Can Asset be set up with different tax and book values?

[Former Member]

Hi,

My Client has some items that are expensed for book purposes but treated as assets for tax purposes. They want to know how or if we can set up an asset with value for tax purposes but zero value for book purposes? Also is it possible to set up assets with different tax and book values?

Any help in this regard is highly appreciated.

Thanks,

Atashi.

[ajaycwa1981 · Accepted solution]

Hi Atashi

Yes, you can.. The procedure is as below

1. Create Asset Master with 100% dep key in Book Dep Area and desired % Dep Key for tax area

2. Capitalize the asset i.e. F-90 or MIGO

3. When you run AFAB, the book dep area will become zero in the very 1st month i.e. the book dep area will get expensed out, where as Tax Dep area will have a value left over as per its dep terms

I dont know if you can post a different APC value in both dep areas... If you dont set the Identical tick in dep area definition, then may be you can

Br, Ajay M

[Former Member]

Hi Ajay,

Thanks for your help. I have assigned you points.

But I have to go back to my second question: Are we able to set up assets in SAP with different book/tax values?

My client says that for an acquired asset, it is pretty common that the tax value and book value are different. What is the procedure to capture it in SAP. The acquired asset needs no depreciation.

Example: We buy an asset for $10,000 and capitalize it for $10,000 for book. For tax purposes, the asset has a basis of $15,000.

Any help from anybody is highly appreciated.

Thanks,

Atashi.

[ajaycwa1981]

Hi Atashi

When you acquire an asset for 10000$ and you are making a payment of 10000 to Vendor, it would post 10000 to both the dep areas...

However, if you allow non-identical values in your dep area definition, then you can create a New Trans Type and restrict it only to the Tax Dep Area and you can post values to it... Use transaction ABSO - Make a copy of tr type 100 and you can post values to Tax Dep Area... Asset will be Dr in the process....... However, i dont know which GL account you would post the Credit entry

Moreover, If you acquire an asset for 10000 from a vendor, how can you valuate it @ 15000 for Tax purpose... You may revaluate it later on based on market prices... But how can you declare it to be worth 15000 as soon as Buy it??

Just check with your client and ask them to show the statute or the accountinf standard which says so....

Br, Ajay M