fi bbp final

Financial Accounting

TO - BE Business Process

Created by: Project Team-FI

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INDEX

1.0 Organizational Elements ........................................................................31.0 Organizational Elements ........................................................................41.1 Company..................................................................................................................................41.2 Company Codes.......................................................................................................................41.3 Fiscal Year Variant..................................................................................................................51.3.1 Posting Period Variant......................................................................................................................51.4 General Ledger........................................................................................................................51.4.1 Chart of Accounts.............................................................................................................................51.4.2 Accounts Group................................................................................................................................51.5 Accounts Receivable................................................................................................................51.5.1 Customers Group..............................................................................................................................51.5.2 Dunning Area...................................................................................................................................61.6 Accounts Payable.....................................................................................................................61.6.1 Vendor Group...................................................................................................................................61.7 Banking....................................................................................................................................61.7.1 House Banks.....................................................................................................................................61.8.1 Chart of Depreciation.......................................................................................................................61.8.2 Asset Classes....................................................................................................................................72.0 Master data...............................................................................................................................72.1 Leading Ledger........................................................................................................................72.2 Non Leading Ledger................................................................................................................72.3 Scenarios..................................................................................................................................72.4 Field Status Variants................................................................................................................72.5 Document Types......................................................................................................................72.6 Posting Keys............................................................................................................................92.7 Tolerance Group....................................................................................................................102.8 Tax on Sales/Purchase...........................................................................................................102.9 Withholding Tax Keys...........................................................................................................102.10 Withholding Tax Types & Codes..........................................................................................112.11 Business Places......................................................................................................................112.12 Financial Statement version...................................................................................................112.13 Vendor Group Number Ranges.............................................................................................122.14 Customer Group Number Ranges..........................................................................................122.15 Payment terms – Vendors......................................................................................................122.16 Dunning.................................................................................................................................122.17 Special G/L Indicators...........................................................................................................122.17.1 Customers.......................................................................................................................................122.18 Payment Types.......................................................................................................................13





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2.19 Cash Journals.........................................................................................................................132.20 Asset Class.............................................................................................................................132.22 Depreciation Areas................................................................................................................142.23 Depreciation Keys..................................................................................................................143.0 Financial Accounting - PROCESS....................................................................................................143.1 General Ledger, Bank & Cash...........................................................................................................143.2 Accounts Payable...............................................................................................................................173.3 Accounts Receivable..........................................................................................................................204.0 Asset Accounting 23

5. Reporting Requirements:..................................................................................................285.1 General Leger.....................................................................................................................28

6.0 Integration with other Modules....................................................................................28





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1.0 Organizational Elements

1.1 Company

A company is the organizational unit used in the legal consolidation module to roll up financial statements of several company codes. A company can include one or more company codes.

Particulars (Case Study):- OSCAR GROUP

Code: - OSCAR

1.2 Company Codes

A company code is defined by means of four-character alphanumeric key that is unique to it in the client.Eachclient. Each company code is an independent accounting unit. The legally required balance sheet and profit and loss statement are created at this level. Power India LimitedPower Electronics Limited

Code- PIL-1000 PEL-2000

1.3 General Ledger

1.3.1 Chart of Accounts

It is a variant which contains structure and basic information about General Ledger accounts.

Code:OCOA

1.3.2 Account Group

Account Group is a group of general ledgers. It controls number range within the group, whether the account is one time, and status of the fields in the master record. Particulars (Case Study):- For this case study we have identified 7 account group

Share CAPITALFixed LiabilitiesCurrent Liabilities





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Fixed AssetsCurrent AssetsIncome AccountsExpense Accounts

1.4 Fiscal Year Variant

The field status variant determines which fields are ready for input, which are required entry fields, and which are hidden during document entry

Fiscal year in this case study:- April – March

Code V3

1.4.1 Posting Period Variant

Posting period variant makes it possible to maintain the status of posting periods independent of the company code.

In this case study:- 12 Normal Periods + 4 Special PeriodsCode:1000

1.5 Accounts Receivable

Accounts receivable application component records and administers accounting data of all customers.

1.5.1 Customers Group

List of customers who will be assigned to a group,

As per case study :- 1000 2000Domestic Domestic Overseas One time One time

1.5.2 Credit Control Area

An organizational unit that represents an area responsible for granting and monitoring credit limits to customers


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Cc Area –PE01

1.5.3 Dunning Area

Dunning area is an optional unit in the organization structure used to group customers for dunning, each dunning area can represent different dunning policies or organization units responsible for dunning.

1.6 Accounts Payable

1.6.1 Vendor Group

List of Vendors who will be assigned to a group,

As per the case study :- Domestic VendorImport VendorService VendorCapital Goods VendorOne Time Vendor

.1.7 Banking

1.7.1 House Banks

Each bank account is reflected as combination of House Bank ID and Account ID.In the case study ,we are creating 63 house banks

One House Bank for Head Office, Four for Regional Office Fifty for Branch office, Eight for manufacturing units

1.8 Asset Accounting

Asset Accounting is used for managing & supervising fixed asset with SAP,

1.8.1 Chart of Depreciation

Chart of Depreciation is a functionality, which consists of different asset valuation approaches. We would assign the same COD to both co codes PIL & PEL

Code :1000





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1.8.2 Asset Classes

The asset class is the main criterion for classifying and structuring fixed assets according requirements of the enterprise.

SL.NoDescription of Assets

Asset Classes

Assigned Number Range

1 Buildings 100000 199999 2 Land 200000 299999 3 Plant & Machinery 300000 399999 4 Furniture and Fixtures 400000 499999 5 Vehicles 500000 599999 6 Office Equipments 600000 699999 7 Asset Under Construction 7000000 7999999

1.9 Field Status Variants

Here we can define and edit field status variants and groups. We group several field status groups together in one field status variant. We assign the field status variants to a company code in the activity Assign Company Code to Field Status Variants

Code:1000

2.5 Document Types

It is basically type of document which tells about transaction. It is defined at client level and uniquely identified by Doc.number, company code, and fiscal year. It controls number ranges for document and account types permitted for postings.

Particulars (Case Study):-

Document Types CodesNumber Ranges

Asset posting AA 1000000000 1999999999Accounting document AB 2000000000 2999999999Dep. postings AF 3000000000 3999999999Net asset posting AN 4000000000 4999999999Contract settlement CH 5000000000 5999999999Customer document DA 6000000000 6999999999Customer credit memo DG 7000000000 7999999999Customer invoice DR 8000000000 8999999999Customer payment DZ 9000000000 9999999999Euro rounding diff. EU 10000000000 10999999999


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Vendor document KA 11000000000 11999999999Vendor credit memo KG 12000000000 12999999999Net vendors KN 13000000000 13999999999Account maintenance KP 14000000000 14999999999Vendor invoice KR 15000000000 15999999999Vendor payment KZ 16000000000 16999999999G/L account document SA 17000000000 17999999999G/L account posting SB 18000000000 18999999999Cash document SK 19000000000 19999999999Adjustment document SU 20000000000 20999999999Data transfer UE 21000000000 21999999999Goods issue WA 22000000000 22999999999Goods receipt WE 23000000000 23999999999Inventory document WI 24000000000 24999999999Goods issue/delivery WL 25000000000 25999999999Net goods receipt WN 26000000000 26999999999Payment posting ZP 27000000000 27999999999Bank reconciliation ZR 28000000000 28999999999Payment by check ZS 29000000000 29999999999Payment clearing ZV 30000000000 30999999999





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2.6 Posting Keys SAP Standard Keys

Posting Types CodeAct assignment model 0Invoice 1Reverse credit memo 2Bank charges 3Other receivables 4Outgoing payment 5Payment difference 6Other clearing 7Payment clearing 8Special G/L debit 9CH Bill.doc. Deb 0ACH Cancel.Cred.memoD 0BCH Clearing Deb 0CCH Clearing Cred 0XCH Credit memo Cred 0YCH Cancel.BillDocDeb 0ZCredit memo 11Reverse invoice 12Reverse charges 13Other payables 14Incoming payment 15Payment difference 16Other clearing 17Payment clearing 18Special G/L credit 19





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CH Cancel.Bill.docDe 1ACH Credit memo Deb 1BCH Credit memo Deb 1CCH Clearing Cred 1XCH Cancel.Cr.memo C 1YCH Bill.doc. Cred 1ZCredit memo 21Reverse invoice 22Other receivables 24Outgoing payment 25Payment difference 26Clearing 27Payment clearing 28Special G/L debit 29Invoice 31Reverse credit memo 32Other payables 34Incoming payment 35Payment difference 36Other clearing 37Payment clearing 38Special G/L credit 39Debit entry 40Credit entry 50Debit asset 70Credit asset 75Stock initial entry 80Costs 81Price difference 83Consumption 84Change in stock 85GR/IR debit 86Stock inward movement 89Stock initial entry 90Costs 91Price difference 93Consumption 94Change in stock 95GR/IR credit 96Stock outwd movement 99





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2.7 Tolerance Group

Here we predefine various amount limits for the employees with which we determine, the maximum document amount the employee is authorized to pos, the maximum amount the employee can enter as a line item in a customer or vendor account, the maximum cash discount percentage the employee can grant in a line item, the maximum acceptable tolerance for payment differences for the employee.

Code:2.8 Tax on Sales/Purchase

The taxes on sales/purchases include input tax, output tax, acquisition tax and additional taxes. In addition to tax codes, percentage rates and tax accounts, you have to specify whether the cash discount amount reduces the tax base amount, depending on the company code.

2.9 Withholding Tax Keys

Here we define the following the withholding tax for accounts payable, withholding tax calculation during payment, withholding tax code per vendor line itemParticulars (Case Study):-


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INTEREST INCOME OTHER THAN SECURITIES 194APAYMENT TO CONTRACTORS 194CINSURANCE COMMISSION 194DRENT 194IPROF/TECHNICAL SERVICE 194J

2.10 Withholding Tax Types & Codes

In this case study we are going to us the standard SAP defined with holding tax codes

2.11 Business Places

Here you define the business places for certain activities like filing & issue of TDS is done & business places are mandatory

Particulars (Case Study):- ASSUMED 1 HO, 4 RO AND 7 +1 PLANTS (PIL & PEL)

BUSINESS PLACE -HO BPHOBUSINESS PLACE -CHENNAI BPCHBUSINESS PLACE -MUMBAI BPMUBUSINESS PLACE -KOLKATA BPKOBUSINESS PLACE -DELHI BPDLBUSINESS PLACE - Durgapur BMDGBUSINESS PLACE - Nashik BMNKBUSINESS PLACE - Pune BMPUBUSINESS PLACE - Ranjangoan BMRJBUSINESS PLACE - Gurgaon BMGUBUSINESS PLACE - Hosur BMHOBUSINESS PLACE - Chennai BMCHBUSINESS PLACE - Bangalore BMBA

2.12 Financial Statement version

Here we can define the versions that where we need to create a balance sheet and profit and loss statement, we can define versions for a specific chart of accounts, for a group chart of accounts, or without any specific assignment.

Code:OSCAR





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2.13 Vendor Group Number Ranges

Here we define the number ranges that we are going to use for creating list of vendors, this can be alphabetic or numeric or both.

2.14 Customer Group Number Ranges

Here we define the number ranges that we are going to use for creating list of customers, this can be alphabetic or numeric or both. The account group ensures that only relevant screen and fields are displayed and ready for input for each of the customer. Each customer account must be assigned to an account group. What fields are displayed and whether their entry is optional or required (we will define in Field status) when you enter or change the customer master data

2.15 Payment terms – Vendors

In this activity you define the payment terms. The rules for determining the due dates are taken from the terms of payment in Financial Accounting (FI). You can make different assignments for incoming and outgoing payments. You can also assign a calendar that is then valid for outgoing and incoming payments.

2.16 Dunning

Dunning is the process of notifying customers that an unpaid obligation has become past due. A company code can be divided into optional dunning areas based on the different dunning policies or organizational units that are responsible for dunning (e.g. sales organization, division or business area)

Particulars (Case Study): - We have decided to have a four level dunning notice, code – 1

2.17 Special G/L Indicators

There are specific posting keys & indicators predefined in the system for special GL transactions, the special GL indicators must be entered when the transaction is created, this enables the system to recognize the transaction as a special GL transaction.

2.17.1 Customers

Down Payment A

Bills of Exchange W


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Letter of Credit X

2.18 Payment Types

We can assign customer payment types specifically to one country, if we use our system for different countries. We must assign at least one type to a customer-specific payment type.

Here we are considering three modes of payment

C – Cheques

T – Bank transfers

W – Wire Transfers

2.19 Cash Journals

Here we create a G/L account, for the cash journal in the required company code. the account can only be posted to automatically, displays a unique account currency If we want to run several cash journals with different currencies in this account, then we need to make sure that, the indicator Balances in local currency only is not set, the account currency corresponds to the company code currency

Code: - Cash Journal for PIL – OPIL

Cash Journal for PEL – OPEL

2.20 Asset Class

It is defined at client level. It is important for structuring fixed assets. An essential function is to establish link between asset master records and accounts to which ther related values and depreciation are posted in GL, for which account determinati

Particulars (Case Study): - Seven Asset Classes have been defined and the number ranges have been mentioned below:

SL.NoDescription of Assets

Asset Classes

Assigned Number Range

1 Buildings 100000 199999 2 Land 200000 299999 3 Plant & Machinery 300000 399999 4 Furniture and Fixtures 400000 499999 5 Vehicles 500000 599999 6 Office Equipments 600000 699999





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7 Asset Under Construction 7000000 7999999 2.21 Account Determination Key

An automatic function that determines the accounts for posting amounts is Financial Accounting. The key of an account determination must be stored in the asset class. In this way, the account determination links an asset master record to the general ledger accounts to be posted for an accounting transaction using the asset class. Usually, you need at least the same number of account determinations as you have asset balance sheet accounts in the general ledger.

Particulars (Case Study): Seven Account Determination Keys have been which are:

2.22 Depreciation Areas

An area showing the valuation of a fixed asset for a particular purpose (for example, for individual financial statements, balance sheets for tax purposes, or management accounting values).

Particulars (Case Study): - Two Depreciation Areas have been defined which are,

Book Depreciation Area (01) Tax Depreciation (15)

2.23 Depreciation Keys

Depreciation keys contain the parameters that control the calculation methods for depreciation calculation.

Case study: In the present case we are using the standard SAP defined Depreciation keys for IT purposes. Depreciation keys for Book Depreciation to be defined during Realization Phase.

3.0 Financial Accounting - PROCESS

3.1 General Ledger, Bank & Cash

No transactions related to General Ledger have been mentioned in the case study, however, certain common period and year end activities have been assumed. As per the case study, the Bank Accounts are maintained at Head Office, 4 Regional Office, 50 Branch Level and at manufacturing locations (7 for PIL and 1 for PEL). INR is the currency for all Bank Accounts. Bank Reconciliations are done at monthly basis for all banks and excess amount is transferred to HO bank branch. Based on these details 63 House Banks are required for PIL and 56 for PEL. For integration with General Ledger


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main Bank Accounts and Bank Sub accounts will be created. The transactions like payment and receipts will affect the sub accounts initially and then at the time of processing bank reconciliation statement the sub accounts will get debited/credited and the main bank account will get the opposite posting. The main bank account amount will tally with the amount as per Bank Statement.

Cash balances are maintained at Plants for petty cash expenses and head office remits funds for petty cash at the beginning of every month. The petty cash will be handled in SAP by using the concept of Cash Journal. This will account for both receipts and payments of cash.

Master Data

Bank master record data includes the bank key, the name of the bank, the address and

country specification.

The Bank Directory contains complete details about each House Bank.

A House Bank is any banking institution with which the organization conducts business.

The House Bank contains the company’s funds.

House Banks for each Company Code are created using a user-defined five character code.

For each House Bank, the Bank Country must be identified in which the bank is located,

as well as a unique Bank Key. The Bank Key is a unique country-specific code. The

system uses the combination of Country Code and Bank Key to identify the House Bank.

Each House Bank can have multiple Bank Accounts created within it, each identified by a

unique code containing up to 18 characters.

Note: The length of both the Bank Key and the Bank Account numbers is a country

specific configuration.

IBAN is International Bank Account Number. For electronic applications the IBAN

consists of up to 34 alphanumeric characters. The length of the IBAN is defined as a

constant for each country.

Each of the Bank Accounts created within a House Bank must be assigned a unique freely

definable five-character Account ID.

The Account ID is used for the Payment Program specifications and in the account master

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Cash Journal Accounting

Several cash journals can be run for each company code. Each cash journal is assigned a unique 4 digit identifier. It is possible to maintain a separate cash journal for different currencies. Using the cash journal one can post to different account types directly. Hence, it is possible to post transactions involving cash payments and receipts from vendors and customers also.

Transaction code to be used for Cash journal processing is FBCJ

Process

Business Case for Collections

Collections from the domestic customers are made at the branch offices and remitted to the

Head Office on monthly basis along with statement of collections made and balance due

customer wise.

Business case for Payments

Payments to domestic vendors are made from the regional offices. Bills are processed for

payments twice in the month on fortnightly basis. After making the payment the regional

offices prepares a statement of vendor wise payments made to the Head office for

reconciliation. Blocking a vendor from payment is solely decided by the Head Office.

Business case for Cash Journal/Petty Cash

Cash balance is maintained at the plants for incurring petty expenses. The head office

remits fund for pretty cash expenses at the plants at the beginning of the each month.

The plants prepare the statement of expenses incurred at the plant and send the same to the

head office at the beginning of the next month together with the balance of petty cash in

hand at the plants.

Cheque Management / Cheque Printing Cum Advice

The function of cheque management will enable printing of cheque through SAP. Cheque

series will be defined for a combination of a Company code and Bank Account (Account Id).





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Cheque numbering will be in sequential order. Cheque series for automatic payment has to be

in sequential order. Cheque printing facility will be available for the bank account.

The print program completes the following:

Assigns cheque numbers to payment documents.

Updates the payment documents and original invoice documents with the cheque

information

Prints cheques and accompanying documents.

Period End/Year End Activity

Foreign Currency valuation GR/IR account allocation Carry forward of all Profit & Loss accounts to retained earnings Post Recurring Entries Accrual Posting Parked Documents Settlement Balance Carry forward of all Balance Sheet accounts to the next period Tax Deduction At Source Stock Report Cash Flow Statement. Changes made to any GL accounts

3.2 Accounts Payable

Introduction:

Accounts Payable is a sub module in the Financial Accounting (FI) .This module is used to process Vendor transactions. As per the case study, procurement of material is done from both domestic and foreign vendors. Import is controlled from the HO. Based on the type of vendors, the vendor groups has already been defined (refer Master data section). All the vendor related transactions will be done using standard SAP. It is assumed that some vendor invoices (like vendors for utilities) will be raised directly in FI. For majority of vendors the Procurement cycle will start with Purchase Requisitions and Purchase Orders. The payment terms to the vendors will be decided during Realization phase. With holding tax will be deducted from the vendors at the time of payment or credit to the vendor account whichever is earlier. The standard with holding tax types and tax codes provided





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by SAP are sufficient to take care of this requirement. (Please refer to the KDS section for details of the Withholding Tax types, Codes and Keys).

Some time vendors are paid advances as well. The same will be taken care of by using Special GL indicators.

Process:

Transaction code for Creating Vendor – FK01

There are two types of Invoices received by the Accounts Payable team for Payment

1. From the Purchase department

2. From the vendor directly in FI (vide Transaction code FB60)

A Vendor Invoice can be created with reference to PO, Goods receipt, a delivery note or a vendor.

Vendor Payments can be Processed automatically using payment programs (via Transaction Code F110) or Manually using Transaction code F-53

Output of the Outgoing payment can be any one of the following : Check, Bill of Exchange ,Bank transfer

All open items of a particular vendor can be cleared or part of the open items are cleared this is decided based on the payment terms defined.

In certain circumstances Advance payment (down payment) has to be made to the Vendor in order to supply material which will later adjust with the final payment.

Transaction Code for recording Vendor down payment F-48.





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Flow Chart – Accounts Payable (Invoice coming from MM module)


Goods Receipt – MIGO

Invoice – MIRO

Bank Reconciliation – FF.67

Payment – F110 / F-53

MM team

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FI team

FI team

Purchase Order - ME 21N MM team

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Flow Chart – Accounts Payable (Invoice raised directly from Finance like for payment of Utilities)

Year end/period end activities

Carry Forward Receivables/Payables F.07Vendor Balance Confirmation F.18Grouping Customers/Vendor Master Records F.1A

3.3 Accounts Receivable

Introduction:

Accounts Receivables manages and maintain the entire accounting data of all the customers. All postings in accounts receivables are also recorded directly in the General ledger. This deals with different transactions such as billing, down payment, Bills of exchange and letter of credit (LC).

As per the case study, both domestic and export sales are done in case of PIL. For PEL only domestic sales are done. Most sales are credit sales. However, sales to some new


Invoice - FB60

Payment – F110 / F-53


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customers are done after accepting Hundi/ Bills of Exchange/ Letter of Credit for foreign customers. Dunning is done in case of customers with overdue outstanding payments. Based on the details Customer Groups are decided (please refer to the Master Data section for details). Below Terms of payment will be considered as mentioned by SD team.

0001-Payable due to immediately0002-Within 14 days 2% cash discount

Within 30 days due net

Background:

A customer is represented in the SAP System by means of a master record. A customer master must be created for each account. Customer master records contain information about the customer account that control how business transactions are posted and managed. The master data for customer is used not only by the Accounting department, but also by the Sale and Distribution department.

There are three segments of customer master record.

General Data: Data at this level pertains to all company codes in which the customer master record is opened

Company Code level: Company specific data is entered at this level and can vary from each company code.

Sales area level: The data will be of sales specific like, Sales order processing, billing, shipping etc

Process:Customer down Payment:

Down payments received are part of the full price which is paid in advance i.e. before the receipt of goods and the balance is paid after the delivery of goods. These down payments are shown on the liabilities side of the balance sheet.Down payments are received from the customers with reference to the sales orderReceipts should be generated by the system when down payments are accounted.Down payments received from the customer will be cleared against the customer invoice.Down payments received from customers will be cleared against open items in the customer’s accounts as well as accounts in special General ledger.

Invoices and Credit Memos:Credit memos are created by using the Transaction code FB75

Bills of exchange:





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Finance department receives the Bills of exchange accepted by the customers. Same bills will be sent to the bank for discounting.Special GL transactions are used to manage the bills of exchange.BOE received from customers will be noted down in the registerBills will be sent to the Bank for discountingCustomer account will be affected upon receipt of Bank statement

Letter of Credit:

The letter of credit is a mechanism which allows importers to offer secure terms to exporters. They are used to protect against Buyer’s risk or Buyer’s country’s risk or against Import control regimes operating in the Buyer’s country.Upon verification of the LC received from the customer, following details are entered in

the system

Value of LCLC opening BankExpiry date of LCReimbursing BankSpecial terms Bank charges

Once the LC is accepted by the Bank, it is documented as a noted item.After the goods are dispatched, LC is sent to the Bank along with necessary documents.Customer invoice is cleared as per Bank statements showing LC amounts as received.

Account Clearing:

Clearing procedure can be:

Manual Automatic

In the manual clearing procedure, open items are selected that balance to zero from an account. The system then marks these items as cleared. It enters a clearing document number and the clearing date in the document items. The clearing date can be the current date or a date that is entered manually. The clearing document number is the number of the most recent document involved in the clearing transaction.For automatic clearing, the program groups together those items from an account that have the same matching values in the fields of the corresponding line items and clears.





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Dunning:

Dunning is the process of notifying the customer that an unpaid obligation has become past due.

Dunning letters will be sent to Customers for reminding them for overdue invoices and recovery of debit balances.

Dunning program will be executed on user decided time intervals.Dunning levels will be fixed.

Flow Chart – Accounts Receivable

Period/Year End activities

Carry Forward Receivables/Payables F.07

4.0 Asset Accounting

As per case study, the fixed assets are procured and disposed centrally at the HO level. Budgets are maintained for the assets to compare budgeted and actual amounts. Depreciation is maintained in Straight Line Method as per Schedule XIV and Written down Value for calculating Managerial remuneration. Depreciation is charged on a monthly basis.However no details about the asset classes and rates of depreciation have been provided. Hence the normal asset classes has been considered for this purpose (The Rates of depreciation for each asset class has been determined based on Schedule XIV. It is also assumed that Tax depreciation will also be charged as per the IT Act.To accommodate the budgetary control for asset procurement, the functionality of Internal Order will be used.. All the asset related transactions (acquisition, depreciation posting, transfer and


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retirement/scrapping of asset) will be handled by using standard SAP transactions. For Tax depreciation, the concept of Group Assets will be used. Depreciation keys will be defined later. However, for calculating tax depreciation, the standard keys provided by SAP (CIN version) will be used.

Chart of Depreciation:

The chart of depreciation is a list of depreciation areas arranged according to business and legal requirements. The chart of depreciation enables you to manage all rules for the valuation of assets in a particular country or economic region.

Master Data

Asset Classes:

The asset class helps in classifying the assets as per the requirements of the various statutes e.g. Companies Act or the Income Tax Act etc. The asset class is the most important criteria for structuring fixed assets from an accounting point of view. Every asset has to be assigned to exactly one asset class. The asset class is used to assign the assets (and their business transactions) to the correct general ledger accounts.

The asset class can serve as a sample master record for all the assets in that class. It controls the number range and the fields for the asset master record.

Account Determination Keys:

Depreciation Areas:

Depreciation Keys:

Process:

Create Asset Master Record:

Asset Master Records have to be created before any transactions relating to assets can be posted. The asset master record contains all information relating to an asset that remains unchanged over a long period of time: ● General master data● Organizational allocations (usually time-dependent)● Depreciation terms


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This is done using Transaction code AS01.

Create Group Asset Master Record:

In the FI-AA component, the calculation and posting of depreciation generally takes place at the level of the individual asset. The system is fundamentally conceived so that depreciation is calculated for each main number or sub-number. To meet certain tax reporting requirements assets may have to be grouped together. Therefore, the FI-AA component enables the definition of group assets for depreciation, in addition to depreciation at the individual asset level. These group assets make it possible to group together a number of assets for the calculation and posting of depreciation. This is done using Transaction code AS21.

Acquisition of an Asset: (For Asset Flow Chart please refer to CO BBP)

The primary business process in asset accounting is the purchase of assets and/or the capitalization of in-house produced goods or services.

Acquisition of Asset with Vendor:

When FI-AA is integrated with FI-AP

An external asset acquisition is a business transaction resulting from the acquisition of an asset from a vendor. This means that you can post the asset acquisition and the corresponding vendor payable in one transaction. Using this transaction reduces the time and energy required for data entry and the possibility of discrepancies.

This is done using Transaction code F-90.

Acquisition of Asset with Clearing Account:When FI-AA is not integrated with FI-AP

The asset acquired is posted using a clearing account. This transaction is used when asset is received after the invoice is received.


Acquisition of Asset with Automatic Offsetting Entry: When FI-AA is not integrated with FI-AP





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The asset acquired is posted using a clearing account. This transaction is used when asset is received before the invoice is received.

This is done using Transaction code ABZON.

Acquisition of Asset through a Purchase Order: When FI-AA is integrated with FI-AP and MM:

When assets are acquired using a purchase order it requires a sequence of steps to be performed at separate times - creating the purchase requisition, creating the purchase order, posting the goods receipt and posting the invoice receipt. When you use this integrated ordering process, you first have to create an asset master record. You can then post the purchase order or the purchase requisition with account assignment to the asset. When you post the Invoice receipt or the Goods receipt the system automatically capitalizes the asset.

This is done using Transaction code MIGO.

Acquisition of Asset through an Internal Order:

An acquisition from internal activity is the capitalization of goods or activities that are completely created within the company itself.

This is done using Transaction code KO88.

Retirement of Assets:

When an asset is sold or scrapped it is treated as retirement of asset. Various types of retirement can be treated as detailed below:

Retirement of Asset with customer:

In this posting transaction, you have to post the revenue (debit A/R, credit revenue from asset sale) first, and then post the asset retirement. When the standard transaction types is used, the system automatically creates a gain posting or a loss posting, as well as a revenue clearing entry, in addition to the asset and accumulated depreciation correction postings.

Specify the customer, against whose account you want to post the retirement. Specify the revenue account, to which you want to post. Specify the affected asset, the amount of APC that is being retired, and the amount of revenue that was earned. The system determines and posts the proportional value adjustments automatically.






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Retirement of Asset without customer:

This transaction is used in a case where FI-AA and FI-AR are not integrated. The transaction is routed through a clearing account. While posting the transaction the details of the following have to be given – asset to be retired, revenue amount, depreciation area, costs if any that arose from retirement etc. The system automatically calculates the gain or loss on sale.

This is done using Transaction code ABAON.

Retirement of Asset by scrapping:

This transaction is used in a case where an asset is scrapped without generating any revenue. While posting the transaction the details of the following have to be provided – asset to be scrapped, depreciation area, etc.

This is done using Transaction code ABAVN.

Transfer of Asset within Company Code:

Using this transaction a fixed asset or a component of the fixed asset can be transferred to a different Asset Master Record. This transaction is generally used in the following circumstances –

Asset under construction is completed and settled to a finished asset An asset was created in a wrong asset class An asset is split up and a part of it is moved to a new fixed asset master record.

In this case the Target asset and the Sending asset are in the same company code.

This is done using Transaction code ABUMN.

Inter Company Asset Transfer:

This transaction is used when an asset is transferred from one company code to another company code belonging to the same corporate group or company. There can be three situations in the case of inter company transfer:

This is done using Transaction code ABT1N.

Depreciation Posting:





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Depreciation from Asset Accounting has to be periodically posted to the corresponding asset and expense accounts of the general ledger. The depreciation is posted directly to Financial Accounting when the periodic depreciation posting run is executed.

This is part of the period end activity.This is done using Transaction code AFAB.Year End Activity

Closing existing Asset fiscal year:

A fiscal year end closing program is run to close the fiscal year for one or more company codes. Once the fiscal year is closed no postings or changing of values can be made. The system will close the fiscal year only if:

All assets acquired during the year are capitalized.Planned depreciation from the automatic posting area has been completely posted to the general

ledger.

The system lists any assets that do not meet the above requirements in the log of the year-end closing. The log also shows the reason for the errors.

This is done using Transaction code AJAB.

Technical step to open new fiscal year:

A new fiscal year for a company code has to be opened. At the fiscal year change, the asset values from the previous fiscal year are carried forward cumulatively into the new fiscal year.

This is done using Transaction code AJRW.

5. Reporting Requirements:

5.1 General Leger

Trial Balance Profit & Loss account and Balance Sheet GL Account Balances GL Line Item Display Bank Reconciliation Statement. Other Standard SAP Reports Age wise analysis Open item balances





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Cleared item balances Parked item balances.

6.0 Integration with other Modules

MATERIAL MANAGEMENT

Valuation Group Code: - P001

Valuation Class

Service Category

Account Category Reference Valuation Class

S001 A020 V020S002S003


Valuation Class Transaction Event Key GL Account

Account Assignment for PR/PO

RAW - 3100Semi Finished - 3101Finished - 3102Spares - 3103Hazardous - 3107Printing Serv - 3104AMC - 3105,Misc - 3106SERVICES - 3108Non Stock - 3109Packing Mat. - 3110Returnable Packaging - 3111Trading - 3112

BSXGBBPRDWRXFREFR1FR3FR4BSVUPF

A (Asset),K (Cost Center),F (Internal Order)

Material Type Account Category Reference Valuation Class




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S004S005S006S007S008

Transaction Event Keys

Transaction Event Keys

Description

BSX Inventory PostingGBB Offset entry of inventory postingPRD Cost (Price) differencesWRX GR/IR clearing accountFRE Purchasing freight accountFR1 Freight clearingFR3 Customs clearingFR4 Customs Provisions

BSV Expense/Revenue from stock transferUPF Unplanned delivery costs

SALES & DISTRIBUTION

Account Keys Condition TypesSales Organization

G/L Account & Dunning Area Assignment

To be provided by SD team during Realization Phase

As mentioned below (maintained by SD team)

SPIL & SPELTo be provided by FI team during Realization Phase

Condition Types


Naming Standard Description

ZPR0 PR00 Price (Base Price)ZPN0 PN00 Net PriceZHI2 HI02 Hierarchy Discount- MaterialZKF0 KF00 FreightZMAN k007 Manual DiscountZK07 K007 Customer DiscountZK04 K004 Material DiscountZK05 K005 Customer Material DiscountZR10 R100 100% DiscountZSTX MWST Output TaxVPRS VPRS CostZSKV SKTV Cash DiscountZUT1 UTX1 State TaxUTXJ UTXJ Tax Jurisdiction CodeZBED Basic Excise DutyZDIF DIFF Rounding Off




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fi bbp final

Documents

chennai business place

field status variants

special gl transactions

special gl indicators

asset master records

bank reconciliation ff

asset master record

customer master record