Assets under Construction 

Use

Assets under construction are a special form of tangible assets. They are usually displayed as a separate balance sheet item and therefore need a separate account determination in their asset classes.

Features

You can manage assets under construction in the system as individual master records, just as you do completed assets.

You can also use collective management of several assets under construction on one master record. You can distribute to the proper assets when the asset under construction is completed by using either

However, if you use collective management, without line item management, there is one limitation. You can only post asset retirements (transfers) with asset value dates that follow in sequential order.

Due to the above restriction, it is not recommended that you manage a large number (or all) assets under construction on one master record. Instead, you should use a general ledger clearing account to temporarily collect acquisitions for assets under construction.

Depreciation

Ordinary depreciation is not allowed for assets under construction in most countries. You reflect this limitation by choosing a depreciation key that does not allow ordinary depreciation in the book depreciation area. To ensure that this depreciation key is protected during master data maintenance, select the asset class as the maintenance level for the book depreciation area (see Screen Layout and Maintenance Level).For certain assets under construction, special tax depreciation is allowed. In this case you also enter corresponding keys in the asset class, to be used as mandatory default values.

Down Payments

For posting down payments, allow the posting of the transaction type group "Down payments" (transaction type groups 15 and 16) in these asset classes. In addition, enter the necessary general ledger account in the account allocation. Also set the indicator for negative APC in the depreciation areas of the assets under construction. This allows subsequent credit memos on already capitalized assets.

Control Information for Assets under Construction

Line Item Management

If you make large capital investments in your own in-house produced assets, you can manage assets under construction with open items, and settle the assets under construction per line item to different receivers. The system activates this line item management when you create the asset, if the indicator for it is set in the asset class to which the asset belongs. This indicator also determines that the transaction type for down payments is automatically allowed in these classes.

Settlement Profile

You can define profiles for the line item settlement of assets in FI-AA Customizing. The profiles determine the receivers to which you are allowed to settle. In order to settle an asset under construction, an appropriate settlement profile must be entered in FI-AA Customizing per asset company code (Specify settlement profile).

List Versions

The transaction for the line item settlement of assets under construction enables you to select line items for allocation to a distribution rule group for each asset. You define display variants for these transactions in FI-AA Customizing (List versions). Using these variants, you can control which information (document number, posting text, and so on) is displayed when you call up line items. There are also interfaces to additional functions of Asset Accounting (such as, master record display, asset values).