Import duty and VAT on fixed asset purchase

[Govind_Sharma]

Hi,

I have encounter the fixed asset procurement scenario where not able to configure the bydesign for business need, mentioned below

I have purchased fixed assets from foreign supplier, the cost sheet would be like

Fixed asset cost   -         10000 USD              

Accessories items -        200 USD               -       Separate serial number and ID

Import duty -                   1000 USD (10%)     -    Non Deductible

VAT -                               1500 USD (15%)    -    Deductible

Handing charges -           100 USD               -      Added to fixed assets for capitalization

Transportation -               250 USD               -     Added to fixed assets for capitalization

Installation charges   -     200 USD               -      Added to fixed assets for capitalization

I have few questions, how to account each items during asset acquisition and capitalization.

Accessories item:-

As per my understanding, this will be additional Individual material ID but the cost will added to cost of main asset for capitalization?

Tax :-

In ByDesign we can have only one tax type in one tax code. How we can apply import duty and VAT using single tax code?

Would like to know how can i configure in system.

Import duty:-

This Import duty would be Non deductible - will be added to cost ( ByDesign works well here)

VAT :-

VAT will be deductible how it can be bifurgated if triggered with same tax code?

Charges:-

I have seen that ByDesign create fixed asset record at the time of goods receipt and change status as capitalized based on purchase order referance. In this case, if we need add some additional cost that will need to change the capitalisation date to incorporate additional cost?

Thanks in advance

Govind Sharma

[Former Member]

Hi,

Go to condition first maintain

the T.code FTXP maintain % against conditions

[parveen_kumar6]

Hello Govind

Accessories Item:

You can decided whether you want to create separate individual Materials here or wants to use the same Individual Materials. First you should add the main item and create an individual Material for the this item, then you can items related to accesssories. In the account assignment of these additional items, either you could choose the individual material from the first item( Use the same individual Material) or you could create new individual Materials here(create separate Individual Materials).

Tax:

Regarding the tax, You cannot assign multiple Tax Types for the Tax codes created using the PDI. You can explore the pre-delivered Tax Content to check for the relevant Tax code.  If it is not there and is a legal requirement, you can check with SAP to deliever these Tax codes.

Import Duty: This can be set up in the Tax code only to have one tax type as Deductible and other being Non-deductible.

Charges:

With the first acquisition made on the asset, system will derive the Initial Acquisition Data and Capitalization Date. Now for the further capitalization, system should not change the capitalization date implicitly.

Thanks
Parveen Kumar

[Govind_Sharma]

Hi Praveen,

Thanks for your reply, i have further question on the same - mentioned below

Accessories Item:

To add new accessories item into asset record which process need to follow

1.  Which stage of posting should add - GOODS RECEIPT or SUPPLIER invoice ?
2.  Should we add an additional line item for accessories or increase Qty of main city. ?

3. If need to add new item,  then how to assign it to the same asset ?
(will system take care of that and create one asset record only and consider additional row as subsidary item of main fixed assets.

Charges:

As per my understanding, capitalization date is determine from the depreciation method.

For exmaple - If depreciation method is "Streight line starting from next month" in this case

If acquisation date is 10th Oct, but capitalisation date will be 1st Nov only.

Also capitalisation date is useful for determination of capitalisation value.
If supplier invoice posted before capitalisation date then it should add to the value of fixed assets.

Like business document for fixed assets purchase

PO - 1000 USD with 1 qty.

GR - 1 qty.

SI - 1200 (1000 main asset + 200 transportation, handling and installation)

Now, these 200 should be part of fixed asset value, which is determined at the time of supplier invoice only.

If system determine capitalisation value at GR posting then we are not able to capitalise full amount of fixed assets.

Kindly let me know your thought on this scenario.

Thanks

Govind Sharma

[parveen_kumar6]

Hello Govind

You can add the items at any stage and system will not automatically post to the same asset. Each line item has the Cost distribution tab and you need to assign the Individual Material ID of the main asset in order to post to the same asset.

GR/IR Clearing run will update the Acquisition cost of the asset, but will not update the Capitalization date. I believe the depreciation amount will be adjusted accordingly at the pro-rata.

Thanks

Parveen Kumar