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Asset data resulting from Mergers & Acquisitions

The recent shake-up in the the financial services and automotive manufacturing industry sectors has seen an extraordinary amount of data for consolidation by existing business operations to incorporate into their running SAP systems.

Part of the challenge for daily operational users is balancing the daily operations needs of simply maintaining existing master and transactional data without the pressure of further work being provided by changes in the competitor landscape.

Business entities that are fixed asset intensive organisations have to rapidly transition fixed assets into their asset registers to ensure that they are able to start accounting for and controlling the location and value of those assets from the moment the acquisition takes place. Failure to start accounting for assets the moment they are acquired can materially affect the quality of financial reporting on assets, depreciation and consequently the operational costs of business entities.

In the absence of customised development efforts to create bridges and connections between disparate systems for the exchange of these data items, accounting and controlling departments will make use of electronic workbooks and spreadsheets to perform the first level of data manipulation. Data is usually extracted from source systems, which may be SAP systems, using flatfiles extracts or electronic reports. This data may be comma or tab separated however if it is a report, it will generally need to have extraneous header data cleaned out in order to arrive at a relatively usable list of items. In some instances these departments may be lucky enough to have this data provided in databases or single table structures but more often than not, no prior preparation was given to this activity and accounting and controlling are engaged in a catchup activity and are required to enagege in a ‘best efforts’ initiative.

Whichever way this data is received, the challenge remains. The business rules for asset accounting from the source company may not be or may not have been the same as for the target and this manipulation requirement needs to be accommodated. Companies will use different subminima for determining what constitutes a candidate for asset accounting. Some corporations will write off anything that has a cost below $1,000 for example. Others may fully write off items that are non-physical in nature and some entities will capitalise and account at an asset level initiatives that became projects to either extended the life of an existing asset or supported an improved business activity or initiative that has no relevance to the target entity. Ultimately accounting and controlling determine what will pass to the existing asset register but the instantiation of these items in the target SAP system is no simple task. Many iterations of ‘record’ cleaning and deletion will likely take place in multiple spreadsheets and workbooks with write-ups and write-downs being made to try and minimize the amount of data to be onboarded.

Creating assets in your SAP system of record is a relatively straightforward activity in a standard configured Asset accounting system. Using AS01 for example, you define your Asset Class, associated company code and perhaps create the asset with reference to characteristics associated with an existing asset. The description of the new (to the target company) asset may be different to the source modeled on, and there may also be numerous other attributes like the planned retirement date, values and allocation information.  For a fast data capturer working with preworked data, this process may take less than a minute per asset for a well designed input reference source but there is the risk of transcription errors or missing items and the ability to validate the quality of the input can only be verified using an asset accounting report which is usually done at the end of an intensive data capture ‘run’.  A spreadsheet of thousands of items for example would ideally be batched into manageable chunks for users to work from. Those totals can be cross validated to ensure accuracy and to ensure nothing has been missed. Seemlingly small typographical issues will be overlooked or possibly ignored and where important attributes like serial numbers etc are referenced this may prove problematical at some future stage long after the initial capture process.

A far more effective mode of capture is one that involves the smallest amount of human intervention, one that allows unattended extraction, summary scrutiny and sign off and then batch en-masse upload with confirmation of establishment in the SAP asset accounting system. As previously mentioned, customized ABAP and LSMW can be used to perform this type of migration of data however both require some degree of technical competency for development and have some not insignificant lead time involved in their establishment. Execution may be easy for a well written ABAP program but the LSMW procedures are not intended for basic SAP users to use on a regular basis and cosnequently specialised training or exhaustive familiarisation with LSMW may be required to ensure consistent results.

Desktop integration utilities that work directly with electronic spreadsheets and workbooks facilitate the mass extract and mass maintenance of asset accounting data without users having to work through the complexity of the asset accounting application. THis simplification applies to either  initial creation or subsequent maintenance of assets, in some instances use of the GUI transaction can be avoided altogether. Using high speed transactional RFC and standard SAP user credentials accounting and controlling personnel are able to quickly navigate through the existing steps of say the AS01 transaction, map the touched fields to an existing extract of asset accounting records in an electronic spreadsheet and then execute a mass change or mass create of items with confirmation for every record touched or created in volumes of hundreds to thousands of records per minute rather than the time used to create and maintain these records manually.

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