Execute Settlement - For AuC (AIBU)

Assets under Construction Without Line Item Management

The procedure corresponds to the procedure for the transfer between two assets within the same company code (see Posting an Intracompany Asset Transfer (Splitting an Asset)). Before carrying out a full transfer of an asset under construction, you have to reverse any down payments that were posted in the current fiscal year. Down payments are ignored for a partial transfer.

For transfers to be displayed in the asset history sheet as acquisitions to fixed assets, you use special transaction types for the transfer of assets under construction.

Assets under Construction with Line Item Management

In Asset Accounting, you can accumulate costs under purely technical aspects in an asset under construction. You do not need to consider the later creation of fixed assets at this point. During the construction phase, you can accumulate all acquisitions for an investment in a single asset. These acquisitions include

• External activity (acquisition from vendor)

• Internal activity (internal order)

• Stock material (withdrawal from warehouse)

When using this "collective management" of assets under construction, it is possible to manage the individual acquisitions as open items over the course of several fiscal years. At completion, the line items must be cleared and then distributed to the various receivers. The system activates open item management when an asset under construction is created, if you set the corresponding indicator in the asset class. In addition, for open item settlement, you have to assign a settlement profile to the company codes involved (in Customizing for Asset Accounting under Transactions   Capitalization of Assets under Construction  Define/Assign Settlement Profiles). The main function of the settlement profile is to specify the allowed receivers (such as, assets or cost centers).

Distribution Rules

Line item settlement is carried out by using distribution rules. Distribution rules are asset-specific. Several distribution rules form a distribution rule group. You can assign these groups to one or more line items of an asset. Distribution rules consist of a distribution key and a receiver. The distribution key can be equivalence numbers or percentage rates. In this way, you can distribute any number of combinations of line items to any number of combinations of receivers.

Distribution by ledger group

You have to set up the distribution of line items as specific to ledger groups, since the system writes one line item for each ledger group.

If in transaction Settlement of Asset Under Construction (AIAB) you want to display additional depreciation areas in the line item list, choose the Show/Hide Depreciation Areas pushbutton.

Receiver

You must settle those parts of the asset under construction that require capitalization to capitalized assets. Those parts that do not require capitalization (expense) can be settled as adjustment postings to cost centers. You can specify a cost element in the account determination in Asset Accounting for this settlement to cost centers. However, you should be aware that you can only settle acquisitions from the current fiscal year to CO receivers. This restriction applies since acquisitions from previous fiscal years should not have an effect on expenses of later fiscal years.

In addition, it is possible to settle to general ledger accounts. However, these G/L accounts cannot be defined with additional account assignment to a CO object. Therefore, you should first settle to clearing accounts, if necessary, and then transfer the values to the corresponding accounts in Financial Accounting.

Investment Support

Just as it does for completed assets, the system calculates depreciation and interest for the asset under construction. This calculation is based on the depreciation terms specified in the asset master record or in the asset class. It is also possible to manage investment support on the asset under construction. However, it is not possible to transfer investment support that was posted to the asset under construction in the year of capitalization. The investment support cannot be transferred to a completed asset, because you cannot tell if the investment support applies to acquisitions in the current fiscal year or earlier fiscal years. Therefore, you have to reverse the investment support manually before the settlement. After the settlement, you post it to the completed asset.

Carrying Out Settlement

You can set up the settlement rules at a given point in time, and then carry out the corresponding update of the line items at a later point in time, since a separate transaction exists for the actual settlement (transaction AIBU). This transaction triggers the settlement posting for the selected assets under construction, and creates the necessary posting documents.

During this process, the system automatically separates the transfer of asset acquisitions from prior fiscal years from acquisitions that took place in the year of capitalization. When the prior-year acquisitions are transferred, (special) depreciation and investment support measures are also transferred proportionally. The system automatically generates carryforward postings for partial capitalization.

The standard report List of Origins of Asset Charges (RAHERK01) enables you to trace the origin of the items in the capitalized asset back to the original asset under construction.