SAP Asset Accounting (FI-AA) has multiple ways to capitalize assets. Two of the most frequently used methods are capitalizing the asset without any budget controls and capitalizing the costs through investment measures. However, both have limitations.

Capitalizing without using budget controls is simpler. Although you do not have to use the Investment Management (IM) component, this method requires manual processing. The IM option is more complex, but because it is automated, companies implement it more often. It is generally better for large-scale capital investments.

I’ll show you an approach that combines the benefits of both methods. In this approach, you create statistical cost elements for asset reconciliation accounts. All FI postings to these assets flow to the internal orders through the cost elements for budgetary control. This method is best suited for simple budget monitoring of certain groups of assets such as lump sum budgets for furniture and fittings. My example includes screenprints and menu paths from an R/3 4.7 system, but is also applicable to SAP ERP Central Component (ECC) systems.

As you’re reading the approach, imagine the following business scenario. Your organization desires to exercise control over spending on furniture and fixtures. Accordingly, it has set up annual budgets and sanctioned amounts to be spent. You must design an effective and simple system of monitoring the actual spend with respect to budgetary limits. You require alerts at various levels of actual spending to ensure that actual spend is within control of the budget. Your SAP system is configured for FI and CO, and you have not implemented IM.

Budget Monitoring Approach

You need to follow two basic steps:

• Step 1. Define the acquisition and production costs (APC) asset balance sheet accounts as statistical cost elements
• Step 2. Provide the APC asset balance sheet accounts with a field status definition that allows additional account assignment to orders or work breakdown structure (WBS) elements

Step 1. Define the APC asset balance sheet accounts as statistical cost elements. Use element category 90, which enables an availability control on an internal order assigned to a fixed asset even with direct capitalization. Note that you cannot reach cost elements with element category 90 through standard transaction KA01. Instead, the system creates the cost elements using program RACKAR00. The CO module is not meant for tracking balance sheet data. Generally, you don’t create balance sheet G/L accounts as cost elements. Element category 90 enables the creation of cost elements for balance sheet G/L accounts that flow data to the internal order.

Access the transaction with IMG menu path Financial Accounting > Asset Accounting > Transactions > Budget Monitoring with Statistical Orders/WBS Elements > Create Statistical Cost Elements. Use transaction OAK7 or click on Create Cost Elements for Project/Order Account Assignment to go to the screen shown in Figure 1.

Figure 1

Output screen after you create the statistical cost elements

Enter the Controlling area, Valid from, and Valid to dates of the cost elements that you’re creating. You can also execute the program in the foreground by clicking on the Scrn.seq. foreground check box. Execute in the test run, see the output, and if there are no errors, execute in the update run. Now the system creates the cost elements with cost element type 90, as shown in Figure 2.

Figure 2

Output screen after you create the statistical cost elements

The cost elements shown in Figure 2 are generated for all APC asset reconciliation accounts defined in depreciation area 01 (book depreciation area). You create cost elements of category 90 from an IMG screen for better control. Due to this, cost element type 90 is not shown as a possible entry while creating cost elements from transaction KA01. After creating these cost elements, you cannot change the category in the cost element master data. Figure 3 displays the cost element 11000 with category 90. After you create these cost elements in the development client, you can transport them to other clients using transaction OKE6.

Figure 3

Display of cost element for balance sheet G/L accounts created with cost element category 90

Step 2. Provide the APC asset balance sheet accounts with a field status definition that allows additional account assignment to orders or WBS elements. Just as the asset balance sheet reconciliation accounts should allow you to use the internal order as the account assignment, the field status group attached to the G/L master data should have a field status for the account assignment with internal order. If not, change the Field status group in the G/L master data (transaction FS00) to allow postings to the internal order with the G/L, but this should be set up as the default in the system (Figure 4).

Figure 4

Field status group for the G/L master data

If there is no field status group that allows internal order posting, then you should make changes to the field status group so that the system allows an internal order for posting with the G/L. Similarly, posting keys 70 and 75 should have a field status that allows for internal order posting. These settings are standard in the SAP system so they should be set properly, but if you do need to set them, you can perform these actions in customizing. This customizing step is necessary if you are not using a standard field status group or posting keys.

Note
Users of R/3 4.6C or lower need to carry out one additional configuration for account assignment. Be sure to set the Relevant to Budget flag on the appropriate transaction types used during asset capitalization. You can do this in customizing. Follow IMG menu path Financial Accounting > Asset Accounting > Transactions > Budget Monitoring with Statistical Orders/WBS Elements > Define Budget Relevant Transaction Types. Check the Relevant to Budget indicator against the acquistion transaction type (e.g., 100 or 110). You can also use menu path Funds Management Government > Actual and Commitment update / Integration > Integration > Integration with Asset Accounting > Flag Transaction Types as Budget Relevant. Select the relevant acquisition transaction type and mark it as Relevant to Budget.

With these two steps, you have completed the configuration and you now need to test your scenario.

Test the Scenario

Next you need to test the scenario by going through a five-step process.

• Step 1. Create an internal order and mark it as statistical
• Step 2. Create asset master data
• Step 3. Post values to the asset
• Step 4. Post budget values to the internal order
• Step 5. Post the asset document to the asset (2303 in this example) with more than the budget amount

Step 1. Create an internal order and mark it as statistical. In transaction KO01, create an internal order in the Control data tab and mark it as statistical by clicking on the Statistical order check box. Then release the internal order by clicking on the Release button next to the System status column. This changes the System status of the internal order from created to released (REL) in Figure 5. After you’ve released the internal order, it can then accept FI postings.

Figure 5

Mark the internal order as statistical in the internal order master data

Step 2. Create asset master data. Use transaction AS01 and update the internal order by entering the internal order (702544 in this example) in the Investment order field in the Origin tab of the asset master data, as shown in Figure 6.

Figure 6

Specify the internal order in the asset master data in the Origin tab

Step 3. Post values to the asset. While posting, notice that the system automatically updates the internal order as shown in Figure 7. You can see the posted document in Figure 8. In these screens, you post an acquisition value of an asset from a vendor through transaction F- 90. Due to the linking of asset master data and an internal order in step 2 (Figure 6), while posting to asset 2303, the system automatically updates internal order 702544. The values flow both to asset 2303 and to internal order 702544. If there is no link between the order and the asset, then you have to manually update the order number in the screen shown in Figure 7. However, I don’t recommend this because it might lead to manual processing errors.

Figure 7

Automatic update of the internal order while posting the asset document

Figure 8

Posted document

See the posted values in Asset Explorer (transaction AW01N) for asset 2303 (Figure 9). The system shows the investment order as a related object because the internal order is in the asset master data as shown in step 2.

Figure 9

Posted values as shown in Asset Explorer for asset 2303

Figure 10 shows the line items posted for the internal order in the Controlling area.

Figure 10

CO line items posted for internal order 702544

Because the internal order is statistical (Figure 5), you cannot settle it to any other object. The values have flown to the asset (Figure 9) and the internal order (Figure 10). A statistical internal order helps in budget monitoring only.

Next you need to test the budget and availability control functionality. Availability control functionality monitors actual values against the budget. If actual spend exceeds the budget, the system shows an error message.

Step 4. Post budget values to the internal order. Figure 11 shows the budget provision of €1,000 for the year 2004 against order 702544.

Figure 11

Budget values for the internal order 702544

Step 5. Post the asset document to the asset (2303 in this example) with more than the budget amount. In this example, the actual amount of €10,000 exceeds the budget of €1,000 (Figure 12). Also notice that an error message appears if the actual posting exceeds the budget (Figure 13). Thus, this method provides the benefits of direct capitalization and budget control with a few simple steps.

Figure 12

Post asset document

Figure 13

Error message if the actual posting exceeds the budget

Sivaprasad Ramachendruni

Sivaprasad Ramachendruni is a solution architect (SAP Financials and SAP S4/HANA Finance) with SAP professional certification. He is currently working for a multinational corporation in the IT sector. He has more than 17 years of functional and SAP system experience spanning across several industries. He has expertise with various modules, including FI, Controlling (CO), Funds Management (FM), Flexible Real Estate Management (RE-FX), Financial Supply Chain Management (FSCM), and SAP S4/HANA Finance. He helps companies design, implement, deploy, and streamline business processes and gain efficiency. He is an Indian cost and management accountant and has a master’s degree in financial management. 

You may contact the author at sivaprasadr@rediffmail.com.

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