When you settle capital investment measures, you generally need to settle the costs collected on the investment measure to different receivers. The system carries this out automatically for the most part, using control parameters and settlement rules you have entered. There are two ways of settling investment measures:

• Periodic settlement at the close of the period

• Full settlement or partial capitalization of the investment measure at its completion

The following graphic provides an overview of the flow of values during the settlement of an investment measure.

During periodic settlement, the actual costs on the order or WBS element are allocated completely or partially to one or more receivers. At the same time, the system generates automatic offsetting postings that credit the order or WBS element. The original debit postings to the order or WBS element still exist on the receivers after the settlement (and can be displayed). The costs that were settled are updated on the receiver, and can be displayed in reports.

There are two parts to the periodic settlement:

• The settlement to CO receivers (such as, cost center) of debits that do not have to be capitalized

• The settlement to the asset under construction belonging to the investment measure of debits requiring capitalization

The settlement to CO receivers involves all complete debits (not yet capitalized to an asset under construction). It is therefore possible to post and manage debits to an investment measure for management accounting purposes, even if these debits have no relevance for capitalization in the balance sheet (for example, overhead).

In the same step as the settlement of debits to CO receivers, the system settles to an asset under construction. You can define the settlement to assets under construction per depreciation area. The depreciation areas are used in Asset Accounting (FI-AA). They allow you to calculate values for fixed assets for different purposes (for example, book depreciation, tax depreciation, cost accounting depreciation, etc.). They make it possible to take different capitalization rules into account during the settlement to the asset under construction. The system posts costs that do not require capitalization (valuation differences between depreciation areas) to nonoperating expense.

Full settlement takes place when the investment measure is completed. During the full settlement, the debits that were transferred to the asset under construction are settled to completed assets. If debits were transferred incorrectly to the asset under construction, you can make a correction at this point and make a final settlement of these debits to cost centers. This settlement to cost centers is allowed only for debits that were posted during the current fiscal year. Debits from prior fiscal years are not allowed to be settled to cost centers at this point, since they were already listed under assets under construction in the balance sheet from the previous year.

However, you should note that you can still post acquisitions to the investment measure after the full settlement. There is no change to the status of the investment measure. Therefore, it is possible to have any number of full settlements for the same investment measure.