an asset is changed in the asset master or in
customizing. This results in change in the depreciation amount.

Example
An asset is acquired for $12,000 on 01/01/2012 and its useful life is 10 years. Hence the yearly depreciation will be
$12,000/10 years = $1,200 per year and the monthly depreciation will be $1,200/12 months = $100 per month.

Depreciation is posted for period 1 to period 6.

Now the useful life of the above asset is changed from 10 years to 5 years in the asset master record in the mid of the year
i.e on 01/07/2012. Then, the revised (new) depreciation will be $12,000/5 years = $2,400 per year and the monthly
depreciation will be $2,400/12 months = $200 per month.

This resulted in increase of Depreciation from $ 1200 to $2400 for the fiscal year 2012.

Original Depreciation: $ 100/ Month

Revised Depreciation: $ 200/Month

What happens with the difference between the original and new depreciation in periods
1- 6?
There are 2 possibilities: Smoothing or Catch-Up
Smoothing
The difference will be equally distributed over the remaining planned periods:

Period Original Depreciation New Depreciation Difference Amount to be Posted

1 Posted -100 200

2 Posted -100 200

3 Posted -100 200

4 Posted -100 200

5 Posted -100 200

6 Posted -100 200

7 Planned 200 100 300

8 Planned 200 100 300

9 Planned 200 100 300

10 Planned 200 100 300

11 Planned 200 100 300

12 Planned 200 100 300

Catch up
The whole difference will be posted in the next planned period:

Period Original Depreciation New Depreciation Difference Amount to be Posted

Period Original Depreciation New Depreciation Difference Amount to be Posted

1 Posted -100 200

2 Posted -100 200

3 Posted -100 200

4 Posted -100 200

5 Posted -100 200

6 Posted -100 200

 Period Original Depreciation New Depreciation Difference Amount to be Posted

Period Original Depreciation New Depreciation Difference Amount to be Posted

7 Planned 200 600 800

8 Planned 200 200

9 Planned 200 200

10 Planned 200 200

11 Planned 200 200

12 Planned 200 200

Conclusion
If the depreciation parameters are changed after the transaction and depreciation are posted. The depreciation posting run
executed with the smoothing method divides the difference between planned annual depreciation and the depreciation
amount posted to date among the remaining posting periods in equal shares.

If the catch up method is used, the depreciation posting run posts this difference as one total in the current posting period.

Help Link

NEXT
http://sap-f5.blogspot.com/2009/06/sap-dates-in-asset-accounting.html

SAP: Dates in Asset Accounting

Asset Value Date: is the value date of an asset transaction from the asset accounting point of view.
Each transaction on a capitalized asset triggers the automatic calculation of depreciation on the
posting amount. The asset value date, corrected by the period control of the depreciation key, is the
key factor in determining the depreciation start date.

Default Values for Asset Value Date

Since the asset value date has a direct influence on the amount of depreciation, the system creates a
default value for this date when it can. The overview that follows shows the default asset value date
for the most important asset transactions:
 Initial acquisition -> Capitalization date from master record (if in same FY,
otherwise posting date)

Subsequent acquisition in the same Asset value date of initial acquisition

year->

Subsequent acquisition in later years-> Document date

Down payment-> Capitalization date from master record (if in same FY,
otherwise posting date)

Investment support-> Capitalization date from master record (if in same FY,
otherwise posting date)

Revaluation-> Date of revaluation measure

Credit memo at time of invoice Value date of the invoice receipt (if in same FY,
receipt-> otherwise posting date)

Later revenue/costs from retirement-> Date of last retirement (if in same FY, otherwise posting
date)

Manual adjustments-> First day of fiscal year

Retirement/transfer-> No default value (required entry)

Settlement of AuC-> Posting date

If the capitalization date is not set in the asset master record after the initial acquisition, or if this
date is not in the current fiscal year, the system uses the logic below to determine a default value for
the asset value date:

 If the document date and the posting date are both in the current fiscal year, the system uses
the earlier of these two dates as the default asset value date.
 If the document date is in a past fiscal year, the system uses the posting date as the default
asset value date.
Automatically Set Asset Value Date
In the following posting transactions, you cannot enter an asset value date directly. The system
therefore uses the default asset value date automatically. It determines which date it uses based on
the table below:

Goods receipt (valuated) -> Posting date

Invoice receipt with ref. to purchase Posting date of goods receipt (if in same FY,
order(valuated)-> otherwise posting date)

Invoice receipt without reference to purchase Posting date

order (valuated)->

Invoice receipt (difference post.)-> Posting date of goods receipt

 Stock withdrawal-> Posting date
K
Defining Your Own Logic for Determining the Asset Value Date
You can set up your own the method for determining the asset value date in Customizing for Asset
Accounting(choose Transactions). Or you can use a customer enhancement project (transaction CMOD).

Capitalization Date
You can enter the capitalization date manually when you create the asset master record. The system
uses this date as the default asset value date when you post the first acquisition to the asset. If you do
not enter a capitalization date in the asset master record, the system automatically adopts the asset
value date of the first acquisition posting as the capitalization date. The system inserts the asset value
date of the first acquisition posting in the capitalization date field (Capitalized on...) in the asset
master record, when a capitalizing transaction type is used.

Depreciation Start Date

The system determines the start period for depreciation calculation from the asset value date and the
period control specified in the depreciation key (period control method) of the transaction category.
The depreciation start date is the first day of the start period. The system determines the book value
of an asset at the point of retirement In a similar fashion.

Date Asset Is Ready for Operation

Along with the date specifications already mentioned, you can also enter the date the asset is ready for
operation in the asset master record (in the detail specifications of the depreciation areas). This date
is for informational purposes only, and has no influence on the calculation of depreciation. If you do
not make an entry in this field, the system automatically enters the capitalization date.

Fiscal Years That Can Be Posted

In the FI-AA component, it is possible to post to the current fiscal year and all previous fiscal years
back to the date of the legacy data transfer for assets. When you post to past fiscal years, the system
automatically updates all the relevant values in the subsequent fiscal years. Therefore, it is possible to
make correction postings in the previous fiscal year, even after the fiscal year change (but before the
year-end closing). However, after posting in a previous fiscal year, you need to run the depreciation
posting program again for that year and all the following fiscal years up to the current fiscal year.
It is no longer possible to post to fiscal years that have been closed using the report for this purpose
(refer toYear-End Closing).

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1. ERP Financials
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Basics of Asset Accounting – Asset Explorer

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 Created by Former Member, last modified by Paulo Junior on Jan 03, 2013
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Purpose
The purpose of this page is to clarify the understanding of the system logic and requirements in relation to the asset Explorer
through transaction code AW01N.

Overview
The following paragraphs and figures will describe with EXAMPLE the steps of how to explore an asset and the functionality
of the main buttons.

In Asset Explorer by transaction code AW01N, we are able to display depreciation calculation. However, if system uses New
depreciation calculation, to be able to simulate Old depreciation calculation, you need to use transaction code
AW01_AFAR.

Exploring an asset with Transaction Code AW01n

Navigation: SAP Easy Access -> SAP Menu -> Accounting -> Financial accounting -> Fixed Asset -> Asset -> Asset
Explorer

Alternatively: AW01N
1) Fill out fields with asset number/Company Code.

2) In Planned values tab, you can check all values related to this asset. APC, Acquisition value, Ordinary depreciation,
net book value.

3) If you select transaction line and click on “hat” button, you can check all details related to each transaction.
 4) And if you double click in the acquisition / retirement / transfer transaction, you will be able to display the document
generated in FI after the acquisition / retirement / transfer.

5) If you click on (display depreciation calculation) button or double click over Ordinary deprec. Value in the ‘Planned
values’ tab, you will be able to see the parameter used by the system to calculate the asset depreciation in that depreciation
area.

 New depreciation calculation displays:

 Old depreciation calculation displays:
O6) In the Posted Values tab you will be able to see how the depreciation will be posted during the year for each period.
PS. In the example below period 1 is missing because it was already posted in time of creation and acquisition posting in
this asset.