Skip to Content
Author's profile photo Mahmoud Elnady

Budget on Asset Purchase

Dear SCN Members

Most of the companies intend to apply budget to prevent over spending on assets purchased , which constitute major part of the companies annual expenditure.

this expenditure is classified under Capital Expenditure ..so all companies would put good control on both asset purchasing process and safe guard.

i will explain in this document how you can purchase an asset using preventive budget. there are two common scenario for asset purchasing using budget

– investment measure.

– Statistical Budget.

In this document i will focus on option no. 2

We have two available alternative to purchase the asset:

  • Purchase  asset first as asset under construction , and then capitalize after completion on related asset.
  • Direct Capitalization of asset.

To apply both scenario you have to follow both steps:

  1. Create Screen Layout for asset under construction & required asset classes that you intend to purchase asset and capitalize directly without accumulating  the cost and capitalize it in later  stages.

Menu Path: Spro-Financial Accounting (New)-Asset Accounting-Master Data-Screen Layout-Define Screen Layout for Asset Master Data

you choose the required asset classes ( or Asset under construction ) to activate cost order in the screen layout as below:

Screen Layout.png

click on Logical Field Groups on the left screen and choose Time-dependent data and click on Field Group Rules,  then change the status of the cost order (21) from No to Opt ( Optional )

and click on both Main No and Sub no. to allow this field on both asset main and sub number.

repeat the above steps to all asset classes that you intend to use in this scenario when you will apply both options.

Screen 2.png

2. Create Asset Class ( Asset Under Construction ) allowing line item settlement

follow the menu path :

Spro-Financial Accounting (New)-Asset Accounting-Organizational Structures-Asset Classes-Define Asset Classes

T-code : OAOA

Screen 3.png

After creation on new asset under construction  classes.we will move to  MM area to activate the internal order field in account assignment A which will be used while asset purchasing.

T-Code : OME9

Screen 4.png

now you need to check you internal order configuration , if it has budget profile and apply statistical posting for asset.

Apply Statistical Posting T-Code OAK7 ” Create cost element Type 90″ or from KA01

Screen 5.pngScreen 6.png

Check your internal order budget profile

T-Code : KOT2

Screen 7.png

i will contribute another document describing how to create a budget profile and activate the availability control..

now to the configuration process has finished you now need to know how to apply the scenario

  • Create Internal order T-Code KO01
  • Assign Budget amount in the created internal order T-Code : KO22
  • Create Asset Under Construction T-code : AS01 and assign the internal order in the asset number in time dependent tab
  • Create Purchase requisition or purchase order on and use the account assignment A that will allow you to insert the asset number and internal order ..
  • try to create the PR / P.O with amount higher than the  budget limit .. you will have a message informing you that budget exceeded and you will not be able to save the PR/P.O
  • Settle the AUC to Final asset using T-code : AIAB

Hope this document will help to put more control on Asset purchasing procedures..

Practical Note:

if you are moving from the investment measure to the above scenario and keep the investment measure running till you finish the open orders related to it , you should not create cost element to the AUC GL for investment measure and create another AUC GL for the New cycle and create cost element Type 90 for it.

Regards

Mahmoud El Nady

Assigned Tags

      40 Comments
      You must be Logged on to comment or reply to a post.
      Author's profile photo Osvaldo Lopez
      Osvaldo Lopez

      Thank you very much for this doc.

      Regards,

      Oswald

      Author's profile photo Mahmoud Elnady
      Mahmoud Elnady
      Blog Post Author

      Hi Osvaldo

      Thanks for your valuable comment..

      Regards

      Mahmoud El Nady

      Author's profile photo Former Member
      Former Member

      Very good.

      Congratulations on the document!

      Artur

      Author's profile photo Mahmoud Elnady
      Mahmoud Elnady
      Blog Post Author

      Thanks Artur for your postive feedback

      regards

      Mahmoud El nady

      Author's profile photo SAP FiCO
      SAP FiCO

      Teslam El Ayaadi     😉

      Author's profile photo Mahmoud Elnady
      Mahmoud Elnady
      Blog Post Author

      Thanks Mr. Emad Hope it helps you..

      Regards

      Mahmoud EL Nady

      Author's profile photo SAP FiCO
      SAP FiCO

      Valuable knowledge.   Keep it coming.

      Author's profile photo Former Member
      Former Member

      Good and simple document.

      Author's profile photo Mahmoud Elnady
      Mahmoud Elnady
      Blog Post Author

      Thanks Mr. Sudhir ...

      Regards

      Mahmoud El Nady

      Author's profile photo Former Member
      Former Member

      Really it's very helpfully , thanks alot mahomud

      Author's profile photo Mahmoud Elnady
      Mahmoud Elnady
      Blog Post Author

      Hi Emad

      Thanks for your positive feedback.

      Regards

      Mahmoud EL Nady

      Author's profile photo Former Member
      Former Member

      Thanks Mr. Mahmoud;

           Very helpful document where I was searching for such scenario to implement it at my customer site and it strongly fitted my requirement.

      Best regards;

      Author's profile photo Mahmoud Elnady
      Mahmoud Elnady
      Blog Post Author

      Hi Ahmed

      Thanks for your encouraging feedback.

      Regards

      Mahmoud EL Nady

      Author's profile photo Former Member
      Former Member

      Thanks for sharing this wonderful document.

      Author's profile photo Mahmoud Elnady
      Mahmoud Elnady
      Blog Post Author

      Hi Sam

      Your feedback always valuable to me.. Thanks

      Mahmoud EL Nady

      Author's profile photo Godavari SAP
      Godavari SAP

      Nice Document. Thanks a lot for sharing.

      Author's profile photo Mahmoud Elnady
      Mahmoud Elnady
      Blog Post Author

      Hi Gidavari

      You are welcome.. Thanks for your feedback..

      Regards

      Mahmoud EL Nady

      Author's profile photo Hidyath pasha
      Hidyath pasha

      Hi Mahmoud EL Nady

      Simply superb hope we get second document soon

      Author's profile photo Mahmoud Elnady
      Mahmoud Elnady
      Blog Post Author

      Thanks for your encouraging Comment..

      Regards

      Mahmoud LE Nady

      Author's profile photo Ibrahim Gad
      Ibrahim Gad

      Very helpful demonstration,

      I was looking for a document like this organized and clear. 🙂

      We are using the same scenario in addition to fund management.

      So, by combining them we can control asset class "FM" and the asset itself "IO". 😎

      Thanks again and looking forward to your upcoming Doc.

      Ibrahim

      Author's profile photo Mahmoud Elnady
      Mahmoud Elnady
      Blog Post Author

      Thanks ibrahim .. your feedback is much appreciated. . also you udea about combining FM with budget control will impose more control option to assets acquisition process. .

      Regards..

      Mahmoud el Nady

      Author's profile photo Former Member
      Former Member

      Nice document. It is really helpful.

      Author's profile photo Mahmoud Elnady
      Mahmoud Elnady
      Blog Post Author

      Thanks Chirag for your positive feedback.

      Regards

      Mahmoud L Nady

      Author's profile photo Former Member
      Former Member

      Good document information and easy understandable.

      Regards,

      Vivek

      Author's profile photo Mahmoud Elnady
      Mahmoud Elnady
      Blog Post Author

      Hi

      Thanks Vivek for your encouraging feedback..

      Regards

      Mahmoud EL Nady

      Author's profile photo Adityaz Febriandri
      Adityaz Febriandri
      Very good document, Thanks
      Author's profile photo Mahmoud Elnady
      Mahmoud Elnady
      Blog Post Author

      Thank you very much Adityaz..

      Regards

      Mahmoud

      Author's profile photo Former Member
      Former Member

      Hello Mahmoud,

      firstly am appreciating you to take initiation to have this document.

      and also kindly let me know how purchase an asset with investment measure and what are the prerequisites to do for AUC with Investment measure.

      If possible send it to      arunsap@outlook.com

      Regards

      Arun

      Author's profile photo Mahmoud Elnady
      Mahmoud Elnady
      Blog Post Author

      Hi

      Thanks Arun for your positive feedback.. if you would like to know the investment measure steps , you may refer to below document

      SAP Best Practices Baseline Package

      document 164

      Regard

      Mahmoud EL nady

      Author's profile photo Former Member
      Former Member

      Hello Mahmoud,

      Very Good document. Just one clarification, if we are to use budget check against WBS and asset capitalization via the same, the only change would be that instead of internal order, we are utilizing WBS field in AS01 and WBS related budget profiles for checking the budgets. Is it right?

      Author's profile photo Mahmoud Elnady
      Mahmoud Elnady
      Blog Post Author

      Hi Parshanth

      Thanks for your positive comment.. I am not able to tell you that if you use WBS it will give you same result , but it seems logically possible ..you may try iy and feed us back with the result ..

      Thanks

      Mahmoud

      Author's profile photo Former Member
      Former Member

      Hello Mahmoud,

      Thanks for the information. As i just know the process of asset procurement but when am executing in system getting different issues. the asset cycle ( through MM ) which am doing is

      1) PO with Acc assignment 'A' by entering asset number.

      2) Goods Receipt

      3) Asset Transfer from warehouse AUC  Project AUC

      4) Settlement Execution AIAB

      5) Dep run

      For the above process i need a back end configuration.

      Could you please assist me for executing the above process.

      will be more thankfull...

      Regards

      Arun

      Author's profile photo Mahmoud Elnady
      Mahmoud Elnady
      Blog Post Author

      Hi Aurn

      i believe that me document is covering your mentioned required steps .. could you try it and inform me back if it work successfully with you or not?

      Regards

      Mahmoud EL Nady

      Author's profile photo Former Member
      Former Member

      Hello Mahmoud,

      Ok sure. will revert you back if i get any queries..

      Thanks

      Arun

      Author's profile photo Former Member
      Former Member

      Hi

      Nice document. Thanks for beautiful explanation.

      Regards

      Karthi

      Author's profile photo Mahmoud Elnady
      Mahmoud Elnady
      Blog Post Author

      Hi

      Thanks for your Positive Feedback..

      Regards

      Mahmoud

      Author's profile photo Heba Okby
      Heba Okby

      Really l proud because i work with you

      Author's profile photo Mahmoud Elnady
      Mahmoud Elnady
      Blog Post Author

      Hi Heba

      Thanks so Much .Appreciated .

      Regards

      Mahmoud

      Author's profile photo Ahtesham zayed
      Ahtesham zayed

      its very helpful document and explanation is so clear.

      Thank you so much sir for this document.

      now i am going to read your next document https://blogs.sap.com/2015/02/10/create-budget-profile-and-activate-availability-control/

      Author's profile photo Ahtesham zayed
      Ahtesham zayed

      please sir share the product costing document with configuration step for beginner.