Definition

In the asset subledger, a depreciation area that you use for the purposes of revaluation.

Use

Recording Revaluation Amounts

You use revaluation areas to record asset revaluation amounts . In the asset revaluation process, we saw that when you revaluated the drilling equipment, that resulted in an increase in the asset's value of UNI 1,200.

One way of handling the revaluation amount in the SAP System is to record it in a separate revaluation area. In the graphic below, the asset's acquisition and production costs (APC) are recorded in the book depreciation area, depreciation area 01. The revaluation amount (UNI 1,200) is recorded in a separate revaluation area, area 03. The asset's adjusted net book value is shown in area 4.

Area 4 is termed a derived area , because the values that is shows are derived from two other areas, in this case the APC from area 01 and the revaluation amount from area 03. Areas 01 and 03, conversely, are termed real areas, because they record values that have been calculated in their own right.

Recording Inflation in Revaluation Areas

This is the most common way of using revaluation areas, although accounting procedures vary from country to country. In Turkey, for example, inflation adjustments are recorded in the book depreciation area (01), so no separate revaluation areas (in the graphic, 03 or 04) are required.

As you can see, the revaluation areas also show the depreciation on the inflation.

Recording Inflation Adjustments for Different Purposes

In some countries, you are required to depreciate and revaluate assets for different purposes. For example, as well as calculating depreciation for use in general purpose financial statements, you may well have to calculate depreciation differently in order to determine how much income tax you have to pay. Similarly, you may have to revaluate your assets for different purposes, using different rules.

To this end, you define separate revaluation areas. The above graphic has one area for recording revaluation amounts calculated for general purposes, area 03, and a derived area, area 04. For the purposes of asset revaluation for tax purposes, you would define two further revaluation areas, as shown in the graphic below:

Inflation for Tax Purposes

Here, as you can see, the revaluation amount for tax purposes (in area 07, UNI 1,250) is slightly higher than that for general purposes (in area 03, UNI 1,200).

Parallel Currencies

For each parallel currency used by your company code, you must create a copy of each revaluation area that posts to the general ledger. You must customize them in the same way as the base depreciation area, with one exception: You must mark them as not to be posted to the general ledger.

These parallel currency areas are required only for technical reasons, because, logically, inflation is specific to a currency only (in this case, your local currency). Therefore, the Asset Revaluation (Inflation) program always posts zero amounts to parallel currencies.

Customizing

You maintain revaluation areas in Customizing for Financial Accounting, under  Asset Accounting Special Valuation Revaluation of Fixed Assets Revaluation of the Balance Sheet Inflation Accounting Revaluation Areas.