Migrating to SAP New Asset Accounting in S4 HANA Finance

Why do you require to migrate the New Asset Accounting to S4 HANA?

Migrating New Asset Accounting in S4 HANA is an important part of the Migration of the SAP database into the S/4 HANA system.

In other words, you cannot migrate the SAP database into S4 HANA until you customize the new Asset Accounting in the S4 HANA Finance application. The New Asset Accounting replaces the classic Asset Accounting in the new system.

Prerequisites for Migrating New Asset Accounting in S4 HANA

To migrate New Asset Accounting in S4 HANA, We must install SAP S4 HANA FInance into the system. But before installing S/4HANA Finance, we need to do certain settings in the system so that we can successfully do the job. So, there are some pre-requisites that you must ensure to complete and set as per requirement. Some of them are here below:

Use the Preliminary Checks program “RASFIN_MIGR_PRECHECK”

You must import this program to your system via SAP Note 1939592 before you install SAP S/4 HANA Finance. Perform this check-in for all your SAP clients, development clients, test client, and production client.

Activate SAP ERP Financials (FI) Extension (EA-FIN) in New Asset Accounting in S4 HANA

You must activate the SAP ERP Financials (FI) Extension (EA-FIN) because it provides the depreciation calculation program. This program we use for the new depreciation calculation.

Apply Settings for the Migration of Chart of Depreciation

As a prerequisite, you are also required to migrate the assigned chart of depreciation. Likewise, you must ensure that the parallel currencies in the leading ledger of General Ledger Accounting and the depreciation areas of the leading valuation in FI-AA are the same.

The company codes that we assign to the same chart of depreciation should have the same number and type of parallel currencies that we use in General Ledger Accounting.

Make sure that the period-end closing has been performed along with the reconciliation of the asset subsidiary ledger with General Ledger.

Now that you get the pre-requisites Before the installation of SAP S/4HANA Finance, it’s time to start installing it in the system.

Also Read: Scenarios in SAP General Ledger Accounting

It’s Time to Install SAP S/4 HANA Finance

After you start the installation of SAP S/4 HANA Finance, it is no longer possible to post any transaction in FI-AA.

Please note, that if you were already using classic FI-AA, then you only need to migrate your charts of depreciation. Additionally, you also check and possibly add to delta customizing.

However, if you were not already using FI-AA but now want to use it, then you must configure your system completely for FI-AA.

Noteworthy – You will also need to complete the relevant steps for migrating to the new General Ledger Accounting before you can customize the new Asset Accounting.

You may be interested in: SAP FICO Questions on Asset Accounting for Interviews

Next, Migrate Chart of Depreciation in SAP New Asset Accounting in S4 HANA

Next after installing SAP S/4HANA Finance, you need to migrate the chart of depreciation automatically using the migration program.

You should run the migration program FAA_CHECK_MIG2SFIN as a test run first. So that you can correct any errors before processing the update run. Migration is possible at any time.

Make Additional Customization Settings in New Asset Accounting in S4 HANA

After migrating the chart of depreciation, you have to make additional customizing settings as part of the migration work of New Asset Accounting in SAP S/4HANA. These are as follows.

1. Define Asset Balance Sheet Accounts of parallel Valuation

Importantly, you need this step if you are using the accounts approach for parallel valuation. However, if you are using the ledger approach in New Asset Accounting, it is not relevant.

In this activity, you can define G/L accounts as reconciliation accounts for depreciation areas of a parallel valuation of FI-AA. Otherwise, you can define them again as accounts for normal postings.

In the accounts approach one or more additional valuations are represented by separate depreciation areas. In this, the posting is made to separate accounts in the G/L before migration.

Importantly in past, we were posting these asset balance sheet accounts directly in FI.

However, in the future, we will post the asset values for both the leading and parallel valuations directly in FI-AA.

Also, we can change the existing balance sheet accounts of parallel valuation that we posted directly as asset reconciliation accounts for the future.

2. Define the Depreciation Area for a Quantity Update

Here you specify which depreciation area you want to use for updating quantities in your chart of depreciation. This setting is relevant if you are using collective low-value assets in your organization.

When there is a posting made to this depreciation area, the quantities are updated in the asset master record.

3. Define Technical Clearing Accounts for Integrated Asset Acquisition

This is a necessary process to post an integrated asset acquisition in SAP S/4 HANA Finance. Take a case when you post an asset acquisition through a vendor. You use Transaction F-90 and input all the necessary parameters.

Here the new asset accounting breaks the postings into the following:

1. The first document you create is with document type AA. You post it for a specified ledger with a debit to the asset and a credit to the technical clearing account. See the image for the specification.
2. The second document is created with document type KR which is not posted to any specific ledger. The business transaction is thus divided into an operational part and a valuating part during the integrated asset acquisition postings

Do this for the Operational Part

For the operational part (vendor invoice) we post a ledger independent document against the technical clearing account for integrated asset acquisitions. This document is valid for all accounting principles.

Do this for the Valuation Part

For each valuating part (capitalization of the asset) we post a separate ledger specific document against the technical clearing account for integrated asset acquisitions. This specific document is valid for each of the accounting principles.

Thus the technical clearing account does not appear on the balance sheet. Instead, it appears in notes attached to the financial statement.

Create a New G/L Account

As a prerequisite, you need to create a new G/L account as an asset reconciliation account. Also, give it a description as “technical clearing account for integrated asset acquisition”.

Finally the Migration of New Asset Accounting in S4 HANA

After this, it’s like we finally migrate New Asset Accounting to SAP S/4HANA Finance. Post this migration, we need to do certain things i.e. Asset Acquisition of IFRS and GAAP into the system. Refer to the below screen images to see what exactly needs to do here.

Visit Course Page: SAP S/4HANA Finance 2020 Training

Asset Posting for IFRS

Asset Posting for GAAP

Prerequisites for the Activation of New Asset Accounting in S4 HANA

Till now you did the following:

• Migrated the chart of depreciation
• Made the assignments to the company codes
• Performed the additional manual customizing settings.

So further now you need to activate the New Asset Accounting in SAP S/4HANA.

For this, we again have some pre-requisites that we need to meet to do the activation process successfully.

Monitor parallel valuation

Check the prerequisite for parallel valuation in the New Asset Accounting.

Changing the leading valuation into New Asset accounting in S4 HANA

We can meet the prerequisite for changing the leading valuation in the new General Ledger Accounting by settings up and activating the business function FIN_AA_PARALLEL_VAL using Transaction SFW5.

Execute Transaction FAA_Check_Activation

Then we need to execute Transaction FAA_CHECK_ACTIVATION. With this, we check if we have implemented all prerequisites for activating the business function Parallel Val customizing switch. Also, we can check if we have completed all periodic postings successfully.

Use Business Function Parallel_Val_Customizing Switch

We have enormous features of New Asset Accounting. You can activate new Asset Accounting using the business function PARALLEL_VAL_Customizing switch. This program checks whether all the prerequisites for activating new Asset Accounting have been met.

You also need to ensure that no postings are made between the execution of Transaction FAA_CHECK_ACTIVATION and the import of the PARALLEL_VAL customizing switch.

So Now after following these rules and steps, we activate the New Asset Accounting in SAP S/4HANA successfully.

Also Read: Asset Accounting in SAP FICO

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