SAP New Asset Accounting Interview Questions

1. Explain Asset Accounting (FI-AA).

The Asset Accounting (FI-AA) sub module in SAP manages a company’s fixed assets, right from acquisition to retirement/scrapping. All accounting transactions relating to depreciation, insurance, etc., of assets are taken care of through this module, and all the accounting information from this module flows to FI-GL on a real-time basis.

You will be able to directly post (the goods receipt (GR), invoice receipt (IR), or any withdrawal from a warehouse to a fixed asset) from MM or PP to FI-AA. The integration with FI-AR helps in direct posting of sales to the customer account. Similarly, integration with FI-AP helps in posting an asset directly to FI-AA and the relevant vendor account in cases where the purchase is not routed through the MM module. You may capitalize the maintenance activities to an asset using settlements through the PM module. FI-AA and

FI-GL has real-time integration where all the transactions such as asset acquisition, retirement, transfer, etc., are recorded simultaneously in both the modules. However, batch processing is required to transfer the depreciation values, interest, etc., to the FI module.

The FI-AA and CO integration helps in:

Assigning an asset to any activity type, Internal Orders act as a two-way link to the FI-AA:

• They help to collect and pass on the capital expenditure to assets,
• They collect the depreciation/interest from FI-AA to controlling objects. (Note that when there is a situation where the asset master record contains an internal order and a cost centre, the depreciation is always posted to the internal order and not to the cost centre.)

The depreciation and the interest are passed on to the cost/profit centres.

2. What is a Lean Implementation in FI-AA?

A ‘Lean Implementation’ is the scaled-down version of the regular FI-AA configuration in IMG, with minimal configuration required to enable asset accounting. This is suitable for small companies using the standard functionalities of asset accounting, and also in situations where the Asset Catalog is not that large.

You should not opt for lean implementation if:

• You need more than Depreciation Areas
• You need to Depreciate In Foreign Currencies as well
• You have Group Assets
• You need to define your own Depreciation Keys/Transaction Types/ Reports
• You need a Group Consolidation

3. What are the kinds of Assets in SAP?

An asset can be a Simple Asset or Complex Asset. Depending on the requirement, assets are maintained with Asset Main Numbers and Asset Sub numbers. A complex asset consists of many Sub-Assets; each of them identified using an asset sub number. You may also use the concept Group Asset in SAP.

4. Explain Complex Assets and Asset Sub numbers.

A ‘Complex Asset’ in SAP is made up of many master records each of which is denoted by an ‘Asset Sub number.’ It is prudent to use asset sub numbers if:

• You need to manage the ‘subsequent acquisitions’ separately from the initial one (for example your initial acquisition was a PC, and you are adding a printer later).
• You want to manage the various parts of an asset separately even at the time of ‘initial acquisition’ (for example, an initial purchase of a PC where you create separate asset master records for the monitor, CPU, etc.).
• You need to divide the assets based on certain technical qualities (keyboard, mouse, etc.).

When you manage a complex asset, the system enables you to evaluate the asset in all possible ways such as

• For a single sub number
• For all sub numbers
• For select sub numbers

5. What is Group asset in SAP? When you will use this?

A ‘Group Asset’ in SAP is almost like a normal asset except that it can have (any number of) sub-assets denoted by Asset Sub numbers. The concept of group asset becomes necessary when you need to carry out depreciation at a group level, for some special purposes such as tax reporting. Remember that SAP’s way of depreciation is always at the individual asset level. Hence, to manage at the group level, you need the group asset. Once you decide to have group assets, you also need to have ‘special depreciation areas’ meant for group assets; you will not be able depreciate a group asset using a normal depreciation area. Unlike Complex Assets, you can delete a group asset only when all the associated sub numbers have been marked for deletion.

6. What is Asset Super Number in SAP?

The concept of ‘Asset Super Number,’ in FI-AA, is used only for reporting purposes. Here, you will assign a number of individual assets to a single asset number. By using this methodology, you will be able to see all the associated assets with the asset super number as a single asset (for example, brake assembly line) or as individual assets (for example, machinery, equipment in the brake assembly line).

7. What is a Chart of Depreciation? How does it differ from a Chart of Accounts?

A ‘Chart of Depreciation’ contains a list of country-specific depreciation areas. It provides the rules for the evaluation of assets that are valid in a given country or economic area. SAP comes supplied with default charts of depreciation that are based on the requirements of each country. These default charts of depreciation also serve as the ‘reference charts’ from which you can create a new chart of depreciation by copying one of the relevant charts. After copying, you may delete the depreciation areas you do not need. However, note that the deletion must be done before any assets are created.

You are required to assign a chart of depreciation to your Company Code. Remember that one Company Code can have only one chart of depreciation assigned to it, even though multiple Company Codes can use a single chart of depreciation.

The chart of accounts can be global, country specific, and industry specific based on the needs of the business. The chart of depreciation is only country specific. The charts are independent of each other. Open table as spread sheet Chart of Depreciation Chart of Accounts Established by FI-AA. Established by FI.

A chart of depreciation is a collection of country specific depreciation areas. The chart of accounts is a list of GL accounts used in a Company Code. The chart of accounts contains the chart of accounts area and the Company Code area. The chart of depreciation is country specific. Usually you will not require more than one chart of account. SAP comes delivered with many country specific charts of depreciation as ‘reference charts’ which can be copied to create your own chart of depreciation.

Depending on the requirement you may have an ‘operating chart of accounts,’ ‘country specific chart of accounts,’ ‘global chart of accounts,’ etc. One Company Code uses only one chart of depreciation. One Company Code uses only one chart of accounts.

Many Company Codes, in the same country, can use the same chart of depreciation. Several Company Codes within the same country can use the same chart of accounts.

8. How do You Create an Asset Accounting Company Code?

• Define the Company Code in FI configuration, and assign a chart of accounts to this Company Code.
• Assign a chart of depreciation to this Company Code in FI-AA configuration.
• Add necessary data for the Company Code for use in FI-AA, and your ‘asset accounting Company Code’ is now ready for use.

9. What is Depreciation? Explain the Various Types?

‘Depreciation’ is the reduction in the book value of an asset due to its use over time (‘decline in economic usefulness’) or due to legal framework for taxation reporting. The depreciation is usually calculated taking into account the economic life of the asset, expected value of the asset at the end of its economic life (junk/ scrap value), method of depreciation calculation (straight line method, declining balance, sum of year digits, double declining, etc.), and the defined percentage decline in the value of the asset every year (20%, or 15%, and so on).

The depreciation can either be planned or unplanned. Planned depreciation is one which brings down the value of the asset after every planned period; say every month, until the asset value is fully depreciated over its life period. With this method, you will know what the value of the asset at any point of time in its active life. On the contrary, unplanned depreciation is a sudden happening of an event or occurrence not foreseen (there could be a sudden break out of a fire damaging an asset, which forces you to depreciate fully as it is no longer useful economically) resulting in a permanent reduction of the value of the asset.

In SAP, you will come across three types of depreciation:

• Ordinary depreciation, which is nothing but ‘planned depreciation.’
• Special depreciation, which is over and above ‘ordinary depreciation,’ used normally for taxation purposes.
• Unplanned depreciation, which is the result of reducing the asset value due to the sudden occurrence of certain events.

10. Define Depreciation Areas.

Fixed assets are valued differently for different purposes (business, legal, etc.). SAP manages these different valuations by means of ‘Depreciation Areas.’ There are various depreciation areas such as book depreciation, tax depreciation, and depreciation for cost-accounting purposes, etc.

A depreciation area decides how and for what purpose an asset is evaluated. The depreciation area can be ‘real’ or a ‘derived one.’ You may need to use several depreciation areas for a single asset depending on the valuation and reporting requirements. The depreciation areas are denoted by a 2-character code in the system. The depreciation areas contain the depreciation terms that are required to be entered in the asset master records or asset classes.

SAP comes delivered with many depreciation areas; however, the depreciation area 01—Book Depreciation is the major one.

The other depreciation areas are:

• Book depreciation in group currency
• Consolidated versions in local/group currency
• Tax balance sheet depreciation
• Special tax depreciation
• Country-specific valuation (e.g., net-worth tax or state calculation)
• Values/depreciations that differ from depreciation area 01 (for example, cost-accounting reasons)
• Derived depreciation area (the difference between book depreciation and country-specific tax depreciation)

11. How do You Set up Depreciation Area postings to FI from FIAA?

You need to define how the various depreciation areas need to post to FI-GL. It can be any one of the following scenarios:

• Post depreciation through ‘periodic processing.’
• Post both the APC (Acquisition and Production Costs) and depreciation through periodic processing.
• Post the APC in ‘real time’ but depreciation through periodic processing.
• No values are posted.

However, you need to ensure that at least one depreciation area is configured to post values automatically to the FI-GL. Normally, this depreciation area will be 01 (book depreciation). For the rest of the depreciation areas, it may be configured that they derive their values from this area and the difference thus calculated is automatically posted to FI-GL. There may also be situations where you may define depreciation areas just for reporting purposes, and these areas need not post to the GL.

12. What is an Asset Class?

An ‘Asset Class’ in SAP is the basis for classifying an asset based on business and legal requirements. It is essentially a grouping of assets having certain common characteristics. Each asset in the system needs to be associated with an asset class. An asset class is the most important configuration element that decides the type of asset (such as land, buildings, furniture and fixtures, equipment, assets under construction, leased assets, low value assets, etc.), the document number range, data entry screen layout for asset master creation, GL account assignments, depreciation areas, depreciation terms, etc. An asset class is defined at the Client level and is available to all the Company Codes of that Client.

The asset class consists of:

• A header section—control parameters for master data maintenance and account determination.
• A master data section—default values for administrative data in the asset master record.
• A valuation section—control parameters for valuation and depreciation terms.

The asset class can be:

• Buildings
• Technical assets
• Financial assets
• Leased assets
• AUC (assets under construction)
• Low value assets

13. Why do you need Asset Classes?

An ‘Asset Class’ is the link between the asset master records and the relevant accounts in the GL. The account determination in the asset class enables you to post to the relevant GL accounts. Several asset classes can use the same account determination provided all these asset classes use the same chart of accounts and post to the same GL accounts.

14. What is an Asset Class Catalog?

An ‘Asset Class Catalog’ contains all the asset classes in an enterprise and is therefore valid across the Client. Since an asset class is valid across the Client, most of the characteristics of the asset class are defined at the Client level; however, there are certain characteristics (such as the depreciation key, for example), which can be defined at the chart of depreciation level.

15. Is it Possible to Create Asset Classes Automatically?

One of the benefits of lean implementation configuration is the ability to create asset classes automatically from the asset GL accounts. This tool selects only necessary system settings so that the asset classes are created automatically in a very short time. During the process of creation, the system allows you to delete all the existing objects (i.e., asset classes, number ranges, account allocations, field selections, etc.) before creating the new ones.

The prerequisites for automatic asset class creation include:

• Company Code must be assigned to a chart of depreciation
• Depreciation areas have already been defined
• GL account number is not more than 8 digits (otherwise you need to assign the classes manually)

Also note that you may need to maintain the GL account for ‘accumulated depreciation’ manually. The system maintains the necessary account assignment only with regard to the depreciation area 01 (book depreciation). If you need more areas, you may need to do that manually in the IMG.

16. What is an Asset Value Date?

The ‘Asset Value Date’ is the start date of depreciation for the asset. The ‘planned depreciation’ is calculated by the system based on this depreciation start date and the selected ‘depreciation term’ for that asset. Be careful with the posting date and asset value date. Both dates need to be in the same fiscal year.

17. What is an Asset Master?

An ‘Asset Master’ can be created by copying an existing asset in the same Company Code or another Company Code; it can also be created from scratch when it is done for the first time. Again, while creating the master, SAP allows you to create multiple assets in one step, provided all such assets are similar (having the same asset class and all belonging to the same Company Code).

From Release 4.5, the transaction codes for creating an asset master have been changed to the AS series instead of the earlier AT series (for example, create asset is code AS01 (AT01 before), change asset is AS02 (AT02 before), and so on. If you are more comfortable with the creation of assets using the conventional screen than with the ‘tab’ feature available now in the AS transaction series, you can do so, but you cannot find these transactions under ‘ASMN’!

Each asset master contains the necessary information to calculate the depreciation:

• Capitalization date/acquisition period
• Depreciation areas relevant for the asset
• Depreciation key
• Useful life/expired useful life
• Change over year, if any
• Scrap value, if any
• Start date of (ordinary depreciation)

18. Explain the Two Ways used to Create Asset Masters.

• Copy an existing asset as a reference for creating the new one.
• From an existing asset class create a new asset so that this asset class provides the default control parameters for the new asset.

19. Is it Possible to Create Multiple Assets in a Single Transaction?

• SAP enables you to create multiple (but similar) assets in one transaction. What you need to know is that all these assets should belong to the same asset class and the same Company Code. Enter the number of assets you need to create in the ‘Number of similar assets’ field. After creating the assets, you will be able to change the individual descriptions/inventory numbers when you are about to save the master records. When you save the master records, the system assigns a range of asset numbers.
• The only drawback of using this method of creating assets in bulk is that you will not be able to create long text for any of these assets.

20. What is the Time-dependent Data in an Asset Master?

All the cost accounting assignment-related data such as cost center, internal orders or investment projects, etc., need to be maintained as ‘Time-dependent Data’ in asset masters. Additionally, the information related to asset shut-down and shift operation also needs to be maintained as time dependent. SAP maintains all the time-dependent data for the entire life span of the assets.

21. Explain Asset Acquisition.

‘Asset Acquisition’ can be through any one of the following three routes:

1. External Acquisition through Purchase

External acquisition of assets will be primarily from vendors, who are either your business partners or third parties. It can also be from your affiliated companies (use Transaction Code: ABZP). The external asset acquisition can be done several ways:

1. The asset can be posted in the MM module.
2. The asset can be created in FI-AA with automatic clearing of the offsetting entry

(Transaction Code: ABZON). This can be achieved either of the following ways:

• The posting is made initially in FI-AP and the clearing account cleared when the posting is made to the asset (FI-AA).
• Post the asset with the automatic offsetting entry (FI-AA) and then clear the clearing account through a credit posting by an incoming invoice (FI-AP).

1. When not integrated with FI-AP, you may acquire the asset in FI-AA with an automatic offsetting entry without referencing a Purchase Requisition (PR). This kind of acquisition is necessary when:

• You have not yet received the invoice or
• When the invoice has already been posted in FI-AP

1. When integrated with FI-AP, acquire the asset in FI-AA using an incoming invoice but without a reference to a Purchase Order (PO).
2. In-house Production/Acquisition

In-house Asset Acquisition is primarily the capitalization of goods/services produced by your company. The costs associated with the complete or partial production of the goods/services from within the company needs to be capitalized into separate asset(s).

Usually, the capitalization is done as follows:

1. Create an order/project (in Investment Management) to capture the production

Costs associated with the goods/services produced in-house.

1. Settle the order/project to an AuC (Asst under Construction).
2. Distribute/Settle the AuC so created into new asset(s). You will be using the

Transaction Type 110 for asset acquisition from in-house production.

3. Subsequent Acquisition

When the asset/vendor accounts are posted, the system updates the corresponding GL accounts (FI-AP and FI-AA) through relevant account determinations. SAP uses various kinds of ‘transaction types’ to distinguish the different transactions. During acquisition the system makes the following entries in the asset master data:

• Date of initial acquisition/period and year of acquisition.
• Capitalization date of the asset.
• Start date for ordinary depreciation (the start date is determined from the asset value date/period/year of acquisition).
• Vendor is automatically entered in the ‘origin.’

22. What is Automatically Set in the Asset Masters during Initial Acquisition?

• Date of capitalization
• Acquisition period
• Posting date of original acquisition
• Depreciation start date (per depreciation area)

23. Why it is Necessary to Block an Asset Master Record?

In case you decide that you do not want to post any more acquisitions to an existing asset, then it is necessary for you to set the Block Indicator in the asset master record. This is usually the case with AUC, where after the capitalization you no longer want any further additions to the asset. The block indicator prevents only further postings but not transfers or retirements or depreciation; even after an asset is blocked, you can continue to depreciate it as in the case of other assets.

24. How do you delete an Asset Master?

You can ‘Delete an Asset Master’ record from the system only when there are no transactions posted to it. The system will not allow you to delete the master record if there are transactions against the asset, even if you reverse all the previous transactions pertaining to the asset and bring down the asset value to zero. However, unlike FI-AR, FI-AP, or FI-GL where archiving is a prerequisite to delete the master records, you may delete the asset master records without archiving. When deleted, the system also deletes the asset number.

25. What is an (Asset) Transaction Type in FI-AA?

‘Transaction Types’ in FI-AA identify the nature of an asset transaction (acquisition or transfer or retirement) to specify what is updated, among

1. Depreciation area,
2. Value field,
3. Asset accounts (in B/S).

The following are some of the common transaction types used:

• 100 Asset Acquisition—Purchase
• 110 Asset Acquisition—In-house Production
• 200 Asset Retirement—Without revenue
• 210 Asset Retirement—With revenue

The transaction type is extensively used in most asset reports, including the asset history sheet, to display the various asset transactions differentiated by the transaction types. SAP comes with numerous transaction types, which will take care of almost all your requirements. However, should there be a specific case; you may also create your own transaction type. Every transaction type is grouped into a Transaction Type Group (for example, 10 -> Acquisition), which characterizes the various transaction types (for example, transaction types 100 and 110) within that group. The system makes it possible to limit the transaction type groups that are associated with certain asset classes.

26. Explain Assets under Construction (AUC) in SAP.

The goods and/or services produced, in-house, can be capitalized into asset(s). But, there are two distinct phases during this process:

1. Construction phase (AUC)
2. Utilization phase (useful or economic life phase)

It then becomes necessary to show the assets under these two phases in two different balance sheet items:

The ‘construction phase’ is one in which you start producing or assembling the asset but it is not yet ready for economic utilization. SAP categorizes these kinds of assets into a special asset class called ‘Assets under Construction’ (AUC).The AUC is managed through a separate asset class with a separate asset GL account. SAP allows posting ‘down payments’ to AUC. It is also possible to enter credit memos for AUC even after its complete capitalization, provided you are managing this asset class and allowing negative APC (Acquisition and Production Costs). The IM (Investment Management) module helps to manage internal orders/projects for AUC. It is necessary to use the depreciation key ‘0000’ to ensure that you are not calculating any depreciation for AUC. But you can continue to have special tax depreciation and investment support even on these assets.

27. How do You Capitalize AUC in SAP?

An ‘Asset under Construction’ can be managed in two ways as far as the asset master is concerned:

• As a ‘normal’ asset.
• As an asset with ‘line item management.’

Later on, the AUC is capitalized and transferred to regular asset(s) by ‘distribution’/‘settlement.’

While doing so, the system, with the help of different transaction types, segregates the transactions relating to the current year with that of the previous years. The capitalization can be:

1. Lump sum capitalization.
2. With line item settlement (when capitalized using line item settlement, it is not necessary to settle all the line items and 100% in a particular line item).

In the case of integration with SAP-IM (Investment Management), capital investments can be managed as an AUC by:

• Collecting the production costs associated with an order/project.
• Settling the collected costs to an AUC.
• Capitalizing the AUC into new assets by distribution/settlement.

28. What do you mean by Low Value Assets?

SAP uses the term ‘Low Value Assets’ to denote assets that will be depreciated in the year of purchase or in the period of acquisition. This categorization usually follows the statutory requirements of the country of the Company Code, wherein you define a monetary limit and consider all those assets falling below the value, say $1,000, as low value assets. You have the flexibility of managing these assets either on an individual (individual check) basis or a collective basis (quantity check). SAP uses a special depreciation key called LVA, and the expected useful life of such an asset is considered to be one period (month).

29. Explain Asset Transfer in SAP.

There are two types of ‘Asset Transfers,’ namely:

1. Inter-company asset transfer
2. Intra-company asset transfer

Inter-company Asset Transfer is between Company Codes, resulting in the creation of the new asset in the target Company Code (the receiving one). The transaction posts the values per the ‘posting method’ selected during the transfer. In doing so the system:

• Retires the asset in the source/sending Company Code by asset retirement.
• Posts acquisition in the new/target Company Code by asset acquisition, and creates the new asset in the target Company Code.
• Posts inter-company profit/loss arising from the transfer.
• Updates FI-GL automatically.

An inter-company asset transfer is usually necessitated when there is a need for physically changing the location from one company to the other or there is an organization restructuring and the new asset is to be attached to the new Company Code. You may use the standard Transfer Variants supplied by SAP. The selection of a suitable transfer variant will be based on the legal relationship among the Company Codes and the methods chosen for transferring the asset values. Inter-company asset transfers can be handled:

• Individually using the normal transaction for a single asset.
• For a number of assets using the ‘mass transfer.’

If you need to transfer assets cross-system, you need to use ALE functionality.

Intra-company Asset Transfer is the transfer of an asset within the same Company Code. This would be necessitated by:

• Change in the asset class or business area, etc.
• Settlement of an AuC to a new asset.
• Transfer of stock materials into an asset (by posting a GI to an order through MM or settlement of a production order to an asset).
• Splitting an existing asset into one or more new assets.

30. What is a Transfer Variant?

A ‘Transfer Variant’ is dependent on whether the Company Codes involved are legally dependent or independent. Transfer variants specify how the transferred asset will be valued at the receiving Company Code and the type of transaction (acquisition or transfer) used for the transaction.

31. Explain Asset Retirement in FI-AA.

‘Asset Retirement’ is an integral part of asset management. You may retire an asset by sale or by scrapping. In the case of sales, it can be with revenue or without revenue; again, the asset sale can be with the customer or without the customer. During asset sales transactions, the system removes the APC (Acquisition and Production Costs) and also the corresponding accumulated depreciation, then the profit or loss arising from the sale is recorded in the system. Even in the case of ‘partial retirement’ or ‘partial sales,’ the system records the proportionate gain/ loss arising from the transaction. Any tax posting arising from the transaction is automatically created by the system.

SAP provides various ways of posting retirement in the system, which includes:

• Mass retirement
• Asset retirement with revenue

With customer (involving integration with FI-AR)

• Debit customer, credit assets

Without customer

• Asset retirement without revenue

With customer

• Debit clearing account, credit asset
• Debit customer in A/R, credit the clearing account
• Asset retirement using GL document posting

32. Describe Transfer of Legacy Asset Data to SAP.

One of the challenges in the implementation of FI-AA is the transfer of ‘Legacy Asset Data’ from your existing systems to SAP FI-AA. Though SAP provides multiple options and appropriate tools to carry out this task, you need a carefully planned strategy for completing this task. You may have to transfer the old asset values through any one of the following ways:

• Batch data inputs (large number of old assets)
• Directly updating the SAP Tables (very large number of old assets)
• Manual entry (few old assets)

Normally, you will not have to use the manual process as it is time consuming and laborious; however, you may do this if you have a very limited number of assets. Otherwise, you may use either of the other two options, though batch data input with error handling is the preferred way of doing it. You need to reconcile the data transferred, if you resort to any of the two automatic ways of transferring the data. You may also use BAPIs (Business Application Programming Interface) to link and process the asset information in SAP FI-AA from non-SAP systems. The transfer can be done at the end of the last closed fiscal year, or during the current fiscal year following the last closed fiscal year. You will be able to transfer both master data as well as accumulated values of the last closed fiscal year. If required, you can also transfer asset transactions, including depreciation, during the current fiscal year. It is important to note that the

GL account balances of the old assets need to be transferred separately.

33. Outline Automatic Transfer of Old Assets.

SAP provides you with the necessary interfaces for converting your ‘legacy asset data’ into prescribed formats for upload into the SAP system. The data transfer workbench allows you to control the entire data transfer process.

1. These interface programs convert the data so that it is compatible with SAP data dictionary tables such as BALTD for master data and BALTB for transactions. If you have more than 10 depreciation areas, then you need to change the transfer structures for both BALTD and BALTB.
2. The converted data is stored in sequential files.
3. Use the data transfer program RAALTD01 (for batch input) or RAALTD11 (direct table update) for transferring the data to SAP.

• Do a test run. This will help to correct errors if any.
• Do a production run, with a few asset records, to update the relevant tables in FI-AA.
• Reset the values in the asset Company Code.
• Continue with the production run for all the assets.

4. All the asset records without errors will be updated immediately through background processing in relevant tables such as ANLH, ANLA, ANLB, ANLC, etc.
5. The records with errors will be stored in a separate batch input session, which can be processed separately.

34. What is an Asset Transfer Date?

The ‘Asset Transfer Date’ refers to the ‘cut-off’ date for the transfer of old assets data from your existing system. Once established, you will not be able to create any old assets in SAP before this reference date. Any transaction happening after the transfer date but before the actual date of asset transfer needs to be created separately in SAP after you complete the old asset transfer.

35. Describe ‘Mass Change/How do You Achieve this?

‘Mass Change’ enables you to make changes (such as mass retirements, changes to incomplete assets, etc.) in FI-AA to a large number of asset master records at one time. The mass change functionality is achieved through work lists, which are FI-AA standard tasks pre-defined in the system. These tasks are assigned with ‘work flow objects,’ which can be changed according to your specific requirements. The work lists are created in several ways from asset master records, asset value displays, from the asset information system, etc.

To make a mass change you need to:

1. Create a substitution rule(s) in which you will mention what fields will be changed. This rule will consist of an ‘identifying condition’ (for example, if the cost center=1345), and a ‘rule to substitute’ new values (for example, replace the ‘field’ cost center with the ‘value’ ‘1000’).
2. Generate a list of assets that need to be changed.
3. Create a ‘work list’ to carry out the changes.
4. Select the appropriate ‘substitution rule’ (defined earlier in step 1 above).
5. Process the ‘work list.’ You may also release it to someone else in the organization so that he/she can complete the task.
6. Run a ‘report’ to verify the changes.

36. What is Periodic Processing in FI-AA?

‘Periodic Processing’ in FI-AA relates to the tasks you need to carry out at periodic intervals to plan and post some transactions.

The tasks include:

• Depreciation calculation and posting

As you are aware, SAP allows automatic posting of values from only one depreciation area (normally 01 -book depreciation). For all other depreciation areas, including the derived ones, you need to perform the tasks periodically so that FI is updated properly.

• Planned depreciation/interest for CO primary cost planning.
• Claiming and posting of ‘investment support’ (either ‘individually’ or through ‘mass change’).

37. What is a Depreciation Key?

Depreciation is calculated using the ‘Depreciation Key’ and Internal Calculation Key in the system. Depreciation keys are defined at the chart of depreciation level, and are uniform across all Company Codes, which are attached to a particular chart of depreciation. The depreciation key contains all the control amounts defined for the calculation of planned depreciation. The system contains a number of predefined depreciation keys (such as LIMA, DWG, DG10, etc.) with the controls already defined for calculation method and type. A depreciation key can contain multiple internal calculation keys.

38. What is an Internal Calculation Key?

‘Internal Calculation Keys’ are the control indicators within a ‘depreciation key.’ Together with the depreciation key, these calculation keys help in determining depreciation amounts.

Each internal calculation key contains:

• Depreciation type (ordinary or unplanned)
• Depreciation method (straight-line or declining balance)
• Base value
• Rate of percentage for depreciation calculation
• Period control for transactions (acquisition, retirement, etc.)
• Change-over rules (in case of declining/double declining methods of calculation)
• Treatment of depreciation after useful life period

39. What is known as a Depreciation Run in SAP?

The ‘Depreciation Run,’ an important periodic processing step, takes care of calculating depreciation for assets and posting the corresponding transactions in both FI-AA and FI-GL. The depreciation calculation is usually done in sessions, and the posting session posts the different depreciation types, interest/re valuation, and also writing off/allocating special reserves.

The depreciation run should be started with a ‘test run’ before making it the ‘production run,’ which will update the system. The system will restart a run session should there be problems in the earlier run. The depreciation run needs to be completed per period. During every depreciation run, the system will create summarized posting documents per business area and per account determination; no individual posting documents are created.

40. Explain the Various Steps in a Depreciation Run.

• Maintain the parameters for the depreciation run on the initial screen of the Transaction AFAB (Company Code, fiscal year, and posting period).
• Select a ‘reason’ for the posting run (repeat run, planned posting run, restart run, or unplanned run).
• Select the appropriate check boxes in the ‘further option’ block if you need a list of assets, direct FI posting, test run, etc. Please note that it is a good practice to select the ‘test run’ initially, see and satisfy the outcome of the depreciation run, then remove this ‘check box’ and go for the ‘productive run.’
• Execute the test run (if the assets are less than 10,000, you may then do the processing in the foreground; otherwise execute the run in the background).
• Check the results displayed.
• Once you are convinced that the test run has gone as expected, go back to the previous screen, uncheck the ‘test run’ check box, and execute (in the background).
• Complete the ‘background print parameters,’ if prompted by the system. You may also decide to schedule the job immediately or later. The system uses the ‘depreciation-posting program’ RABUCH00, for updating the asset’s values and generating a batch input session for updating FI-GL. The ‘posting session’ posts values in various depreciation areas, interest, and revaluation, besides updating special reserves allocations and writing off, if any. If there are more than 100,000 assets for depreciation calculation and posting, you need to use a special program, RAPOST00.
• Process the ‘batch input session’ created by the system in step-7 above. You may use the Transaction Code SM35. Again, you have the option of processing the session in the foreground or in the background.
• System posts the depreciation in FI-GL.

41. How does the System Calculate Depreciation?

• The system takes the ‘depreciation terms’ from the asset master record and calculates the annual depreciation for the asset taking into account the ‘useful life’ and the ‘depreciation key.’ The start date for depreciation is assumed to be the first date of acquisition of the asset.
• The system may also calculate other values such as interest, revaluation, etc.
• The depreciation and other values are calculated for each of the depreciation areas.

42. Explain Derived Depreciation.

‘Derived Depreciation’ is a separate depreciation area that is ‘derived’ from two or more ‘real depreciation’ areas using a pre-determined rule. You may use this to calculate something such as special reserves or to show the difference in valuation between local and group valuation, etc. Since the values are derived, the system does not store any values in the database, but updates the derived values whenever there are changes in the real depreciation area or its depreciation terms. You may also use the derived depreciation only for reporting purposes.

43. What is known as a Repeat Run in the Depreciation Process?

A ‘Repeat Run’ is normally used at the end of the fiscal year to carry out posting adjustments or corrections that may arise due to changes in depreciation terms or manual depreciation calculations. However, you can also use this to repeat but within the same posting period. The ‘repeat run’ also provides the flexibility to restrict the calculations to specific assets.

44. What does restart a Depreciation Run Mean?

Restart Depreciation Run is used only when there has been a problem with the previous run resulting in the termination of that run. To make sure that all the steps in a depreciation run are completed without errors, the system logs the status at every stage of the processing and provides ‘error logs’ to find the problem. This ‘restart’ option is not available during the ‘test run’ mode.

45. What is Depreciation Simulation?

‘Depreciation Simulation’ refers to a ‘what if valuation of assets. This is achieved by changing and experimenting with the ‘parameters’ required for depreciating the assets. The simulation helps you to ‘foresee’ the depreciation should there be changes in various ‘depreciation terms.’ You may simulate to see the valuation for future fiscal years. Sort versions and options for totals report are also available in simulation. The depreciation simulation can be applied to a single asset or your entire asset portfolio.

46. What is a Sort Version?

A ‘Sort Version’ defines the formation of groups and totals in an asset report. You can use all the fields of the asset master record asset group and/or sort criteria for defining a sort version. The sort version cannot have more than five sort levels.

47. Can you select Direct FI Posting for a Depreciation Run.

If the check box to enable ‘Direct FI Posting’ is clicked then the system will not create the ‘batch input session’ for a depreciation posting; instead, the FI-GL is posted directly. Be careful when checking the Direct FI Posting check box because there will not be an opportunity to correct mistakes, if any, in accounts and account assignments such as business area, cost objects, etc., when you execute the depreciation run. Also, you will not be able to check and correct postings.

Note that if this option is selected during a depreciation run, and if the run is terminated for any reason and needs to be restarted, this has to be kept checked during that time as well. The standard system comes with the document type ‘AF’ (number range defined as ‘external numbering’) configured to be used in ‘batch input.’ Hence, with this default configuration, you will get an error when you try a depreciation posting run by selecting the option ‘direct FI posting.’ You can, however, overcome this by not restricting the same FI-AA customization. (Use Transaction Code OBA7 and remove the check mark from ‘Batch input only’ check box.)

48. Explain Year Closing in FI-AA.

The year-end is closed when you draw the final balance sheet. But, to reach this stage, you need to ensure that the depreciation is posted properly; you can achieve this by checking the ‘depreciation list’ and also the ‘asset history sheets.’ After this is done, draw a test balance sheet and profit and loss statement and check for the correctness of the depreciation. Correct the discrepancies, if any, with adjustment postings. You need to re-run the depreciation posting program if you change any of the depreciation values. When you now run the ‘Year-End Closing Program,’ the system ensures that the fiscal year is completed for all the assets, depreciation has fully posted, and there are no errors logged for any of the assets. If there are errors, you need to correct the errors before re-running the year-end program. When you reach a stage where there are no errors, the system will update the last closed fiscal year, for each of the depreciation areas for each of the assets. The system will also block any further postings in FI-AA for the closed fiscal year. If you need to re-open the closed fiscal year for any adjustments postings or otherwise, ensure that you re-run the year-end program so that the system blocks further postings.

49. Explain Asset History Sheet.

SAP comes delivered with country-specific ‘Asset History Sheets,’ which meet the legal reporting requirements of a specific country. The asset history sheet is an important report that can be used either as the year-end report or the intermediate report whenever you need it. Asset history sheets help you to freely define the report layout, headers, and most of the history sheet items.

50. What is an Asset Explorer?

‘Asset Explorer’ is a handy and convenient single interface transaction that helps you to display asset values, depreciation details, etc., in a very user friendly way. Gone are the days where you had to move to different pages and re-enter the same transaction many times to display the details of different assets.

Using asset explorer you have the convenience of:

• Moving from one asset number to the other effortlessly.
• Displaying asset values, both planned and posted, for any number of depreciation areas from the same page but in various tab pages.
• Jumping to the asset master or cost centre master or GL account master.
• Calling up various asset reports.
• Currency converted views.
• Looking at the various transactions relating to an asset.
• Looking up all the values for different fiscal years.
• Distinguishing between real and derived depreciation areas with two differentiating symbols.
• Displaying the depreciation calculation function, and if necessary, recalculating depreciation

Asset explorer is designed for easy navigation, with the following sections:

• Asset values window

The top-left area/window is the ‘asset values’ window, which is in a tree-like structure expanding to various depreciation areas such as 01, 03, 10, etc. By selecting any one of these depreciation areas, you will be able to view the value of an asset in the ‘asset value details window.’

• Objects related to asset window

This is also on the left-hand side of the display page, just below the ‘asset values window.’ With a drill-down tree-like structure you will be able to navigate between cost centers and GL accounts relating to the asset.

• Asset value detail window (with tab pages)

This is the main window on the right, usually occupying most of the page area. Here, you will see information such as Company Code, asset number selected, fiscal year, etc. This window is made of two components that are completely re-sizable: the top area displaying the asset values and the bottom showing the asset transactions.