Asset under Construction through MM

Hi All,

I am describing AUC through MM process.

What is AUC?

AUC is Asset under construction where some assets are in construction phase and cost needs to capture through internal order for the time being. Once asset is fully completed then cost would be transferred to another cost object (E.g. Cost center) and settle with final asset.

E.g. ABC company constructing building for their office. While construction many expenses are attached to it. Till the time it is created we can not charged it in Building account hence we need to create AUC account where cost will be stored.

Process of AUC

1.     Create AUC asset class in OAOA

2.     Create Allocation Structure in OKO6.

Click on “New entries” to create allocation structure.

Go to Source to assign GL account(P&L) which is “Material Transfer to Asset”

Click on Material to assign GL.

Go to Settlement cost element to add receiver “FXA”

3.     Create settlement Profile and assign allocation structure with settlement profile in OKO7

4.     Create Planning profile in OKOS

5.     Create Budget profile in OKOB

6.     Create Order type and assign Budget profile, Settlement profile and Planning profile in KOT2

7.     Create Investment profile in OITA

8.     Create IO as well as AUC in KO01

Create IO:

Assignment Tab:

Assign Profit Center

Control Data Tab:

In this section System status should be in Release stage “REL”

Investments Tab:

Assign Investment Profile in this section

Create AUC through IO. Go to Extras-Asset under construction

Create AUC:

General Tab:

In this section put capitalization date and text

Time Dependent Tab:

In this section assign IO

Depreciation Tab:

In this section Depreciation Key needs to be assigned.

Note- Depreciation key is “0000”, as depreciation is not calculating in AUC.

9.     Create PO with Account assignment “F” (Order) in ME21N

PO needs to be created with Account Assignment “F”, GL needs to be selected manually in Account Assignment tab with IO

10.     Post GR in MIGO and Invoice in MIRO, it is normal like other PO invoice processing

11.     Create main asset class in OAOA

12.     Create Main Asset master in AS01 where AUC will be settled

Create Main Asset master with Cost Center.

General Tab:

In this section put Asset description and Capitalization Date

Time Dependent Tab:

In this section select Cost center

Depreciation Area Tab:

In this section select Depreciation Key, Useful life and Depreciation Start date

13.     Settlement with AUC in KO88

Here IO will be settled with AUC. Put IO and select Processing type Automatic. Before Final Run always perform a Test Run which will show if there is any Error.

Go to Settlement Rule and Add AUC because IO will be settled with AUC.

Add AUC in Settlement Rule

Go back to the main screen to perform the Test Run as well as Final Run

14.     Settlement with Fixed Asset in KO88

Here AUC will be settled with Fixed Asset.

Fill up the necessary details and select processing type Full Settlement

Go to Settlement Rule and Add Fixed Asset because AUC will be settled with FA.

Add FA in Settlement Rule

Go back to the main screen to perform the Test Run as well as Final Run

15.     Check the AUC and FA in AW01N

AUC

Settlement journal entry can be seen here.

Fixed Asset

Settlement journal entry can be seen here.

Now Depreciation needs to perform on FA.

Journal entries:

Material Purchase through IO

Material Transfer to Asset Dr.

GR/IR Cr.

Invoice Posting

GR/IR Dr.

Vendor Cr.

Settlement with AUC

AUC Dr.

Material Transfer to Asset Cr.(IO)

Settlement with FA

FA Dr.

AUC Cr.

Note- AUC of Investment Measure is Integration with 4 modules FI-CO-MM-IM.

Thanks,

Snehashis