1 depreciationcalculation mbm

7/23/2019 1 DepreciationCalculation MBM

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Configuration of Depreciation Calculation for “Next Month”

Symptom:

Depreciation needs to be calculated one month after capitalization of asset.Reason and PrerequisitesRequest made by customer.

Background:

Period Control is a function in !"## that determines the start or the end of depreciation calculation atthe time of a fi$ed asset acquisition or retirement.

%here are many different country"specific regulations &particularly for asset acquisitions' that go(ern ho)the depreciation start date &asset (alue date' can be determined from the date of the posting.

Period control is part of the Depreciation key. *ou can specify indi(idual period control for each

transaction type &acquisition+ retirement+ transfer'.

S#P pro(ides the most commonly used period controls &such as the first year con(ention'.

Refer to R,- library !"##: i$ed #sset Depreciation " Period Control for more information.

Solution:%o enable your company to determine depreciation on assets from the month follo)ing themonth of capitalization+ you can use the standard S#P Period Control /ey 00.%here a fe) more related configuration steps that you need to complete.

Configuration of the Period Control and other related configuration steps are detailed belo):

Step 0:Step 1:Step -:

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3et4s take an e$ample and later see as to ho) )e need to configure this in our system.

Example: Asset 100000216 was created for company code 1010 with “Capitalized on &First ac!isition on date" of 01#0$#200%# ystem wo!ld ha'e to start depreciation from01#0(#200%#

STEP 1:

Since )e do not ha(e the right period control method that )ould enable depreciation to beposted for the ne$t month+ )e )ould ha(e to create a period control method. 5e then assignthem to depreciation keys.

SPR6 " !"##: Depreciation " 7aluation 8ethods " Depreciation /ey " Calculation8ethods " Period Control 8ethod.

*ou can also use transaction code ##8P to get here.

Create a 9e) period control method that consists of period control key 00; and then sa(ethe customizing.

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!t )ould ha(e to look like the belo) screen after the configuration has been done.

STEP 2:

%he ma<or step in achie(ing this pro<ect completed )ould be+ to ha(e the Depreciation/ey configured. %his depreciation key needs to be created )ith period control method00; i.e. &ollo)ing month' that )e <ust created.

Create a ne) Depreciation /ey:

SPR6 inancial #ccounting #sset #ccounting Depreciation 7aluation 8ethods 8aintain Depreciation /ey

*ou can also use %ransaction Code ##8# to get here.

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By clicking on the “NewEntries” you would be ableto create new Period ControlMethod. Assign periodcontrol keys to the periodcontrol methods or“Ac!uisition transactions”"“#ubse!uent ac!uisitions”and “$etirements and



# small pop"up screen appears+ asking for Chart of Depreciation. !n this field )e )ouldha(e to key in C=+ )hich is our C6D. %he ne$t fe) steps+ )ill e$actly tell us as to ho)you need to create a ne) depreciation area.

#s per the abo(e screen+ please click on the 9e) =ntries; button. %his )ould help youcreate a ne) depreciation area.

9ame the Depreciation /ey as per your con(enience+ that )ill help you identify thatthis key is different from the rest of them. %he standard calculation methods are anintegral part of the system and cannot be altered. !f you need to modify a calculationmethod for legal or business reasons+ copy the calculation method and make thealterations to the copy. %he key of the calculation method that you create has to begin

)ith >+ * or ?.

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#fter the naming the depreciation key+ you )ould ha(e to follo) the belo) steps

#ssignment of calculation methods

9e) entries

%his step )ill lead to you to customizing a depreciation key by assigning all thecalculation methods for the calculation of depreciation.

%he calculation of depreciation is controlled by the calculation methods+ the controlparameters that are entered in depreciation keys+ and the cutoff (alue keys.

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5e )ould ha(e to configure the ne) depreciation key as per the abo(e screen shot. *oumaintain each calculation method separately+ and then assign it to a depreciation key. Sincethe indi(idual calculation methods are independent of each other+ you can use a gi(encalculation method in more than one depreciation key. #s a result+ you do not ha(e to define alarge number of ne) calculation methods in order to maintain a number of depreciation keysthat function similarly.

Once the depreciation key is created it’s usually in an “Inactive” status. We would

have to activate the depreciation key by clickin on the above activate button. !s lon

as a depreciation key has the status "irated# the settins $ro" the old depreciation

key and calculation key are taken. %ables %&'&() contain the data $or the new

depreciation keys *with the base "ethod# "ultilevel "ethod...+

,

After this step, you can save

this configuration by clicking onthe “SAVE” button.

We would also have toactivate this depreciation key

for the systeto calculate right values. !fthe "epreciation key is notactivated syste would notcalculate values as per itsconfi uration.



STEP 3:

6nce )e ha(e the depreciation key created as per our requirement in the system+ )e )ouldha(e to assign this to the #sset Class. @enerally+ the assets in an asset class use the samedepreciation terms &depreciation key+ useful life'. %herefore+ you do not ha(e to maintain thedepreciation terms in the asset master record. !nstead+ they can be default (alues from theasset class.

!n this step+ you determine the depreciation terms that are to be used in your asset classes.Depending on the definition in the screen layout control used+ these depreciation terms areoffered either as optional or mandatory defaults )hen you create an asset.

or each asset class+ you can maintain as many charts of depreciation )ith their depreciationareas as you need. %his allo)s you to use the asset class in all countries belonging to theclient.

)ote

Chan*es to the asset class only affect assets that are created after the chan*e ismade# For assets that already existed in the system+ and are affected ,y the chan*esmade at the asset class le'el+ yo! ha'e to !se mass chan*e proced!res -see theystem Administration .!ide: /aster ata /aintenance and eor*anization# 3henchan*es are made to depreciation terms+ the system a!tomatically recalc!latesdepreciation for the assets concerned.

9a(igation path: SPR6 inancial #ccounting #sset #ccounting 7aluation DetermineDepreciation #reas in the #sset Class.

*ou can also use transaction code 6#*? to get here.

Please sa(e the configuration after maintaining them. %his ends the configuration part. %hene$t steps )ould be to sho) ho) the configuration has resulted into postings.

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4estin* the Confi*!ration

STEP 1:

Create an asset that )ill sho) as to ho) the depreciation is calculated as per youre$pectation. #SA0 Create #sset;

Press =nter; key on the key board



Please key in the required master data:

5hen you ha(e a look at the depreciation tab+ you )ill find that the depreciation area createdis attached to the asset.

#fter this please sa(e the asset and make a note of the asset number to make postings.

STEP 2

9o) lets perform a posting &#B?P' to the sa(ed asset 0AAAAA10 to check the depreciationposting.

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/indly simulate the posting to check the document details:

Sa(e the document for the posting to happen.

9o) )hen you look at the asset &#SA-' you can see that the 6rd.dep.start date is

A0.A.1AA+ though the Capitalized on E irst acquisition on date is A0.AF.1AA. Please see

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the belo) snapshot.

9o) )hen you look at the asset e$plorer &#5A09' )e can see the depreciation posting is

from the second month &96%=: S#P !9%=R9#3 system has * (ariant from #pril to 8arch'hence the posting for period AF is in actual period A0.

=(en if )e ha(e an asset posting in the mid of the month or at the end of the month+depreciation )ould start calculating from the start of ne$t month. rom our e$perience+ it4sal)ays better to ha(e the asset capitalized on the first month and asset deacti(ated , retiredat the end of the month. %his )ould reduce the reconciliation issues bet)een the sub ledgersand also ha(e consistent depreciation throughout the year.

General information about depreciation key calculation

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Calc!lation /ethod 5:

Calc!lation /ethod 55

Calc!lation /ethod 555

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#peciic to theChart o depreciation

Base Method#ype of depreciation

"epreciation ethod

'eclining Balance Method $ultiplication factor fordeterining the % rate

&pper ' (ower liit for % rate

Period Control Method Ac)uisition

*etireent!ntracopany #ransfer

+ostcapitali-ation 'Subse)uentAc)uisition

Multi (e)el Method "epreciation percentage rateValidity period for a given %rate ase Value "eterination and(iitation / $a0 Aount$ethod1

*rdinary depreciation classiication 2o Assignent

Straight(ine "epreciation "ecliningalance "epreciation 3ther "epreciation

Changeo)er Method 2o autoatic changeover 4hangeover when straightline dep. is higher /5erany1

4hangeover when net book value percentage reached 4hangeover when net book value less than changeoveraount

4hangeover when net book value less than straightline rate 4hangeover after end of the useful life

4hangeover in ne0t year as soon as straightline higher /+oland1

4hangeover when net book value percent less orsae as 0%

4onversion After End of +lanned (ife !nflation

NB& + rate or depreciation changeo)er % of the A+4 at which the

syste changes the calculation

of depreciation.

4hangeover as soon as the

2V 6 the A+4 ultiplied by



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Consideration o #hutdownPeriods 7es 2o "efault fro 4o4o'area

Consideration #crap &alue

4ontrolled by cutoff

value key ase value reduced by

theScrap value aount

ase value notreduced

4utoff value i nored

Multiple #hits in depreciation key

!ncrease in depreciation ande0pired useful life

!ncrease in depreciation, no

increase in e0pired useful life

2o effect on depreciation and useful life

"efault value fro

4o4o area

1 depreciationcalculation mbm

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