RE-FX – Deactivation of ROU Assets
Deactivation of ROU Assets
This article explains in detail the functionality available in RE-FX for the deactivation of ROU Assets.
The complete retirement can be triggered from RE-FX and get the ROU assets retired fully and thereby deactivated. No retirement transaction should be posted to Assets within the Asset Accounting module for the ROU assets which are generated and capitalized as part of IFRS16 Lease accounting process for the lease-in contracts entered into by the lessee.
The transaction – RECEASSETDEACT can be used to post the complete retirement and deactivation of ROU assets.
Pre-requisites to be met to post the deactivation
- The contract tenure must be ended/end date reached
- There should not be any open valuation for the ROU asset. All valuations including the last time slice should have been posted.
- Depreciation should have been posted till the last period
- The useful life of the asset must have expired
All the above mentioned conditions must be fulfilled to get such Assets/contracts picked up by this Transaction. System will ignore the contracts/ROU Assets even if any one of this criteria is met.
Upon execution of the Transaction – RECEASSETDEACT, system will generate the list of contracts and ROU assets eligible for deactivation. Multiple ROU assets can be deactivated at one go.
System will generate the list for which deactivation can be posted
After executing the deactivation, the status will change to “deactivated” for the ROU assets.
System will post the Accounting entry for the complete retirement of ROU asset and updates the ROU Asset master with the deactivation date.
Debit – Accumulated depreciation account
Credit – ROU Asset account
Deactivation date will be set on the ROU Asset master and no further postings are allowed to the deactivated asset.
Reversal of Deactivation
The deactivated ROU assets can be activated again, meaning reversal of complete retirement posted can be reversed. For the reversal, SAP has provided a standard transaction – RECEASSETDEACTRV.
Batch job can be set up for the generation of report
Also a report (monthly or quarterly) can be generated and made available to the business users by setting up a batch job. This job frequency can be set up on monthly/quarterly basis (based on requirements) which will generate a report of the eligible ROU assets for which complete retirement can be posted. This report can be sent through an email to the inbox of the intended business users who are managing the Leases/ROU assets.
For more details you can refer to the SAP note – 2528788 – RE-FX Leasing: Deactivation of leased assets.