Skip to Content

Year-End-Closing in Asset Accounting The process described in this blog assists you in keeping on top of Critical Factors, such as data consistency, which can involve a considerable amount of time and work during the year-end closing phase in asset accounting. This blog takes  you through all of the steps necessary for an unproblematic year-end closing, before the critical external audit phase.  

 

Part 1: Preparation for Year-End Closing in Asset Accounting

 The year-end closing in Asset Accounting is a required step before you can close the fiscal year in Financial Accounting (FI). If you omit this step, or do not carry it out until after closing the fiscal year in FI, serious problems can result. Among these could be problems with reconciliation (usually differences between values in asset accounting and in the general ledger that result from depreciation recalculation), or difficulties in changing master data. In order to prevent these problems before they can happen, you should follow the steps below in the sequence they are listed.  

 

1. Check Last Closed Fiscal Year in FI and FI-AA  

 

Critical Factor

The closed fiscal year in FI cannot be larger than the last closed fiscal year in Asset Accounting. If you do not adhere to this guideline, the following problems can result: Recalculation of depreciation is no longer possible, but is nonetheless required, and error messages are therefore issued. Recalculation of depreciation is also triggered, for example, when changes are made to the asset master record (for example, to the cost center or even to texts). These changes are then sometimes no longer possible, since in certain cases the depreciation recalculation is triggered. Reconciliation differences occur due to being unable to run the depreciation recalculation.

 

 Recommendation and Troubleshooting

 First close the fiscal year in Asset Accounting and then in FI. Make sure that, at the most, two years are open for posting in FI-AA. If you have problems because the fiscal year is closed in FI but not in FI-AA , and in addition the years are far in the past, contact your SAP consultant. In this case you may need to perform a thorough reconciliation of the ledgers. If, as part of the euro conversion, you need to close a company code that is not used for Asset Accounting, then contact SAP consulting using a message.  

 

Background

For more detailed information, refer to the R/3 Library for Asset Accounting or the online documentation for Asset Accounting. Additional information is also found in the Euro Support Guide.     

 

2. Check Customizing Using Report RACHECK0  

 

Critical Factor

Errors in Customizing of depreciation areas, transaction types and period rules. These can cause the following problems:  

  • Inexplicable error messages are issued when adjustment postings are made, although nothing was changed in Customizing. A typical example of these error messages is AAPO 176 “Transaction type XY cannot be used for activity Z.”  
  • Transfer postings cannot be carried out.  
  • Differences occur due to missing account assignments.  
  • When depreciation is recalculated, there are inexplicable error messages, such as AA641.  

 

Recommendation and Troubleshooting

Customizing report RACHECK0 should be started at least once before the go-live date by asset accounting specialists, and corrections made in Customizing accordingly. Modification of transaction types to agree with the current Support Package status, as necessary.  

 

Background

The implementation of Support Packages does not change customer-specific settings, although this may be necessary in a few, well-documented cases. You have to make these settings manually. In addition, old Customizing settings (for example, investment support measures) are not reset or only partially reset, and their completeness is checked by the year-end closing program.  

 

3. Check Incomplete Assets  

 

Critical Factor

Incomplete assets prevent the year-end closing from being made. The system lists these assets in an error log, with the request for them to be processed.

 

 Recommendation and Troubleshooting

 You can find and process incomplete assets before the year-end closing using report RAUNVA00. There are two different types of incomplete assets:

  • The asset is incomplete, but can be posted.
  • The asset is incomplete and cannot be posted.  

You need to correct both types.  

 

Background

Incomplete assets can be created, for example, when the user lacks authorization for master data fields that are required entry fields, but these are not so critical that the asset cannot be created at all. The system sets an indicator showing that assets are incomplete. Another reason could be that the screen layout rule of the asset is changed, and a field that has no entry is now designated as a required entry field. When changes are made to assets so that they are no longer incomplete, the system does not automatically reset this indicator. However, the indicator can be removed by the report. For assets that are still incomplete when the report is run, you can go directly from the report to their asset master records and correct them, as long as this is allowed by your authorization profile.

 

4. Check Indexes  

 

Critical Factor

Missing indexes can lead to the following errors:  

  • Insurable values are not updated. Later calculations in closed fiscal years can only be made using a report.  
  • If entries are missing, it may not be possible to carry out the fiscal year change.  
  • If entries are missing, it may not be possible to carry out the recalculation of depreciation, and the assets affected are flagged.  
  • Inexplicable error messages might be issued when there are certain combinations of settings. One of these might be AA609 “Depreciation area XY not created in comp.code”, although this area does not exist.

 

Recommendation and Troubleshooting

You should enter the indexes for determining replacement values, or for updating the base insurable value, as part of the preparations for closing. You use transaction AYLS for this task. It is important to carry out a recalculation of depreciation after the index series have been maintained. Also refer to SAP Note 35721. For assistance with indexing and carrying forward insurable values in fiscal years that are already closed, contact your consultant.  

 

Background

Calculation and carryforward of indexed values, above all insurable values, takes place solely during the fiscal year change. If the indexes are not up-to-date at that point, the fiscal year can still be closed. But calculations from that point on can only be made using a special report.  

 

5. Recalculate Depreciation  

 

Critical Factor

Not recalculating depreciation can lead to the following errors:  

  • Values are not calculated correctly. This results in an incorrect display in the asset value display transaction.
  • Differences between the general ledger and subsidiary ledger are possible.
  • In the new fiscal year, there are assets with the message “Depreciation values not completely calculated for this asset“ (error message AA510). Recalculation at this point often does not correct the error.
  • Assets with indexed depreciation areas are possibly not deactivated in the case of a complete retirement, if the calculation of replacement values was not up-to-date.

 

Recommendation and Troubleshooting

 

Start the depreciation recalculation program for the whole company code, for which the year-end closing is to be carried out. Execute report RAAFAR00 in test mode with the List assets and Execute in Background options. When you run RAAFAR00, a statistical log is issued. The log contains any error messages. Correct the errors leading to any error messages you receive, and start an update run of report RAAFAR00 for these assets.  

 

Background

 Under certain circumstances, such as those listed below, depreciation values are not updated in the depreciation areas of some assets:  

  • You have changed depreciation keys. This is especially important in the case of unit-of-production depreciation, where it is essential that you recalculate depreciation after maintaining the current parameters.  
  • You have made mass changes that you programmed yourself, and these changes affected data relevant to depreciation.  
  • You still want to calculate subsequent revaluation (after the legacy data transfer is closed) using current index figures. In order to correctly calculate replacement values, however, you can only use index series that calculate historically.

 

 IMPORTANT: Up to and including this step, you can repeat all activities as often as necessary to ensure that the system is up-to-date. However, in the case of the following steps, you have to consider more carefully the individual planning and regulations within your enterprise, for example, whether you post depreciation once a year or once a month, and so on.

 

6. Execute Depreciation Posting Run   

 

Starting with this step, you begin preparing directly for the year-end closing. You can only carry out the processes and activities described below when the year-end closing is imminent and is about to really be carried out. Nonetheless, we recommend carrying out the depreciation posting run RAPOST2000 in test mode beforehand, to catch possible errors.  

 

Critical Factor

It is not possible to carry out the year-end closing without first performing the depreciation posting run for the last period of the fiscal year.

 

Recommendation and Troubleshooting

Perform the depreciation posting run for the last period of the year (usually period 12 of the fiscal year being closed). We emphatically recommend that you start report RAPOST2000 first in the Background and in test mode, and then carefully consider the log. If error messages are issued in the test run, then correct the errors (usually these are in account determination or Customizing of cost centers), before starting RAPOST2000 in update mode, since the report cannot be reversed. If RAPOST2000 was nonetheless started by accident and possibly even processed, you should contact Remote Consulting. The following applies if you recently upgraded from a release below 4.7 to a release greater than or equal to 4.7  you should inform yourself about the changed posting logic in the area of cost center postings. Refer to the Release Notes and related SAP Notes, such as 684659 . 

 

Background

RAPOST2000 collects the values to be posted in Asset Accounting, summarizes them according to certain criteria, and then posts these values to the general ledger. This guarantees consistency between the subsidiary ledger and the general ledger. It is important to stress that there is no reversal function for the depreciation postings, and the same applies to periodic asset value postings that we will discuss shortly. If depreciation terms are changed retroactively, this can often be corrected by starting RAPOST2000 as a repeat run.  

 

7. Execute Periodic Posting Program

 

Critical Factor

Unless the periodic posting of balance sheet values is current, it is not possible to carry out the year-end closing.

 

Recommendation and Troubleshooting

Before you can carry out the year-end closing, you have to perform period posting of balance sheet values using report RAPERB2000. Once the report is run, do not carry out any more postings affecting asset balance sheet values.  

 

Background

The need for the periodic posting program is based both on accounting necessities as well as a technical restriction in releases previous to 5.0 and before the implementation of the New G/L (as of release 5.0 the New G/L functionality allows “direct posting” for more than one area). From an accounting perspective, it is necessary in order to be able to make available the current status of all depreciation areas on a given key date. It is important to keep in mind here that the year-end closing report checks the date of the last periodic posting program run using the system date as a reference. As a result, the year-end closing can only be carried out at a time close to the end of the year. In addition, the periodic balance sheet postings are an important step before the reconciliation of the general ledger and subsidiary ledger for the individual depreciation areas, since this is the only way for them to be in agreement. Therefore RAPER2000 has to be executed at least once in update mode. Also in case the New G/L functionality is used (more than 1 area post directly),  RAPERB2000  can be necessary to “catch-up” and post  missing “online”  postings in areas defined as to post directly due to errors. 

 

8. Reconcile General Ledger and Subsidiary Ledger  

 

Critical Factor

The values in Asset Accounting do not agree with the balances of the general ledger accounts. As possible consequences, the external auditor might not be able to certify the closing, or it may not be possible for the closing to be submitted to tax authorities.  

 

Recommendation and Troubleshooting Perform a reconciliation of the values of Asset Accounting with the balances of the general ledger accounts. We recommend the following procedure:

 

 1. Start report RAABST02. If the report logs differences in table EWUFI_BAL (table FAGLFLEXD if the New G/L functionality is active) , proceed with the following steps. If the report does not find any differences, the general ledger and subsidiary ledger are consistent to each other.  

 

 2. For the account concerned, compare the last two fiscal years using the account display transaction (FS10N or FAGLB03 in New G/L) in the General Ledger. If the closing balance and opening balance differ, you have to start the balance carryforward program again for the current year.

 

 3. Create two asset history sheets for the accounts involved using the following parameters:

  • Limiting the account assignment or the asset class in the dynamic  selections  
  • Sort version 0020  
  • Group totals  
  • Report date – fiscal year end of prior year and current year
  • Setting “Depreciation posted”  If the starting and final value of the asset   history  sheets are different, you should repeat the fiscal year change in asset accounting ( transaction AJRW).

If the starting and final values are still different after you repeat the fiscal year change, then check to see if there is an asset with a capitalization date but without acquisition data. Follow the procedure outlined in SAP Note 194635.

 

 4. The asset history sheet for the previous year does not agree within itself when you cross-foot. In this case:  

    a) Start RAABST01 for accounts with line item management.

    b) Start RAABST02 for reports without line item management.

    c) If the balance carryforward is affected, you now have to reset the year-end closing, perform depreciation recalculation, possibly carry out a depreciation posting run, and then run the year-end closing again.

 

 5. The starting balance values of the current year do not agree with the value of the balance display. There are various possible causes, that then also require different actions on your part.

     a) The difference arose already during the legacy data transfer. In this case, contact SAP Remote Consulting.

     b) Missing line items. To see which line items are involved, see the log of RAABST01 or RAABST02. There are two possible scenarios:  

  • Missing line items during asset acquisition. These can be created easily using report RACORR05. In the case of multiple account assignments, use report RACORR05A.  
  • Missing line items during asset retirement. These can not be created using report RACORR05. In this case, contact SAP R/3 Support, describing the exact parameters of the asset concerned.  

 

    c) Line items with incorrect acquisition year. This situation is found at times with postings from invoice verification (transactions MRHR or MIGO). For correcting this problem, there are a number of correction reports that are listed in SAP Note 366848. If you are unsure of how to proceed, contact SAP Support.  

    d) Account determinations that have errors or are incomplete can also cause differences, which cause errors during the euro conversion, if not before. For these errors, you should now, at the latest, consider your results from point 2.  

    e) Manual postings to asset balance sheet accounts. In this case, contact SAP Remote Consulting, with the document numbers involved.

 

 Background

For further Background information and hints on the reports that can be used for reconciliation, refer to SAP Note 382548. The procedure for reconciling the subsidiary ledger and general ledger is described in SAP Note 104567, point 3. Information specific to the local currency changeover in the euro conversion is not relevant for routine preparations for closing. Keep in mind, that certain items in the asset history sheet, such as down payments and APC, can be added together, although they can be assigned to different accounts.  

 

9.Execute Fiscal Year Change Program

 

Executing the fiscal year change program is an optional step in the course of the year-end closing. It is not necessary in order to carry out the year-end closing.

 

Critical Factor

Posting in a given fiscal year is only possible in Asset Accounting when totals segments have been created for the year. These are created by report RAJAWE00, which serves a technical purpose only and has no business or accounting purpose.

 

Recommendation and Troubleshooting

We recommend carrying out the fiscal year change in Asset Accounting close to the time of the year-end closing. From the viewpoint of SAP, no more than two fiscal years should be open at the same time. This means that the current fiscal year and the totals segments belonging to it have to be exactly one year greater than the last closed fiscal year.  

 

Background

The fiscal year change report RAJAWE00 creates totals segments in Asset Accounting with values such as accumulated ordinary depreciation, accumulated special depreciation, planned depreciation of the current year, and so on. Only after these are created can postings affecting asset balance sheet values be made.    

 

 

Part 2: Execute Year-End Closing Program  

Once these preparatory tasks have been completed, you can then carry out the year-end closing in Asset Accounting.

 

Critical Factor

Closing the general ledger before closing  asset accounting violates generally accepted accounting principles. Not only that, but a missing year-end closing in asset accounting, when the fiscal year is already closed in FI, leads among other problems to no longer being able to change asset master records.  

 

Recommendation and Troubleshooting

 Perform year-end closing in Asset Accounting. First execute report RAJABS00 in test mode, and check the log for error messages. If you carried out the steps listed above in the correct order, you should not see any error messages.  

 

Background

As part of a sequence of postings and master record changes, a depreciation recalculation is triggered and checks are performed into the last fiscal year that is still open in Asset Accounting. If the system then determines that it is no longer possible to post depreciation to the general ledger, all further processing terminates and the system issues an error message.   

 

 PS: This blog has been posted thanks to the information and documentation provided  by Markus Bredel  (SAP- IMS). 

To report this post you need to login first.

19 Comments

You must be Logged on to comment or reply to a post.

  1. Jayaram Sankaranarayanan
    Hi

    Very good document. By the way, do you have any experience on Shortened Fiscal year and its impact on AA as well as others. Including what testing scenarios we need to take care….

    Thanks & Regards

    S Jayaram

    (0) 
  2. Egor Linus
    I found it very useful and comprehensive. Please send me the links to year-end-closing of other modules like FI-GL, CO, PS, PM.

    Thanks and Regards

    (0) 
  3. Nishan Dev S

    Javier,

     

    Top notch blog, this is a golden information which you presented to the world of Asset accounting in SAP Universe.

     

    Best Luck,

    Nishan Dev

    (0) 
  4. Nitin Goyal

    Hi Jaiver,

    Thanks for this blog! It is really useful. But looking more clarification on your first point i.e.

     

    1. Check Last Closed Fiscal Year in FI and FI-AA

    Critical Factor

    The closed fiscal year in FI cannot be larger than the last closed fiscal year in Asset Accounting.

    Recommendation and Troubleshooting

     First close the fiscal year in Asset Accounting and then in FI.

     

    Request you to clarify bit more on this… As both statements looks contradictory…!

     

    Regards,

    Nitin Goyal

    (0) 

Leave a Reply