Treatment of Donated Current and Non-Current Assets in GM-GTE

[amarlal_lohano]

Hello Experts,

We are implementing GM-GTE solution at our client, which is a Trust based University. During our meetings, the client came up with the requirement, that they receive:

(1) goods from donors for onwards distribution (such as for relief purpose), which client wishes to bring in stock on fair value and due to the client nature of being a Trust based organisation, they need detailed reporting of same.

(2) Non-current asset from donors to be used in their departments, again they need detailed reporting of their use.

Now for instance, GM-GTE is not in place, the possible treatment in Scenario 1 would be to open a separate Material Type in MM and bring the goods into inventory through MIGO via MT 561 and then issue the same to the Cost Centre (K) using MT 201 passing the following entries:

1. Dr. Donated Material XXX

     Cr. Grant Income XXX

2. Dr. Material Consumption XXX

     Cr. Donated Material XXX

In Scenario 2, again a separate Asset class will be opened for Donated Assets and the possible entries at the time of acquisitions, depreciation and disposal should be:

1. Dr. Donated Asset XXX

     Cr. Deffered Grant XXX

adding offsetting account in 1st entry above, if creating entry using ABZON

2. Dr. Dep Expense XXX

     Cr. Acc. Dep             XXX

3. Dr. Acc. Dep XXX

    Dr. Cash Proceeds XXX

        Cr. Donated Asset XXX

Gain on Asset Disposal will be Cr. and Loss on Asset Disposal will be Dr. in above mentioned case.

4. Dr. Deffered Grant XXX

         Cr. Grant Income XXX

Now coming back to our actual Scenario, where GM-GTE is in place. How can we integrate these Scenarios in GM-GTE case as per client reporting requirement. One possible solution can be to open Grant Master using GM-GTE objects and then bring the goods and asset in SAP using grant money by deriving values using GM Derivation Rules based of Asset Class and Valuation Class. We can make a copy of MT 561, so that it credit the Deffered Liablity/Grant Income account everytime any transaction occur.

Correct me If I am wrong in any accounting entry above.

Any possible sound solution from experts would be welcome.

Regards,

Amar Lal

[sjajodia]

Hello Amar Lal,

The way we have done it is by doing the following:

1. Derive Expenditure Sp. Class from GL Account (Material or Asset APC)

2. Derive Not Relevant Grant, Sp. Pgm and Sp. Class for Depreciation (Material Consumption can credit Material Account)

3. We create internal orders in CO for all Sponsor Programs and Grants and derive all GM assignments except Sp. Class from the internal orders.

Hope this helps.

Shyam

[amarlal_lohano]

Dear Shyam,

Thank you for your reply. The only difference between the solution explained my me and the solution proposed by you is that you are suggesting to Derive Expenditure Sp. Class from GL Account, whereas in mine, the same is based on the Valuation class.

As far as the scenario of Asset is concerned, we have got the idea. But how to deal the same in case of material. Can you elaborate it more by explaining the series of steps, which will be required to be performed for catering the scenario.

Regards,

Amar Lal

[sjajodia]

Amar Lal

I don't think you can enter Sponsor Class in account determination for materials (e.g. BSX). So you have to derive the Sp. Class from the GL Account.

Thanks

Shyam

[atif_farooq]

Amar what is your confusion in material scenario ? Please let us know.

[amarlal_lohano · Accepted solution]

Dear Shyam and Atif Sir,

We have adopted the following solution incase of material.

We have opened a different material type for Donated Goods, which will include all items such as Medicines, Books, Consumable Items etc. Separate Matrial Codes will be opened as per client requirement. The Goods will be stock-in using MB1C with MT 501, where the user must enter Internal Order, so that data of grant can be derived. MT 501 does not generate any PO or Invoice, so this will serve the purpose of receiving goods without PO.

On the first entry the Donation Income will be recognized, which will also hit the revenue sp. Class of grant. We will derive GR+SP+SC on the basis of Business Transaction, Valuation class and Material group (Food, Consumable, Books). Field of Material Group can be inserted using customization or using Usertemp field from MARA table in FMDERIVE.

On the Second Entry of Material issuance to a Cost Centre (Donation) using MT 201, the Grant Budget will be consumed and in this way, the client’s requirement of getting financial aspect of donation in kind received will be catered using GM-GTE. Also we can see the Stock availability in detail, which was also a requirement of Client. The client has been agreed on the Scenario.

Thanks for valuable suggestions.

Regards,

Amar Lal

[atif_farooq]

Amar please take extreme precaution while using internal order for revenue posting since order is a cost object , it will lead to FI and CO mismatch when done by CO person hence real time integration will not be possible.t is always recommended to have a real object like profit center for posting revenue. This has been learned from past experiences.Please educate client on this.

No need for material group based derivation rules which will lead to ABAP, you can achieve the same by opening mutiple valuation classes and keeping one GL for all these valuation classes and assigning these valuation classes to material for donated goods.

Hope this will help.

[sjajodia]

Atif

It is quite common in public sector to post revenues to CO Objects. Revenues are commonly posted to Grants for which we use internal orders.. The easiest way to do it is to set up all revenue GL Account as primary cost elements in CO. There is no adverse effect that we have observed. This will keep the amount of master data down.

Thanks

Shyam

[atif_farooq]

Dear Shyam

FI & PCA will not reconcile , i came across this issue in my previous implementation where i had used profit centre accounting with document splitting in New GL. However we can still post revenue to internal order if PCA is not being used.

Thanks

[amarlal_lohano]

Dear Atif Sir,

I have following confusions in my mind, since I am new to SAP and PSA, so I would like to have clarifications on following points for my better understanding:

1. As per my understanding Donations and its treatments have a limited life, as they ultimately close out somehow through its onwards distribution. The organisation receiving the donations doesn't keep them long. Since the nature of Donation (having limited life) correspond to the Internal Order (A defined object which can be settled), while Profit centre's nature correspond to any object which is having of a permanent nature (such as a defined department e.g. Bio, Physics etc.). So isn't it fair to keep Donations on Internal order rather than on Profit centre due to their same nature?

2. Another query, which came in my mind after your suggestion of using Profit Centre is that whether we have to open a single Profit centre for all donations? or we have to open each for every new donation?

3. If we use single Profit Centre for all donations, then how will we distinguish for every donation? i.e. how we will identify the revenue received and expenses incurred on a single donation?

Apart from above you suggested to use opening of multiple valuation classes in a material type instead of opening of a new Material Type, as later will lead to Material Group based derivation rules leading to ABAP work. But in case, if we use USERTEMP field to derive Material Group rather than asking Abaper to bring in Material Group field as source field. Wouldn't it serve our purpose without leading to Abap work?

Many Thanks and Regards,

Amar Lal