How to configure asset impairment ECC6.0

Question

Hi,
Our client is looking to enable asset impairment functionality in SAP. An asset impairment is different from a revaluation. Revaluation occurs when a business adjusts the assets prices from a mark to market perspective. An impairment occurs when the business realizes the assets it possessu2019 are worth more or less then what is declared on their balance sheet. SAP FA has standard transactions for revaluation of assets and allows to determine the GL accounts in transaction (AO90 under revaluation account assignment) but nothing for impairment.
I know there are several options listed on the forum to post an impairment but none provide the end result I am looking for
The closest option I have is using ABAVN with a partial retirement (but the posting is wrong).
The client provided the following example:
Facts:
u2022Fixed asset with original cost of $100
u2022Original useful life of 10 yrs
u2022Straight-line depreciation
u2022Impaired to $50 at end of 2nd year (after $20 of depreciation) expense
u2022No expected change in useful life
The related posting must be:
-50 cr. FA acquis
20  dr. Acc. Depr.
30  dr. impr loss (P&L)
After the impairment posting the depreciable base is 50, original useful life is 10, and remaining useful life is 8.
The asset would continue to depreicate at a rate of 6.25 per year for 8 years.
Has anyone configured this in their system?
Thanks,
Kuldeep

Answer 1

Hi,
Please find detailed information provided by SAP.
Impairment
Prerequisites
●  If you are using the new depreciation calculation, you have activated the FIN EA-APPL add-on.
●  You have created the following new transaction types:
○  Transaction type for impairment according to IAS36 (debit) for current year (transaction type group A2)
○  Transaction type for impairment according to IAS36 (debit) for prior year (transaction type group A1)
○  Transaction type for impairment according to IAS36 (credit) for current year (transaction type group A2)
○  Transaction type for impairment according to IAS36 (credit) for prior year (transaction type group A1)
●  You create the transaction types in Customizing:
○  For new General Ledger Accounting under Financial Accounting (New) ® Asset Accounting ® Special Valuation® Revaluation of Fixed Assets ® Revaluation for the Balance Sheet ® Define Transaction Types for Revaluation
●  For each depreciation area, you have specified that impairments can be posted both as revaluation of acquisition and production costs and as depreciation revaluation:
○  For new General Ledger Accounting under Financial Accounting (New) ® Asset Accounting ® Special Valuation® Revaluation of Fixed Assets ® Revaluation for the Balance Sheet ® Determine Depreciation Areas
●  If you want to perform different impairment postings depending on different accounting principles, then you have restricted the transaction types to depreciation areas that use the same accounting principles:
○  For new General Ledger Accounting under Financial Accounting (New) ® Asset Accounting ® Special Valuation® Revaluation of Fixed Assets ® Revaluation for the Balance Sheet ® Define Transaction Types for Revaluation ®Limit Transaction Types to Depreciation Areas
●  For posting impairments in the general ledger, you specified for each depreciation area that revaluation is taken into account during the depreciation posting run:
○  For new General Ledger Accounting under Financial Accounting (New) ® Asset Accounting ® Integration with General Ledger Accounting ® Post Depreciation to General Ledger Accounting ® Specify Intervals and Posting Rules.
Process Flow
  1.  You use the asset list to create a worklist containing the relevant assets. From the SAP Easy Access screen, choose Accounting ® Financial Accounting ® Fixed Assets ®Environment ® Worklist ® Generate. ChooseImpairment Posting as the task for the worklist.
  2.  You specify how the system should post the impairment:
○  As negative revaluation of the acquisition and production costs to reduce the acquisition value (standard setting)
○  As depreciation revaluation, that is, as an increase in the amount of accumulated depreciation
  3.  You specify the transaction types that the system uses to generate the impairment postings for the current year and the previous year.
  4.  You specify how the system should distribute the impairment amount to the individual assets. You have the following options:
○  Distribution of the impairment amount dependent on the net book value
The system distributes the total amount of the impairment proportionally based on the net book value of the individual assets.
○  Customer-specific distribution of the impairment amount
The system distributes the total amount of the impairment based on your customer-specific specifications that you define using the Business Add-In (BAdI) BAdI for Distribution of Impairments (FIAA_IMPAIRMENT_DISTR_CUST). You can also use this BAdI to import an external file in which you have specified the impairment amounts at the level of the individual assets.
○  Distribution of the impairment amount to a net book value of zero
Regards