Changes in Asset classes and Master Data/Componentization/IFRS

[Former Member]

Dear Experts,

Discussion is on Asset Accounting

I have been involved in a fresh implementation (India) on SAP S/4 HANA 1511. Business does not have its asset register as per IFRS requirement, but they want to go with as IFRS compliance for asset accounting.

I am not sure what changes I will have to do for this requirement.

1. How break up for Asset Classes will be done considering IFRS. Where I need to pay attention in this regard?

2. How Asset master will be created (considering componentization as per IFRS). Where I need to pay attention in this regard?

3. How I should explain this to business so that they can make a current asset register (excel) as per IFRS componentization wise.

Please Consider while reply:

1. Business does not have any foreign link/reporting. it is pure Indian company.

2. Business does not have current asset as per IFRS.

I have searched forum and found this link. My query is not resolved with this.

Impact of IFRS on Asset accounting in new Imple... | SCN

Regards

Ruksana

[ajaycwa1981 · Accepted solution]

Hi Ruks

IFRS requires you to depreciate assets based on useful life. So, your depreciation keys would be based on "Remaining useful life" and not the traditional % based depreciation... I think, even in India, it has changed from 2014 to Useful life based

Another big change in IFRS is the componentization of FAs.. Incase you have a big machinery having 100 components and each component has a different Useful life, IFRS requires you to treat each one of them as an individual asset. in SAP, you will use the functionality of Sub-Asset (AS11)

So, once you create the MAIN ASSET (AS01), you will enter the same number in AS11 and the sub assets will be created.. The Main asset will have numbering like 1000-0 and Sub Assets like 1000-1, 1000-2, and so on

You will then capitalize each asset component individually and not the whole machine. Ofcourse, it is a tedious process.

Ajay M

[Former Member · Accepted solution]

Thanks Ajay. You have great clarity on subjects.

Regards

Ruksana