Asset Under Construction (AUC)

In SAP Project System (SAP PS), Asset Under Construction (AuC) represents an
accounting object that is used to track and manage costs related to an asset that is
being constructed or developed as part of a project. The AuC functionality in SAP PS
allows you to monitor the costs associated with the construction, acquisition, or
development of an asset before it is completed and placed into service.

Here's a detailed explanation of Asset Under Construction in SAP PS:

1. Purpose of Asset Under Construction (AuC):

 AuC provides a means to capitalize and track costs incurred during the
construction phase of an asset project.
 It allows you to monitor and manage costs related to an asset before it is
ready for use or capitalization.
 The costs captured in the AuC are eventually settled to the final asset
when it is completed.
2. Creation of Asset Under Construction:
 An AuC is typically created as a WBS element in SAP PS. The WBS element
serves as a container to accumulate costs.
 The AuC WBS element is linked to an AuC master record, which represents
the asset under construction itself.
 The AuC master record holds key information such as asset class, cost
center, depreciation key, and other relevant data.
3. Cost Accumulation:
 Costs associated with the construction or development of the asset are
charged to the AuC WBS element.
 Various types of costs can be accumulated, including labor costs, material
costs, external services, overheads, and internal transfers.
 Costs can be captured through goods receipts, purchase orders, time
confirmations, service entry sheets, or other relevant documents.
4. Settlement to Final Asset:
 Once the asset construction is completed, the costs accumulated in the
AuC WBS element are settled to the final asset.
 The settlement process transfers the costs from the AuC to the
appropriate asset master record, capitalizing the costs to the final asset.
 The settlement process can be triggered manually or automatically based
on predefined rules or completion percentages.
5. Depreciation and Asset Management:
  After settlement, the final asset is ready for depreciation and ongoing
asset management.
 The depreciation key defined in the AuC master record determines the
depreciation calculation for the final asset.
 The final asset can be assigned to a cost center, profit center, or other
organizational units for ongoing management and reporting purposes.
6. Reporting and Analysis:
 SAP PS provides various reporting and analysis tools to track and monitor
the costs and progress of the AuC and final asset.
 Reports can be generated to analyze the costs, settlement status,
depreciation, and other relevant information.
 These reports help in assessing project performance, monitoring asset
construction costs, and ensuring accurate financial reporting.

By utilizing the Asset Under Construction functionality in SAP PS, organizations can
effectively manage and control the costs associated with asset projects during the
construction phase. It enables accurate tracking, capitalization, and depreciation of
costs, leading to improved financial visibility and control over asset investments.