Asset Shutdown to stop depreciation
Asset Shutdown to stop depreciation
Asset Accounting has always been under prime focus of accounting fraternity. This may be due to the fact that it produces something called “Depreciation”. This is an expense that is booked to recognise wear and tear of the asset to be spread across years.
The depreciation at times can be little contentious as it causes notional decline in the company profits. In other words, depreciation can have impact on the profitability of an organisation.
The term depreciation is also subject to various laws that need to be adhered to. For e.g. in certain cases, as per legal requirements, the depreciation should not be charged. This restriction can be applicable either for a shorter period or for longer period till certain event in future.
Now when we speak about SAP, we use Depreciation Keys to depreciation assets periodically based on certain parameters. SAP is flexible enough to accommodate various methods for depreciation:
Straight Line
Declining Balance
Useful Life
Apart from the above, SAP also has possibility to meet various other legal requirements. In this case we will discuss in detail about the possibility of restricting an asset from depreciation either permanently or for a certain period. The requirement can be achieved by using “Asset Shutdown” feature of Asset Accounting.
In order to configure and use the “Asset Shutdown” feature in an effective manner, we will have to work as below:
Changes to Depreciation key
Changes to Fields Status
Changes to Asset Master
Shutdown specifies that depreciation will be reduced or stopped if there are specifications for shutdown periods in the asset master record.
Changes to Depreciation Key
IMG Path: Financial Accounting (New) > Asset Accounting > Depreciation > Valuation Methods > Depreciation Key > Maintain Depreciation Key
T Code: AFAMA
In the above path or by using the T Code we can enter the configuration to be done for a Depreciation Key.
In the Depreciation Key, change the Shutdown Indicator to Yes
Given below is the text available in SAP under help for the field “Shutdown”.
This applies only to ordinary depreciation, even if depreciation is split into a portion based on units of production.
Special depreciation is normally not considered during a shutdown, since it is based on tax specifications only.
Changes to Fields Status
Next step in the process is to make the field “Asset Shutdown” available in the asset master. In order to achieve this first we need to review the configuration of an Asset Class using following IMG path:
Financial Accounting (New) > Asset Accounting (New) > Organizational Structures > Asset Classes > Define Asset Classes
In the Asset Class, we need to note the Screen Layout Rule assigned to the Asset Class. Going forward we will have to do changes to this rule using following IMG Path:
Financial Accounting (New) > Asset Accounting (New) > Master Data > Screen Layout > Define Screen Layout for Asset Master Data
Double click on “Define Screen Layout for Asset Master Data” here we need to select the Layout and double click on “Logical field groups”
Now select “Time-dependent data” and double click on “Field group rules”
This will bring us to the following screen where we have to make the field “Shutdown” as optional
Now save the changes and we have done with configuration related steps.
Changes to Asset Master
Transaction Code: AS01 / AS02
Next step in the process is to do changes in the Asset Master data.
The field Asset Shutdown becomes available in Asset Master, Click on More Interval and maintain this field for the period that you would prefer depreciation not be calculated.
Add a new interval and the screen will look as below:
After this the depreciation will not be calculated for the period where we activate Asset Shutdown.
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