Transferred Reserves (Deferred Gain) (SAP Library

Transferred Reserves (Deferred Gain)

Purpose

The "transferred reserves" component allows all or a part of the undisclosed reserves that arise from the sale of assets to be transferred to replacement assets. The gains from the sale thereby reduce the depreciation base for the newly acquired assets. Or you can show them as special reserves on the liabilities side of the balance sheet.

If such reserves are not transferred in the year in which they arise, because there are no appropriate new acquisitions, then a reserve can be created. In this way the gain from the sale of the asset does not count as profit. This reserve usually must be transferred within the following (two) years to new assets acquired during this time period.

Features

It is possible to post this transfer of reserves to replacement assets in the FI-AA Asset Accounting component. The allocation of gain resulting from asset sales (as special items with reserves) must be posted manually in the FI General Ledger.

You manage and depreciate the reserves transferred to assets separately from the acquisition and production costs.

Caution

The following explanations relate to the standard chart of depreciation for Germany (refer to Special Reserves in Germany). Other countries, in which the transfer of reserves is allowed, require similar depreciation areas.

The following describes the different methods for managing reserves transferred to an asset in the system:

Handling on the Assets Side

Using this method, the acquisition and production costs of the asset are reduced by the amount of the transferred reserve. Ordinary depreciation and special depreciation are then automatically calculated by the system based on the reduced acquisition and production costs. The reserves transferred to the asset cannot be identified separately from the actual acquisition and production costs.

In order for this calculation to take place, you define the book depreciation area (01), and the tax depreciation area (02) so that they allow for the management of values for the transfer of reserves. You do not need the area for "special depreciation" (03), since the transfer into the areas 01 and 02 must be of the same amount. For the transfer of reserves, therefore, you should use a transaction type that posts to area 01 and area 02. You must also enter the appropriate accounts for the transfer of reserves in the account allocation for the book depreciation area:

Offsetting account for the transfer of reserves
Control account for transferred reserves (=asset control account)

Posting on Liabilities Side

In this case, the transferred reserves can be represented in the balance sheet as value adjustments on the liabilities side. The calculation of depreciation in the book depreciation area is then based on the unreduced acquisition and production costs. The following options exist:

Posting in special reserves depreciation area (03)

If your accounts in Financial Accounting do not differentiate between reserves for special depreciation that arise from transferred reserves and those that arise from other special tax depreciation (for example, in Germany, the law providing tax credits for investment in the new states), then you can use area 02 "special depreciation based on the trade balance sheet acquisition and production costs," and the derived depreciation area 03 ("special reserves"). However, the system posts to the accounts for area 03 (expense from allocation to reserves and special reserve account) during the transfer of reserves.

Allow for the management of values for transferred reserves in area 02 and 03. Post the reserves with a transaction type that only posts to area 02. The system then automatically shows the reserves in area 03. With the depreciation posting run, the system also automatically posts the transfer and clearing of the reserves to the corresponding accounts for special reserves in Financial Accounting.

Posting in a separate depreciation area

If you want to use a separate account in Financial Accounting for posting transferred reserves, then you must create a new depreciation area using any key (such as, area 04). This area is only used to manage the transferred reserves (not APC). The clearing of the reserves is carried out by normal depreciation.

Carry out these tasks when configuring the system:

Define the special depreciation area (area 04). Allow for the management of negative book values. Do not allow APC in depreciation area 04. Also specify that the depreciation and asset values from this area are posted periodically to the general ledger (FI-AA Customizing: (Valuation ® Depreciation Areas ® Define depreciation areas).

Specify that area 04 is for managing reserves (FI-AA Customizing: Special Valuation ® Transferred Reserves (Deferred Gain)).

Make sure that area 04 is not allowed to manage investment support (FI-AA Customizing: Special Valuation ® Investment Support).

Specify that area 04 is for managing positive ordinary depreciation (FI-AA Customizing: Depreciation ® Ordinary Depreciation ® Determine depreciation areas).

Maintain the account allocation for area 04. Enter the following accounts:

Accounts for the allocation of the reserves (FI-AA-Customizing: Special Valuation ® Transferred Reserves (Deferred Gain)).

Accounts for ordinary depreciation (write-off) of the reserves (FI-AA Customizing: Depreciation ® Ordinary Depreciation).

Enter the reserves account in the account for ordinary depreciation (write-off) of the reserves. Enter the account for revenue from write-off of reserves in the account for ordinary depreciation expense.

Revenue account for the writing-off the reserve due to retirement (corresponds to the account for loss from asset retirement) – FI-AA Customizing: Transactions ® Retirements).

Define a transaction type for the transfer of reserves that posts only to area 04 (FI-AA-Customizing: Special Valuation ® Transferred Reserves (Deferred Gain)).

Use this transaction type to post the reserves only to area 04.

Post the depreciation (the write-off of the reserves) (Post depreciation) and the changes to asset values from area 04 ( Bal. sheet posting) periodically to Financial Accounting (Periodic processing).

Make sure that the affected assets have the same depreciation terms in areas 01 and 04, in order to ensure parallel depreciation of the APC and the reserves.

If you want to see the values from book depreciation along with the transferred reserves, you have to define an additional, derived depreciation area (05). Define area 05 so that its values are calculated from adding book depreciation and area 04.