cancel
Showing results for 
Search instead for 
Did you mean: 

Changing Fixed Assets useful life according IAS rules

Former Member
0 Kudos

Hi all,

According to the new IAS rules (International Accounting Standards) when an asset's useful life (currently with straight line depreciation) is changed we have to distribute the "net book value" (remaining depreciation to be posted) between all the remaining months in the same proportion.

Currently, SAP standard calculates the depreciation as the difference between the posted depreciation throughout the previous months and the amount that should have been depreciated with the new useful life, and it assigns this calculated amount in the current month when the useful life is changed.

We have checked that the remaining depreciation to be posted can be distributed equally over the remaining periods of the fiscal year by marking the "smoothing" flag through transaction OAYR per company code, but we need this amount to be distributed over all the remaining periods for the new useful life (not only over the current fiscal year).

Please find below an example to try to clarify my query:

A fixed asset with str.line depreciation has the following values:

Acquisition value: 12000 eur

Useful life: 3 years

Depreciation per year: 4000 eur.

The asset starts to depreciate on 01.01.2008 and its useful life is

changed to 2 years on 01.07.2008. On that moment the net book value is

10000 eur.

SAP adjusts the difference between the amount that should have been

depreciated with the new useful life (3.000 eur) and the real amount

posted (2.000 eur) = 1.000 eur depending on the "smoothing" flag:

1. If the flag is not marked: SAP assigns 1.500 eur (500 eur (6.000/12)

+ 1.000 eur from the difference) on 01.07.2008

2. If the flag is marked: SAP distributes the difference between the

remaining periods of the current year (from July to December) and it

assigns 666,66 eur per month (500 eur + 166,66, obtained from 1.000

eur/6 months).

But we need the same depreciation amount distributed over the remaining

months: 10.000 eur/18 months = 555,55 eur/month.

Has anyone come through the same problem before?

The only solution I can think of is transferring the asset values to a new one. Or maybe a user exit.

Any feedback will be much appreciated.

Thank you very much in advance. Best regards

Accepted Solutions (1)

Accepted Solutions (1)

MarkusBredel
Employee
Employee
0 Kudos

Hi,

do you use the new depreciation calculation functionality with time-dependent depreciation parameters? You could create a new depreciation parameter interval as of 7/2008 in your example, and that should distribute the remaining net book value then over the remaining life.

Of course a transfer to a new asset is also possible.

Regards,

Markus

Former Member
0 Kudos

Good morning Markus,

Could you please shade some light on this new functionality? I have never used it before.

Thank you very much in advance. Best regards

Edited by: PMA on Dec 3, 2008 11:17 AM

MarkusBredel
Employee
Employee
0 Kudos

Hi,

you find some very detailed information in Nathans Blog series about new ways to depreciate fixed assets. This should answer your questions. You find them in Nathans author page at

[/people/nathan.genez/blog|/people/nathan.genez/blog]

Regards,

Markus

Former Member
0 Kudos

Hi Markus,

Sorry to come back to you regarding this question. Unfortunately we are not still on 6.0 so we can't take advantage of the new functionality.

I am now trying to make an asset transfer through transaction ABUMN but the new asset is taking into account the capitalisation value of the original asset rather than the net book value that we would need the system to consider to calculate the new depreciation values.

Do you know if there is a way to solve this?

Thanks a lot. Best regards

MarkusBredel
Employee
Employee
0 Kudos

Hi,

this can be influenced by the transfer variant you use (gross method vs. net method). Further more the transferred net book value depends of course on the period control for transfers of the assigned depreciation key. You should check this.

Regards,

Markus

Former Member
0 Kudos

Hi again Markus,

I have been struggling with the calculation methods assigned to the depreciation key in use but I haven't been able to afford the required values.

I have tried changing the "Period Control Method", changing the Depreciation method on the base method, the Multilevel method (activating the Remaining life field) .... but I haven't been able to aford it. Could you please shade some light on how I must customize this? Sorry to be a pain .....

One more time, thank you very much in advance for your help. Best regards

0 Kudos

Dear Friend,

i think note 879039 will help you.

Answers (0)