Prasad: Could you resolve the question. I am also in similiar situation. Not sure what GL account fields are related to Asset impairment, in AO90. I appreciate your help in understanding the concept of account determination in SAP for asset impairment. I have two accounts to enter in AO90. 1. Accumulated impairment. 2. Impairment expense. These two are in addition other regular APC and Depr account
Regards,
Sree
Dear,
Check the below thread, Ravi has explained you in detail
http://scn.sap.com/thread/1622986
OAXE, restrict this impairment to the right depreciation areas
Thanks
Thank you very much for the response. Yes, the URL is helpful. However, I am not clear on the right fields in AO90 for entering the following two GL Accounts: 1. Accumulated impairment. 2. Impairment expense.
AO90 - Check the below and assign accordingly
Balance sheet accounts -> Revaluation account assignment
Depreciation -> Account assignment for revaluation on depreciation
Simulate a scenario in DEV
Thanks
Please refer SAP Note 1144500 (This is for revaluation of fixed assets with reference to SORP requirements in UK relating to public sector undertakings)
You will find the configuration document here. You may use this as a guide.
You have three types of revaluation:
1) Upward revaluation
2) downward revaluation not below historic cost
3) downward revaluation below historic cost
Usually in cases 2 and 3, you are going to impair the asset. Impairment is nothing but "Unplanned Depreciation" in SAP Terminology. SAP may not completely support the accounting requirements for unplanned depreciation. There is no other go.
For example, if you have made impairment during the fiscal year, that impairment value will be ignored by SAP for calculating the ordinary depreciation for the remaining months of that particular year. Therefore, you would see the difference between system posted ordinary depreciation and expected to be posted depreciation.
However, at the beginning of the next fiscal year, the system will take into consideration the amount of "Impairment / Unplanned Depreciation" and the ordinary depreciation amount gets adjusted accordingly.
Example:
Asset is purchased on 01.01.2012 (Fiscal Year Variant Calendar Year) with value of $120,000 for 10 years life. (120 months)
Depreciated for 4 months - so the depreciation until April is $4,000 ($1000 per month)
Let us say, now you posted an impairment on 01.05.2012 an Unplanned Depreciation (Impairment) of $20,000
Still the system would compute the depreciation of $1000 per month from May to December (it will not take into consideration the amount of $20,000 unplanned depreciation). Please note this is standard system behaviour, it is not possible to get the correct amount of depreciation. You would usually expect the depreciation of $800 ($120,000-$4,000-$20,000 / 116 months) = $ 800. But, that is not the case with system, it would still calculate $1,000 for that year.
You would expect the depreciation of $6,400 from May to December (800 * 8 months), but system has deducted $8000 (1000 * 8 months). Now the difference is $1,600. That means to this extent the system as excessively deducted.
Therefore, the system will nullify this affect from the next year which is 01.01.2013 by depreciating
$ 814.81 instead of $ 800.
Difference between $ 814.81 and $ 800 is $14.81 which is nothing but $1,600 / 108 months (from 01.01.2013 to end of life of the asset)
Hi Ravi,
Thanks for your excellent post. Does the system behave the same in regards to ignoring the unplanned depreciation even if we have the new depreciation calculation activated?
Best regards,
Vishal.
Hi Vishal,
I did not get your question. What do you mean by "new depreciation calculation"?
It is the standard behaviour of the system as far as unplanned depreciation is concerned. Even SAP does not have answer for this.
If you get an answer for unplanned depreciation behaviour, please update the thread. As far as my knowledge is concerned, unplanned depreciation posted will not be considered immediately while calculating the ordinary depreciation for the current fiscal year. Only when the next fiscal year is started this unplanned depreciation will be deducted and the ordinary depreciation will be calculated accordingly.
Best Regards,
Ravi
Ravi,
We have the classic way of depreciation calculation and the new depreciation calculation. I was thinking that the described treatment of unplanned depreciation might have been fixed in the new depreciation calculation method. I am just speculating. I may be wrong.
Best regards,
Vishal.
Hi Prasad,
You can use the following new impairment functionality in ECC 6.0 EHP5.
http://help.sap.com/erp2005_ehp_05/helpdata/en/1a/0966b9e2814c4b88e9dff97476430d/content.htm
I have acchived all my impairment process requirements for IFRS and GAAP with above steps.
> You will find impairment option in AR01 worklist
> sytem will post to imapirment accounts configured in AO90 for revaluation of APC or DEP during dep run.
> Most of the times we will use impairments by revaluating depreciation compare to reduction of APC.
> No need to create additional depreciation areas for impairment. You can activate revaluation function in required dep areas and create custom transaction types based accounting principle like impairment IFRS/GAAP only.
> You need to create custom asset history sheet with revaluation amounts.
Let me know if you need any further details.
Thanks,
Kishore Gudur
Hi Kishore,
Do we have to create a new depreciation area to track impairments?
We have a scenarios where we just need to impair the values from the book depreciation area, but continue the tax areas as it is.
So I was thinking whether it is possible to just use depreciation area 01 for the impairment.
Regards,
Vishal.
Hi Vishal,
No need to create new depreciation area. You can activate revaluation option only in required dep areas (T.codes OAYR& OABW).
Yes you can post only require dep area ex: book through custom transaction types by limiting to required dep areas.(T.code A084 and OAXJ).
Thanks,
Kishore Gudur
Kishor,
Thanks. I want to revalue just by increasing the depreciation. Which transaction type should I use from the following?
| 800 | Post revaluation gross |
| 820 | Revaluation of new acquis. with depreciation |
| 891 | Revaluation (downward) prior year |
| 892 | Revaluation (upward) current year |
| 893 | Revaluation (upward) prior year |
| 896 | Adjustment-revaluation (downward) |
| 897 | Revaluation (downward) current year |
| 898 | Adjustment-revaluation (upward) |
Vishal.
Message was edited by: Vishal Thakur
Kishor,
I don't see impairment option in AR01 transaction. See the screen shot. We are on ECC 6.0 EHP5. Do we have to activate any business function.
Regards,
Vishal.
HiVishal,
Yes you need activate business function FIN_GL_CI_3: Impairment of assets According to IAS 36 (new).
After activating above function you can see impairment option:
After activating above function new custom transaction type groups A1 and A2 are available to create new transaction types. I recommend you to create new custom transaction types : Se the following sample transaction type .
The following link have all config steps:
http://help.sap.com/erp2005_ehp_05/helpdata/en/1a/0966b9e2814c4b88e9dff97476430d/content.htm
Hello Kishor,
For Impairment you should have selected the "Credit" radio button, then only the asset value will be impaired. If you select "debit" then instead of impairing the asset, it will do upward revaluation (means the asset value will be increased)
SAP has no answer why the unplanned depreciation is not considered immediately (like special depreciation) for calculating the ordinary depreciation. The unplanned depreciation will only be considered during the beginning of the next year (when the unplanned depreciation will be deducted from the APV) and calculates the ordinary depreciation.
Thanks and Regards,
Ravi
Hi Ravi,
Yes in the case of APC Revaluation you need to select credit radio button, then it will reduce APC value. But if you are reevaluating by depreciation, you need to selected debit radio button.
Thanks,
Kishore
Hi Kishore,
What do you mean by "revaluating by depreciation"? Revaluation will only be done on APC.
Can you give please give a business example with hypothetical figures?
Many Thanks,
Ravi
Hi Ravi,
Example: Asset APC 100000$
Acc.Dep 30000$
NBV (01012012) 70000$
Fair value as on 01012012 60000$
Impairment Loss 10000$
Now you have two options:
Revaluating by depreciation : After this posting
Asset APC 100000$
Acc.Dep +Dep Reval 40000$
NBV 60000$
In this method you are posting to accumlated reval/imp account and Imp. exp
Note: You are not reducing your Initial APC Value but adjusting NBV by increasing dep revaluation amount.
Revaluation APC: After this posting
Asset APC 100000$
Revaluation APC 10000$
Net APC 90000$
Acc.Dep 30000$
NBV 60000$
In this method you are posting APC account and Impairment exp.
Hope you understand now the difference between these methods. Check asset explorer after posting through dep revaluation method. Revaluation bucket will update if you post as APC Revaluation.
Thanks,
Kishore
Thanks Kishor for your explanation.
What is the enhancement pack EHP allows this new functionality? Do you have any idea?
Thanks,
Ravi
