Transfer Method (SAP Library - Asset Accounting (FI-AA))

Transfer Method

Definition

Method within a transfer variant that determines how a transferred asset is capitalized in the receiving company code. The transfer methods are fixed in the system and cannot be changed by the user.

Use

The system controls the valuation of transferred assets using transfer variants that you define. You can enter one of the following transfer methods in the transfer variant:

Gross method (methods 1 and 4 - with/without transfer of values to dependent areas)

When you use this method, the system transfers the historical APC and the accumulated depreciation from the sending asset. That is, the asset is capitalized with its historical APC and accumulated depreciation.

When this transfer method is used, there is normally no sales revenue entered.

Recommendation

SAP recommends that you always use the gross method for transfers between two companies that are not legally independent entities (relationship type 02). You should also use the gross method for transfers between group depreciation areas.

Net method (method 2)

When you use this transfer method, the system transfers the net book value of the sending asset. That is, the net book value of the asset is capitalized in the receiving company code. You specify during the transfer transaction which depreciation area should be used for determining the net book value.

Recommendation

SAP recommends that you use the net method only for transfers between two companies that are legally independent entities (relationship type 01).

New value method (method 3)

When you use this transfer method, you enter the transfer price manually in the transfer transaction. That is, the asset being transferred is capitalized in the receiving company code with a value you entered manually during the transfer. Another option is to enter a depreciation area that is used for determining the net book value.

Recommendation

SAP recommends that you use the new value method only for transfers between two companies that are legally independent entities (relationship type 01).

This graphic is explained in the accompanying text

Base Values in Different Transfer Methods

Example

The following example shows the effects of using three different transfer methods on the posting amounts of an asset retirement (partial retirement).

APC of the asset: 2000

Accum. depreciation: 1000

Revenue entered manually: 3000 (using new value method)

Percentage retired: 50%

Gross method:

Sending asset: You retire 1000 APC (50% of 2000) and 500 accumulated depreciation (50% of 1000).

Target asset: Acquisition of 1000 APC (amount retired) and 500 accumulated depreciation (depreciation retired).

Net method:

Sending asset: You retire 1000 APC (50% of 2000) and 500 accumulated depreciation (50% of 1000).

Target asset: Acquisition of 500 APC (APC minus depreciation).

New value method:

Sending asset: You retire 1000 APC (50% of 2000) and 500 accumulated depreciation (50% of 1000).

Target asset: Receives 3000 APC (revenue that was entered manually).