Professional Documents
Culture Documents
FollowRSS feedLike
7 Likes 2,537 Views 17 Comments
Overview:
This blog post will explain the End to End process for Posting, Depreciation & Write off (normal/Extraordinary) of Asset
Investment Support Measure.
In some countries the Government provides grants under certain circumstances for investments made. Grant may be
received by Consumer/Other authorities toward Capital Expenditure for the Project.
This Investment Support is treated either as a reduction of the acquisition and production costs of the asset, or as a value
adjustment on the liabilities side of the balance sheet.
These investment support amounts are normally displayed and depreciated separately from the Asset Acquisition Costs.
Separate Depreciation Area is created for posting the Grant & depreciation on it. Acquisition cost will be untouched in Main
Dep. Area. This is called as Adjustment on Liabilities side.
If Separate Dep. area is not created, then grant is reduced from Acquisition cost. This is called as Support managed on
Asset Side. In this method, system doesn’t support automatic assistance for certain transaction like retirement of Asset
during retention period.
So Best Practice is to create Separate Dep. Area & post the grant in that area. SAP supplied the Dep. Area 51 in standard
for this purpose but any other Area can be created as well by copying the existing one.
Configurations:
Activate this Dep. Area on each Asset Class level in OAYZ wherever is required.
TCode – ANVEST
If Support Area is different than Book Depreciation Area, system automatically consider this as Liability side adjustment.
Retention period derive the time period during which the asset with this investment support cannot be sold. System gives the
error, if sold before that. This message can be converted into warning.
If Asset is sold before this period, system generate the repayment posting, according to specification given in ‘Repayment
type for Premature Retirement’
There are options available under Investment Measure like Default values, time dependent data etc., can be used as per
Client’s requirement.
These are created automatically when the Investment Support Measure Key is created, it is not possible to create new ones
nor deletion of existing one.
System create the Transaction Type from I, J & K and then two character of Investment Measure Key.
I* Used for Posting the Grant
Here new TT can be created by copying the existing TT & only Debit/Credit characteristic can be changed.
Asset Investment Support measure to be made optional on Asset Master data layout.
In case of India IT Depreciation, all Transaction Types are to be assigned against Transaction Group ‘Investment Support’
Asset Eligibility:
In AS01/AS02, Investment Key is maintained in the asset master record in Allocation Tab. Entering this key also
activate/visible the required Depreciation Area for the Asset.
Appropriate Dep. Key will have to be assigned against this Dep. Area.
You can manage an indefinite number of support measures for each asset. However, if you manage more than one support
measure for an asset, each one must be managed in a separate Depreciation Area.
Once the Acquisition is posted to Asset with the full amount of APC including Grant, value is updated in Book Depreciation
Area.
Transaction Type I* will be used to post the same. Make this TT default against Investment Support process.
Grant receivable Account can be given at the time of transaction in Offsetting Account field, otherwise will be picked from
AO88 config.
Now Book Dep. area has the Positive value of Acquisition & Inv.Support area has the Grant value in Credit side.
Grant will be amortized based on Dep. Key given against Inv.Support Dep. Area.
This way, you can clearly identify the Acquisition Value & Grant Value with Depreciation on both.
When Depreciation is run for these Assets (AFAB), following Accounting will be posted in Inv. Support Dep. Area in addition
to Book Depreciation posting:
In nutshell, PL will be debited with the absolute amount of Depreciation after deducting the benefit of Depreciation on Grant
portion.
If Asset is retired/scrapped in the retention period of Grant, then following accounting would be posted:
*Proportional Adjustment is calculated based on configuration of ‘Repayment Type for Premature Retirement’ under
Investment measure key.
First of all, Full Grant will be divided by retention period, in case of Proportional by Monthly, this value will be multiplied by
Months till retirement dated & reduced from Grant value.
In case of Paid back completely, no adjustment is made & full grant is reversed.
In case of Amount entered by user option, no Grant will be refunded & full gain is posted with Net Grant.
If Asset is retired/scrapped after retention period, entry will be posted like ‘Amount entered by user’ scenario.
If any Extraordinary write-off to be posted, use TCode – ABSO & Transaction Type J*. Following Accounting entry will be
posted:
There may be other transaction as well like Augmentation, Normal Retirement, Grant of prior year acquisition etc.
After getting the exact requirement from Client, specific Transaction type can be configured & used for posting.
Conclusion:
After reading the blog post, this process can be understood very easily & implemented quickly without any challenge.
This type of activity is very frequent in Electricity distribution companies where Consumer contribution is involved for Capital
projects.
Hope you found this blog post useful, thanks for reading!!
Regards,
Hitesh