After the release of SAP S/4 HANA Simple Finance, there has been
great interest in the new, next generation finance solution of SAP. If an organization
wants to simplify their finance function, then it is best to get the HANA
capabilities of SAP. SAP S/4 HANA Simple Finance is a faster, smarter and
simplest implementation strategy. Having running simple, organizations tend to
use simple finance. Here is the overview of what simple finance involves;
Fixed
Assets
A fixed asset is something intended for long-term use by the company
in its normal course of business, typically longer than a single accounting
period. The cost, or depreciation, is spread over the useful life (or expected
life) of the asset rather than charged to the profit and loss (P&L) in the
year of purchase.
Most countries have their own legislation regarding what can be
included in the value of the asset, how much depreciation is charged, and when
it’s charged, along with requirements regarding records to be kept of
acquisitions, disposals, transfers, and depreciation for each asset.
Sometimes different records have to be kept for different purposes,
for example, for Generally Accepted Accounted Principles according to local
legislation (local GAAP), for International Financial Reporting Standards
(IFRS), or for group or tax purposes. You may also need to keep separate
records for revaluations and investment support.
In SAPS/4HANA, the New Asset Accounting module holds the asset
register and allows the recording, management, and depreciation of many types
of fixed assets. New Asset Accounting also integrates with other sub modules,
for example, SAP Investment Management (IM), SAP Project System (PS), and SAP
Plant Maintenance (PM) or SAP Enterprise Asset Management (EAM).
Not all long-term assets are physically used by the business and
classified as fixed assets. Assets may be purchased for resale, for example, in
the motor trade, in which case, they would be treated as stock rather than a
fixed asset. They may also be used in the leasing business, in which case, they
come under slightly different accounting regulations and may be recorded in
several different ways depending on their complexity.
New Asset Accounting
New Asset Accounting is SAP’s latest version of the Asset Accounting
module and was introduced in SAP ERP 6.0 Enhancement Pack 7 (EHP 7). It has
since been fully optimized for SAP S/4HANA. Although called New Asset Accounting,
many of the underlying principles and structure remain the same, so existing
Asset Accounting users will still see many familiar transactions, for example,
the Asset Explorer screen However, other transactions have been enhanced with
additional fields or functionality. So why is it called New Asset Accounting?
SAP General Ledger
With the old version of the SAP General Ledger, the easiest way to
account for additional accounting principles in one system was by using
additional accounts in a separate range of the same chart of accounts.
For example, your main accounts might be local GAAP, so you might
have a separate range of accounts for delta postings where IFRS or group
accounts differed. Typical delta postings might be where you have different
accruals, taxes, or different valuations for fixed assets.
The (new) SAP General Ledger, introduced in 2004, brought in the
concept of having one or more parallel ledgers, which allows you to post most
transactions (invoices, payments, etc.) for two or more sets of books
simultaneously to additional parallel ledgers and report on them independently.
New transaction codes allow you to post adjustments in the
additional ledgers so that a single ledger represents a complete set of books
according to a specific set of accounting principles.
The SAP General Ledger enables you to post acquisitions, disposals,
and depreciation in Asset Accounting for one set of books in real time to the
main or leading ledger in SAP ERP Financials (FI),and postings for the other
accounting principles to parallel ledgers, albeit at the end of the month.
Changes Brought in by New
Asset Accounting
Apart from improvements to speed and performance, most of the
enhancements brought in by New Asset Accounting revolve around posting to the
different accounting principles more efficiently and reporting.
All depreciation areas in New Asset Accounting are now equal and
post in real time. You can also navigate and drill down to most financial
documents in the Asset Explorer, not just those in the main depreciation area.
When a change is made to an asset, its planned depreciation (used to
post actual depreciation) is immediately updated, and all reports show
up-to-date values.
Single Source of Truth
The reconciliation between FI and Asset Accounting is assured by
design; for example, reconciliation accounts, which don’t allow manual
postings, are now used in all depreciation areas, which helps preserve the
integrity of the postings. Cost elements are now integrated into the chart of
account master records, ensuring that SAP ERP Controlling (CO) is aligned with
FI.
Postings to the other ledgers no longer take place separately at the
period- end, so postings can’t be accidentally omitted, and you have access to
up-to-date figures all through the period, not just at the month-end.
Benefits
of New Asset Accounting
Simplification
of Posting Logic
New transactions and accounts have been introduced that allow you to
post independently to individual depreciation areas, accounting principles, or
ledger groups, if required.
Transparency
A separate line item is produced for each asset posting, including
the acquisition and retirement values,the depreciation P&L charge,and the
accumulated depreciation,which allows full visibility in FI.
No Redundancy of Data
New Asset Accounting no longer requires the use of delta
depreciation areas in addition to normal depreciation areas.
New Logic and Easier Data
Structures Aids Reporting
Custom reports are rarely necessary now to merge data from different
places or tables as more data from CO, Profitability Analysis (PA), Purchasing,
Sales and Distribution (SD), Asset Accounting, and so on are now stored in a
single table in FI and available in the general ledger line item reports.
Smooth Period-End
The period-end procedure is simpler and faster, with up-to-date data
avail- able all through the month. Postings are direct or in the background, so
there are no more batch postings. The depreciation posting at month-end is
faster because the values don’t have to be recalculated. The planned value is
simply posted directly; that is, no additional batch postings are required.
Posting each ledger to different periods is possible as long as the year start
and end dates are the same, for example, having calendar months for local GAAP,
but quarterly periods for International Accounting Standards (IAS).
Intuitive SAP Fiori Apps
Shorter training times and better user experience are provided with
SAP Fiori apps.
Smart Migration
When migrating from another SAP system to SAP S/4HANA, although many
tables are obsolete, compatibility views in SAP S/4HANA have the same name as
the previous tables to allow custom reports and certain pro- grams to continue
to run. If your existing system has been converted to SAP S/4HANA (as opposed
to uploading opening balances), data from years prior to the migration are
stored and remain accessible for reporting.
You can choose which depreciation area posts to which ledger
(previously only Depreciation Area 1 posted to the leading ledger).
Prerequisites
New Asset Accounting is available even if you’re not on SAP S/4HANA
(as long as you’re on SAP ERP6.0 EHP 7 or above),but you must have the new
version of the SAP General Ledger implemented first and use the ledger
approach. It’s activated at the client level and, therefore, applies to all
company codes. Not all of the features are available until you migrate to SAP
S/4HANA, and after you’re on SAP S/4HANA, classic Asset Accounting no longer
exists.
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