The Fixed Asset Accounting component of SAP system handles transactions and data for company’s fixed assets. Just like the AR (customers) and AP (vendor) component, each fixed asset is treated in the system as subsidiary ledger. Each fixed assset has a complete record in the system, from acquistion to retirement. This component has seamless integration with the other SAP components such as Financial Accounting (FI), Controlling (CO), Material Management (MM) and Production Planning (PP).

Chart of Depreciation

• Chart of depreciation is country specific, and SAP provides already model chart of depreciation for most countries. The main purpose of this is to manage the respective legal requirements of asset valuation and depreciation for companies;
• Each company code in the system should be assigned to Chart of Depreciation;
• Only one chart of depreciation can be assigned to a company code;
• More than 2 company codes can use one Chart of Depreciation.

Asset Class

• Asset Class is maintainted at client level. This means that the asset class in an SAP system is valid and applicable to all company codes in the client;
• Asset class serves as fixed asset classification according to legal and management requirements;
• Considered as the most important way of structuring fixed assets in SAP system.

Depreciation Area

• Depreciation area is use to calculate different values in parallel for each individual asset. For instance, there are different types of values for the balance sheet, and for cost accounting or for  tax purposes;
• Depreciation areas are group together in accordance with the requirements of a specific country or economic area, into a chart of depreciation.

Account Determination

• All transactions for each individual asset e.g. changes of asset values are automatically updated the general ledger accounts for fixed assets through Account Determination;
• Depreciation are automatically computed by the system, the computed values are automatically posted to the depreciation g/l accounts.

Asset Master Record

• Contains the records of assets that remain unchange over an extended period of time;
• This provides long-term documentation of the fixed assets;
• Grouped into eight categories such as; General, Time-dependent, Allocations, Origin, Net Worth Tax, Insurance, Leasing, Depreciation Areas.

Asset Transactions

• Aquisitions - Purchase from vendor, or Purchase from affiliated companies (Inter-company transactions), or In-house production.
• Transfers - Transfer within the company (intra-transfer) or Transfer between company codes (Inter-company transfer);
• Depreciation - Planned depreciation, or Unplanned depreciation;
• Retirement - Retirement by Sale, or Retirement by Scrapping.

You may also consider reading these:

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• SAP Financial Accounting Overview
• SAP Controlling Overview
• SAP General Ledger Overview
• Create SAP Transaction Codes