System Settings for Posting Depreciation

The following describes the possible Customizing settings for posting depreciation. You find these activities in Customizing for Asset Accounting under Integration with the General Ledger.

Features

Depreciation Areas to be Posted

You decide which depreciation areas should have their values posted to Financial Accounting (FI). In Customizing for Asset Accounting, choose Define How Depreciation Areas Post to General Ledger. Enter depreciation posting rules for these areas.

Note Note

All company codes that are assigned to one chart of depreciation post depreciation to the same depreciation areas. You have to enter depreciation posting rules for these areas. This means that a depreciation area, which is assigned to two company codes through its chart of depreciation, has to post depreciation in both company codes. Posting in one while omitting the other is not possible.

End of the note.

Posting Document Type

You have to specify a document type for posting depreciation. When you post depreciation, do not use document types that are limited to use with batch input. (See Posting Depreciation). Otherwise the depreciation posting run is not able to post directly to Financial Accounting.

Note Note

For each company code, you can enter only one document type that can be used for posting in all posting depreciation areas.

End of the note.

It is also essential that you specify in the definition of of the document type that it uses a number range with external number assignment. For more information, see SAP Note 903118. You need to prevent manual postings using this document type through organizational measures in your enterprise (that is, outside of the system).

The following relates to the settings you can make for posting depreciation in the Specify Intervals and Posting Rules IMG activity:

Depreciation Posting Cycle

You determine the depreciation posting cycle by entering the length of time (in posting periods) between two depreciation posting runs in the activity Specify Intervals and Posting Rules. This means that a setting of 1 indicates monthly posting, 3 means quarterly posting, 6 means semi-annual, and 12 means annual (for a fiscal year variant with 12 posting periods). When you start a depreciation posting run, you have to enter the period for which you want it to be carried out.

You do not necessarily have to adhere to the posting cycle. You can also choose an unplanned depreciation posting run using an indicator on the selection screen of the depreciation posting program. When you set this indicator, you can skip over several periods, and post the total depreciation for all of the skipped periods in one period. You might need to do this, for example, if you carried out legacy data transfer during the fiscal year. This method enables you to post all depreciation up to the transfer date at one time.

Caution Caution

You can use a different fiscal year variant in Asset Accounting than you do in General Ledger Accounting (see Fiscal Years and Periods). The period you enter in the depreciation posting run, however, is always the period in the fiscal year variant for the general ledger.

If you set the Alternative Fiscal Year Variant indicator in Customizing for Asset Accounting under Start of the navigation path Valuation Next navigation step Fiscal Year Fiscal Year Variants Allow Differing Variants for Depreciation Areas with G/L Integration End of the navigation path , then the fiscal year variant of the given ledger is the determining one; otherwise it is always the fiscal year variant of the leading ledger The same applies for the display of the posted depreciation in the Asset Explorer.

If you are using a different fiscal year variant in Asset Accounting, the system determines the FI-AA period to be posted in the following way:

First, the system determines the date of the last day of the FI period entered (according to the fiscal year variant of General Ledger Accounting). Then it determines the FI-AA period in which this date falls, and posts to this period. For example, you might enter period 1 for the depreciation posting run, but the system posts period 2. The reason for this difference is that January 31 falls in period 2 according to the fiscal year variant in Asset Accounting. This problem occurs particularly when you use fiscal year variants that apply to specific depreciation areas.

End of the caution.

Posting Procedure

The system supports two different procedures for distributing the the forecasted depreciation over the posting periods. You make the settings for these two procedures in the Specify Intervals and Posting Rules Customizing activity.

Catch-Up Method

Using the catch-up method, the system calculates the posting amount in this period as the difference between the planned depreciation and the depreciation posted up to this period.

Example Example

Acquisition posted in period 5	12000
Depreciation start in period	1
Planned annual depreciation	1200
Deprec. posted up to period 5	0
Planned deprec. up to period 5	500
Deprec. to post in period 5 =	(500-0) = 500
Deprec. to be posted per period (6-12) =	(700/7) = 100

End of the example.

Smoothing

Using the smoothing method, however, the system distributes the difference between the forecasted annual depreciation and depreciation already posted, to the remaining posting periods.

Example Example

Acquisition posted in period 5	12000
Depreciation start in period	1
Planned annual depreciation	1200
Deprec. posted up to period 5	0
Remaining periods, incl. period 5	8
Deprec. to be posted per period (5-12) =	(1200-0)/8 = 150

End of the example.

The difference between the two procedures becomes evident when processing acquisitions within the fiscal year or when handling post-capitalization.

With the catch-up method, depreciation falling due on a transaction within the fiscal year (from the depreciation start date, according to period control, up to the current period) is posted in one total. The depreciation posting program posts this amount in the period, in which the posting date of the transaction lies. The amount posted is dependent on the asset value date.
With the smoothing method, this amount is distributed equally over the periods from the current posting period to the year end (independent of the asset value date of the transaction).

For more information, see Graphic: Catch-Up/Smoothing Method.

Caution Caution

You should be careful if you use smoothing, and the depreciation start date comes after the acquisition date. In this case, the system does not distribute the planned depreciation first to the periods after the depreciation start date. Instead, it posts depreciation starting from the acquisition date. However, the total amount of planned depreciation is not affected.
When an asset is retired during the fiscal year (partial or complete retirement) smoothing does not distribute depreciation only up to the retirement date; it distributes depreciation up to the end of the year.

End of the caution.

Posting Interest/Revaluation

If you manage interest or revaluation in a given depreciation area, you can post them to appropriate accounts in Financial Accounting in the same way as depreciation. Or you can specify that they be ignored. It is not possible to post interest or revaluation alone (without depreciation).

Note Note

For more information on the calculation of interest to be posted, see Calculation of Interest.

End of the note.

Additional Account Assignments

In each depreciation area, you can specify to which of the possible objects (such as cost center or order) account assignment of depreciation should be made. This information is then taken from the asset master record, if applicable, and passed on to Financial Accounting as an additional account assignment.

You make the settings for this in Customizing under Additional Account Assignment Objects.

Note Note

For more information, see the Additional Account Assignment.

End of the note.