Asset Under Construction Process

March 26, 2009 by mySAP
Filed under: Asset Accounting Process

This refers to the SAP process of settling AUC. This is part of the end to end process Procurement for Fixed Asset in SAP.

Common Business Requirement

When the AUC is ready to be used, asset master in non-AUC asset classes should be created. Thereafter, distribution rule should be maintained and settlement carried out where the system will debit the asset in non-AUC asset class and credit AUC. Upon settlement, system capitalizes the non-AUC class with asset value date of settlement. Upon final settlement of the AUC, it must be manually deactivated

Depreciation Key

Conceptually, AUC is an asset which is not ready to be utilized yet. Hence, since economic benefits are not yet being derived from the AUC, depreciation should not be posted.

Basically, in SAP depreciation areas 01 legal depreciation (depreciation areas post to the GL module), asset classes have the default depreciation key 000 No Depreciation. In addition, validation rule has been set in the system to ensure only depreciation key 000 No Depreciation is allowed for AUC asset classes. In this way, no depreciation is posted for the AUCs during depreciation run

Settlement of AUC

Settlement of AUC is controlled by settlement profile. One company code will only be assigned to one settlement profile.

Settlement profile dictates that:
• Distribution rule will be defined by absolute amount, percentage or by proportion (e.g. 2/7, 1/8 etc.)
• Settlement must always be in full on item level. At the point of saving the distribution rule, if the total percentage entered is not equal to 100%, the system will issue a warning message. Although the system allows distribution rule to be saved if the percentage is not equal to 100%, settlement cannot be successfully carried out unless the distribution rule has been amended (system issues error message during settlement execution).When distribution rule amended to 100% the settlement can be run for items. If there exists any items not distributed to any object, they remain on AUC.
• Settlement will only be made to fixed asset (technically, it is possible to settle AUC to G/L accounts or other cost objects e.g. internal order, cost center etc)