Low Value Asset depreciation change from Fiscal year to calendar year

[Former Member]

Hi SAP Gurus,

My client’s fiscal year starts from March and end in Feb. All assets are depreciated according to the fiscal year.

However, Germany just passed a law indicating that starting 1/1/08, all low value assets with the value from 151 EUR – 1000 EUR need to be depreciated over 5 years. Also, the depreciation needs to be based on calendar year rather than fiscal year.

How could I set up a depreciation key that is based on Calendar Year? I thought about setting up a new depreciation area assign Fiscal Year Variant “K4” to the depreciation area to handle this. Is there another way to do this?

Any help will be greatly appreciated.

Thanks,

Cassandra

[andreas_mann3]

Hi Cassandra,

...Germany just passed a law indicating that starting 1/1/08...

could you please publish (or send <a href="https://www.sdn.sap.com:443http://www.sdn.sap.comhttp://www.sdn.sap.com/irj/servlet/prt/portal/prtroot/com.sap.sdn.businesscard.sdnbusinesscard?u=iwo3sshliihvcradiegqaw%3d%3d">me</a>) more infos to that matter?

thank you

and regards

Andreas

[Former Member]

Hi,

OSS note 1082378 described this in details. The note is in German, so I have someone in the office translating it for me.

Any idea how to resolve this?

***********************************************************************************************

<b>1. LVAs - Low Value Assets</b>

The rules for immediate depreciation of LVA’s change:

• Up to 150€ net

immediate depreciation

• 151€ through 1000€ net

Annual grouping of those assets, overall depreciation within 5 years.

• More than 1000€ net

These are not treated as LVA’s

<b>Cause and Prerequisities</b>

Details to the new regulation of depreciating LVA’s:

• First category (up to 150€ immediate depreciation) reflects the current treatment of LVA’s at a value up to 60€.

• The third category (value higher than 1000€ net) is not a problem.

• The second category (creation of a compound item/ pool of Assets with a value from 151€ up to 1000€) however is new::

o The Assets which fall in this category need to be grouped into a annual compound items/pool.

o This annual pool needs to be depreciated with 20% per year (which reflects a lieftime of 5 years).

o When the single assets were purchased (January/December) is not relevant..

o If an asset retires within this 5 year period (Sale, Scrapped, etc) this should not affect the annual pool to which the asset belongs. The pool still needs to be depreciated for the remaining time.

This (obligatory) creation of pools contradicts with the commercial law (Handelsrecht) principle of separate valuation. This could result in a separate valuation of the fixed assets: 1st. a valuation per commercial law and 2nd a valuation per tax law).

Additionally to that the period of 5 years is a problem, because often an asset can not be used through the whole period (e.g. a computer)

In practise it will be tried to adjust the commercial law valuation accordibng the tax law valuation for simplification reasons.

<b>Solution</b>

Many questions are still not completely answered. Therefore SAP can not give an answer for those. Please ask you auditors for clarification.

Unanswered questions:

a) ist it still possible to have the LVA’s separated in the Asset accounting module besides the creation of those asset pools?

b) Ist it allowed to only have exactly one asset pool or is it allowed to have multiple pools per year in the system?

When thinking about the allocation of assets to cost centers it would be a prerequisite to at least group asset pools per cost center or other controlling objects.

There should be no reason against the method of still separating LVA’s in the asset accounting module. An alternative would be the creation of group-assets.

As an example SAP listed the following steps which should make it possible to adjust the asset accounting according the new rules. This is only a guideline and is not exhaustive, especially as there are still unanswered questions.

IMG –> Asset accounting

a) changing of the LVA values to max 1000€ net.

b) Maintain new depreciation key based on method „Linear AnschWert pro rata bis Null".

You can also copy exiting Key “LINI’ with the following

o Base Method „0007“ (Normal: Prozent aus Dauer (nach Ende Dauer)

o Dec.Bal. method „001“ (keine degressive Abschreibung)

o Period cont. method „005 „ (Acquisition at start of the year (06), Retirement and transfer (08)).

o Multilevel method „010“

o Multiple shift: „2“ no effect on depreciation and life time

o

o Acquisition only at year of capitalization: „Yes“

o No reduction in short year: “Yes”

c) Change of the default values to the just created new depreciation key and to a 5 year life time