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Author's profile photo Betty Guedez

SAP S/4HANA Conversion projects – Tips on Asset Accounting – Preparation Phase

Updated as of release 2020

Hi,

I am Betty Guedez and when I brought this blog post for the first time, I provided hints based on what we need to do during finance system conversion projects regarding Asset Accounting business process. My intention today is to update this content according to release 2020.

Many things have changed for better!

It is exciting to bring great news on this SAP S/4HANA 2020 release! All the activities mentioned in the original blog post, dated May 2020, are still valid on this 2020 version, but now with the plus that the new Asset Accounting reconciliation tool is holistic and system-conversion aligned.

How is this possible?

New standard reports FIN_AA_CORR_RECON and FIN_AA_CORR_DISPLAY have been delivered thru SAP Note 2896400. These new transactions output show possible reconciliation issues, using the same naming convention as the one used in system conversion steps like R20, R21 and so on. So, this innovation is likely bringing a reduction on number of inconsistencies on Asset Accounting data during system conversion, as the issues are detected upfront, before the process takes place.

Let me go deeper on this when speaking about reconciliation, below on this document.

It is important to bear in mind that reports, notes and KBA´s mentioned here are updated on a periodic basis as SAP S/4HANA is a product in ongoing optimization. Some of them could even be deprecated, in fact.

This document has been updated based on SAP S/4HANA release 2020.

For now, I will provide guidance on Asset Accounting preparation activities and some of common steps executed in preparing this business process to move to New Asset Accounting in SAP  S/4HANA.

In the following picture, we can see the 2 main stages in a conversion project, according to Activate methodology. Under Preparation phase, SI Checks take place and below it, we can find preparation activities relevant for all business processes. Simplification items verification and Asset Accounting Preparation are in the circle.

SAP%20S4HANA%20System%20Conversion%20Process%20Overview

SAP S/4HANA System Conversion Process Overview

There are 2 possible scenarios of existing Asset Accounting when a system conversion takes place:

  • Classic Asset Accounting is in use, or
  • New Asset Accounting is active already

As Prepare phase for all these business processes also covers reconciliation activities, is good to know that SAP has traditionally provided tools to identify and, in specific cases, fix data inconsistencies prior to a system conversion process (important to say is that there are cases in which SAP Support takes an active role on issues resolution). For now, we will have a look on the new available reconciliation tools and the way to use them.

In SAP ERP and SAP Suite on HANA, reconciliation tools are available (and necessary) because the data model requires periodic harmonization of the financial information, as it is dispersed in different tables. We currently use these same tools to a) identify and b) fix inconsistencies, before starting the system conversion process.

Let´s call this preliminary step Reconciliation activities.

Reconciliation Activities:

If Classic Asset Accounting is in use:

  1. Execute transaction code ABST2 (also available thru transaction code SA38, program RAABST02), to access a program that reconciles FI-AA postings against G/L posting. This report outputs the complete list of Asset Accounting accounts, where those that need postings to get them aligned (reconciled) with G/L can be seen.

ABST2%20Entry%20Screen

ABST2 Entry Screen

The result looks like:

ABST2%20Sample%20Result%20Screen

ABST2 Sample Result Screen

G/L accounts belonging to Asset Accounting account determination are evaluated and differences are shown like the one highlighted.

  1. Execute transaction code ABST (it is also available thru transaction code SA38, program RAABST01): This program identifies differences in balances between Asset Accounting and G/L, due to postings made in Asset Accounting but not found in G/L.

 

Initial screen of ABST is as follows:

ABST%20Entry%20Screen

ABST Entry Screen

If New Asset Accounting is Active:

  1. Execute transaction code ABST2 (also available thru transaction code SA38, program RAABST02), as explained in (1).

 

  1. Execute transaction code ABSTL (it is also available thru transaction code SA38, program FAA_GL_RECON): This transaction code has the same functionality as ABST (explained above), but for New Asset Accounting.

Till now, everything remained unchanged.

What´s new in Asset Accounting Reconciliation on SAP S/4HANA release 2020, valid for both scenarios Classic and New Asset Accounting?

FIN_AA_CORR_RECON: This transaction allows to perform reconciliation checks on Asset Accounting data upfront a SAP S/4HANA conversion project. This means, it is executed in a SAP ERP or SAP Suite on HANA productive system. The checks identify the most critical data inconsistencies, which should be corrected before the Software Update Manager (SUM) execution in an SAP S/4HANA system conversion project.

FIN_AA_CORR_RECON

FIN_AA_CORR_RECON

FIN_AA_CORR_DISPLAY: This transaction is used to analyze the result of the reconciliation run. There is the option to choose, let´s say, the last run as selection criteria to view the issues found on it. There is also the possibility of choosing another execution, via the selection criteria, by Company Code and Fiscal Year as well.

In the case of data inconsistencies, please have a look at SAP Note 2714344.

FIN_AA_CORR_DISPLAY

FIN_AA_CORR_DISPLAY

Common steps for both scenarios: [1]

Another good news brought by this new standard Asset Accounting Reconciliation tool is that some of the output messages serve as hints to focus on in the upcoming checks, like:

Report Asset History Sheet: Thru transaction code SA38, program name RAGITT_ALV01 This report brings detailed information of assets in many different layouts (See available layouts on transaction code OA79).

In case of G/L accounts with differences, showed by previous reports: Along with the Company Code, you can use the account determination as the selection criteria (hit Dynamic Selections) to execute RAGITT_ALV01. The report will retrieve all the asset transactions on those accounts.

RAGITT_ALV01%20Entry%20Screen

RAGITT_ALV01 Entry Screen

Once this report is finished, proceed to compare the values with the G/L account balance in transaction code FS10N and this comparison will help you identifying missing entries on the asset side.

Another useful way to detect inconsistencies is making a comparison between tables BSEG and ANEP for all the assets under investigation. This could be very helpful to see what is missing on any of both sides, G/L and Asset Accounting.

Proceed as follows:

  • Go to ANEP, providing Company Code, Fiscal Year and Asset Number. In case there are a lot of records to analyze, try reducing the selection using Period.
  • Copy the values of BELNR field (document number)
  • Go to BSEG, providing the same criteria as you did on ANEP but adding BELNR (Document Number. Paste the values (you have them on the clipboard). Retrieve the records
  • Compare one to another
  • If differences do not show up, try deleting Document Number from selection criteria on BSEG

We can see an example of this comparison on the following picture (without going any deeper because that exceeds the purpose of this document):

Comparison%20between%20BSEG%20and%20ANEP%20entries

Comparison between BSEG and ANEP entries

With the fact of existing missing entries on Asset Accounting side, program RACORR05 can be executed (again, thru transaction code SA38), to create the required Asset Accounting entries based on the counterparty FI posting identified.

For this action, make sure you have the following information to proceed:

  • FI Document Number
  • Document Type
  • Company Code
  • Fiscal Year

You can tick Test Run to verify information is correct and after that, untick Test Run for definite execution.

But if missing entries are on G/L side, corresponding exact amounts can be seen in report RAGITT_ALV01.  In this case, execute RAGITT_ALV01 using the parameter “List assets” and find the asset master record. With this information, a correction journal entry in FI with transaction code ABF1 (SAP Note 69225) can be posted, as follows:

Transaction%20ABF1

Transaction ABF1

Sometimes, current fiscal years are different between FI and AA (SAP Note 375419): In this case, executing RAGITT_ALV01 in the next year and to identify the exact missing amount.

Now, let´s continue with next steps.

Preparation Steps to New Asset Accounting:

Getting ready for conversion process: Start with the execution of report Simplification Item Check (transaction code SA38 – report /SDF/RC_START_CHECK) and search for components related to Asset Accounting (SI*_FIN_AA).

The following picture shows the entry screen of Simplification Item Check (SIC): Execution

Simplification%20Item%20Check%20Initial%20Screen

Simplification Item Check Initial Screen

Fix the errors found by SIC report (if any) and continue with the rest of Asset Accounting preparation activities.

Bear in mind that Fiscal Year closing activities for Asset Accounting must have been performed for previous fiscal year. Relevant tasks of this closing activities are

  • Transaction ASKB – Periodic Postings in Asset Accounting
  • Transaction AFAB – Depreciation Run

These activities drive us to an important subject of this document: Restrictions

Restrictions of Asset Accounting during Software Update Manager (SUM) execution.

In the following picture, we see the conversion process where Software Update Manager controls the execution of all steps required to complete the system conversion to SAP S/4HANA.

SAP%20S4HANA%20System%20Conversion%20with%20Simplification%20Item%20Check%20executions

SAP S/4HANA System Conversion with Simplification Item Check executions

It is very important that, after periodic postings are done and Depreciation Run is executed (1st SUM SI Check), no more periodic postings should be done in Asset Accounting till conversion process has been completed (Second Box). The reason: is not possible to make any corrections or fix anything of these new postings once in SAP S/4HANA, in case of need. On top of that, Depreciation calculation is performed on the fly in SAP S/4HANA, so it´s better that new postings wait till SAP S/4HANA is running, to avoid mismatched balances caused by incomplete processing (ASKB, for example) in current ERP.

Besides that, some findings in customer conversion projects reveal that certain AA postings not 100% completed, made after Depreciation run but before Business Downtime starts, could cause errors in Simplification Item Check executed just before finance System Conversion or lead to excessive execution time of some system conversion steps.

There are some ways to avoid these issues

Notifying the users not to perform any Asset Accounting activities till business uptime is reached is usually enough to guarantee the continuity and successful finalization of a system conversion cycle. Business uptime is back after the red line in the picture. This helps a lot and full commitment of business and project team is always desirable.

If this notification is not viable, then blocking AA activities until business uptime is reached is OK. In our drawing, this period happens along the red line in the picture. We called it User lockdown and ramp down business operations.

Important SAP Notes regarding Asset Accounting in system conversions to SAP S/4HANA

  • Adjust Ledger Assignment and Fiscal Years according to SAP Note 2220152 Ledger approach and Asset Accounting (new): Alternative fiscal year variant for parallel valuation
  • Every combination Ledger/Currency will require at least one Depreciation Area definition in the Valuation Plan SAP Note 2403248 – Availability of RAFABNEW)
  • For additional recommendations, please go to SAP Note 2450680 Reversal of depreciation posting (report RAPOST2000) is not possible
  • Whenever is possible, it is strongly recommended to keep record and evidences of each conversion cycle. It is very useful to keep a log of all errors, issues and solutions/notes/KBAs applied in terms of enrich each conversion cycle with efficiencies based on previous experiences. In fact, documentation of the following activities shall be kept:
    • Reconciliation Activities
    • Configuration Activities
    • Conversion steps
    • Post Conversion Activities

 

Hope you like this content.

Please keep safe and healthy.

 

Brought to you by the SAP S/4HANA RIG

[1] Process detailed in SAP Note 2032547  https://launchpad.support.sap.com/#/notes/2032547

 

 

 

 

 

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      Author's profile photo Vikrant Shyam
      Vikrant Shyam

      A very detailed and nicely explained article..!!