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New Ways to Depreciate Fixed Assets in ERP 6.0 (Part 3)

New Ways to Depreciate Fixed Assets in ERP 6.0 (Part 1)

New Ways to Depreciate Fixed Assets in ERP 6.0 (Part 2)

The first two blogs in this series introduced the new depreciation calculation (New DCP) for Asset Accounting in ERP 6.0 and then went into details on the fundamental change in how SAP calculates planned values.  This blog will cover another new item introduced in 6.0; time dependent depreciation parameters.


What are time dependent depreciation parameters?

Time dependent depreciation parameters refers to a series of fields on the Depreciation Areas tab of the asset master that can be maintained for specific time intervals.  These fields affect how the asset calculates depreciation. 


What parameters can be changed?

The following fields are now maintainable on a period level:

  • Useful life (Years and Periods)
  • Depreciation key
  • Scrap value (amount or percentage)
  • Variable depreciation portion


Other fields in the depreciation area screen such as the Negative Values, Group Asset, or Changeover Year are not maintainable on a period interval basis.  These continue to operate as they did in prior releases which means that they are in effect for the life of the asset.  Any changes to their values will result in a recalculation of the asset’s value including prior periods (which may have already posted to the G/L).


Didn’t ERP already have time dependent parameters?

Yes, but this is completely different.  So as not to confuse anyone, this new functionality is separate from the time dependent data that already exists on the fixed asset master record.  The asset data stored in table ANLZ which maintains the asset’s point in time assignment to a cost center, plant, tax jurisdiction code, fund, WBS element, shutdown interval, etc. has not changed.  The information in this blog is about time dependent depreciation parameters which is completely different.


Why is this important?

As mentioned above, the fields on the Depreciation Area tab of the asset master used to be in effect for the life of the asset.  This meant that it was not possible to specify depreciation key XXXX for a certain time frame and then use key YYYY for another.  Once you switched to key YYYY, the asset’s depreciation values were recalculated as if YYYY had been in effect since the asset was originally capitalized.  This was not consistent with US GAAP (maybe some other countries as well) and made it very hard to implement a “go forward” calculation.

Time dependent depreciation parameters allows you to make a change to an asset’s depreciation convention as of a particular date without affecting the calculated amount from prior periods.  It is now possible to make a change to one of the depreciation parameters so that it results in a new planned amount but only from the date specified and without any adjustment to prior periods (whether the periods have posted to the GL or not is not relevant).


What does the calculation look like? 

I’ll continue using the same asset record from the previous New Ways to Depreciate Fixed Assets in ERP 6.0 (Part 2).  

Prior to making the change, the Posted Values display on the Asset Explorer shows the breakdown of the monthly depreciation amounts as shown below.  The $2,000 represents the initial calculated amount based on the initial $120,000 acquisition.  The drop to $1,500 in period 4 represents the partial retirement of $30,000.  This will serve as our “before” image of the calculation.

Posted Dep prior to change


As of October 1st, it is determined that the asset should now depreciate over a total of 10 years instead of 5.  This change in depreciation should not affect the prior month’s calculation and should only be used on a go forward basis.

If this change would have been made in a prior ERP release, the useful life (UL) would be in effect for the entire annual calculation.  This would result in a change in the planned amounts for periods 1-12 of this year as well as all future years.  But in this example we want periods 1-9 to stay “as is”.  The change in UL should only effect the calculation from period 10 onwards and leave periods 1-9 with their current calculated amounts of $2,000 and $1,500.

Here is what the calculation looks like if it were made using the old depreciation calculation.  The doubling of the UL has caused a consistent 50% reduction in the planned amounts for all periods (again, whether or not the period has been posted to the G/L is not relevant).  This is not the desired outcome.

Old DCP calculation after change


To make the UL change you have to access the detail depreciation area screen for the asset.  Notice the More Intervals button at the bottom of the image below.

Depreciation Areas tab on the Asset Master Record


After pressing the More Intervals button, the following prompt appears requesting the start date of the new interval.

New Time Interval


Once the interval has been specified, the new UL can be entered.

New interval is created


By looking at the asset’s values you can see that the ordinary depreciation for the fiscal year has been reduced from $19,500 to $17,250 because the change in UL spreads out the amount to be depreciated over a longer time period.  In addition to changing the period breakdown of the calculation, this has resulted in a different annual depreciation amount between the Old and New DCP techniques.  Using the previous calculation prior to 6.0, the annual planned depreciation amount would be $9,750…  this is not correct for this scenario.

Asset Explorer with updated values


Displaying the depreciation calculation reveals that a new period interval has been created.  Note that the period factor has changed so that the 3rd interval is only in effect for 3 periods (.25) and that the rate has been reduced from 20% to 10%.  This shows that the change in UL did not affect all of 2007 but only affects periods 10-12.  The previous interval has also been reduced from .75 to just .50 .

Depreciation Calculation


For moredetail you can see how the $2,250 of calculated planned depreciation is allocated for this 3rd interval.  As expected, the planned amounts of $2,000 and $1,500 for periods 1-9 are not changed and the doubling of the UL has resulted in a 50% reduction in the planned amount that was valid at that point in time.

Posted Dep for New DCP


What’s next?

I have one more blog in mind for the New DCP related to the Asset Explorer.

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  • Nathan,

    We have turned on the EA-FIN in our sandbox environment which is at ECC 6.0.  When I look at the change screen for assets it does not give me the option to make the depreciation areas time dependent???

    Is there another setting we need to change??


    Jennifer Berlin

  • Dear Nathan,

    The article is highly useful for consultants working on FI-AA module, infact i faced the same problem and it was very difficult to understand how depreciation is recalculated and the adjustment entry is posted by SAP in the next depreication run.

    Now this is a welcome step by SAP, that deprecitaion does not recalculate for the old period.

    Thanks & Regards
    Sanjay Marathe

  • I am facing on the same problem, but I think that NDC doesn’t work correctly !
    I understood the explanations about the new depreciation calculation.
    But my problem is following :

    – For the asset 100007556, I created an interval from 27.02.2009 with 15 years of use instead of 6 year initially (1st printscreen).

    – After this modification, when I display asset values (3rd printscreen – AW01N and comparisons), I see the same values for 2009 and the following years (2010, 2011, etc…). I did’nt understand why, because this new interval start from 27/02/2009 and not from 01/01/2009 !!!
    (I think that the depreciation in 2009 should be 10/12 of 2818.71 euros and no 12/12 !)
    The recalculation is done from start of the year and no at the start of new period !
    Thanks for your help.

    • I would recommend looking at the depreciation trace to see whether or not the intervals are there and if they have been created with the changes that you specified.
      • Dear Nathan

        After having finalized the tests, I must say that the new depreciation calculation works accurately and meets our needs absolutely, fom a point of view of calculation.

        I must also congratulate you for the quality and the relevance on your blog.

        Therefore, I must continue the tests in order to measure the impact on our FI processes, during the activation of the module function EA-FIN in the environment of production.

        However, you who have already this experience, can you say to me if the activation of this module function can have impacts not desired on module FI ?

        For example:

        – impacts on the fixed assets on which modifications of values or periods took place in the past during the activation of the new depreciation calculation

        – subsidiary fixed assets

        Thank you very much for your help.



        • I’m not sure I understand your two questions since they could be interpreted several different ways.

          1. If you’ve made adjustments to asset values in the past and then activate the New DCP those adjustments will not disappear or somehow recalculate in another manner.  The same is true for changes to the depreciation terms of the asset because the New DCP will only see a single interval for the master data records after it is initially activated.

          2.  How are subsidiary assets different from a depreciation calculation standpoint?  The company code or cost center (or however you are referring to subsidiary) that is assigned to the asset is not affected by the New DCP. 

          • Nathan

            For the first point,the example is the following:

            – our fiscal year is fixed over the calendar year (from 1/1/2009 to 12/31/2009)

            – We execute the depreciation calculation once a year, with the end-year closing

            – the new depreciation calculation is activated at July 1st, 2009

            – we have modified the depreciation terms or the values of a fixed asset at February 15th, 2009

            – At the end of the year, while the closing process, the depreciation calculation will be done with the new program or with the old program (or with the both ?)

            For the second point, I think that it is a mistranslation: it is acted in fact of sub-number assets.

            Many thanks


          • Keep in mind that the depreciation program merely posts the values that are calculated in the subledger by the depreciation engine (either Old or New).  So the timing is irrelevant in a way..  if values are changed (ex., change in deprec key that is reflected back to the beginning of the year), then the posting program just calculates what should be posted as of that time and posts the delta.  There are no changes to RAPOST2000 in ERP 6.0 so it is not a variable when discussing EA-FIN or the New DCP.

            Another point…  part of implementing the New DCP is that you need to run a recalculation immediately after the extension is active.  This is what SAP recommends…  and I would recommend that you should recalculate values immediately prior to the technical upgrade.  This would ensure that the values in the system (as a starting point) are correct and any subsequent changes that are encountered after the upgrade are not the fault of the New DCP.

            To your question…  If you modify the deprec key on the asset using the Old DCP (prior to the upgrade or activation of EA-FIN) then the change is calculated over the entire year.  That’s how the old DCP works and the value stored in the asset tables will reflect this…  I would expect to see the same calculated amount in each month throughout the year.  The posting program will post this calculated amount the same before or after the upgrade, before or after EA-FIN is activated.  IF you had changed the key after EA-FIN was activated and did so specifying a time interval, THEN you would get a different calculated amount.  Again, RAPOST2000 would just throw that amount up to the GL.  To put it another way, if the New DCP is active it is completely active and the old calculation is not used in any way except for AW01_AFAR (there are some back doors but I’m not posting those!).  So RAPOST2000 will just use the amounts in the asset tables that were recalculated using the New DCP.

            There are no differences regarding sub-assets.  Sub-assets are (in many ways) completely identical to main assets in terms of functionality, reporting, posting, and value treatment.  The New DCP does not treat them differently in any way.  No changes in that area.

          • Thanks you very much for this excplanations, Nathan.
            But in the following sentence (“then the posting program just calculates what should be posted as of that time and posts the delta”), have the posting program to be replaced by depreciation engine ????



          • No, it has not been replace.

            There are two parts to this; Calculation of depreciation values, and the posting of those values to the GL.  The posting of values by RAPOST2000 has not changed.  It only reads the asset’s planned and posted amounts and figures out what to be posted next.  In your case there isn’t much of a calculation since the posted amount is zero all the way until the end of the year.  But for most customers that run depreciation monthly, the posted amount will increment 1/12 with each execution of the program.

            This blog series deals with how the values are first calculated and stored in the appropriate tables.

          • Hello Nathan

            I thank you for all this information.

            At now, if you are available, I would like to know in which tables, informations is stored resulting from the depreciation calculation.
            On how long do these tables store the information (is a history keep) ?

            Thank you in advance.


          • There have been no changes related to this.  No new tables to store values or calculations.  That would require a significant re-work to all of the asset reports.  ANLC is the main value table that stores the final calculated amounts.
          • Good morning Nathan

            – I assume that it is not possible to keep historization of old datas (SAP keep only the last calculated amounts).

            – I have two others questions :
               – is it possible to work with 12 ponderated periods of 30 days instead day per day or month of 28 days, then month of 30 days, etc…)???

               – in the case where I modify the business area in the mid year (for example, on 7th may), is it possible to have the depreciation from 01/01/2009 to 06/05/2009 on one busiess area and depreciation from 07/05/2009 to 31/12/2009 on another one ??

            One more time, thanks a lot for your help.


          • 1. Correct.  It has never tracked a history of the calculated amounts in a way that can be reported.  The figures are stored in change documents but you can’t really report on that.

            2. yes.  this is not dependent on the NewDCP and has always been available.  You can either define your FYV that way or weight the periods in FI-AA.  But assuming a normal K4 FYV, the subledger treats each period the same (1/12th) regardless of the number of days in the period.

            3. yes.  this is standard.  If you assign a new BA or CC as of a particular date, the depreciation that was posted to the previous BA/CC prior to that date will remain on that BA/CC.  The expense is not moved.

          • Many thanks, Nathan

            But to do this, is it necessary to unmark the field :
            “Dep. to the day” in AFAMA transaction ?

            and if the response is “yes”, what happens when the asset is modified for exemple on 17th june ? the depreciation will be calculated from this date (17/30 and 13/30)or from the 1st june (30/30) (start of period) ?

          • Hi Nathan

            I hope you are wery well.

            When you say : “by the way, for questions like this please use the forum or email me directly”

            what is your email address, please ?

            I have just two last questions about your last response.

            Many thanks.


          • you can look in people’s business cards here on SDN to see if they have maintained it (which I have).  I’m also very easily found via Google and my company.
          • Hi Nathan,

            Thanks for sharing the information on new functionality of depreciation. I have a quick quetsion for you.In old function, if the useful life of the asset is reduced say from 5 to 3 years and depreciation was already calculated for 2 years, SAP will post catch depreciation in the period in which the useful life is changed. But if we want to spread the affected depreciation amount over the remaining useful life of the asset instead of it being posted in one period, shall we need to change depreciation key in the asset master along with useful life or by using interval in asset master record, system will by default post deprecaition in the remaining useful life? Can you pl. confirm this?

            Thanks and regards,


  • Hello Nathan,

    Nice document on FI-AA time dependent depreciation concept. It is really fantastic one.

    Thanks for sharing knowledge šŸ™‚


    Lakshmi S

  • We have activated EA-FIN in out system. We are in EHP 6, ECC 6.0. We are not able to see the interval field. Is there any other setting that is required.

  • Hi Nathan,

    Do more intervalsĀ work for USA AssetTax depreciation ( Special depreciation) ?

    Our requirement is we had aĀ ACRS/MACRS key is Z200 in thatĀ 50% special depreciation was assigned. Now the tax rules changed from 50%Ā  to 100% . We would like to change it to 100% and haveĀ  50% special depreciation historical data which we used earlier. Does it store historical data in asset master or Asset Values?


    Kindly advice.



    Bhaskar Reddy.S