Assets Management

EGN 5622 Enterprise Systems Integration

Spring, 2013

Assets Management
Concepts & Theories

Asset Accounting
Concerned

with tracking the financial

consequences associated with the entire
lifecycle of an asset, from acquisition to
disposal (retirement).
Assets can be categorized as tangible,
intangible, and financial

Asset Accounting Classification

Tangible

assets

Fixed assets
Leased assets
Assets under construction

Intangible

assets

Intellectual property
Patents
Trademarks

Financial

assets

Securities
Long term notes (debts)
Mortgages
4

Asset Accounting Components

Asset
accounting
Tangible
assets

Intangible
assets

- Fixed assets
- Leased assets
- Assets under
construction

- Intellectual
property
- Patents
-Trademarks

Financial
assets
- Securities
- Long term
notes (debts)
- Mortgages

Asset Accounting in corporate

financial structure
Chart

of Accounts
General Ledger Accounts
Balance sheet accounts
Income statement accounts
Reconciliation accounts
Subsidiary

ledgers (sub ledgers)

Accounts Receivable (customers)

Accounts Payable (vendors)
Assets

Asset Accounting
Assets

are assigned to

company code
Business area
Accounting

data of assets are maintained in asset

sub-ledger accounts.
E.g. Acquisition costs and depreciation

Asset

sub-ledger accounts are created when

asset master record is created and associated
with a reconciliation account in the general
ledger
Sub-ledger account and the master record
share the same account number
Companies maintain separate reconciliation
accounts for different types of assets
7

Example of Asset Accounts in GL

Asset Accounts (AA) Structure

Example

Asset Management (Lifecycle)

Cost center

Asset master
creation (AA)

Vendor master

Asset
Report
(AA)

Vendor invoice

Asset
Acquisition
(AA)

Outgoing
payment

Asset
Addition
(AA)

Depreciation
Charge

Asset
Transfer (AA)

Asset
Retirement
(AA)

Within/outside
Company code

Plant/location

External

Customer
Master

Business
Area

Customer/Scraping

Customer
Invoice

Customer
Payment

Major Activities in Asset

Management (Lifecycle)
Asset

Acquisition
Asset Depreciation
Asset Retirement

11

Asset Acquisition
Asset

acquisition is concerned with acquiring assets

via internal or external processes
Internal:
production process or project systems

External: 3 external options for purchasing assets,

Purchase from an established vendor using the purchasing process
(different GL accounts)
Purchase from an established vendor without using the purchasing
process (manual entry in GL and sub-ledger; similar to AP
accounting)
Purchase from a one-time vendor or a vendor for whom master data
are not maintained (via clearing account).

12

Asset Acquisition With a Clearing

Account

5,000

Magal and Word | Integrated

Business Processes with ERP
Systems | 2011

13

Asset Depreciation
Asset

depreciation is concerned with the

decrease in the value of an asset over time
Depreciation can be planned or unplanned
Depreciation methods are used
Straight line
Double declining balance
Useful

life
Residual value
Book value
Depreciation areas: parallel valuation
Magal and Word | Integrated
Business Processes with ERP
Systems | 2011

14

Straight Line Depreciation

Magal and Word | Integrated

Business Processes with ERP
Systems | 2011

15

Double Declining Balance

Depreciation

Magal and Word | Integrated

Business Processes with ERP
Systems | 2011

16

Financial Statements Based on

Depreciation Areas (parallel
valuation)

Magal and Word | Integrated

Business Processes with ERP
Systems | 2011

17

Asset Retirement
Concerned

with the disposal or

retirement of an asset after its useful
life
Retirement may be:
Revenue generating (sold)
Non-revenue generating (scrapped)

Magal and Word | Integrated

Business Processes with ERP
Systems | 2011

18

Asset Explorer
Asset

explorer provides an overview of all

activities related to the asset, including:
Acquisition data
Planned and posted depreciation
Drill-down details for:
Master data
Transactions
Documents

Depreciation posting run (for an assumed

useful life)

19

Asset Explorer
The asset explorer can:
show all the values of a fixed asset
display various forms of summarized
information for decision making
display connections from the Asset
Explorer to the G/L accounts, vendor
accounts, the cost center, and the Purchase
Order of the Asset
display planned values are, as well as
values already posted for analyzing asset
values

Asset Explorer Interface

Magal and Word | Integrated

Business Processes with ERP
Systems | 2011

21

Asset management linked to

financial accounting

Magal and Word | Integrated

Business Processes with ERP
Systems | 2011

22

Assets Management
SAP Implementation

SAP Module View

Financial
Accounting

Sales &
Distribution
Materials
Mgmt.

R/3

Production
Planning

Quality
Mgmt.

Controlling

Plant
Maintenance
Human
Resources

Fixed Assets
Mgmt.

Integrated Solution
Client / Server
Open Systems

Project
System
Workflow

Industry
Solutions

Create Asset Master

Create Asset Master

Purchasing an Asset

Purchasing an Asset

One way to skip the step of creating an Asset in the books is to directly go
to the Purchase Order, and click the button pointed to.

Receiving an Asset

Invoicing an Asset

Asset Explorer (Comparison)

Asset Explorer (Parameters)

Asset Explorer (Simulation)

Asset Explorer (Simulation)

Features of the Asset Explorer

Header: where you enter
the company code and
asset number (Structure)
Overview tree: allows
you to navigate
between the different
depreciation options

More Features of Asset Explorer

Overview tree: displays
objects that are related to
the asset

Tabs: allows you to

analyze the planned
values and posted
values using different
parameters, as well as
compare fiscal years
and depreciation areas

SAP IDES Client, Userid, Password

Exercises for Assets Management:

Client: 110
Application server: budapest.cob.csuchico.edu
System number:
23
System ID:
BDP

Userid:
Initial Password:

ides-061 to ides-082
SAP4US

HW Assignment (Due date 2/11/2013)

1.Create appropriation request
2.Create asset
3.Create a vendor
4.Create an information record to link the vendor
and the asset
5.Create a purchase order for the asset
6.Check the asset and accounting records
7.Make assets receipt against purchase order
8.Enter incoming invoice
9.Use asset explorer