IAS 16.13 applying in SAP AA

[Former Member]

Hello,

I would like to know your experience in applying IAS 16 paragraph no. 13, i.e. do you use subnumbers or create supernumbers (or maybe other solution), when a subsequent acquisition creates a new asset item with different depreciation period, e.g. new windows (with UL of 5 years) were replaced in old building (with UL of 40 years)?

[Former Member · Accepted solution]

Hi,

subnumber is good solution for the subsequent additions in existing assets, having different life or dep rate.

the benefit is that we can depreciate it differently from main assset , at the same time we can trace all additions in existing assets at one place.

Rajesh

[Former Member]

Hi Marius,

I think that I have the same situation als you and I'm interested how you have solved this with sub-assets?

In the most situations the use full live is changed and the depreciaton corrected in this fiscal year for the old years.

Example:

Was 3 years

After 1 year to change this in 5 years.

In the second year they want to correct the depreciation for the first year.

Thanks,

Paul

[Former Member]

Hi Paul,

Yes, we had a problem when subsequent acquisition prolonged useful life. I still can’t find how to configure depreciation calculation, when we want to depreciate NBV+subsequent acquisition value through new useful life. There are some configuration options in IMG but after testing we realized that calculation is performing totally wrong. So we changed our Accounting Policy according to IAS 16.13, and we are recognizing subsequent acquisition only then when this acquisition creates new asset item, otherwise acquisition expenditures goes to costs. So by us in SAP, each subsequent acquisition is a new asset sub-number, with his own APC and own useful life.

Of course we need to combine UL of asset sub-number that it wouldn’t be longer than UL of asset main-number, e.g. windows can’t be depreciated during 10 years when remaining UL of the building is 8 years.

[Former Member]

Hello

I am not able to understand your real problem.

CAn you please elaborate the scenario you want to address using SAP?

Regards

Anantha

[Former Member]

my problem is elaborated here

[Former Member]

Hello,

In the base method use option - activate Depreciation after use ful life

and make the system calculate - Depreciation from remaining use ful life.

This shoud work

Regards

Anantha

[Former Member]

Hi Anantha,

Example:

acquisition value 10,000

The depreciation started on 01-01-2000 and is 10 years (1000 a year)

Now we want to change the use fule live to 20 years.

The result we want is:

A depreciation from 500 a year from 01-01-2007 with a correction from the old depreciations from before 2007 ( 7*500 = 3500) in 2007.

At the moment this is an issue for France and South Africa in our system.

I did some tests but SAP don't like it when you are making changes in values (changed the values with data take over and created manual postings)

Thanks,

Paul

[Former Member]

Hello Paul,

What is the output you are getting immediately after changing the useful life to 20 years.

I guess it should work as long as you have activated posting of negative depreciation for the depreciation area.

Regards,

Anantha

[Former Member]

Hi Anantha,

The depreciation is now 541,67 for 13 years and not 500,00 The differences is split over the next 13 years and there is no correction for the old years in 2007

Thanks,

Paul

[Former Member]

Hi,

This is functionally wrong. why would you want to correct the historical values. those values have been reported and they are correct.

any change in depreciation rate must be prospective.

anyways if you want to achieve this, you can do so by activating SMOOTHING at depreciation area level.

Regards

Anantha

[Former Member]

Hi Anantha

I think to that this is functional wrong, but...

Smoothing is not working.

I found a solution to change the use full live and to make Write up (or manual depreciation) postings on the asset to correct the depreciation ammount. For this I created a new depreciation area (statistical) and transaction types to post these amounts only in this new area. This is only working for a depreciation key with Straight Line.

Paul