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Author's profile photo Former Member

Asset Impairment

1. PURPOSE:

An asset that is worth less on the market than the value listed on the company’s balance sheet due to an unexpected or sudden decline or antiquity innovation change, this could be the result of physical demage to the asset.

2. REQUIREMENT:

IFRS requirement, Impairment of some Asset could be carried out.

3. CONFIGURATION STEP:

3.1. Go to tcode OABW to check revalue APC in the depreciation area where you want to post. This would help in identifying the area where the Impairment will have to posted.

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3.2. Go to tcode OAYR and select your company code. Then click on the posting rule.

In the book depreciation area, go to Other posting settings. Check on “Post revaluation”.

This setting is required for posting the impairment amount.

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3.3. Go to tcode AO90 and create a revaluation APC for each fixed asset class and clearing account Revalutaion APC.

The revaluation APC has to be a reconciliation account and the revaluation clearing is P/L account.

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3.4. Go to tcode AO84 to create Transaction type, example “Z80”, “Z81”, “Z82”, “Z83”

– Z80: Impairment Loss (Prior-Yr acq.)

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– Z81: Impairment Loss (Curr-Yr acq.)

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– Z82: Reversing an Impairment Loss (Prior-Yr acq.)

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– Z83: Reversing an Impairment Loss (Curr-Yr acq.)

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3.5. Go to tcode ACSET and select the company code, then choose Book depreciation area, add account assignment object “KOSTL” – cost center and account assignment type “Depreciation Run”.

This setting is required cost center for posting the impairment GL account when Depreciation Run.

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4. BUSINESS SCENARIO:

– Post impairment asset: Tcode ABAW:

Now, go to tcode ABAW, select the asset to be impaired. Put the transaction type as Z81, press Enter.

In the next screen give an asset value date, amount to be posted as Impairment. Now, click Save.

An asset accounting document will be generated.

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NOTE: This impairment amount will NOT be posted automatically. Once depreciation run takes place then only the amount gets posted to GL account.

a. Impair loss

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b. Reverse Impair loss

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– Run depreciation: for a period in tcode AFAB:

a. Impair loss

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b. Reverse Impair loss:

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End

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      27 Comments
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      Author's profile photo Former Member
      Former Member

      Good one Julie.

      Thanks for sharing.

      Author's profile photo RAHEEM BAKSH
      RAHEEM BAKSH

      Hi Julie Phan

      Excellent Document

      Regards

      Raheem

      Author's profile photo Former Member
      Former Member

      Hi

      Nice documentation thank you for sharing knowledge.

      Author's profile photo Former Member
      Former Member
      Blog Post Author

      Thank you very much, guys! 🙂

      Author's profile photo Former Member
      Former Member

      Hi Julie,

      Very useful document. Thanks for the efforts.

      In this i have a doubt..

      When we run impairment loss system has reduced impairment loss from APC Value and it is showing Acquisition value as 900 its okay.

      When we reverse the same impairment loss why it is showing Acquisition value as 1100 instead of 1000?

      Regards,

      Gopikrishna Mallireddy

      Author's profile photo Shaik Md Abubakar Siddiq
      Shaik Md Abubakar Siddiq

      Helo Julie...

      Very Use full Documentation for me as of now...Good Work and thanks for your Wonder full Efforts.

      Author's profile photo Santosh Visave
      Santosh Visave

      Hi Julie,

      Very nice document, keep it up....

      Santosh Visave

      Author's profile photo Pankaj Pareek
      Pankaj Pareek

      Hi Julie,

      Nicely explained implementing the asset impairment.

      Thank you for sharing it.

      Regards

      Pankaj Pareek

      Author's profile photo Former Member
      Former Member

      Hi Julie,

      Nice Document 🙂

      Author's profile photo Former Member
      Former Member

      Thank you very much, guys! 🙂

      Author's profile photo Ravi Sankar Venna
      Ravi Sankar Venna

      Thanks for the document.

      The inherent design problem of Impairment is it would only considered from the next year for calculating the ordinary depreciation. Even after posting the impairment, there would not be any difference in the current year's ordinary depreciation, this is the design of the system, we may have to live with it. But, most of the clients are not happy.

      Author's profile photo Former Member
      Former Member
      Blog Post Author

      Thank you very much for your valuable information, Sir Ravi.

      I noted this point.

      Author's profile photo Former Member
      Former Member

      many thanks for the document !!!

      Best regards

      Satya

      Author's profile photo sreehari tokala
      sreehari tokala

      Thank you very much Julie...........

      It's very help full Document to implement .

      Thanks & Regards,

      Sreehari. Tokala

      Author's profile photo Warren Nash
      Warren Nash

      Good document Julie.

      Regards

      Waza

      Author's profile photo Lakshmi Sama
      Lakshmi Sama

      Hello Julie,

      Nice document and you explained the concept in a good manner anyone can understand it easily 🙂

      Thanks & Regards,

      Lakshmi S

      Author's profile photo Muhammad Javed
      Muhammad Javed

      Dear Julie,

      Nice explanation about impairment concepts, process and configuration.

      Thanks for sharing.

      Regards
      Javed

      Author's profile photo Former Member
      Former Member

      Hi Julie,

      Very nice document with clear examples.

      Regards,

      Author's profile photo Erwin Leitner
      Erwin Leitner

      Hello,

      Thank you very much for excellent information.

      "Mrs. SAP" 🙂 ➕

      all the best Erwin

      Author's profile photo Former Member
      Former Member

      Very Helpful!

      All the best!

      Author's profile photo Mukthar Ali Ahamed N
      Mukthar Ali Ahamed N

      Good explanation...Thank you for sharing your knowledge.

      All the best

      Mukthar

      Author's profile photo Former Member
      Former Member

      Hi Julie,

      Thanx For Your Information.......

      Regards,

      Kishore.P

      Author's profile photo pawan Gupta
      pawan Gupta

      Hello Julie,

      We have a requirement in which we have to revalue an Asset with out Accumulated Depreciation impact.

      Regards

      Pawan Gupta

      Author's profile photo Lisa Zhang
      Lisa Zhang

      Good sample and detail customizing explaination!

      Author's profile photo Former Member
      Former Member

      Hi,

      Nice document. Beautiful explanation. Thanks for sharing your knowledge.

      Regards

      Karthi

      Author's profile photo pawan Gupta
      pawan Gupta

      Hello Julie,

      We have implemented Asset impairment functionality but we are facing issue in profit center determination, when depreciation posted with more than one profit center as per assignment of asset then in impairment g/l account is not splitting as per profit center assigned in asset but constant is determined.we want impairment split as per profit center in asset.

      Can you please guide on it

      Author's profile photo Freire da Cruz
      Freire da Cruz

      Helped us a lot. Thank you.