False.  The standard reports provided by SAP can be copied and modified. Branches can be added or removed from a report tree.

2.    What is the asset value display used for?

Asset value display offers extensive possibilities for planned as well as already posted asset values. For example, it is possible to compare results from different depreciation areas, simulate asset values over time, view posted transactions, and execute reports.

3.    Describe simulation in the context of AA and simulation versions.

Simulation in the AA context is an experimental change to parameters affecting the valuation of assets. It can apply to a single asset, the entire asset portfolio, or a test depreciation area.

Simulation versions allow you to simulate a change in depreciation method (depreciation key and useful life) for asset value/depreciation reports and this way to forecast asset depreciation.

4.    Describe the asset history sheet.

The asset history sheet is the most important and most comprehensive year-end report or intermediate report. It displays the various stages of a fixed asset’s history – from the opening balance through the closing balance – including any acquisitions, retirements or accumulated depreciation.  SAP supplies country-specific versions of the sheet.  It is often a required appendix to the balance sheet.

5.    What is a sort version, and what is the maximum number of sort levels in a sort version?

The sort version defines the formation of groups and totals in an asset report. All fields of the asset master record can be used as group and/or sort criteria for defining of a sort version. It consists of a maximum of 5 sort levels determined via fields.

Related posts:

1. SAP Asset Accounting FAQs – Asset Transactions
2. Configuring Asset Accounting
3. Change Fiscal Year in Asset Accounting
4. SAP Asset Accounting FAQs – Organizational Structure
5. SAP Asset Accounting FAQs – Master Data

Periodic processing comprises the tasks that must be performed at periodic intervals.  Since only the values from one depreciation area can be automatically posted online in Financial Accounting, the changes to asset values (transactions) from other areas with automatic postings have to be posted periodically to the appropriate reconciliation accounts.

2.    What is the role of a depreciation area in handling different types of valuation? Why do we need to handle different types of valuation?

By using various depreciation areas that differ from each other in

•    kinds of depreciation (ordinary, special, unplanned  depreciation)
•    depreciation terms (depreciation method, useful life)
•    base values for depreciation calculation (APC, replacement value)

It is possible to perform different valuation and meet the calculation needs for specific purposes (e.g., balance sheet, cost accounting or taxes).

3.    The system supports three direct types of depreciation.  What are they?  Define them.

•    Ordinary depreciation is the planned reduction in asset value due to normal wear and tear.  Therefore, the calculation of depreciation should be based on the normal expected useful life.
•    Special depreciation represents depreciation that is solely based on tax regulations.  In general, this form of depreciation allows depreciation by percentage within a tax concession period without taking into account the actual wear and tear of the asset.
•    Unplanned depreciation is concerned with unusual circumstances, such as damage to the asset that leads to a permanent reduction in its value.

4.    True or False?  Depreciation is calculated by solely using the depreciation keys, which are defined at the chart of depreciation level and available in all company codes.

False.  The depreciation keys are defined at the chart of depreciation level.  Therefore, they are available in all company codes.  SAP supplies depreciation keys for every chart of depreciation.  The system calculates depreciation using depreciation keys and internal calculation keys.

5.    What is a depreciation key and internal calculation key?

Depreciation key is used for calculating depreciation amounts.  It controls automatic calculation of planned depreciation, interest and maximum percentage for manual depreciation.

Internal calculation key makes up a part of the depreciation key and it defines a method, base value and rate of percentage for depreciation, changeover rules (for declining depreciation), treatment of depreciation after useful life and period control for transactions.

6.    Define derived depreciation area.

A derived depreciation area is calculated from two or more real areas using a calculation formula.  You can use derived depreciation areas, for example, to calculate special reserves as the difference between tax and book depreciation.  The book value rule in a derived depreciation area is checked each time a posting is made or depreciation is changed in the corresponding real area.

7.    True or False?  Generally, the system determines the depreciation start date from the asset value date of the first acquisition posting.

True.

8.    True or False?  If the definition of the depreciation key or depreciation terms is changed depreciation values are recalculated automatically.  Only if the depreciation terms change values are recalculated

False.

9.    When imputed interest is calculated, how does the system post this expense to the CO (Cost
Accounting) module?

For cost accounting, you might have to calculate imputed interest on the capital tied up in assets. The system posts interest simultaneously during the periodic depreciation posting run.  It posts to the accounts that are entered in the relevant account determination for each depreciation area.  Furthermore, an additional account assignment can be made to the cost center or the internal order entered in each asset master record (same for depreciation).

10.    What does the system use to calculate the replacement values, and what are the two ways of calculating the current replacement value?

Index series entered in the asset or in the asset class.

The two ways of calculating the current replacement value are historical (current year: acquisition year) and normal (current year: previous year).

11.    True or False? The depreciation posting program automatically updates the asset values and G/L accounts. The program generates a batch-input session for the update of the G/L accounts.

False.

12.     True or False?  Replacement value of an asset can be determined by using an index series.

True.  The “indexed replacement values” component makes it possible to calculate replacement values for assets, and to use replacement values as the basis for calculating depreciation.  You determine the replacement value using index series.  You enter the index series in the asset or in the asset class.

13.    True or False?  When the depreciation posting program (RABUCH00) is run, the system posts individual documents for the different depreciation types.

False.  The depreciation posting program RABUCH00 updates the assets values and generates a batch-input session for the update of the general ledger.  The posting session also posts the different depreciation types, interest and revaluation, in addition to the writing-off and allocation of special reserves.  The system does not create individual documents, only summarized posting documents (per business area per account determination).

14.    For automatic depreciation postings, should the document type be assigned an external or internal number range?

For each company code a document type must be defined for posting depreciation.  The depreciation program should only use a document type that is limited to being used for batch input.  In this way, unintentional use of the document type can be prevented.  It is also essential that the document type is assigned a number range with an external number assignment.  The depreciation program can then assign the document numbers itself.  If the numbers are assigned in this way, the depreciation posting program can keep a check on posting to Financial Accounting.  If errors occur, this numbering also makes it possible to make corrections.

15.    Explain the difference between the methods for distributing forecasted depreciation to the posting periods.

The smoothing method distributes depreciation evenly to the periods from the current depreciation period to the end of the fiscal year (regardless of the value date of the transaction).

With the catch-up method, the depreciation on the transaction (from the start of capitalization up to the current period) is posted as a lump sum.  The depreciation posting program, posts this amount in the posting period, in which the value date of the transaction lies.

Related posts:

1. SAP Asset Accounting FAQs – Asset Transactions
2. Configuring Asset Accounting
3. Change Fiscal Year in Asset Accounting
4. SAP Asset Accounting FAQs – Organizational Structure
5. SAP Asset Accounting FAQs – Master Data

During the life of an asset there are a number of changes that affect the value of the asset.  The FI-AA System recognizes a wide range of business transactions.  Transaction types make it possible to handle all of the necessary postings appropriately.

2.    It is possible that an asset acquisition is posted in two steps or in two different departments?  How do the two entries clear?

When the asset acquisition is posted in two steps or two different departments, you normally post to a clearing account.  Use a general ledger account with open item management to guarantee that this account can be cleared.  Either the FI department includes this clearing account in their periodic run of SAPF123 (Automatic clearing program) or the clearing account has to be cleared in an additional step (Menu path: Posting > Acquisition > External acquisition > Clearing offsetting entry).

3.    What is the difference between non-valued and valued?  Explain their implications on Asset Accounting.

For non-valued, the goods receipt takes place before the invoice receipt and the values are not yet posted to Asset Accounting.  The line items are created and the values are updated instead at the time of the invoice receipt.  However, the system uses the date of the goods receipt as the capitalization date.  At time of invoice receipt the asset is capitalized, line items are created, and the value fields are updated.

For valued, the goods receipt takes place before the invoice receipt and the values are posted directly to Asset Accounting.  The asset is capitalized, line items are created, and the value fields in the asset are updated.  When the invoice is received later, there may be differences between the invoice amount and the amount posted at the time of goods receipt.  In this case, the corresponding adjustment postings are made to the asset.

4.    There are certain pieces of information automatically set in the asset master record at time of acquisition.  What are they?

The following information is automatically set in the asset master record at the time of the first acquisition posting:

•    Date of capitalization
•    Posting date of original acquisition
•    Acquisition period
•    Depreciation start date per depreciation area.

5.    Most asset transfers are described as either inter-company or intra-company.  What is the difference?

Inter-company transfer indicates a transfer between company codes.  This transfer creates a new record at the target company and posts the values according to the posting method selected.

Intra-company transfer indicates a transfer within one company.  Reasons for such a transfer include:
•    The asset has changed location.  As a result, you have to change organizational allocations (i.e., asset class, business area) in the master record that cannot otherwise be changed.
•    The asset needs to split.  Therefore, a portion of the original asset will be transferred to a new asset.
•    The asset under construction needs to transfer its costs to a real (depreciable) asset.

6.    Define transfer variant.

The transfer variant specifies:
•    The method according to which the transferred asset is valued in the receiving company code
•    The transaction types (retirement/acquisition) that are used for the transfer

Your specification of the transfer variant can be dependent on the following:
•    The type of relationship between the company codes involved (legally dependent/independent)
•    The cross-system depreciation area

7.    For assets that the company produces itself, why are there two phases relevant to Asset Accounting?  What are they?

The two phases relevant to Asset Accounting for assets produced in house are the under construction phase and the useful life phase.  The assets have to be shown in two different balance sheet items during these two phases.  Therefore, they have to be managed using a different object or asset master record for the under-construction phase and for the completed asset.  The transfer from under-construction phase to completed asset is referred to as “capitalization of the asset under construction”.

8.    True or False?  Using the Asset Accounting module, it is no longer necessary or possible to manually plan depreciation.

False.  In addition to the automatic calculation of depreciation using depreciation keys, you can also plan manual depreciation for individual assets in the FI-AA system.

Related posts:

1. SAP Asset Accounting FAQs – Organizational Structure
2. SAP Asset Accounting FAQs – Master Data
3. Configuring Asset Accounting
4. SAP Asset Accounting – Information Systems
5. Change Fiscal Year in Asset Accounting

Depreciation area 01, which can be set up as the book depreciation, can make automatic postings to the general ledger.  Other depreciation areas may get their values from depreciation area 01 but calculate and post different depreciation values to the general ledger.  Other depreciation areas can be set up to show: country specific valuation (i.e., tax depreciation); values/depreciations that differ from depreciation area 01 (i.e., cost-accounting reasons); consolidated versions in local/group currency, book depreciation in group currency; and the difference between book, 01, and country-specific tax depreciation (‘derived depreciation area’).

2.    What information (sections) are included in the asset class?

An asset class consists of three main sections:

•    A header, containing control parameters for master data maintenance and account determination,
•    A master data section with default values for administrative data in the asset master record,
•    A valuation section with control parameters for valuation and depreciation terms.

3.    Describe the function of an asset class.

The most important function of an asset class is to establish the connection between the asset master records and the relevant accounts in the general ledger.  The account determination in the asset class determines the posting top the general ledger accounts.  Several asset classes can use the same account determination assuming the asset classes use the same chart of accounts and post to the same general ledger accounts.

4.    If the company code is in implementation status and assets exist in an asset class with no transactions, you can delete and add new asset classes.

[True] or False

When the company code is in implementation status:

•    No assets have been created in an existing asset class; this class is deleted and generated again
•    There are assets in an existing asset class (but no transactions)
-    Delete all asset classes and their assets and generate them again or
-    Only add new asset classes.
•    Transactions exist for the assets: you can only add new asset classes

If the company code is in production status: the system creates only asset classes that were not yet created.  Exiting classes remain unchanged.

6.    Define maintenance level.   What are the possible maintenance levels?

Maintenance level defines the level (asset class, main asset number, sub-number) at which a field in an asset master record is to be maintained.  Maintenance level definition is part of the screen layout rule.

If, for example, you define the maintenance level ‘main asset number’ for a field, then the field will be filled with a default value from the asset class. However you will be able to change the field when maintaining master data at the asset main number level.

The three maintenance levels are:

•    Asset class
•    Asset main number
•    Asset sub-number

7.    What significance is depreciation key ‘0000’?

Depreciation key ‘0000’ is a SAP delivered key that ensures depreciation and interest is not calculated and posted.  This key can be used for the assets under construction, however, special tax depreciation and investment support are possible even on assets under construction.

8.    What are the options for creating and asset master record?

The two options for creating an asset master record are:

•    Use the asset class, to which the asset will belong, to provide default values.  The asset class then supplies the most important control parameters in the asset master record.
•    Use an existing asset as a reference for creating the new asset master record (possibly the reference asset has default values that are more suitable than those in the asset class).

9.    Why might assets be divided up using sub-numbers?

A complex fixed asset can be represented in the system using several master records, that is, sub-numbers.  Assets may be divided using sub-numbers if:

•    Managing the values for subsequent acquisitions in following years (i.e., buildings) separately
•    Managing the values for individual parts of assets separately,
•    Dividing the asset according to various technical aspects.

10.    Define work lists.

Work lists are used for mass retirements, mass changes and work on incomplete assets.  There are three steps in using work lists:

•    Select the objects (assets) to be changed
•    Assign the task to be performed on the objects
•    Release the work list and process the Workflow

Related posts:

1. SAP Asset Accounting FAQs – Asset Transactions
2. SAP Asset Accounting FAQs – Organizational Structure
3. SAP Master Data Management (FAQs)
4. Configuring Asset Accounting
5. SAP Asset Accounting – Information Systems

The Asset Accounting sub-module manages a company’s fixed assets.  Within the Financial Accounting system, FI-AA serves as a sub-ledger to the General Ledger, providing detailed information on asset-related transactions.

2.    Define the chart of depreciation.

The chart of depreciation contains the defined depreciation areas. It also contains the rules for the evaluation of assets that are valid in a given country or economic area.  The chart of depreciation is a catalog of country-specific depreciation areas structured to meet the various business needs.

Each company code is allocated to one chart of depreciation. Several company codes can work with the same chart of depreciation.

3.    What is the difference between the chart of accounts and chart of depreciation?

The chart of accounts can be global, country specific and industry specifics based on the needs of the business.  The chart of depreciation is only country specific.  The charts are independent of each other.

4.    How is Asset Accounting integrated with Cost Accounting (CO)?

Postings to depreciation can be made through a cost object such as a cost center or internal order.  Also, an asset can be assigned to a cost center, internal order, activity type, or a maintenance order.

5.    What is an asset class?

This is the main criterion for classifying assets by business and legal requirements.  The asset class, created at the client level, consists of a master data and depreciation area section.  Each asset master record must be allocated to one asset class.

6.    Define depreciation area.

A depreciation area shows the valuation of assets for a particular purpose (for example, for individual financial statements, balance sheets for tax purposes, and cost accounting values).

Related posts:

1. SAP Asset Accounting FAQs – Asset Transactions
2. SAP Asset Accounting FAQs – Master Data
3. Configuring Asset Accounting
4. SAP Asset Accounting – Information Systems
5. Change Fiscal Year in Asset Accounting

2.    List the types of tasks you can perform using Schedule Manager.

•    Worklists (via workflow)
•    Background jobs
•    Online (real-time) jobs
•    Transactions
•    Text reminders

3.    Answer True/False to the following:
True/False.  In order to use Travel Management, the HR module must be implemented.
False, SAP provides a mini-master record that can be used by FI when HR is not implemented.

True/False.  You must enter a Travel Request and Travel Plan before you can submit an Expense Report.
False, Travel Requests and Travel Plans are optional functions in Travel Management.  They provide additional travel information that is not necessary for reimbursements.

True/False.  The vendor payment program is used to reimburse employees.
True, the payment program processes expense reimbursements using the vendor master records that are created for each employee.

4.    List the components of the mini-master record.

•    Personnel actions
•    Organizational assignment (of the employee)
•    Personal information
•    Addresses
•    Bank Details
•    Travel privileges
•    Travel preferences

Related posts:

1. SAP General Topics

Value-added taxes are assessed on the additional value that is added to a product as it moves through the production chain from raw material to producer and finally to the consumer.  Sales and use taxes are based on the final sales value of the product.

2.    For what are jurisdiction codes used?

Jurisdiction codes are used in multi-level taxes to identify each taxing authority.  When using jurisdiction codes, each level must be defined.  For example, if there is a state, county and city sales tax then the following three codes would be created:

•    State:     2500000000
•    County:     2510200000
•    City:    2510280930

3.    Briefly describe the following:
a)    Calculation Table – Contains all of the logic for calculating taxes including the access sequence, condition type, and tax procedure.

b)    Tax Procedure – A country-specific template containing all of the processing logic and algorithms that support the tax amount computations.  It contains the steps, condition types, reference steps, and account keys

c)    Tax Code – Assigned to a tax procedure and is entered in the G/L master record and accessed when the G/L account is used in a document.

4.    What settings are necessary for automatic tax account assignment?

The account key must be configured with posting keys, rules, and tax accounts.  The rules determine if the tax code or account key will be used for account determination.

5.    How can taxes be calculated?

Taxes may be calculated automatically by the system or entered manually by the user.  In the case of manual entry, the system will verify that the amount entered is correct.

Related posts:

1. Taxes

There are ten levels possible in the financial statement hierarchy.  For each level, an item name and total is assigned to a group of accounts.  Higher levels provide more summarization than lower levels, level one being the highest and therefore, least detailed.

2.    Describe how G/L accounts are assigned to the financial statement hierarchy.

G/L accounts are attached to the lowest level of the financial statement hierarchy.

3.    Discuss planning in FI.

Planning in FI utilizes the financial statement version to determine the layout of the planning screens.  Changes to the Financial Statement version are immediately reflected in the planning screens (upon re-entry).  Values entered in the planning screen are allocated between the periods using a Distribution Key.  The figures are entered based on the following:
•    Fiscal Year
•    Version -
•    Business area -
•    Currency -

4.    True or False. An account may be assigned to more than one node?  Why?

True.  In some cases, an account may be listed in one group when it has a credit balance and another when it has a debit balance.  For example, a cash account is an asset when there is a debit balance and a liability when there is a credit (overdraft) balance.  This feature is also available for account groups via the debit/credit shift.

5.    Explain the difference between Cost of Sales Accounting and Period Accounting.

Cost of Sales Accounting attempts to match revenues with their associated expenses; whereas, Period Accounting is primarily concerned with the activity occurring over a given time period.

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The only technical requirements of period-end closing are to close the current posting period and to open the new one.  Month-end reports can be run after the posting period has been closed.  There are additional business processes (e.g., valuing foreign currency open items and G/L accounts, analyzing open items and accounts that will be closed out, etc.) that should also be completed for proper control, even though they are not required for closing.

2.    Discuss the annual closing process in SAP.

1.  Execute the month-end closing process for the last period.
2.  Run the balance sheet adjustment programs and make any manual adjusting entries.
3.  Generate year-end reports.
4.  Carry G/L, customer, and vendor accounts forward.
5.  Open the new posting period.

3.    Explain the purpose of running the GR/IR clearing account program.

The GR/IR (Goods received/invoice received) clearing account program reclassifies the entries in the GR/IR account as either assets or liabilities for reporting purposes.  At the end of a period the company can be in a situation where goods have been received but an invoice has not, or vice versa.  Therefore, there may be a debit or credit balance in the GR/IR account.

4.    Explain the basic process of valuing accounts for closing before running a balance sheet.

Before running a balance sheet, you need to value both open items and G/L accounts thatuse foreign currencies.  Open items need to be valued for vendor and customer accounts, reconciliation accounts, clearing accounts, and expense and revenue accounts.  This process is completed to accurately record the value of your assets and liabilities in the reporting (local) currency.

5.    What is the exchange rate difference key used for?

The exchange rate difference key is defined in the account master records of G/L accounts managed in foreign currency.  It is the key that defines which gain/loss account is updated when the G/L account is revalued.

6.    How is an exchange rate difference accounted for when posting and clearing an invoice in foreign currency?

The exchange rate difference between the invoice and payment is accounted for in a gain/loss account defined by the exchange rate difference key.   It is posted automatically.

7.    Explain how accounts managed in a foreign currency are valued.

Each account managed in foreign currency is defined with an exchange rate difference key.  This key identifies a valuation gain/loss account that is updated when the account is valued using program RFSBEWOO.  The valuation process itself takes the difference between the original exchange rate used in the transactions and the current exchange rate and posts the difference to a gain or loss account.

8.    What is the difference between valuation of open items and valuation upon receipt of payment.

When valuing open items, the system will post any differences to an unrealized gain/loss account.  When payment is actually received, the difference becomes a realized gain/loss.

Related posts:

1. Period end closing in Controlling
2. Year End Closing – RFSUMB00
3. Month End Closing Activities in FI
4. Period End Closing Activities in Controlling
5. Closing in on the Communication Gaps – Guide to an Integrated CRM

•    From the Exchange rate table
•    From a manual entry in the document exchange rate field

2.    What are exchange rate types used for? List and describe five exchange rate types.

Exchange rate types are used for foreign currency revaluations and postings.

–    B (Bank Selling Rate)
–    G (Bank Buying Rate)
–    M (Average Rate) – The default rate type for posting documents.
–    EURO – Used for exchange rates between EU member nation currencies (e.g., DEM:FRF)
–    EURX – Used for exchange rates between an EU member nation currency and a non-member nation currency (e.g. DEM:USD)

3.    List the currency types used in FI.

The available currency types are transaction, group, hard, index, global, and company code (local).  Please note that this list is not exhaustive as other modules may also have their own currency types (e.g., controlling area currency).

4.    How many currency types can be used at one time for each company code?

Up to four currencies can be used for each company code.  They are transaction, local, and up to two optional parallel currencies.

5.    Explain the base currency function

A base currency is set up to eliminate the need for entering every possible exchange rate combination into the exchange rate table.  A base currency is established on the exchange rate type table for a specific exchange rate.  The base currency and base rate are then used to translate from Currency A to the base currency and then from the base currency to Currency B.

6.    Explain why a translation ratio is useful.

A translation enables SAP to process extremely large or small exchange rates that would exceed the maximum allowable number of digits (i.e., 9999.99999 or 0.00001).

7.    What are the prerequisites for posting a document using foreign currencies.

–    Local currency must be defined in the Company Code Global Parameters
–    The foreign currency must be defined in the Currency Code Table
–    A translation ratio must beset between the foreign and local currencies
–    An exchange rate must be defined between the foreign currency and the local currency in the Exchange Rate Table.

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