Settlement 

Purpose

Orders and/or WBS elements are used to temporarily collect costs for an investment measure. These debits then have to be debited in turn to assets under construction or cost centers. Therefore, periodic settlement of the measures is required. In addition, an investment measure with an asset under construction has to be settled to fixed assets when it is completed.

Process Flow

The posting of a settlement usually takes place as part of periodic processing. You can choose whether all selected orders or projects are settled, or only individual orders or projects. You make this determination using a freely definable selection variant. By means of the processing type in the initial screen of the transaction, you determine which of the following should be carried out:

During an automatic settlement, the processing type is determined for each debit based on the applicable distribution rule. If the investment measure is technically closed (the system status technically completed is set), then processing type 3 (partial capitalization) applies. Otherwise processing type 2 (periodic settlement) applies.

The system settles all debits that have a preliminary settlement rule. They are settled to CO receivers. At the same time, the system internally carries out the settlement to an asset under construction.

The system settles all debits that have been settled to assets under construction. They are settled to the final receiver assets, which have been assigned a full settlement rule.

Before carrying out the full settlement, the system automatically carries out a periodic settlement. This procedure ensures that all of the debits posted to the investment measure that require capitalization have been settled to an asset under construction.

The system not only settles the costs in the period, but also determines the cumulative balance on the order up to the settlement period. If there is a balance, the system issues an error message.

The system settles all debits, which have been assigned a distribution rule. This distribution rule has to be either a blanket rule, or a line-item distribution rule, corresponding to the processing type.

Value Date

You can enter the value date for the settlement in the initial screen of the settlement transaction, or in the settlement rules for the respective investment measure. If you enter the value date in the settlement rule, the system uses this date, and ignores any value date you enter in the settlement transaction.

If a value date is not entered in the transaction for a full settlement or partial capitalization, and no value date is entered in the settlement rule, the system uses the date of technical completion as the value date.

If the system is unable to determine a value date using any of the above rules, then it uses the last day of the settlement period as the value date.

Point in Time for the Periodic Settlement

You should carry out a periodic settlement at the close of each cost accounting period. This allows these cost amounts to be cleared in the correct period.

If you always capitalize 100% in the cost accounting depreciation area, then you must carry out the periodic settlement only at the close of the fiscal year, or at the close of those periods for which a balance sheet is created.

Point in Time for Settlement to Asset under Construction

The settlement to an asset under construction takes place automatically, internally within the system. This transfer takes place automatically at the same time as the periodic settlement to CO receivers.

The percentage rates for the costs that require capitalization can sometimes only be determined at the close of the period. Therefore, the capitalization structure has a time-dependent definition. You can change the capitalization structure during the fiscal year, even if periodic settlements have already been posted. However, a change has no affect on investment measures, for which final settlement has already been posted, or on partially settled line items.

In Asset Accounting only one depreciation area (book depreciation) is posted automatically online to the general ledger. The other areas that are automatically posted to the general ledger can only be posted using periodic processing. Therefore, the settlement to costs is posted immediately only for the book depreciation area during the periodic settlement. The settlement for the other depreciation areas takes place only during the periodic posting of these areas to the corresponding reconciliation accounts.

Transaction Types

The system uses specific transaction types when posting settlements to assets under construction. You define these transactions in Customizing for the Asset Accounting (FI-AA) component. In FI-AA Customizing, you can also specify the transaction types the system should use for the settlement of investment measures (under Transactions ® Determine Transaction Types for Internal Transactions). Appropriate transaction types are provided in the standard system.

Full Settlement/Partial Capitalization

During the full settlement, the system now settles all debits that were settled to assets under construction to the respective receivers (completed assets). Before you can carry out full settlement, the investment measure has to have the technically completed status setting.

The system settles prior-year acquisitions and current-year acquisitions separately, so that they are shown correctly in the asset history sheet. Prior-year acquisitions are the values that were already transferred to the asset under construction in previous years. Proportional values for special depreciation and investment support are determined on the asset under construction using a blanket calculation.

At the time of the full settlement, the down payments and the down payment clearings to be settled have to balance to zero (see Down Payments ).

Reversal

You can reverse a posted settlement using the settlement transaction, as long as the settlement documents that belong to it have not been reorganized. However, you can only reverse the most recently carried out settlement. If you have to reverse an older settlement, you first have to reverse the most recent settlements (following it) in reverse chronological order.