Depreciation method

[Former Member]

Hello SAP Gurus

Please note that in our system we have catch up method designed. We are now doing our legacy data transfer. We are facing few issues in transfer. In certain old assets, depreciation posted is more then expected and the reason can be various over the years. So now when we bring these kind of assets in our new world, system is doing catch up method and taking up the extra depreciation. I can understand that it is due to catch up method assigned. So Gurus if I change the method to Smoothing, there will be no effect. But my quesstion is that will there be any other effects or is there any other way to bring these kind of assets and down the line to depreciate properly.

Secondly if we want to bring the unplanned depreciation, will be there any new settings to be involved to bring unplanned depreciation, becoz I tried posting unplanned through AS91 and when I went inot asset explorer, i saw that it is populating in unplanned column but also taking it off in prior period. What can be the reason.

Please advise.

thanks

[dominic_holdstock · Accepted solution]

Hi,

Smoothing will not solve your basic problem, all it will do is cause the excess depreciation to be posted over the remainder of the year instead of in the first period.

Are you doing a takeover at year end or mid year?

Also check whether it is only the first period that has too much or all future periods

Check whether you have set the flag "Recalculate Depreciation"

Kind regards

[Former Member · Accepted solution]

Hello Dominic

Thanks for your early reply. I always appreciate it. We are going live in August Mid, so will be bringing the legacy depreciation upto July 07. What you suggest should we do to bringover the actual depreciaion w/o any adjustment in SAP world.

I checked, its only the first period when it gets adjusted. Remaining periods are ok.

Dominic, where this flag "Recalculate Dep" is there can you advise.

Thanks

[Former Member · Accepted solution]

Hello Dominic

I found that flag Recalculate Dep". No I have not checked that flag.

Please also note that my system which is doing catch up is doing for this very year which is for 2007. what ever the ord dep being brought over for these 6 periods from jan 2007 to June 2007 is getting catch up whereevr it is less or more.

Please advise.

thanks

[dominic_holdstock · Accepted solution]

Hi Jimmy,

Since you are doing a mid year takeover, the adjustments in the current year are unavoidable. This is due to how the system calculates depreciation.

If still possible i would change the migration methodology

Takeover Date 30.06.07

Last Posted Depreciation 31.12.06

Data Loads:-

a) APC & Accumulated Depr per 31.12.06

b) Current year acquisitions via AS91 "Transactions"

c) Manually post retirements

d) Let SAP post depreciation from Jan (basically ignore the current year legacy system depreciation).

The total depreciation by period 7 will be the same as now, but without the variations being as obvious

Kind regards

[Former Member · Accepted solution]

Dominic

I understand your solution but my main problem is due to the more depreciation posted in current year acquisitions. I have no problem upto 2006 but for some assets which were posted more depreciation due to various reasons are getting effected. I guess the system behaves like this way only.

Secondly I tried posting that extra depreciation in unplanned depreciation via AS91 but when I went in to Asset explorer, I was surprised to see that in the same period it was showing as planned for same amount for reversal. Is there reason or some config is missing to bring over unplanned depreciation

Pl advise.

Thanks always

[dominic_holdstock · Accepted solution]

Hi Jimmy,

OSS Note 25120 could apply to your unplanned depr. problem.

Kind regards

[Former Member · Accepted solution]

Thanks Dominic

There is another one more issue. We are also bringing the assets with asset shutdown check box. The problem is that it is also reversing the depreciation for these assets. The planned is though zero for going forward periods but the ord depreciation which is brought over gets reversed.

Please advise the solution

thanks

[Former Member · Accepted solution]

Hello Dominic

I was looking at your earlier answers related to depreciation. My problem is somewhat slightly different. I will try explaining you.

My system is based on APC and not on NBV wigh Rem life ticked. This is the requirement of client as his depreciation is based on no of days and to achieve APC was the only solution. Now the problem is coming when we do additions in value and also in UL or doing unplanned depreciation. Suppose asset was purchsed in 2005 for 10000 with UL of 10 yrs. It was depreciating 10000/10 = 1000 per year but after two years, the customer adds up some value to it lets say 1000 and when it added the the value after claiming depreciation was 8500 and addtion of 1000 makes it to 9500 with useful life of 10 yrs starting from addition. But the system is calculating based on 10000 only. If I design another key with NBV and Rem life ticked then it will work but the depreciation based on days will not be right.

In case of unplanned dep.

Suppose APC=10000 Dep till date is 1000 and Unplanned dep added is another 500 but going forward asset dep is calculated on 10000 only and If I change base method to APC less unplanned it works for only 10000-500 but not 10000-1500.

Can you suggest what to be done in these cases. Since you are quite expereince, please advise.

[dominic_holdstock · Accepted solution]

Hi Jimmy,

By setting the shutdown directly the system is interpreting this as a shutdown from beginning of the year. In such cases takeover the data without shutdown flag, and then add a new interval in the time- dependant data to specify the exact date from when it is to be shutdown.

Kind regards

[dominic_holdstock · Accepted solution]

Hi Jimmy,

a) The problem is that you have an actual APC of 11000 (10000 + 1000) but want to depreciate based on an "APC" of NBV 8500 + APC 1000 and a start date = subsequent addition.This is somewhat illogical.

Try using a Dep Key Base NBV

% from useful life

Rem. Life = Not active

Depr After end of life = Permitted

Your take-over data would then be APC 11000 Cum Dep 1500,NBV 9500 Ord dep start 2005 expired life =2

Depreciation would then be 9500 /10

(If Rem Life was active it would be 9500/8 )

b) The 10000-500 is used because the 1000 is ordinary depr. Use the same key as above.

Kind regards