Asset Accounting Configuration in SAP S/4 HANA

What is Asset Accounting ?

Asset accounting in SAP is a module that manages an organization's fixed assets throughout their lifecycle. It involves recording, tracking, and managing tangible assets such as buildings, machinery, and equipment. Key functionalities include asset acquisition, depreciation calculation, asset retirement, and reporting for financial and managerial purposes. This module ensures accurate financial reporting and compliance with accounting standards.

Configuration steps to set-up Asset Accounting :

STEP 1: To Copy Reference Chart of Depreciation/Depreciation Areas (EC08 )

Charts of Depreciation - are used to manage various legal requirements for the depreciation and valuation of assets. These charts of depreciation are usually country-specific and are defined independently of the other organizational units. Example: You can use one chart of depreciation for all company codes in a country.

STEP 2: Depreciation Areas - in SAP contains the parameters required to evaluate an asset. It is defined by a two-digit numeric key. You may use more than one depreciation area to represent different asset valuations for cost accounting or legal reporting. For example, A chart of depreciation is made up of a list of such depreciation areas.

Click on Depreciation areas

• Real depreciation area: Values are committed to the database

• Area does not post: Used for reporting purposes, such as areas for other currencies

• Area posts in real time: Used for depreciation areas that post both acquisition and production costs (APC) and depreciation to the general ledger.

STEP 3: Assign Input & Output tax indicator for  non-taxable acquisition ( OBCL )

Enter Input tax indicator & Output tax indicator.

STEP 4: Define Accounting Principle

In SAP (Systems, Applications, and Products), accounting principles refer to the fundamental rules and guidelines used to prepare and present financial statements within the SAP system. These principles dictate how transactions are recorded, classified, and reported to ensure accuracy, consistency, and compliance with regulatory standards. They form the basis for financial accounting processes within SAP and help maintain transparency and reliability in financial reporting.

Click on New Entry

STEP 5: Assign Accounting Principle to ledger

STEP 6: Define Settings for Ledger and Currency Type

Currency Types :

To supplement standard SAP currency types, such as Document Currency (00), Company Code Currency (10), Controlling Area Currency (20), and Group Currency (30), you can create your own currency types.

Check your currency settings and create more currency types, if necessary. The currency types that you create can be made up of a combination of letters and digits or of letters only. However, they must begin with the letter Y or Z. For example, Y1, Y2, ZA, or ZB.

• Global Currency Conversion Settings view

For your own currency types, enter the currency into which the conversion shall be made (Currency field), and the currency from which currency conversion is to be made (Source Currency field). In addition, enter the exchange rate type and the date on which the translation shall be performed (document date, posting date, or translation date). You can also decide whether the currency conversion shall be done in real time. If you don’t select Real-time Conversion, you can do so at period-end closing using the foreign currency remeasurement run.

• Currency Conversion Settings for Company Codes view

For each combination of company code and your own currency types, make your settings as described previously.

• Company Code Settings for the Ledger view:

Assign the new currency types to the ledger, where you want to use it.

STEP 7: Assign Chart of Depreciation to Company code (OAOB)

In this configuration activity we are assigning chart of depreciation to company code. You can have only one chart of depreciation to one company code. 

STEP 8: Technical Clearing Account for Integrated Asset Acquisition GL Map

The system ensures that the Technical Clearing Account for Integrated Asset Acquisitions has a balance of zero (for each ledger and account assignment object) for every accounting principle in the chart of depreciation. So that the system can ensure the zero balance, manual postings cannot be made to the account. The account does not appear in the balance sheet, but in the notes to the financial statement (since it has a zero balance). 

Click on New Entry >>

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STEP 9: Specify Document Type for Posting of Depreciation (AO71)

PATH: SPRO, IMG, Financial Accounting, Asset accounting, Integration with General Ledger Accounting, Post Depreciation to General Ledger Accounting, Specify Document Type for Posting of Depreciation.

In this configuration activity we are able to specify document type for posting of depreciation. It is assigned per company code. 

STEP 10: Specify Account Determination

The account determination key defines the accounts in Financial Accounting that should be posted during asset transactions, for each chart of accounts and depreciation area (defined as an automatic posting area) in the chart of depreciation.

Click on New Entry >>

STEP 11: Create Screen Layout Rules

The screen layout specifies the status of the fields in the asset master record. You use the screen layout to determine if fields are required entry or optional entry fields, or if they are suppressed completely, for example you create only the keys and descriptions of the screen layout controls.

STEP 12: Define Number Range Interval (AS08)

STEP 13: Asset Class T.code (OAOA)

Asset classes are the most important means of structuring fixed assets. You can define an unlimited number of asset classes in the system. You use the asset classes to structure your assets according to the requirements of your enterprise. Asset classes apply in all company codes.

New Entry

Click on save

STEP 14: Create GLs  T.code (FS00)

Create Machinery GL

Create GL Accumulated Depreciation Machinery

Create GL loss on assets sale

Create GL SALES  ASSETS clearing

Create GL profit on asset sale

Create GL depreciation

STEP 15: Configuration to the determine the G/L account to Post the Asset (AO90)

Select Chart Of account and Enter Account Determination Tab

Select C001mach and Enter Balance Sheet Account

GLs Mapping

Enter Depreciation tab

STEP 16: Determine Depreciation Areas in the Asset Class (OAYZ)

In this configuration activity we are able to determine depreciation areas in the asset class. Usually in one asset class, we use the same depreciation terms. Here we are making the default settings for them.

 Depreciation areas

Thank you for your time in reading my blog, Asset Master Data and Asset Posting will be covered in my Next Blogs.

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