Structuring Fixed Assets 

Use

It is possible to structure fixed assets at several different levels in the system:

·        Balance Sheet Level

·        Classification Level

·        Asset-Related Level

Structuring of Fixed Assets

Features

Balance Sheet Level

For structuring according to balance sheet criteria, the Financial Accounting (FI) component offers a three-level hierarchy:

·        Balance sheet version

·        Balance sheet item

·        General Ledger account

Classification Level

At this level, fixed assets can be structured using asset classes in the Asset Accounting component. You use asset classes to structure assets according to legal requirements or the demands of accounting. Every asset belongs to an asset class. You use the account determination in the asset class to assign each asset to an item in the balance sheet (refer to Account Determination). For more information, see Functions of the Asset Class.

Asset-Related Level

At the asset-related level, a four-level hierarchy has been set up in the Asset Accounting component (refer to Basic Functions of Asset Maintenance ):

·        The group asset makes it possible to group a number of assets together for the purpose of uniform evaluation and depreciation. Group assets are assigned to asset classes, just like other assets. The asset class of the group asset is not related to the asset classes of the assets that belong to it.

Group assets are used primarily in the USA to meet certain tax requirements.

·        The asset main number represents an asset that is to be evaluated independently. The asset is viewed as a single unit for evaluation. It contains information for the valuation of the asset, as well as organizational information.

·        Below the asset main number, the asset can be further divided into its component parts by the use of asset sub-numbers. You can use sub-numbers to depreciate subsequent acquisitions to an asset separately from the original asset.

·        The lowest level consists of the transaction data per depreciation area (such as acquisitions or retirements) that belong to the asset master record (line items).

Please note that this four-tiered hierarchy is not mandatory. You can represent a simple fixed asset just using an asset main number (asset master record).