Executing Depreciation Calculations in SAP FICO

In SAP FICO, depreciation calculations are an important part of asset accounting. They ensure that the value of an asset is reduced over time based on its useful life, in accordance with company policies and accounting standards. This article provides step-by-step instructions on how to execute depreciation calculations in SAP FICO, along with examples.

1. Prerequisites for Depreciation Calculation

Before you can execute depreciation in SAP FICO, the following must be set up:

  • Asset Master Records: The asset master records must be created for all assets, including details like asset class, depreciation key, and useful life.
  • Depreciation Areas: Depreciation areas should be defined, such as book depreciation, tax depreciation, or special depreciation areas.
  • Depreciation Keys: Depreciation keys that define how the asset's value will be depreciated (e.g., straight-line, declining balance) should be set up.
  • Posting Periods: Ensure that the relevant posting periods for the current fiscal year are open in the system.

2. Steps to Execute Depreciation Calculation

Step 1: Access the Depreciation Run Transaction

To start the depreciation calculation, use transaction code AFAB. This transaction allows you to run the depreciation for all assets or specific ones for a given period.

Alternatively, you can navigate through the following menu:

SAP Menu > Accounting > Financial Accounting > Asset Accounting > Periodic Processing > Depreciation Run

Step 2: Enter the Selection Parameters

In the "Depreciation Run" screen, enter the following selection parameters:

  • Company Code: Specify the company code for which the depreciation should be calculated.
  • Fiscal Year: Enter the fiscal year for which the depreciation run is to be executed.
  • Period: Specify the period (month) for which depreciation will be calculated.
  • Asset Subnumber (Optional): If you wish to calculate depreciation for a specific asset or asset group, you can specify the asset subnumber.

Example:

    Company Code: 1000
    Fiscal Year: 2024
    Period: 12 (December)
    Asset Subnumber: Leave blank (for all assets)

Step 3: Select the Depreciation Areas

Choose the depreciation areas for which you want to calculate depreciation. Typically, these areas might include:

  • Area 01: Book depreciation
  • Area 02: Tax depreciation
  • Area 03: Special depreciation

Example:

    Depreciation Areas: 01 (Book Depreciation), 02 (Tax Depreciation)

Step 4: Execute the Depreciation Calculation

Click the "Start" button to begin the depreciation calculation. SAP will process all assets based on the parameters you have entered. The system will automatically calculate depreciation based on the depreciation keys, useful life, and acquisition value.

Example Calculation:

    Asset: 100001 (CNC Machine)
    Acquisition Value: $50,000
    Depreciation Key: LINR (Straight-Line)
    Useful Life: 10 years
    Annual Depreciation: $5,000
    Depreciation for December 2024: $416.67

Step 5: Simulate the Depreciation Run

Before posting the depreciation, it’s important to simulate the depreciation run to review the results. To do this, select "Simulate" and check the posting preview for any errors or discrepancies.

Example Simulation Result:

    Debit: 600000 (Depreciation Expense) - $416.67
    Credit: 100000 (Accumulated Depreciation) - $416.67

Step 6: Post the Depreciation

If the simulation results are correct, click the "Post" button to officially post the depreciation to the General Ledger. The system will update the asset’s accumulated depreciation and expense accounts.

Example Posting:

    Document Number: 1400005679
    Depreciation Expense: $416.67
    Accumulated Depreciation: $416.67

3. Verifying Depreciation Calculations

After posting the depreciation, it’s essential to verify the calculations. You can use the following transactions:

  • AW01N: Asset Explorer – Use this to review individual asset details, including depreciation posted.
  • FB03: Display Document – Use this to check the accounting document created for the depreciation posting.

Example Verification:

    Transaction: AW01N
    Asset: 100001 (CNC Machine)
    Depreciation Posted: $416.67
    Accumulated Depreciation: $5,000

4. Reporting Depreciation

To report on depreciation calculations, SAP offers a variety of standard reports:

  • S_ALR_87011990: Asset Balances Report – Displays all assets with their depreciation and acquisition values.
  • S_ALR_87012059: Depreciation and Impairment Report – Shows detailed depreciation values for each asset and the associated general ledger postings.

Example Report:

    Report: S_ALR_87011990
    Filter: Depreciation Area = 01 (Book Depreciation)
    Result: List of assets with depreciation details for the fiscal year.

5. Conclusion

Executing depreciation calculations in SAP FICO ensures that asset values are properly reduced over time according to the company's policies. This process is crucial for maintaining accurate financial statements and complying with accounting regulations. By following the steps outlined in this article, you can efficiently manage asset depreciation in SAP FICO.




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