Parallel Accounting in Asset Accounting 

Use

In Asset Accounting, you can handle parallel accounting using depreciation areas. You have to define the necessary depreciation areas for each of the accounting principles involved.

Depreciation area 01 is the master depreciation area in Asset Accounting. If you use parallel ledgers for parallel accounting, then the values of depreciation area 01 are posted to all ledgers. Nonetheless, you have to assign the leading ledger to depreciation area 01. 

Posting to a company code different from that of the fixed asset is not allowed for any depreciation areas.

There are two approaches for handling parallel accounting in Asset Accounting. You can use either additional accounts or parallel ledgers.

Features

In Asset Accounting, the different accounting principles differ primarily in the following:

·        Determination of depreciation

·        Capitalization of assets produced in-house

Determination of Depreciation

For each depreciation area (that is, for each accounting principle), you enter the specific depreciation terms, useful life, and so on. The system then determines depreciation for each depreciation area in parallel, using the depreciation rules that were entered. This depreciation is posted separately for each depreciation area. Depending on the approach you use, the postings are made to additional accounts or in a parallel ledger.

Based on the approach you decide to use for parallel accounting, you have to make the following settings:

Additional accounts

You enter the additional accounts in Customizing for Financial Accounting (New). Choose Asset Accounting → Integration with the General Ledger → Assign G/L Accounts.

Parallel ledgers:

You can use a Wizard to set up the depreciation areas for parallel ledgers. In Customizing for Financial Accounting (New), choose Asset Accounting → Valuation → Depreciation Areas → Set Up Areas for Parallel Valuation.

Another option: In Customizing for Financial Accounting (New), choose Asset Accounting → Valuation → Depreciation Areas → Define Depreciation Areas, and enter a target ledger group for each depreciation area. You should then assign a Different Depreciation Areafor account determination, so that you do not have to enter additional accounts for the depreciation area. Normally you should enter the master depreciation area 01 here.

Posting APC Differences

Values can be posted from Asset Accounting to General Ledger Accounting either periodically or directly. Direct posting of values is similar to online posting. However, it differs from online posting in that the posting can be delayed and cancelled. The periodic posting program RAPERB2000 collects cancelled posting documents and posts them again. Unlike direct posting, RAPERB2000 generates collective documents by fiscal year, period, account group and affiliated company for those depreciation areas that post periodically to General Ledger Accounting. It creates special collective documents with asset account assignment for those depreciation areas that post directly to General Ledger Accounting.

When direct posting is used, the volume of documents increases significantly with each additional accounting principle used. Therefore, for performance reasons, you should carefully consider whether direct or periodic posting should be used.

Capitalization of Assets Produced In-House

For capitalizing in-house produced assets, you can use the function for determination of capitalization values in Investment Management (IM). Using this function, you can specify by depreciation area the percentage to be capitalized and the percentage to be posted to non-operating expenses when investment measures are settled (see Parameters for Settlement).

In preliminary settlement, you can settle any part of the costs not requiring capitalization (for example, to cost centers). These values that were settled in preliminary settlement can no longer be settled to the fixed asset or asset under construction. In all depreciation areas, these non-capitalized values are shown as costs.

From the point of view of Controlling, there has to be at least one (cost-accounting) depreciation area that is settled completely. This ensures that all values remaining after preliminary settlement are always completely capitalized for Controlling.

For more information, see Settlement of Investment Measures.