AUC SETTLEMENT THROUGH INTERNAL ORDER IN SAP
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TAG: AUC SETTLEMENT THROUGH INTERNAL ORDER IN SAP
ASSET UNDER CONSTRUCTION END TO END PROCESS
Posted on 20 Jul 2017
Assets under Construction (AuC) are a special form of tangible assets. They are usually displayed as a separate balance sheet item, requiring separate account determination and their own asset classes. During the construction phase of an asset, all actual postings are assigned to the AuC. Once the asset is completed, a transfer is made to the final fixed asset.
Internal orders are used to capture the costs of AuC during the construction phase. Once the AuC is completed, the final asset is created in the appropriate asset class, and the internal order is set to complete. The next settlement transfers the AuC asset value to the completed asset.
Asset Under Construction Process
1.1 CREATE ASSETS – ASSET UNDER CONSTRUCTION
1.2 Create Assets – for Final Settlement
We have created two asset master records, one Asset under Construction and one for the final settlement.
1. 3 Posting the Closing Invoice – Acquisition without order – FB01
In this step, you post the acquisition from purchase with vendor.
1.4 Define Distribution Rules for Asset Under Construction AIAB
In this process step, you maintain the settlement rules for the Asset under Construction created in the previous steps.
You have maintained the rules for the settlement. The execution of the settlement is part of the periodic processing.
1.5 Settle Asset under Construction – AIBU
With the execution of this step, Assets under Construction are settled according to their settlement rules.
Note Under certain conditions, you may need to capitalize an asset under construction before all suppliers have presented their closing invoices. This can cause a few difficulties, especially if the closing invoice cannot be posted until the fiscal year following the capitalization of the asset under construction, and down payments were already posted to the asset under construction.
Initially, you post the down payment normally. If you then need to capitalize the asset under construction at the end of the fiscal year, but before the closing invoice is received, you post reserves for the total amount of the expected invoice. You post these reserves directly to the capitalized asset (external acquisition with vendor, transaction type 100). In the case where you plan to distribute the values from the asset under construction to several final assets, it makes sense to post the reserve to the asset under construction first, and then capitalize it. Whichever method you use, you must reverse the down payment on the asset under construction, because the down payment is not allowed to appear in the account for down payments to fixed assets. Instead, it must appear in the account for completed assets.
To settle the asset under construction, down payments must be cleared with invoice or forecasted invoice (reserve). The asset under construction can only be settled after this clearing
2.1 Asset Acquisition for Constructed Asset (Investment Orders /Internal Order)
2.1 Create Internal Order – KO01
2.2 Release Investment Order / Internal Order – KO02
This activity releases investment order.
2.3 Accounts Payable – Posting Invoice to Investment Order – FB60
In this activity, you can enter a supplier invoice without reference to a purchase order.
2.4 Asset under Construction Settlement – KO8G
In contrast to assessment, you cannot perform settlement across fiscal year boundaries. The system automatically determines the posting date from the posting period/fiscal year using the last day of the posting period. There are three processing types defined for settlement:
Automatic: The system selects all the distribution rules for a sender.
Periodic: All distribution rules with settlement types PER and AuC are selected. PER rules are applied first. In investment measures, this is followed by settlement to assets under construction.
Partial capitalization: Use this processing type if you want to partially capitalize an investment measure which is not yet complete, that is, if you want to settle part of the overall cost to finished assets.
With this process step a periodic settlement is executed. All costs collected on the investment order will be settled to the automatically created AuC.
2.5 Create Internal order Settlement Rule – KO02
In this process step the settlement rules for the final settlement are maintained and the status of the investment order will be set to technical completed, which allows the final settlement of the order.
2.6 Final Settlement of the Investment Order (Collective Processing) – KO8G
The final settlement transfers the costs from the AuC asset to the completed asset and to the cost center as specified in the settlement rules. After the final settlement the balance of the investment order and of the AuC is zero.
2.7 Completion of Investment Order -KO02
In this process step the investment order is closed by changing its status to Closed.
Thank You
Jayanth Maydipalle
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Aditya Sibal
August 24, 2020 3 minute read
AUC creation through Investment measure (WBSE).
782,842
Introduction
This blog post is about AUC creation through an Investment measure (WBSE).
Here, will try to explain the process flow of AUC creation through Investment measure WBSE, which is regularly followed in Capex projects.
What is AUC?
AUC is a different form of asset, without depreciation. Requires separate account determination & Asset classes.
Parameters Covered in Blog Post
Configurational for creation of AUC from WBSE
Process Flow
Configurational Process as below
Step (A)
Define Asset Class for AUC
Path : SPRO>>Investment Management>>Project as Investment Measures>>Master Data>>Asset Under Construction>>Define Asset Classes
Investment Measure – This indicator specifies AUC can only be created with investment measure relation/ reference.
No Direct creation.
Step (B)
Define Investment Profile
Path : SPRO>>Investment Management>>Projects as Investment Measures>>Define Investment Profile
The investment profile as in the below screenshot plays a very important role in AUC creation.
It acts as a bridge between investment measure(WBSE) in our case and Asset class.
The area I have hidden is the place where we mention the Asset Class at the time of configuration of the Investment profile.
In the below screenshot, the Asset class is assigned, as created in Step (A).
Check – Manage AUC, When you set this indicator, the system automatically creates AuC for investment measure(in our case WBSE).
When the WBSE system status is Rel, AUC will be created automatically.
Step (C)
Define Investment Profile/Project Profile Assignment
Path : SPRO>>Investment Management>>Projects as Investment Measures>>Master Data>>Define Investment Profile
In the same option you will get
(Define Investment Profile & Define Investment Profile/Project Profile Assignment)
As mentioned in the below screenshot, we will tag the Investment profile & Project profile with each other.
This step too has great relevance if you want to call a specific Investment profile for the project profile.
If left blank, then the user needs to opt/ choose the investment profile manually in the project.
Step (D)
Determine Depreciation Areas in the Asset Class
Path: SPRO>>Investment Management>>Projects as Investment Measures>>Master Data>>Assets under Construction>>Define Asset Classes
In the same option you will get
(Determine Depreciation Areas in the Asset Class)
Kindly note for every AUC Asset class, depreciation areas are maintained with the depreciation key ‘0000″, having NO Depreciation calculated.
Process Flow as below
Choose Investment profile
As displayed in the above screenshot, opt appropriate value for investment profile as highlighted below(green box).
For the generation of AUC, the linkage of Investment profile and Investment measure(in our case: WBSE) is a Pre-Requisite.
Release WBSE
As soon as you change the system status of WBSE from CRTD to REL.
AUC will be generated.
WBSE & Investment profile linked to each other
Release WBSE (Investment Measure)
Investment Profile tagged to WBSE calls the asset class for AUC, as mentioned in the Investment profile
Condition in Asset class for AUC (Investment Measure checked) is called.
This indicator specifies AUC can only be created with investment measure relation/ reference. with No Direct creation.
Further asset class calls depreciation key with no depreciation.
WBSE with system status “REL AUC”
Follow the path as described below to view AUC from WBSE.
In the blog post, I have tried giving a brief overview of how AUC can be created through WBSE by using an investment profile, which is a very important integrational point.
In the next proceeding blog post, will demonstrate settlement with respect to AUC.
Regards
Aditya Sibal
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PLM Project System (PS)
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