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Change in useful life

Aug 31, 2017 at 06:34 PM

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Former Member

Hello,

When changing the useful life of an asset during the fiscal year, SAP calculates a 'difference' to true-up fiscal year depreciation (whether through smoothing or the catch-up method, it doesn't matter).

Is there a way to avoid this true-up at all. Our team, basically, considers each fiscal period to be reported and closed and therefore would like the change in useful life adjustments to be go-forward only. That is, based on the current period, calculate the adjusted remaining periods and straight line depreciate. Instead of going back to the beginning of the year, recalculating the straight line depreciation, and then adjusting with catch-up or smoothing.

These assets currently use the default LINR depreciation key.

Thanks!

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1 Answer

Bernhard Kirchner
Sep 01, 2017 at 11:08 AM
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Hello Kyle,

If you change the useful life during the year , the depreciation will be recalculated for all open fiscal years / periods.

Option 1 : You can enter a time interval in the depreciation area

- in AS02 go to the tab "Deprec. areas" and click on the area

- press more intervals

- here you can enter for example a useful life and a certain validity date.

Option 2: Shutdown for a certain period (2444093 - How to "shutdown" an asset?). But then there is no depreciation calculated for this period

Option 3: Enter depr. key "0000". But then there is also no depreciation calculated for this period.

best regards

Bernhard

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Former Member

Thanks Bernhard,

I wonder if our issue could be that we aren't closing the periods correctly, then? Per your response, "...the depreciation will be recalculated for all open fiscal years/periods." If we made a change in the middle of the current year, and did not want the depreciation to be recalculated for the periods that have already passed, would just need to assure the periods are closed in FI-AA? I'm not sure if we follow the correct process for closing FI-AA periods.

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Former Member

I have performed a bit of testing in our test environment with changing which periods are 'open' in OB52 and reviewing the asset in AS02 for changes. It doesn't appear to matter which periods are open, there is always a 'true-up' adjustment for the periods that have been posted, in the current open fiscal year (the adjustment always appears to evaluate the full year, not just the periods). Example:

  • Depreciation was posted for period 1 - 4 and planned for 5 - 12.
  • Useful life was changed in period 5
  • Period 5 planned depreciation includes a 'catch-up' adjustment for periods 1 - 4, even though periods 1 - 4 are closed in OB52.
  • Period 6 - 12 planned depreciation are the new, adjusted depreciation amount

Our expectation, to adhere to international accounting standards, would be that there is no 'catch-up' of any kind for periods 1 - 4. Instead, the remaining adjusted depreciation (after the useful life change) is spread across the remaining useful life periods (we are using LINR depreciation key).

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