Community Aska Question Write a Blog Post i Technical Articles Harsha Baid March 30, 2021 6 minute read Asset Accounting in S/4 HANA Fallow RSS feed Like 2Likes 1,236 View 2Comments Introduction This article aims to covers the set up involved in Asset Accounting and its interaction with the General Ledger module. The article aims to cover intricacies involved with respect to Asset Accounting to minimize the challenges faced during the set-up. Note: The article does not cover the migration aspects involved while moving to Asset Accounting. ‘The usage of Asset Accounting is not just restricted in S/4 HANA. It can be used with ECC system also (from EHP 7 onwards), provided New GL is activated. However, the difference is while it is mandatory to activate new Asset Accounting in $/4, itis an optional feature in ECC. Additionally, AA in S/4 provides additional features that are not available in ECC. Before configuring Asset Accounting, it is important to list out all the accounting principles that the organization desires to follow while preparing its financials and to determine whether each of these accounting principles would translate into separate parallel ledgers. Once this has been determined then, it becomes easier to proceed with the next steps. Set up of Asset Accounting Let us assume that an entity is required to follow the IFRS for its Financial Reporting as per statute, Additionally, it needs to have a tax reporting and local reporting in place.... The entity would in this case set up its Leading Ledger OL in consonance with the IFRS. Three parallel non- leading ledgers need to be set up in accordance with the Taxation, Group Reporting and Local GAAPRequirements. Accordingly, Ledger OL has been set up for IFRS purposes and Ledgers N1, N3 and N4 for Group Local and Taxation Requirements respectively. See the below set up: We have defined four accounting principles as follows in the below path: Financial Accounting-Financial Accounting Global Settings-Ledgers-Parallel Accounting-Define Accounting Principles’ [ Y] Newtnnes copyAs.. Oeste Undo change Selecta SeertBIack DaseeerAl Contigratonelp wre v seca Pie Ts. rie Le msi ou Gown ape ctr Pree ibe lace aaa re aa errr ar eee econ scone se Us GAAP Thereafter we have defined the ledgers and the accounting principle they represent: IFRS Ledger-Leading Ledger = Change > Display NewEntries CopyAs. Delete Undo Change SelectAll S) Dialog Structure Ledger BL Leading Ledger [a Currency Types [5 Blobal Currency Conversion Setti [a Currency Conversion Settings for Co Ledger ‘Accounting Principles for Ledger and Company Code 5 Company Code Sentngs tor the 7 Accounting Principle [Accounting Priceples for be IFRS Internation Financial Reporting Standaras Company Cade: SKO1 | Slovaita company Name or Accounting Prheipte Group Ledger-Non-Leading LedgerChange» Distsy HewEntnes CopyAs.. Delete ncn Change Selecta) SelectBlock’ Deselesta) ch Sag Ste Lager [I] _Nanesingh ager Ce ourency Types [5 Global Currency Conversion Seta [5 Currency Corversion Settings for <5 Ledger Accounting Princlplas for Ledgar and Company Cade Ca comparyy Cove Setings tory — ‘Accounting rep Nae occa Pcie oui Prineples or ‘ ain | see |e “)F bup Accounting Principle Company Coos SKOL_ Siovaia company Local Ledger-Non Leading Ledger: [ change disnlay NewEnhes Copyas.. Dele Unde Chance Selecta Sele lock Dialog Steucuae Cheurency Types 25 Global Currency Conversion Sett Cocurency Carversion setings tor Oo Leoger Accounting Principe for Ledger and Company Code, C5 Company Code Seng OC — coving exrene (Accounting Principles for Le [tea eager Ih3 [Local ase Company Cade: SKo | Slovskia company Name er accounting Paneiple Local ae Tax Ledger-Non Leading Ledger Ghange-> Display NewEnoies Copyas.. Delete Unda change Select al Select bine Dialog Struenre Ledger [ha "@}ravcase Ca curency Types ens [5 Global Currency Conversion Set Co Curency Conversion Settings tor Da Ledger ‘Accounting Principles far Ledger and Company Cate Co Company Gude Selngs fortny © Accounting Principle Name of Accounting Principle (Q/Aceaunting Pancipies for Le eee EE |e TAKGAP Comary Code: [S60 | Sovak company We have also assigned accounting principle to Ledger Group: Financial Accounting-Financial Accounting Global Settings-Ledgers-Parallel Accounting-Assign Accounting Principles to Ledger Groups:Newenties CopyAs.. Delete Undo Change Select Al Select Black Des Assignment of Accounting Principle to Target Ledger Group ‘Accounting P...| Target Lecger Group Deseriston «0 a Leading Ledger ap NL Non Leacing Ledger TFRS aL. * Leaning Ledger w Leap NB Local GAAP vy TAX, Na Tax GAAP Once the ledger and accounting principle set up is complete, we set up the Chart of Depreciation. In this ‘example we are copying the new Chart of Depreciation SKO1 from OSK: Financial Accounting-Asset Accounting- Organization Structure-Copy Reference Chart of Depreciation = Copy x *From Chart of dep. |osk *ToChart of dep: /sko1 Once the Chart of Depreciation is copied, we rename the same and delete all the depreciation areas: Financial Accounting-Asset Accounting- Organization Structure- Specify Description of Chart of Depreciation/ Copy Delete Depreciation Areas\] oetals conyas...Celete Uren change SelettAI Seectetock Deserta! Comnauatontep Mire Chart sf SOL | Slovakia ear of predate Define Depreciation Areas Ar |Nome of Depreciaton area Real TrgtGroip —ArcPrinc. it 1 smeecitod as IRS Lavan Posts in Real Time . 2 ‘IPRS Depreciation Grp Curency as TRS 0-85 Does Not Post y 21 youp Ceprecation “om oe 11 area Posts in Real Tine ¥ 2 Group Ceprecati. Grp Curency vom oe 0 area Does Hat Post ¥ =| 21 |Lecal GAAP Depreciation von Usa aves Posts Jn Real Time 22 Local GAAP epretston- Grp curercy v0 Ucar 0 ava Does Not Post: 2 TaxDepredaton 2M Tw 1 rea Posts in Real Time 32 TaxDepredston Grp cumency 2M WS 0 Area Does Not Post . In our case we have set up four depreciation areas namely IFRS, Group Valuation, Tax GAAP and Local GAAP. Before we finalize the depreciation areas, the following points must be considered. 1 The depreciation area must specify the type or purpose of depreciation. This is done under the following pat! SPRO-Financial Accounting-Asset Accounting-General Valuation-Depreciation Areas-Define Depreciation Areas-Specify Area Type = Unda Change SelectAll! Select Block DeselectAll Configuration Help More ~ Chartafces: SKOL | Slovakia char of depreciation Ar Name oF Depresiatian area Typ Desenption OL IFRS Depreciation 1 Valuatian for trace bal. sheet 2 IFRS Depreciation - Grp Currency OL Valuation tor trade bal, sheet At Group Depreciation 06 Group vauation | 12 Group Depreciation - Grp Currency 05 Group valuation 21 Local GAAP Depreciation 28 Balance sheet accarcing to atrer guidelines ( 22 Local GAAP Depreciation - Gra currency 38 Balance sheet accorsing to abner guiveines ( 31 Tax Depreciation Valuation for tax bal. sheet (oft from trade ba 22 Tax Depreciation - Grp Currency. || lation tor tax bal. sneet (ai. trom trace ba Here we have defined book depreciation for the purposes of Valuation for trade valuation, Tax depreciation for taxation requirements and likewise 2. The input and output tax indicators need to be set up for the company code. This is an essential pre- requisite to the set-up:SPRO-Financial Accounting-Asset Accounting-Integration with General Ledger Accounting-Assign Input Tax Indicator for Non-Taxable Acquisitions [ ~) Undo Change SelectAll SleetOlock DeselectAll CorfiguratonHeip More 02, | company tae on Te Ou ansaet cae w [pect Spat coan arate cn 3, Traditional asset accounting does not require every depreciation area to be assigned to a ledger group, However, in new Asset Accounting each depreciation area must be assigned to a ledger group. This is a mandatory step in New Asset Accounting. The ledger group might/might not post. However, each area must be assigned to a ledger group. Deals comyAs..Dote Undo Change Seectal Gebct@nck CesekcAN Cormbwaton ip Mere Cchonerae 40% | SivaKa carter acerca DDotne Depreciation areas Ar ane cr epreeaton es Rea mou N=PIe OL 4 “Rs mrecetot tae tes 1 9raa oats fanaa Ps 5 2. fens pereseton-orp carey me tas 0 pron es nor Post | 22 crap Dereon “mo cae Len fonts Hn Real Tine | 22 | raupRerecson- Gp Cues % M GaP re Does Mot Pont | =| #2 Lora Gee Cepecsnen 7M vse prea rate In Real Tine a 22 LovalGaar Cenectn - Or eareney 7 0 ee 0 prea ose noe Post 2 21 Tax epreciton uM Tost Lea fost in eal Tine a 2 | rexbepelten- orp Cutency “Me Tt 6 rea toes not Post a 4. In Asset Accounting (new), the system must ensure that all ledgers in which the company code updates its balances in the GL module are also updated via Asset Accounting. Here all the four ledgers in which the ‘company updates its balances, namely OL, NI, N4 and N4 also post real time via Areas 1, 11, 21 and 31. Also all representative ledgers assigned to the ledger groups used in the assigned chart of depreciation must also be assigned to the company code. 5, Innew Asset Accounting, for every currency type in company code, we need to create parallel depreciation area for each of our accounting principle that does not post to G/L. Since the company code in ‘our example had a parallel currency defined, we needed to create an additional area that does not post. So, we create four new areas, namely 2, 12, 22 and 32 each representing an accounting principle defined earlier that does not post. 6. Unlike in traditional asset accounting where only one ledger group can post in real time, in new Asset Accounting multiple ledger group can post in real time. On account of this reason, the need for delta depreciation area and the periodic APC transaction posting RAPERB2000 is no longer needed in New Asset Accounting. 7.A depreciation area cannot be mapped to an extension ledger. The ledger must be standard ledger.8. If there are different accounting principles assigned to different ledger groups, the same cannot adopt depreciation/acquisition value from other depreciation terms. In case this aspect is overlooked system will throw the following message: = Performance Assistant = * HAAS we B Transfer of dep. terms is not allowed in area 80 of chart of dep. HDC4 An Message no. ACC_AADS4 Diagnosis ‘A depreciation area can only adopt depreciation terms from a depreciation area to which the same accounting principle GL is assigned. Or else the depreciation area posts acquisition values immediately: then the depreciation area is not allowed to adopt values from any other depreciation area Depreciation area 80 adopts depreciation terms irom depraciation area 01 in chart of depreciation HDC4, However, different accounting principles are assigned to the two depreciation areas. Procedure Correct the setting in Customizing for Asset Accounting under Specify Transfer of Depreciation Terms. In our example each of the depreciation areas 01. 11, 21 and 31 represent a different accounting principle and hence they need cannot adopt values from other depreciation areas. See setting below: Financial Accounting-General Valuation-Depreciation Areas-Specify Transfer of APC values Financial Accounting-General Valuation-Depreciation Areas-Specify Transfer of Dep Terms.Unde Change SelectAll Select Block DeselectAll Canfiguratian F Chait ofdep. SKO1 Slovakia chart of depreciation _ Ar Name of Depreciation Area YalAd = Ident. 01 IFRS Depreciation pos] 02. IFRS Depreciation - Grp Currency 01) 4] 11 Group Depreciation 00 12 Group Denreciation - Grn Currency 2 iy 21 Local GAAP Depreciation 00 [1] 22. Local GAAP Depreciation - Grp currency a Yi ML Tax Depreciation oa 32. Tax Depreciation - Grp Currency nv | v Undo Change SelectAll Select Block DeselectAll Configuration Heln Chart of dep: SKOL | Slovakia chart of cepreciation “An Name of Depreciation Area TT Ieentical -] |e? FRebepreceton | po] 02. FRS Depreciation - Grp Currency * or iv] 11 Group Depreciation 00 12. Group Depreciation - Grp Currency 1 vi 21 Local GAAP Depreciation 00 22. Local GAAP Depreciation - Grp currency 21 31 Tax Depreciation 0 32. Tax Depreciation - Grp Currency a1 iv] ‘Setup of technical clearing account in new Asset AccountingNew Asset Accounting requires a technical clearing account to be set up. The system divides the acquisition posting into two parts, the operational and the valuating part. + The operational part pertains to the vendor invoice which is ledger group independent document i. posts to all the ledgers (valid for all accounting principles). + The valuating part pertains to posting capitalization of the asset. This document is ledger group dependent document. This is valid only for a given accounting principle + Both the operational and the valuating part are posted against the technical cleating account. The technical clearing account is defined in the following set up Financial Accounting-Asset Accounting: Integration with General Ledger Accounting-Technical Clearing Account for Integrated Asset Acquisition-Define Technical Clearing Account for Integrated Asset Acquisition NewEntries CopyAs.. Delete Technical Clearing Account for Integrated Acquisition 1h. Account caLP | 2210950] 3] The technical clearing account needs to be defined as Reconciliation for Asset and due to the operational and valuating part of the posting, for each accounting principle in the Chart of Depreciation the balance in this account would be zero. Example of an acquisition posting: | crane Denapcnangeness OBpyArenerDoLUneMt SekitnaWOLaIOHEe! ay OecumereMESe CEDEYCUIENY — GeealLeage Vow Data En Vion cunt oor onenona onpany ooo: x esas 2600 curesey Leger a) JSOSCh | EVE Pees iw co," mem. 5 acrout —Ceereaen Amount cur. seat 170 121010 oneooroo0n con 0000 eu Checking the Asset View- Operational and Valuation Part: The first part is the Operational part and the second part is the valuating part‘Bapcirenyv) [auneters | [eanaatastassnnmert une mem | Document Header Info Document Date: 01.01.2020 Documentiyps: KR Company Cede: SKO1 Accounting Principle: Intemation Finanelal Reporting Standards Posting bate: 04012020 Penod: Ot FisealYeor. 2020 Display Currency: Company code currency neers | FPVYFh| EYMey)| eee |@ Ty, Penad Ledger Grp Ret. doc.“ Documenta ~ “item PK BusA Segment Profit Cir GAL Acct Short Text E Amaunt Crey Cost Ctr Order WES Elen. wet ‘eooooom8 io00000 131 2130200 YeraorPayaies= 00 10 000mm. CUR et 27 ‘1nseo onasonooeoa een 1000000 EUR ‘socoocon0 + 000 EUR eve ‘aooonooo! 170 {10%0n osasonooeea cee ¥a 00000 EUR We 275 ‘onsen onanotoreea cam 10 ce.0 EUR wooo000" + 00 EUR “ + ogo cue Operational Part: ©) bglayAnatner Document Cleo Ducumert Messer Oiplay Curency Erky View ctnerLewger More Data Ey View osumertnuneer fiooeaceo convary coon (Sm esate EE Dowunene pate [01.01.2020 Posting Date 01.08.2020 Peroo: peterence: (asset 2 cos-comp no. comeney (EUR Bees Leger croup Ledger ol sean 2020 Peron: ft a} | ale) FY) | EME @| (ey) kv) @l-)|(o Ca,” tem Ltem 8 Account Description Amount Cur Tx soi 1 omo01 31 2130200 vendor Payables Do s.00000- EUR 2 occo02 70210850 aogonrrecoon wooo ‘.gon00 Fu Valuating Part in OL:] change Ditaytcange ate Daan view Corum: ee as02 owns aera urerey, cu a MEM | EES ca.,” tem ik. 8 account Desereation 011722192 ommmeosoe tea Valuating Part in Ledger NI: Depay AreberCocunere erpary Coxe ($k03 Portngoste: 01-01.2000 rots campna SEE I)8y)| a arount cur Sebstncnsual once Dseleyoacumant Header Spay Comers eager creup a ©) change Denayicnange Mose Dae viow cur ni B0 081 nero 1.20 ferice a5 @ ca," tem K. 9 Aeroint —— Deserton a1 1 Ta 210190 _sooo00Ha0000 sous &) | EME) | Sees) @ DsntayAnaterCocunere compary cous se00 PostngQate 01-02.2020 AArount Cur Depreciation Run postings in each ledger: Processed Fixed Assets: Fixed assets Without Error: Fixed Assets with Errors in at Least One Area: 0 20.03.2020 Run Dave: ‘Set nenoaual yet Dietayoacunent Header copay ourency rca Yeu 2000 eager cru 1 TERS 300000000 Jordinary Depreciat. cae 100000003 |Ordinary Depreciat. TsRP 9200000003 |Ordinary Depreciat. yraxe 2300000003 |Ordinary Depreciat. 2se,10-|EUR 242, 81-EUR 275, 51-|EuR 2et, 45-|EUR Ledger OL:\) Disp Anciner Document Display DocumentHeaaer splay Cumency More Y Das Erny Vw rune noe boooo00 ecanpary ate (SL sca Yor 00 covert date 28.61.2020 ovina ost sh.04.2620 ened: 1 referee crosecomp xo cartnsy ER] Testi espera [] Leber coven 1020 vad] SLIM Ek |) | (a) o,,” tem K.-S Account ‘Description: Amount Liter Curr. TH sor 178 ‘214100 ecoonoteco00 e000 su.70- gon! EUR 240° es00d00 Dentin perae 4,70 oooon2 EUR Ledger Ni: | Dsplayanctrer oocument Display Document Heater Display Duency More ~ Data View neue: mer "Bisoonen3 | coos cos: es | rca voor 2620 acute. 2.03200 Posing bas: 01.2020 peat 3 | Rerrence cross.compno:) cuerey ie Tet ese ou Leger rcatenr 2020 ene | @ | SEQ MFM| EVEM| seJeJe4 | oD co,” tem k, 8 Accra Desengton ssroun Liem cur. seo 175 1211100 eongootondon oon 101.64 oosoot EUR 249 €50000 —_Daqreiton xeense tov. oocne2 EUR Similarly document for depreciation will be posted in all the non-leading ledgers. ‘he company code used here is a dummy co code. ConclusionWith this document we have tried to outline the major variations in Asset accounting in S/4 HANA as ‘compared to ECC, The lifecycle of asset from acquisition to depreciation is covered in this document with the help of an example. Alert Moderator Assigned tags SAP S/4HANA | Related Blog Posts SAP ERP to S/4 HANA Migration Scenarios By Shakeel Ahmed , Jan 31, 2018 Architecture Of S/4 HANA vs ERP. By KIRAN KUMAR VADREVU , Nov 06, 2015 S/4 HANA ~ Right time and transition path for implementation By Mrinal Kanti Roy , Aug 02, 2016 Related Questions Simplification List in Asset management in $/4 HANA By Shiv Kumar , Feb 28, 2017 S/4 HANA Course material Content By ARUNKUMAR MADHESWARAN Jun 20, 2018 S/4HANA - Asset Acct -Multiple Technical Clearing accountsBy Aja ly .Oct 21, 2020 2 Comments You must be Logged on to comment or reply to a post. Q Kemmer Domenic March 30, 2021 at 3:53 pm The Technical Clearing Account is a new account that has been introduced for accounts that cannot be posted to in a single ledger only. ... Then you can post the other side in two separate documents one to each ledger. This is called the valuating part of the transaction, myLoneStar Q carotyn Pierce March 30, 2021 at 3:54 pm this is really so good, thank you for sharing with us, its really helpful get-vidmateapp.com get-mobdroapk.com Find us on Privacy Terms of Use Legal Disclosure Copyright Trademark Cookie Preferences Newsletter Support