Fixed Asset: market value

[Former Member]

Hi All!

Due to IAS we must post an special provision:

when the inmaterial fixed asset value market is minor than fixed asset net value we have to post a provision by depreciation (in order to reflect the possible loss when we sale it)

This provision does not affect the fixed asset countable net value. So that provision don't have post in 01 depreciation area. But:

1- when we sell the assets the provision must appear in the sale affecting to the benefit or loss.

2- I need to know the provision for each fixed assets. That's why we need SAP shows its in FI-AA area.

With the transactions under Manual Value Correction folder (fixed asset menu) the fixed asset net value is modified.

We've tried to implement a second area doesn’t affect to fixed

asset values from the 01 depreciation area and vice verse to post there this provision. But The system doesn’t allow that (message error number AC528)

Do have more ideas?

Thank You in advance

[Former Member]

Hi

Your requirement can be met through the configuration under Transferred Reserves (Deferred Gain) node in Special Valuation of Asset Accounting. Read the document at this node.

Define the your own depreciation area and determine the dep. are here. Then assign accounts here. Then define the transaction type to transfer the provision to 01 depreciation Area under node Define Transaction Types for Transfer of Reserves.

This will solve your issue.

Thanks

Vijay

[Former Member]

Hi Vijay, thank you for your answer but...

It seems that Transferred Reserves is used to sell a fixed asset and transfer the benefit to other asset (If I've undertood right)

I put an exemple to fix the question:

I adquiered a fixed asset by 1.000 euros (a building) in 2005

- Deprecation key: LIND (Str.-line) / Use Life: 10 years

In 2007 my building on second hand house market is valuated in 500 euros (minor than fixed asset countable net value 800 euros).

So I must post a provision by depreciation by 300 euros. That post does'nt affect to fixed asset countable net value (is just a provision). My fixed asset countable net value is 800 euros.

In 2010 I sold my asset by 1.000 euros. My fixed asset countable net value is 500 euros. So my profit is 500 euros. Then I must to reverse the provision post in 2007 .

I need to post that provision related to fixed asset but without affect to asset net value, to reverse that in the asset sale.

Thank You very much

Francesc

[Former Member]

Hi,

To my understanding you can do this without using FI-AA by Creating a Provision Account and posting entries to it by debiting your P&L. In the year of Sale you can reverse the provision and do a manual depreciatio of the provision amount.

Thanks

Vijay

[Former Member]

That's right!...

But it would be better the provision was integrated in FI-AA (similar at the SAP foreign currency valuation).

The trouble appears when you sell the asset. If you've posted a privision and sell the asset with loss, the provision cover part of this loss. So if this provision is not integrated in the asset (separated GL document) you need to do the following steps in the sale:

- First you have to remember the asset has a provision

- Then You post the sale (the system calculates the profit or lost related to asset net value)

- At the end, you must calculate the part covered by the provision and post a document using that provision decreasing sale loss or increasing sale benefits.

That's why I thought that SAP had an integrated solution to that question.

Thank You

Francesc

[Former Member]

Hi,

You are right.. there is no integrated solution in SAP for this,we need to follow a workaround for this.

Thanks

Vijay