How to reverse asset impairment?

[Former Member]

Hi All,

Consider the following Scenario (step 1-5):

1. Asset A1 was acquired with Rs.15000 in FY 2011.

2. Upto 2013, ordinary depreciation of A1 is Rs.5000. Depreciation runs were executed for period 1-12.

3(a). Remaining amount Rs. 10000 was impaired (ABAA TTY 641). Hence, net book value reduced to 0.

3(b). Unplanned depreciation run was executed for period 13.

4. In 2014, asset A1 was transferred to asset A2 (ABUMN TTY 300).

    In asset A2, the transfer transaction correctly showed A1's acquisition value, ordinary dep., unplanned dep. and net book value.

5. It was later informed that asset A1 should not have been impaired. Hence, we need to reverse the impairment.

Problem statement:

Though the transfer transaction can be reversed in any year, impairment transaction cannot be reverse in next fiscal year. Hence there is no use of reversing transfer to reverse impairment in A1. How to reverse impairment in the transferred asset A2? We already tried AB01 with TTY 731 but this reverses on the entry in accumulated impairment and not in depreciation impairment.

It can be portrayed in the following transaction sequence:

1. Acquisition on (A1)

dr. PLANT AND MACHINERY

cr. CAPITAL WORK-IN-PROGRESS

2. Deprecation on (A1)

dr. DEPRECIATION - PLANT

cr. ACCUMULATED DEPRECIATION - PLANT AND MACHINERY

3(a). Impairment posting on ( A1) having no accounting entry

3(b). Unplanned depreciation on (A1)

dr. IMPAIRMENT - PLANT & MACHINERY

cr. ACCUM.IMPAIRMENT - PLANT & MACHINERY

4. Transfer from (A1) to (A2)

cr. PLANT AND MACHINERY (A1)

dr. ACCUMULATED DEPRECIATION - PLANT AND MACHINERY (A1)

dr. ACCUM.IMPAIRMENT - PLANT & MACHINERY (A1)

dr. PLANT AND MACHINERY (A2)

cr. ACCUMULATED DEPRECIATION - PLANT AND MACHINERY (A2)

cr. ACCUM.IMPAIRMENT - PLANT & MACHINERY (A2)

EXPECTED is:

5. Reversal of impairment on (A2)

dr. ACCUM.IMPAIRMENT - PLANT & MACHINERY

cr. IMPAIRMENT - PLANT & MACHINERY

Thank you in advance.

Regards,

Priyanka S.

[former_member198650 · Accepted solution]

Hi Priyanka,

As you said, if you go with TTY 731 the amount is not crediting to impairment depreciation, if it is posting to another account then you save it. Later you do transfer posting by FB01/AFB1 in FI to depreciation-impairement a/c.

Regards,

Mukthar

[Former Member · Accepted solution]

Thanks Muthkar,

To post an FI entry:

dr. DEPRECIATION - PLANT & MACHINERY

cr. IMPAIRMENT - PLANT & MACHINERY,

the 'DEPRECIATION - PLANT & MACHINERY' G/L iscurrently not configured for direct posting. With an exception that G/L will have to be modified to allow direct posting for the above FI entry.

Otherwise is there any way where impairment of A1 which was done in 2012, but reversal can be done in later years? Currently SAP does not allow that.

Regards,

Priyanka S.

[former_member198650 · Accepted solution]

Hi Priyanka,

You can remove automatic posting check box for a while and do posting. Because SAP does not allow to reverse it later years.

Regards,

Mukthar