Fixed Asset Lifecycle

Asset Accounting is used to manage and monitor tangible fixed asset

An asset is typically an object, a right, or an item owned by an enterprise. It is intended for long-term use and can be identified individually in the balance sheet. Each asset belongs to a company code. All postings made for the asset (acquisitions, retirements, depreciation, and so on) are posted in the assigned company code.

The acquisition is when the asset arrives at the company and an FI journal document is posted for the acquisition of this asset. In order to do that, first you create the asset master record, which consists of general master data and asset value data.

Capitalization is the formal recognition that an asset is ready for use and will appear on the balance sheet as a fixed asset.

The capitalization date (ANLA-AKTIVDATUM) is in the master data and determines when depreciation begins. In case of adding missing costs, SAP recalculates depreciation retroactively from this date.

Difference between acquisition and capitalization

The clearest way to see the distinction is with an Asset under Construction (AuC). You can post acquisition costs to an AuC over time, but the AuC is not yet capitalized as a final asset. Only when you settle the AuC to a completed asset does capitalization occur, setting the capitalization date and triggering depreciation.

The lifetime of the asset starts from the Capitalization Date and ends with the deactivation date.
During its lifetime, the asset is periodically depreciated. The depreciation amounts are planned according to the Depreciation Key, and Useful Life defined in the Master Record.
The Asset History Sheet can be generated with planned or posted depreciation.
Value corrections can be made. For additional depreciation, you execute unplanned depreciation.

Asset Lifecycle ends with Retirement. You can distinguish the following types of retirement:

• Scrapping with no revenue earned.
• Selling, resulting in revenue being earned.

• AS01/AS02/AS03 – Asset Master Data.