Down payments represent a type of acquisition to fixed assets which you generally need to capitalize and report in a separate balance sheet item. For this reason, down payment postings use separate, special transaction types in the SAP R/3 System.

The following transactions should be posted in connection with the down payment:

• Creating a down payment request
• Posting the down payment
• Posting the corresponding closing invoice
• Clearing the down payment with the closing invoice

The R/3 FI-AP (Accounts Payable) component has specific transactions that allow for posting to the corresponding assets. You post the down payment made to the reconciliation account for Asset Accounting ("Capitalized down payments to assets") as well as to the reconciliation account for Accounts Payable ("Down payments made to assets"). The offsetting account for the reconciliation account in Asset Accounting is a clearing account. In order to prevent down payments from being shown twice in the balance sheet, this clearing account must be linked to the same balance sheet item as the reconciliation account in Asset Accounting.

When the closing invoice is received, it must be posted in full and capitalized to the asset. After this, you must clear the down payments with the closing invoice. When you clear the down payment, the system reverses the original acquisitions (the down payments) to the asset.

When you create a down payment request with account assignment to asset, the system carries out the same checks that take place when you post directly to an asset. You can use the down payment request as a posting reference when you post the down payment manually. The payment program can also convert it automatically into a down payment posting.

You post the down payment made to the reconciliation account for Asset Accounting ("Capitalized down payments to assets") as well as to the reconciliation account for Accounts Payable ("Down payments made to assets"). The offsetting account for the reconciliation account in Asset Accounting is a clearing account.

As an alternative to posting in Financial Accounting, you can post the assets side of the accounting transaction in Asset Accounting without integrated posting to Accounts Payable.

You can use the payment program in Financial Accounting to have the system automatically post down payments. This option is open to you in addition to the manual posting of down payments in Asset Accounting. The payment program processes all of the down payment requests in the system that have come due and have been properly flagged. For more information on down payment processing in Financial Accounting, see the R/3 library.

If you want to start up an asset under construction at the year-end closing, you have to settle (transfer) the asset under construction to a capitalized asset. If the invoice receipt for a down payment does not take place in the same fiscal year as the down payment, you have to clear the open down payments already made first. They must be cleared with a forecasted invoice (reserve). The asset under construction can only be settled after this clearing.

In order to post down payments to assets in the FI-AA component, you have to make the following system settings: