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Counting old items (Spare Parts that came as part of an asset) as Inventory

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Dear Experts,

We have some old items (Spare parts) that came initially as part of a machine (fixed asset), and was not counted as an inventory. There is now a requirement from business to count these items and receive as stock (for tracking purposes). What's the best procedure would you suggest to use for this case? And what procedure would you suggest if some of these items themselves can be treated as assets?

Thanks,

Abdullah

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Answers (1)

Answers (1)

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Hi,

Best option is to enter in asset with zero value so that it can be tracked. You can check the link:

https://archive.sap.com/discussions/thread/1053142#

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Hi Balasubramanian,

Thank you for your quick response.

This is a valid answer for the items that can be treated as sub assets, but I am more confused about the other items (ERSA - spare parts). We mainly have two cases here:

In one case, items have already material codes available in the system and have average values. In this case, can we use 242 movement type to return from asset to stock? The main asset's value will be reduced in the same ammount.

And the second case, when there is no applicable codes in the system and we need to create new ones. In this case, what is the best option? Do we give zero values to the newly created items and use 501 movement type to return to stock? Or, do we give Standard Costs (Prices) to these items, and use 242 movement type to return to store?

Thanks,

Abdullah

Former Member
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Abdullah,

Getting the items into the system is definitely the right way to go.

"Capital Spares" have been an exception case since we started tracking spares in computer systems integrated with finance. Ask the accounting group how they want to handle the financials. Any of the methods you describe are possible in the system. The business (accounting) needs to decide how to treat the value.

The return from asset to stock is crossing between Capitalized Assets and Operational Inventory. This method is fine if the accountants agree. Or they may just want to keep the value of these items within the asset. You can use the "Amount in Local Currency" field in MIGO to force an amount for this transaction (on movement types 242 or 501 or others) that is different then Standard or Moving Average.

As you setup the material codes, plan for the next time you need to repair or buy these spares. Will those costs be capitalized or operational? Will they be held in inventory (value of the spare) or expensed when they occur?

You know the methods possible. You just need accounting to tell you what they want to do.

TRE

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Hi,

Abdullah is right on policy-decision point of view. But this is something like a inter-departmental issue. MM team should be able to give their views to FI team (If value of such goods are very high, then some audit experts can also involve in taking decisions)

There are pro's and con's of using mvt 242/501, mainly on price of the material. 242 will try to post to inventory with MAP not with WDV. 501 may allow new value but will hit your MAP if you receive on existing material code.

You may have to also consider FI documents created on these transactions, because, when you receive material suddenly to stock without paying any vendor (FI entries may not complete, which may need to be reversed by FI team).

I remember in my previous company, we enabled split-valuation and used valuation type "Project Return" and take back the material to stock.

There are many ideas, but it is all about material value and how it hit MAP and how the FI document flows.

You may have to create different scenarios in Test client and check the end-to-end results (MM to FI flow) and suggest to your FI team (It is like a integrated testing scenario).

regards,

Bala.