Chart of Depreciation

[Former Member]

Can anyone suggest what is SAP recommendation for maintaining which area as the lead area in chart of depreciation. Do they recommend to have Statutory as the lead area or the Group. IF they recommend Group and we have statutory as the lead area then what are the disadvantages. Also We do not have New GL. Please give your suggestions based on your experience.

Thanks

[former_member190652 · Accepted solution]

Hi James,

Your leading depreciation area should always be your leading group statutory area as per SAP recommendation.  For multinational organizations generally they have US GAAP as the leading area whereas local statutory areas as parallel depreciation areas.  In case you keep the leading area as local statutory area and later on if you go for New GL implementation with parallel ledgers, then you need to do another project for conversion of leading area from statutory to group area if your leading ledger becomes your group ledger.

So, please consider this before designing your ledgers in GL in future and the depreciation areas in AA.

Regards,

Sridhar

[Former Member · Accepted solution]

Sridhar

Thanks for your answer. It does make sense. Our Group Currency is USD but having operations in various countries we have various local currencies and local GAAP's. We have no plans for new GL. presently we have a chart of account with different ranges for meeting local, tax, group reporting requirements.So my question is that if we stay with Statutory as lead area then will there be any impact from SAP side in new OSS notes or anythings else. As per my understanding SAP recommends area 01 as Group Currency area.

[former_member190652 · Accepted solution]

Hi James,

You don't have any plans to implement NewGL with parallel ledger functionality at present.  That means you are now using classic GL which has only one ledger (0L) which in itself is a leading ledger.  So, obviously your ledger is tagged to your statutory accounting principle.

SAP recommendation is to link your leading depreciation area 01 to your leading ledger 0L.  Because value flow to CO happens only from your leading ledger.

So, stay with Statutory as lead area though group currency is USD.  However please note that if you plan to go for New GL implemenation in future with leading ledger as US GAAP (most probably be the case since yours is a multi-national organization with group currency of USD), then you need to assign your leading depreciation area 01 to your leading ledger 0L of US GAAP.

Regards,

Sridhar

[krishnakishore_gaddam]

Hi,

The Depreciation always get posted to Book Depreciation-01 in  real time. It is recommended to maintain lead area as per the local statutory rules which will update Book Depreciation Area 01. The values will get updated to GL in real time.

Regards

Krishna Kishore

[former_member205661]

Hi James,

Book Depreciation Area 01 is generally the leading area for financial reporting. All documents should be posted to this area, as is also stated for example in the SAP Library under "Standard Depreciation areas: Germany" and same also under "Standard Depreciation areas: USA".

Please have a look at the online documentation in the SAP Library under Link:

Features of a Depreciation Area - Asset Accounting (FI-AA) - SAP Library

Under these section you will also find the explanation for Book Deprecation Area (01):

Standard Depreciation Areas: USA - Asset Accounting (FI-AA) - SAP Library

Standard Depreciation Areas: Germany - Asset Accounting (FI-AA) - SAP Library

Together with all that is said in all the previous threads above, this should help you explain why Book Area 01 is generally the mandatory depreciation area posting to the company code currency.

Best regards,

Brigitte

[madhusoodanan_ramachandra]

Hi James,

01 depreciation area (Book depreciation) is mandatory and this posts to company code currency of statutory books.  Group depreciation area, normally identical to book depreciation, posts to the group currency of your statutory book.  Which depreciation areas should post to GL is based on your OB22 currency settings in GL.

Hope this clarifies your question.

Best Regards,

Madhu

[Former Member]

Hi,

According to me in no case can a Group Depreciation Area be kept as leading depreciation area, as in that case no particular level information would be made available.for each individual asset. Also group area concept is used for reporting purpose only and only FI-GL integration is done with the leading ledger and their can be only one depreciation area that can be assigned to leading ledger, hence its important that statutory depreciation area be kept as main depreciation area and group depreciation are be kept for reporting purpose only.

Regards,

Malhar.

[former_member182098]

Lead area would always be your statutory area, which will go and hit the FI-GL.

You have no choice but must use the statutory area (book depreciation) as the leading depreciation area.