Catch-up depreciation in subsequent year

[Former Member]

Hello,

There was a previous posting asking essentially the same question I have, but it was from 2009.  I'm wondering if anything in SAP has changed over the last 6 years to allow me to create my desired posting without using "unplanned depreciation".  The previous posting was titled "Catch up depreciation from previous year".  Here is my example:

An AUC was completed and should have gone into production 12/01/2014 but paperwork and approval delays have resulted in the Accounting department not being notified about this new fixed asset being capitalizated until 11/01/15.  I would like to use the standard SAP depreciation transactions of AFAR and AFAB to post a catch-up entry in November 2015.

Example:

Asset Value - $6,000 (using straight line depreciation)

Useful Life - 5 years

Monthly depreciation = ($6,000/5)/12 = $100 per month

Catch-up depreciation for prior months - December 2014 to October 2015 (11 months) = $100 x 11 = $1,100

Depreciation for current month (November 2015) - $100

Total Depreciation (catch-up + regular monthly amount) booked in November 2015 - $1,100 + 100 = $1,200

Straight line depreciation booked every month thereafter until the end of the useful life - $100

Is it possible to achieve the catch-up posting described in the red line above or would I be required to record unplanned depreciation for the depreciation that should've been recorded in 2014?  Or is there another, more appropriate way for me to approach this type of transaction that I haven't thought of?

Note - accruals for this new asset have been made since December 2014.

Thank you very much for your knowledge and assistance!!!

Lisa

[Former Member · Accepted solution]

Thank you for your response, Pankaj!

I don't have configurator access but I have checked the settings in the straight line depreciation key and Smoothing is NOT checked off.

Even when I set the depreciation start date to 12/01/14, SAP doesn't include the catch-up for December 2014, it does a catch-up for January-November 2015 which doesn't result in the correct depreciation expense and accumulated depreciation being recorded.

If I change the useful life without making any other entries, I don't get the correct monthly depreciation b/c I'm only depreciating the asset over 59 months, not 60 ($101.69 vs $100 per month). 

Since the 2014 accrual has reversed, I still need to ensure $100 depreciation expense and accumulated depreciation is being recorded in 2015 for the missed period last year (December 2014).

Through testing, I have also discovered that the asset value date year and the posting date year must be the same.  SAP won't let me complete my transaction if they are not.

It kind of seems like I'm stuck but I'm certainly not an expert on the FA module in SAP so I'm happy to hear thoughts from others!!!

Lisa

[Former Member · Accepted solution]

Thanks for more details, it is always helpful.

In that case, you can post depreciation for last year as unplanned depreciation (ABAA), and let system calculate depreciation catch up for this year(AFAB), this way your remaining asset value will turn out to be correct and result in calculation as expected for remaining life of asset. if this does not happen you depreciation key will need to re configured if that is expected behavior.

Check with your consultant what method is used in depreciation key, REMAINING BALACE OVER USEFUL LIFE ETC. that might be the reason you are not able to get correct calculation.

Note: ABAA is initially a posting in AA module, and is to be posted to FI during Normal depreciation run or unplanned depreciation run.

Pankaj Bansal

[Former Member · Accepted solution]

Thank you again for your thoughts!  It appears that nothing in SAP has changed since 2009 to allow the catch-up entry to include values from the previous year.  I will have to do as you recommend and post unplanned depreciation for the 2014 amounts.

Thank you again for your help and time!

lisa

[Former Member · Accepted solution]

Kindly close the thread if recommended approach was helpful / correct answer so users in future may know what was the solution.

BR

Pankaj Bansal

[Former Member · Accepted solution]

I'm trying to search the website to figure out how to close the thread.  Can you tell me how to do this or where to look to find out how to do this?

[Former Member · Accepted solution]

With every reply i make, there are two options visible only to you.

Helpful - means i was able to able to help in some manner.

Correct Answer - will automatically close the thread, if you feel that was right answer.

Pankaj Bansal

[Former Member · Accepted solution]

thank you   I had to go to a different view of my thread in order to see the buttons.  I got it figured out now!

Lisa

[Former Member]

Hi Lisa,

Standard Depreciation Keys take care of this requirement by default.

i am not sure if you have Configurator access, but you just need to make sure your depreciation key does not have Smoothing Active, which will do calculation in other way around.

Just change the useful life of asset, system will automatically adjust depreciation to be posted, in your next run.

Hope it was helpful.

BR

Pankaj Bansal

[Former Member]

Correction, You will need to set depreciation start date as Jan-1-2014 or as desired to calculate catch up.