Handling of Fixed Assets 

Purpose

The Handling of Fixed Assets scenario provides detailed management and monitoring of fixed assets from the perspective of the life cycle of individual assets. The scenario covers the entire life of the asset from the purchase order or initial acquisition (which can be managed as an asset under construction) all the way to the asset retirement. Between these two events, the system handles all asset-related business transactions and ensures integration with the general ledger. The system calculates, to a large extent automatically, values for depreciation, interest, insurance and other purposes, and makes them available in the Information System.

Prerequisites

You manage fixed assets in a subsidiary ledger.

Process Flow

  1. Typically, you post the acquisition of purchased assets during the ordering process in Purchasing. Before you create a purchase order, you create a master record for the asset. You can then post the purchase order to the asset. When you post the goods receipt or the invoice receipt, the system automatically capitalizes the asset.
  2. Asset acquisitions can also be posted directly to Asset Accounting (posting: debit asset, credit vendor or clearing account)
  3. You capitalize assets produced in-house by settling an order or work breakdown structure (WBS) element to the asset in question, or by posting an offsetting entry against the asset.
  4. During the useful life of an asset, you post all business transactions that change its value. You account for any organizational changes relating to the asset by changing the asset master record or by posting transfers.
  5. Periodic entries handled by collective processing (for example, depreciation posted to the general ledger, or entries for year-end closing) are also posted during the useful life of an asset.
  6. You post the removal of an asset from your fixed assets (either due to sale or scrapping) using the appropriate Asset Accounting transaction.