1. Business Requirement:

Let us say we have an asset with useful life 1 year and yearly depreciation is $1200. The company code is having fiscal year as calendar year (which is Jan-Dec). The Asset is acquired at the beginning of the year, so the depreciation will start from period 1. Now we are period 4 so already there are 3 depreciation runs posted with each period $100 as depreciation amount for this asset. Now the requirement from Business is that they have wrongly mentioned the useful life as 1 but actually it should be 2 years and when we change the useful life there shouldn’t be any change in already posted depreciation values, i.e. the depreciation amount only changed from period 4 to $50 from $100 as the useful life will be 2 years. In order to achieve this we will be following the below process.

Here I am giving a detailed example.

Asset Number

100000

Company code

1000

Initial Useful life

1 year

Fiscal year

Jan-Dec(calendar year)

let us say the year to date depreciation amount

$1,200

Period wide break up of depreciation amounts to be posted when we see at the beginning of the year.

Period

  1. Dep. amount

January (period 1)

100-

February (period 2)

100-

March (period 3)

100-

April (period 4)

100-

May (period 5)

100-

June (period 6)

100-

July (period 7)

100-

August (period 8)

100-

September (period 9)

100-

October (period 10)

100-

November (period 11)

100-

December (period 12)

100-

Now we are in period 4 so already the first 3 period’s depreciation is posted.

So the table looks like below

Period

  1. Dep. amount

January (period 1)

100-

February (period 2)

100-

March (period 3)

100-

April (period 4)

100-

May (period 5)

100-

June (period 6)

100-

July (period 7)

100-

August (period 8)

100-

September (period 9)

100-

October (period 10)

100-

November (period 11)

100-

December (period 12)

100-

In period 4 the business has found that they wrongly mentioned the asset useful life as 1 year but it’s actually 2 years and system shouldn’t recalculate the depreciation for already posted periods in the current fiscal year which actually do when we directly change the useful life.

The table should looks like below after the change is done which is the business requirement.

Period

  1. Dep. amount

January (period 1)

100-

February (period 2)

100-

March (period 3)

100-

April (period 4)

50-

May (period 5)

50-

June (period 6)

50-

July (period 7)

50-

August (period 8)

50-

September (period 9)

50-

October (period 10)

50-

November (period 11)

50-

December (period 12)

50-

In normal scenario the system will act as below, it will recalculate already posted depreciation for the 3 periods as 50 each and post the remaining 150 as debit to Asset and hence Asset value is increased in the period 4.

The table looks like below in normal case

  1. Dep. amount

Period

January (period 1)

100-

February (period 2)

100-

March (period 3)

100-

April (period 4)

100

Its positive 100 because we have extra 150 posted as dep.
in the previous 3 periods, that should be posted back to
asset as debit value and the current period dep. is 50 credit,
hence the net is 100 debit.

May (period 5)

50-

June (period 6)

50-

July (period 7)

50-

August (period 8)

50-

September (period 9)

50-

October (period 10)

50-

November (period 11)

50-

December (period 12)

50-

2. . Artifacts about Company code:

The company code uses Fiscal year variant as Oct. – Sep. with 12 periods and 4 special periods which is a year dependent fiscal year with the below configuration.

  

/wp-content/uploads/2016/04/pic1_922741.jpg

(Pic 1)

3. Normal System behavior:

if we change the Asset life value in Asset master data in Dep. area tab directly as shown in the below screen, there won’t be any change in the dep. posted in closed fiscal years, but in the open fiscal year if we are in middle of fiscal year this change will recalculate the closed period depreciation and increase the dep. to be posted in the next open period The business don’t want to recalculate the dep. for already posted periods and wanted to post the new dep.

PIC3.png

   (Pic 3)

The plan for dep. to be posted for this asset when the life value is 9 year.

PIC4.png

  (Pic 4)

If we change the life value directly in deprec. Area tab, let us say from 9 year to 4 years, save the asset and see the plan now.

You can see below there is a sudden increase in the dep.amount to be posted in period 7.

/wp-content/uploads/2016/04/pic5_922717.png

  (Pic 5)

  This is because for all the posted periods in the current fiscal year the dep. is recalculated and will be posted in the next period.



4. Solution proposed & testing performed:

The solution will be explained in later stage.For the convenient I am changing back the life value to 9 year which will bring us back to initial plan.After changing back to 9 years the initial plan can be seen again.

/wp-content/uploads/2016/04/pic6_922724.png

   (Pic 6)

Steps to carry out  the solution:

  1. Go to AS02 (asset change), and give the asset number and company code.

/wp-content/uploads/2016/04/pic7_922725.png

    (Pic 7)

  1. Press Enter and go to Deprec. Area tab.

/wp-content/uploads/2016/04/pic8_922727.png

  (Pic 8)

  1. Then double click on Deprec. Area 01. The below screen will be opened.

/wp-content/uploads/2016/04/pic9_922728.png

    (Pic 9)

  1. At the bottom you can see More intervals  
  2. Click on more interval, then the below screen will be opened.

PIC10.png

    (Pic 10)

  1. Now you click on Add interval at the bottom and system asks for from date of new interval.

/wp-content/uploads/2016/04/pic11_922733.png

  (Pic 11)

  1. Now here you have to choose the date as first day of the next period (which is 7 in this scenario else system won’t accept the date). That would be 03/27/2016 and press enter. The below screen will be coming up.

/wp-content/uploads/2016/04/pic12_922734.png

    (Pic 12)

  1. Now add the required number of useful life here (this will be from asset capitalization date, not from this date) and save.

/wp-content/uploads/2016/04/pic13_922735.png

  (Pic 13)

Note: once this is added and saved these values can’t be deleted, hence be very care full when saving the data.

5. Observations:

Go to AW01N and give the asset and check for posted values it will show difference in the period 7


/wp-content/uploads/2016/04/pic14_922739.png

  (Pic 14)

Now we compare the results of dep. plan with the values when we change life value directly from Deprec. Area tab of asset master (Pic 5) and when we change life value in the above method (Pic 14), the change in life value of asset is only effecting the Dep. plan from the period which it had changed.

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