FIAA Overview of New DCP

SAP s New
SAPs
Depreciation
Calculation in ERP 6.0
Nathan Genez & Eric Barlow

Managing Partners
Serio Consulting LLC
Contents
New Depreciation Calculation in ERP 6.0
Upgrade Considerations
Wrap-Up
Contents
Wrap-Up
Who is Serio Consulting?

Founded by a group off fformer S
SAP America Platinum
Consultants with over 40 years combined SAP experience
Focused on the Capital Management area of SAP across both
SAP ERP and SAP BW
Project Systems (PS)
Investment Management (IM)
Asset Accounting (FI-AA)
Professional Service Offering:
SAP Implementations and Upgrades

Quality Assurance and Configuration Reviews
Advanced Capital Management reporting solutions including BW
Advanced Tax solutions
Remote On-Demand consulting
http://www SerioConsulting com/

http://www.SerioConsulting.com/
Source: Nathan Genez & Eric Barlow, New DCP Overview, slide #4
Scope of New Depreciation Calculation (New DCP)
What does the New Depreciation Calculation refer to?

How depreciation amounts are calculated / planned
It does not refer to

How depreciation is posted
The process to gather depreciation figures and post them to the G/L
is covered by the depreciation posting program RAPOST2000
What Values Are Affected?
All planned values including:

Planned ordinary depreciation
Planned special depreciation
Interest
Inflation
Revaluation
Why Was the Calculation Changed?

A period interval-based calculation is more intuitive and easier
to understand
Support of time-dependent depreciation parameters
Support of method changeover and base value determination on
a period level
More flexibility to support customer and country specific
requirements via Business Add-Ins (BAdIs)
Potentially greater performance
Better handling of rounding accuracy issues related to large
amounts with no decimals (e.g., currency JPY)
and many
y other reasons ((mostly
y country
y specific)
p
)
Technical Requirements
Delivered in SAP ERP 6.0 as part of the Enterprise

AddOn for Financials (EA-FIN)
Not possible to release for earlier SAP ERP or SAP R/3 versions
EA-FIN must be active
The new calculation cannot be disabled using
standard methods other than deactivating EA-FIN
Old: Transaction-Based Calculation
Prior to SAP ERP 6.0, depreciation was always

calculated in detail on every transaction line item
Whenever a transaction is posted
posted, a depreciation amount was
calculated
The asset line item table contained fields for:
Ordinary
O di
depreciation
d
i ti on transaction
t
ti
Special depreciation on transaction
Old: Transaction-Based Calculation (cont.)
All transactions were interpreted sequentially

First posting served as the baseline calculation
All subsequent postings were adjustments to the
original posting
Annual depreciation
p
= sum of the depreciation
p
of the
individual transactions
This approach could make the verification of depreciation
figures difficult
Example of Transaction-Based Calculation
Scenario
Straight line depreciation
Total Acquisition Cost (APC) / Total Useful Life (UL)
Useful life = 10 years
12 period calendar fiscal year: January December (e.g., K4)
Period control = pro rata determination
The following
g two transactions are posted:
p
Transaction
Amount / Percentage
Time
I iti l A
Initial
Acquisition
i iti
$12 000
$12,000
J
January
1
Partial Retirement (current year)
$3,000
October 1
Example of Transaction-Based Calculation (cont.)
Date
Transaction Type
Transaction
Amount
Period
Factor
Rate
Base Value
Calculated
Depreciation
Jan 1
Initial Acquisition
$12,000
12 / 12
10%
$12,000
- $1,200
Total
- $1,200
Date
Transaction Type
Transaction
Amount
Period
Factor
Rate
Base Value
Calculated
Depreciation
Jan 1
Initial Acquisition
$12,000
12 / 12
10%
$12,000
- $1,200
Oct 1
Partial Retirement
- $3,000
3 / 12
10%
- $3,000
$75
Total
- $1,125
R/3 4.7
R/3 4.7
R/3 4.7
Asset Explorer
displayed the
depreciation
amounts
calculated for
each line item
Asset Line Item table displayed the amounts in

additional detail
R/3 4.7
New: Period Interval-Based Calculation
Depreciation calculation is based on period intervals

(time segments)
All transactions in the same period interval are aggregated and
used to calculate depreciation as a single number
All line items are aggregated by their appropriate period
All periods are aggregated to get an annual value
Annual depreciation = sum of the depreciation of the

period intervals
inter als
New: Period Interval-Based Calculation (cont.)
SAP ERP 6.0 no longer calculates depreciation or

interest on asset line items
ERP 6.0
What Is a Period Interval?
Initially, there is just one time interval per year,

depreciation area, and amount type
New segments
N
t are created
t d whenever
h
an eventt changes
h
the assets value, such as:
Transactions within fiscal year
Time-dependent master data changes
Shutdown or multiple shift intervals
Depreciation
D
i ti parameter
t changes
h
Changes to depreciation method

Multilevel method changes within a fiscal year
Method changeover occurs at the end or within the UL
More Information on Period Intervals
The number of period intervals depends on the number

of fiscal periods with changes that affect the assets
depreciation
p
calculation
The more transactions posted
Or the more depreciation parameter changes
Made across more periods will yield more depreciation
period intervals
The maximum
ma im m n
number
mber of depreciation period inter
intervals
als is
the same as the number of normal fiscal periods
Example of Period Interval-Based Calculation
10
11
12
Period Interval 1
Date
Transaction
Type
Transaction
Amount
Prd
Int
Prd Interval
Duration
Rate
Base Value
Depreciation
Per Interval
Jan 1
Initial
Acquisition
$12,000
12 months
10%
$12,000
- $1,200
Total
- $1,200
Example of Period Interval-Based Calculation (cont.)
Period Interval 1
10
11
12
Period Interval 2
Date
Transaction
Type
Transaction
Amount
Prd
Int
Prd Interval
Duration
Rate
Base Value
Depreciation
Per Interval
Jan 1
Initial
Acquisition
$12,000
9 months
10%
$12,000
- $900
Oct 1
Partial
Retirement
- $3,000
3 months
10%
$9,000
- $225
Total
- $1,125
ERP 6.0
Period Interval = 1 - 12
Base Value
Percentage
Period Factor
Final Annual
Depreciation
ERP 6.0
Final Annual
Depreciation
Base Value
Period Interval 1 = 1 - 9
Period Interval 2 = 10 - 12
Percentage
Period Factor
Comparison of Old vs. New Calculations
Is there a difference in the final calculated amount

between these two approaches?
NO
The annual depreciation amount is identical between

both approaches for most all scenarios.
Contents
Wrap-Up
Configuration Requirements
No configuration is required as part of the

new calculation
No changes are necessary to the depreciation areas or
depreciation keys
No migration
g
of data is required
q
The final depreciation amounts calculated by SAP
should be the same before and after the upgrade *
Small amount differences might occur in some situations
Process
SAP recommends that all customers recalculate values

(RAAFAR00) immediately after the technical upgrade
Also consider recalculating prior to the upgrade as part of a
formal system close process
Enhancements
Existing user exits are no longer processed by the new

depreciation calculation
SAP-delivered
SAP
d li
d new BAdI is
i compliant
li t with
ith the
th
new calculation
BAdI FAA_EE_CUSTOMER
FAA EE CUSTOMER
Method SET_BASE_VALUE replaces AFAR0001
Method SET_PERCENT_AMOUNT replaces AFAR0002
Method DEFINE_CHANGEOVER_YR
DEFINE CHANGEOVER YR replaces AFAR0003
A migration of the business logic must be made to these

new BAdIs if the new calculation is used
Reporting
Since depreciation is no longer calculated on a line item

basis, all asset transaction reports will show $0.00 as
the depreciation
p
amount
SAP Note 949701 will hide the depreciation figures so that the
report is not misleading
C
Consider
id creating
ti an assett history
hi t
sheet
h t version
i that
th t breaks
b
k outt
depreciation by type for each period
Asset Explorer
In addition to the normal Asset Explorer, there is an

alternative version that always uses the old
depreciation
p
calculation
Allows you to compare the calculations between the old and
new depreciation calculations without deactivating the
Enterprise AddOn
Transaction
Description
AW01N
Current Depreciation Calculation (New)
AW01 AFAR
AW01_AFAR
Old Depreciation Calculation
Asset Explorer AW01N New Depreciation Calc
ERP 6
6.0
0
Asset Explorer AW01_AFAR Old Deprec Calc
ERP 6
6.0
0
Contents
Wrap-Up
Resources
Relevant SAP Notes

949701 Fix for asset line item reports
965032 Explanation of small differences post upgrade
988238 Information related to new calculations impacts on
year end closing
Resources (cont.)
SAP ERP 6.0 Documentation on New DCP

http://help.sap.com/saphelp_erp2005vp/helpdata/en/44/07e6a80f
2e5920e10000000a155369/frameset.htm
SAP ERP 6.0 release notes

http://help.sap.com/erp2005
http://help.sap.com/erp2005_ehp_02/helpdata/en/43/68805bb88f2
ehp 02/helpdata/en/43/68805bb88f2
97ee10000000a422035/frameset.htm
Information for Enterprise AddOn EA-FIN

http://help.sap.com/erp2005_ehp_02/helpdata/en/44/558b1099c9
3672e10000000a114a6b/frameset.htm
Resources (cont.)
SAP Developer Network (SDN) Wiki

www.sdn.sap.com/irj/sdn/wiki > ERP Financials > Financial
Accounting > Asset Accounting
Resources (cont.)
SAP Developer Network (SDN) Blog Series

www.sdn.sap.com/irj/sdn/wiki > ERP Financials > Financial
Accounting > Asset Accounting
Resources (cont.)
SAP Financials Expert

Discover the Logic and Parameter Changes in the New
Depreciation
p
Calculation (January
(
y 2007))
Thank you for your attention
Nathan Genez
Managing Partner
Serio Consulting
g LLC
227 Sandy Springs Place
Suite D238
Atlanta, GA 30328
T 1-713-240-0421
E nathan.genez@SerioConsulting.com
http://www SerioConsulting com
http://www.SerioConsulting.com
Eric Barlow
Managing Partner
Serio Consulting LLC
227 S
Sandy
d S
Springs
i
Pl
Place
Suite D238
Atlanta, GA 30328
T 1-404-667-0447
E eric.barlow@SerioConsulting.com
http://www.SerioConsulting.com

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SAP s New

Nathan Genez & Eric Barlow

New Depreciation Calculation in ERP 6.0

New Depreciation Calculation in ERP 6.0

Who is Serio Consulting?

Professional Service Offering:

SAP Implementations and Upgrades

http://www SerioConsulting com/

Scope of New Depreciation Calculation (New DCP)

What does the New Depreciation Calculation refer to?

It does not refer to

What Values Are Affected?

All planned values including:

Why Was the Calculation Changed?

Delivered in SAP ERP 6.0 as part of the Enterprise

Old: Transaction-Based Calculation

Prior to SAP ERP 6.0, depreciation was always

Old: Transaction-Based Calculation (cont.)

All transactions were interpreted sequentially

Example of Transaction-Based Calculation

Partial Retirement (current year)

Example of Transaction-Based Calculation (cont.)

Example of Transaction-Based Calculation (cont.)

Example of Transaction-Based Calculation (cont.)

Example of Transaction-Based Calculation (cont.)

Example of Transaction-Based Calculation (cont.)

Example of Transaction-Based Calculation (cont.)

Asset Line Item table displayed the amounts in

New: Period Interval-Based Calculation

Depreciation calculation is based on period intervals

Annual depreciation = sum of the depreciation of the

New: Period Interval-Based Calculation (cont.)

SAP ERP 6.0 no longer calculates depreciation or

What Is a Period Interval?

Initially, there is just one time interval per year,

Changes to depreciation method

More Information on Period Intervals

The number of period intervals depends on the number

Example of Period Interval-Based Calculation

Example of Period Interval-Based Calculation (cont.)

Example of Period Interval-Based Calculation (cont.)

Example of Period Interval-Based Calculation (cont.)

Comparison of Old vs. New Calculations

Is there a difference in the final calculated amount

The annual depreciation amount is identical between

New Depreciation Calculation in ERP 6.0

No configuration is required as part of the

SAP recommends that all customers recalculate values

Existing user exits are no longer processed by the new

A migration of the business logic must be made to these

Since depreciation is no longer calculated on a line item

In addition to the normal Asset Explorer, there is an

Current Depreciation Calculation (New)

Old Depreciation Calculation

Asset Explorer AW01N New Depreciation Calc

Asset Explorer AW01_AFAR Old Deprec Calc

New Depreciation Calculation in ERP 6.0

Relevant SAP Notes

SAP ERP 6.0 Documentation on New DCP

SAP ERP 6.0 release notes

Information for Enterprise AddOn EA-FIN

SAP Developer Network (SDN) Wiki

SAP Developer Network (SDN) Blog Series

SAP Financials Expert