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Asset Transfer-Disposal Process

This document outlines the asset transfer and disposal process in SAP. Full asset transfers typically occur when an asset was initially capitalized incorrectly, which can be rectified by creating a new asset master in the correct class and transferring values. Partial transfers may be used when multiple assets were capitalized together but some need to be moved, such as transferring some laptops to a new cost center. Assets can be retired through scrapping, sale to a customer, or sale without a customer, with the accounting entries varying based on the method and whether a gain or loss is realized. SAP allows different general ledger accounts to be set for different profit and loss scenarios during asset disposal.

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715 views2 pages

Asset Transfer-Disposal Process

This document outlines the asset transfer and disposal process in SAP. Full asset transfers typically occur when an asset was initially capitalized incorrectly, which can be rectified by creating a new asset master in the correct class and transferring values. Partial transfers may be used when multiple assets were capitalized together but some need to be moved, such as transferring some laptops to a new cost center. Assets can be retired through scrapping, sale to a customer, or sale without a customer, with the accounting entries varying based on the method and whether a gain or loss is realized. SAP allows different general ledger accounts to be set for different profit and loss scenarios during asset disposal.

Uploaded by

Jolinko1
Copyright
© Attribution Non-Commercial (BY-NC)
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as DOC, PDF, TXT or read online on Scribd

Asset Transfer/ Disposal Process

This refers to the SAP process of transferring and disposing fixed assets.

Common Business Requirement

Full asset transfer is typically necessitated when an asset was initially capitalized in the wrong asset class.
Asset master in the correct asset class should first be created and thereafter the values will be transferred
via the transfer within company code function in the Fixed Assets module.

A common reason for partial transfer is where multiple quantities of assets were capitalized in one asset
master and some of the assets are transferred to another cost centre or plant.

For example, 10 units of laptop were initially capitalized in one asset master with IT cost centre. If 5 units of
the laptop need to be transferred to Finance cost centre, a new asset master in the same asset class will be
created and partial transfer will be carried out for 5 units to the new asset master. This function will be as
following

Debit accumulated depreciation account of sending asset


Credit gross book value account of sending asset
Debit gross book value account of receiving asset
Credit accumulated depreciation account of receiving asset

If a full transfer is done (versus a partial transfer), the sending asset is retired. The asset value date of the
transfer is the deactivation date of the sending asset.

Normally, there are 3 ways to retire fixed assets:

• Retirement by scrapping (i.e. without revenue)


• Retirement with revenue with customer
• Retirement with revenue without customer

When an asset is retired by scrapping, the net book value at the time of scrapping will be the amount of
loss on disposal. The scrapping function will be

Debit loss on disposal account


Debit accumulated depreciation account
Credit gross book value account

For retirement with revenue with customer, the system will post the following entries:
Debit accumulated depreciation account
Debit customer account
Credit gross book value account

And Depending on the whether the sale amount is greater/lesser than the net book value of the asset, the
gain/loss on disposal account will be credited/debited.

If multiple assets are being sold all at once, the retirement with revenue without customer function will be
used. This function will be:

Debit accumulated depreciation account


Debit predetermined revenue clearing account
Credit gross book value account
Depending on the whether the sale amount is greater/lesser than the net book value of the asset, the
gain/loss on disposal account will be credited/debited.

Thereafter, invoice to the customer is raised in the Accounts Receivable module where the customer
account will be debited and the suspense account credited.

Where a full scrapping/ sale is done (versus a partial scrapping/sale), the asset is retired. The asset value
date of the scrapping/sale is the deactivation date of the asset.

Account Determination

In the account determination set up, SAP allows different profit and loss (P&L) GL accounts to be set for:
• Loss on retirement without revenue
• Loss on asset sale
• Gain on asset sale
• Revenue clearing account

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