Low value Assets -clarification

[Former Member]

Hi,

Please can you clarify the following on low value assets concept.

Once low value asset configuration is done,please clarify which of the following things happen?

1.Give 1 month or 1 year useful life against depreciation key GWG, so that complete value of the low value asset is written of in same month or same year.-This is working fine for me.

2.System gives you a  message saying the value of the asset is low value so can't be capitalized.In such case does system automatically post an entry charging off to Profit&Loss Expense GL Account?

If system automatically writing off to expense GL Account,which GL Account it takes from Account determination configuration(T Code AO90) that is from which GL mapping field?

If it stops with the message can we make the message as warning only and still post to low value fixed asset?how does this works?

3.Assuming point#2 right,whether automatic write off works only for Procurement process that initiates from MM module or it also works for direct acquisition from FI i.e F-90 or ABZON(acquisition with automatic offsetting account) etc?

I have done the following configuration for low value assets,please also let me know if I am missing any thing keeping the above 3 points  to work.

1.Created low value assets class with required asset determinations and other settings.

2.Financial Accounting / Asset Accounting / Valuation / Amount Specifications (Company Code/Depreciation Area) /

(1)Specify LVA asset classes--selected value based maximum check option 1.

(2)Specify Max. Amount for Low-Value Assets -filled 2 columns i.e

LVA Amount and-----------

MAx LVA Purchase .

what is the difference between the above two columns? first one works for FI and 2nd one works for MM purchases?

It would be greatly appreciated is point by point answer is provided.

Regards

hinfi

[Former Member · Accepted solution]

Hi,

For Q.no 1) If you want dep to be posted in the same month then give life as 1 month or if you want dep to be completed in a year give 1 year.

For Q.no 2)System will not charge off to expenditure heads. Conceptually also assets either has to be depreciated or amortized. If you want to book to expenses then dont create asset at all just book to expenses.

For Q.no 3)Automatic write off is not possible.

For Q.no 4)LVA purchase is for MM integrated transactions and LVA amount is for others( that is standalone AA transactions)

Hope it solves.

Regards,

GSR

[Former Member · Accepted solution]

thanks both for your response.So my understanding from the above response is,

1.I am clear now that settings for low value assets is just to give the  message whether we can capitalize or do not capitalize and will not do any automatic write off's as Sethuraman said.

2.With regard to Sethu's reply for Q#4,LVA amount for other standalone AA transactions means they must be FI postings.

3.As far as Preeti's reply on max&min amounts ,I am not sure if I am interpreting her answer incorrectly but seems there is no concept of minimum amount here.As Sethu said 1st column is for all non MM purchases and 2nd column is for MM purchases.Both are maximum amounts check only.

Example of my understanding is,

Suppose in any column(1st or 2nd) if say I give $1000 as limit,then any amount posted on that particular asset class up to $1000 will be allowed to post to Low value asset class.If amount is>$1000 then system gives an error saying it is not low value and I need to post the amount to other Asset class which is not low value.

Please confirm point wise again.

regards

hinfi

[Former Member · Accepted solution]

Hi,

Your understandings are correct for all the points.

Regards,

GSR

[Former Member · Accepted solution]

Hi Sethu,

thanks for the answering point wise for my question.I have marked your reply as correct answer,but not finding how to assign the points.Does that automatically gives points?

hinfi

[Former Member · Accepted solution]

Hi,

As soon as you mark my answer as correct points will be updated to me automatically.

One small suggestion, mark the reply which gives the correct answer and not the final reply so that members who look this thread in future would come to know which is the correct answer.

Hope it is clear.

Regards,

GSR

[Former Member · Accepted solution]

Thanks Sethu,but still I am stuck with this.Below are the steps which I have done,please let me know if I am missing any steps further,

1.Checked  for 1 Asset Class as LVA Asset class by selecting "1" (Value based max amount check) in T Code OAY2 against all Depreciation areas.

2..Mentioned max amount as $1000 in T Code  OAYK against Co Code.(I have given in only 1st column i.e LVA amount since I am not using procurement module).

3.Created an Asset under Asset class against which I have checked the Low value Asset in step#1.This automatically brings Dep Key for writing off in the first year fully.

4.I have acquired asset  using T Code F-90  against the asset created in step #3 with more than $1000,my expectation is system should give me message that amount exceeded max amount i.e$1000 and stop me posting.But it is posting to the asset without any message.

Please let me know if I am missing some thing still?

I hope this can be answered under this discussion chain only!

regards

hinfi

[Former Member · Accepted solution]

Thanks Sethu,but still I am stuck with this.Below are the steps which I have done,please let me know if I am missing any steps further,

1.Checked  for 1 Asset Class as LVA Asset class by selecting "1" (Value based max amount check) in T Code OAY2 against all Depreciation areas.

2..Mentioned max amount as $1000 in T Code  OAYK against Co Code.(I have given in only 1st column i.e LVA amount since I am not using procurement module).

3.Created an Asset under Asset class against which I have checked the Low value Asset in step#1.This automatically brings Dep Key for writing off in the first year fully.

4.I have acquired asset  using T Code F-90  against the asset created in step #3 with more than $1000,my expectation is system should give me message that amount exceeded max amount i.e$1000 and stop me posting.But it is posting to the asset without any message.

Please let me know if I am missing some thing still?

I hope this can be answered under this discussion chain only!

regards

hinfi

[Former Member · Accepted solution]

Hi,

In T code F-90 enter transaction type 100 which is for external acquisition which would throw an error like mean amount exceeds. But if you enter transaction type 120 which is for goods receipt it will not throw any error.

Anyway it is better to enter the max amount in LVA purchase field also. Why give a chance? There will be no negative impact in entering that field.

Hope it is clear.

Regards,

GSR

[Former Member · Accepted solution]

Hi Sethu,

Thanks much,it worked,I was probably not selecting right Co Code&Asset class due to many COD's&Co Codes in system.I will check if I can close this.

hinfi

[Former Member]

If it stops with the message can we make the message as warning only and still post to low value fixed asset?how does this works

Please do not define any Mimiumn Amount OAYK then if you want to capitalise any value you can define only maimum Value .

I have done the following configuration for low value assets,please also let me know if I am missing any thing keeping the above 3 points  to work.

If you done configuration correctly then this hsould work for any low value asset whether coming from MM or directly from FI.

what is the difference between the above two columns? first one works for FI and 2nd one works for MM purchases?

As I said in Point 1 this to define minimum and max. value for low value asset . if you do not want any asset to capitalise . as LVA for example . less than 10 Rs / GBP then you can define 10 here so system will not capilsie any asset less 10 . and in same way you can define the maxmum value for lVA like 6000 .

So system won't recongnise any asset more than 6000 and will give you error  and this you can do at comapny code level . IF you have more than one comapny code using LVA then you can define different amount of Mimumn and max value for each comapny ocde.

Many Thanks