Last Updated on March 2, 2022 by Pradeep
Asset Accounting in SAP – Role
Asset accounting in SAP S/4HANA is the new way of accounting to manage and supervise fixed assets into the sap system. It helps in providing detailed information on transactions that involve fixed assets. It is a kind of subsidiary to the General Ledgers. We call it New Asset Accounting. Since we already have Asset Accounting in ERP version, now that is upgraded in HANA technology, so we named it as New Asset Accounting.
Related: Process of Asset Accounting in SAP FICO
What Features of New Asset Accounting in SAP we are talking about?
These 3 important features that have updates in new asset accounting in SAP S/4HANA are:-
- Parallel Valuation
- Ledgers
- Currencies
Currencies in Asset Accounting in SAP
Companies are often obliged to draw up a set of statutory accounts in their local country. However, they need to adjust those statutory accounts when reporting to the head office. This is because they require consistency in a report to group practices. And likewise, they need to adjust for local GAAP or report in different currencies.
Although in SAP S/4 HANA up to 10 currencies are now available. Out of these 10, 2 are fixed and 8 are freely definable. Only 3 currencies can be used in Asset Accounting.
Ledgers in Asset Accounting in SAP
Earlier, if you wanted to record and report on data for more than one accounting principle in SAP, the only way to do this was by using a different area of the chart of accounts.
The new SAP General Ledger brought in the technology for parallel ledgers. This enables you to keep two sets of books simultaneously.
However, not all companies may want to set up parallel ledgers. Especially if they only have a few differences between accounting principles. Therefore, New Asset Accounting in SAP with S/4 HANA still allows the choice of the two methods. These are:- Account Approach and Ledger Approach.
Parallel Valuation – The Account Approach
You may choose not to set up any parallel ledgers in SAP Finance. In that case, you can continue to post different accounting principles to different areas of the chart of accounts.
This is called the Account Approach and can be set by the company code.
Some companies keep the chart of account length the same and use a completely separate range of accounts. However, you can also add an additional digit to your existing account.
For example, Suppose you use 123456 for the book or local GAAP. Here you can add a prefix to create 8123456 to post to group or IFRS accounts. This just makes it easier to understand, compare and reconcile the two values.
Your reports then access the different accounts accordingly.
Remember, although you need not set up any additional physical ledgers in FI with the account approach. Still, there are many new transactions in New Asset Accounting in SAP S/4 HANA that allow you to choose which accounting principle to post to.
Even with the account approach, you will need to set up ledger groups for the different accounting principles. And then link the depreciation areas to them.
Depreciation Area – The Ledger Approach
With the ledger approach, you need to set up a depreciation area in New Asset Accounting. This applies to each additional ledger and for each currency you post in FI.
The ledger approach excludes extension ledgers. Having separate ledgers means you can use the same chart of account codes in each ledger. This is regardless that you may be posting different amounts for the different accounting principles.
To summarize, with the ledger approach, you post to the same accounts in different ledgers. While with the account approach, you post to different accounts in the same ledger.
Types of Depreciation in SAP S/4HANA
S/4 HANA provides different types of depreciation. For example, ordinary or planned depreciation is routine depreciation based on the criteria in the asset master record.
What Ordinary Depreciation does?
The New system posts the Depreciation, including any relevant interest periodically. For example for cost accounting plus any revaluations and impairments.
With New Asset Accounting we have the type of period, like, week, calendar month, the quarter, set in the configuration. You can choose periods such as 4-4-5 weeks.
In SAP S/4 HANA Finance whenever you do any change or posting into an asset, the system updates the planned depreciation in real-time. This helps at the end of the period as no requirement for further calculation. It also helps in posting the planned depreciation that becomes actual depreciation.
In SAP S/4 HANA, you can now choose whether to post depreciation for all accounting principles at the same time. Else you may run the depreciation for each accounting principle separately.
Transaction AFAB
In S/4 HANA still uses Transaction Code (Tcode) AFAB, but the selection screen is slightly different.
You no longer need to choose a reason for the posting run. This is because SAP S/4 HANA will automatically know whether it’s planned, restart or unplanned depreciation.
You can choose to run the posting separately for each accounting principle. Else you can leave the Accounting Principle field blank and run for all accounting principles.
Read: List of imp. Tcodes in SAP FI
We also have a very useful addition herein to the New Asset Accounting in SAP S/4HANA. It is the info for the posting parameters button. It is at the top of the Depreciation posting Run selection screen.
This allows you to see which periods and which accounting principles were last posted.
Although the depreciation transaction runs in the background in New Asset Accounting, it still runs faster. This is because it’s not recalculating every asset. Instead, it just takes the planned values that are always up to date.
New Depreciation Engine in SAP S/4 HANA
New Asset Accounting in SAP brings with it the new Depreciation Calculation Engine. SAP has designed it to cope with more country-specific requirements and it calculates by period intervals rather than the transaction.
The engine also includes more flexibility for time-dependent changes. For example when making mid-year changes to depreciation terms such as useful life, depreciation key, scrap value and so on. The final calculated amount in most cases will be the same as before but one area where you may see some change is when the useful life of an asset changes partway through its life.
Related: Important SAP FICO Interview Questions on Asset Accounting
EndNote
SAP has introduced many new features in the new Asset Accounting in S/4HANA. These three that we discussed, are a few of those. If you are in the process of understanding the complete functionalities of SAP S/4HANA Finance on its latest versions, you must learn the New asset accounting in SAP with all its key aspects.
Learn in-depth New Asset Accounting in: SAP S/4HANA Finance Online Training
Watch Video: SAP New Asset Accounting – Know What’s New
