Amortization in SAP

Dear All,
My customer wants to use the automatic amortization for all Prepayments.
Is there any standard SAP tool for amortization. Can anyone help me regarding this.
Regards,
Nidhi

Hi
The functionality of Amortization is as follows:-
I am supplying a tool for making the product to my vendor as the cost of the tool is quite high.
But the cost of tool to be recovered from the vendor, instead of recovering the cost at a single shot. I would like to amorite the tooling cost on every purchase.
Say for Eg the amount payable for a vendor towards the supply of raw materials is Rs. 100 , instead of paying him 100 i will be paying 90 deductin the tooling cost.
This will continue till the tooling cost get recovered
It is actually is the distribution of the difference between the acquisition value and the repayment amount over the term.
A new book value is determined for a position on the valuation key date by calculating the net present value on the key date and generating corresponding interest capitalization flows.
There are 2 methods of doing this:
Linear Amortized Cost (LAC)
and Scientific Amortized Cost (SAC)
For more details about the topic please go to the following link:
http://help.sap.com/saphelp_47x200/helpdata/en/a4/6c28e4aa17014b9ed66af5c6218f17/frameset.htm
Regards

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Hi Anand,
use an additional depreciation area which is assigned to your asset class.
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I received a requirement from the users to do amortization for a fixed asset. Can somebody please help me to understand the business process of amortization and what is the requirement to do amortization for a fixed asset since I do not have prior experience on this.
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Ramki

Hi Ramki,
I'm not sure if you really mean amortization:
The process of reducing the value of intangible assets by spreading the costs over the useful life of the asset.
This can also be achieved by making a value adjustment on the balance sheet key date. From a consolidation point of view, the amortization of goodwill during the first consolidation is relevant. Typically, the procedures for amortization are governed by external regulatory bodies.
Or if you mean depreciation:
http://help.sap.com/saphelp_46c/helpdata/de/4f/71fd71448011d189f00000e81ddfac/frameset.htm
hiere you'll find under the 4th link a complete documnetation
regards Bernhard
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Good Day,
Please kindly provide me complete configuration guide on how to make automatic entry on amortization of bank loan including its interest expense wherein interest rate has been predetermined.
Proforma Entries:
Bank Loan Granted
Dr Cash In Bank XXX
Cr Bank Loan Payable XXX
Monthly Amortization
Dr Bank Loan Payable XXX
Dr Interest Expense XXX
Cr A/P- Vendor Account (for check issuance) XXXX
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Rod

Hi
Please check the below mentioned configuration settings
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3.SPRO->Financial Accounting-> General Ledger Accounting ->Business transactions->Bank account interest calculation->Interest calculation->define reference interest rates.
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I'm new to this area and please explain in detail what I'm supposed to do for this requirement.
The requirement: Use AM module to post pre-paid expense asset amortization (Straight Line amortization)
The implementation of this capability will allow Property Accounting to enter prepaid expenses into the FA subledger and have SAP automatically post monthly straight line amortizations as part of the month-end process. The idea is to configure a new asset class for "prepaid Leasing Commission" assets that will have the following GL accounts.
GL Account: 159001000
Cost Center: 159001000
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What I have done so far:
I have created an asset and have created a Cost center and assigned the profit center to that. I have also created a non-recon account. The question is where do I use the Non-recon account and the expense account and have the SAP post it automatically? Will be helpful if you can provide the steps I should be following and the tcodes for this. Thanks for the help.

Hi,
I would recommend that you go through the IMG of Fixed Asset Accounting and complete the FI-AA configuration.
You store the accounts to be used in postings in the node "Integration with General Ledger".
Requirements to use cost center as accounting object are documented in the SAP Help Portal as well as in note 684659.
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Historical Goodwill Amortization

Hi Gurus,
we are planning to start a new consolidation environment.
One problem we have is related to legacy amortization, since we wolud like to perform automatic goodwill amortization.
We do not have an underlying SAP EC-CS or FI-LC, but we are speaking about the historical goodwill that was generated in the past and now must be considered as well since we are going to perform the first consolidation.
We found OSS Notes:
610218 - Legacy data transfer of manual goodwill entries
379665 - SAP consolidation: Legacy data transfer for goodwill entries
and would like some of you to share your own experience in this situation, with this notes.
Let's say this year (2009) is Y: as a consequence of First Consolidation BCS will calculate 1000 as Goodwill and we be finally depreciated up to year 2018.
Historical Goodwill emerging in Y-4 (2005) was 1000, to be depreciated in 10 years (100 for each year): so capitalided goodwill depreciation is 400.
So the questions are:
1. Goodwill will be depreciated up to year Y+6 (2013), considering past depreciation quotes?
2. Will these postings be considered in further operations (eg. divestiture or organizational changes)?
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Thanks in advance for your cooperation.
GFV

Hi guys,
the question concerns technical aspects rather than functional or legal issues.
In other word the situation is the following:
I have Goodwill emerging in past years (let's say 2005, 2006, 2007, ...), that was amortized in Legacy system: so, in each year, we have some postings for each of the (past) Goodwill(s).
This year 2009 will be First Consolidation: users want amortizations related to past Goodwill(s) to be recorderd automatically by SEM-BCS, without manual intervention
So the question are:
1. Can this be requirement be satisfied with standard functionalities?
2. Will Goodwill AFD manually recorded for the past years be considered within First Consolidation?
As per my comprehension Dan says this requirement can be satisfied.
Thanks for your cooperation.
GFV

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Please read up on asset shutdown in the SAP Help. What you described is standard functionality. Since the asset was not used for a specific period of time in essence the life of the asset was extended by that same period.
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Condition type for Amortization charges

All SAP Gurus,
We want to reduce the amount equal to the Amortization charges from the payment to the vendor.
The calculation are such that we have to put the condition for Amortization charges into Tax procedure.
Which condition type can be used for the Amortization charges in Tax procedure?
Regards,

Dear sir.
Amortization charges
excise value should calculate more that the material base price correct.
so for that u have to create one condition type in M/06 with condition class : A and calculation type : A
insert the condition type in your pricing procedure and from which it should calculate and click statistical and give the sub-total : 4.
while creating Po give the Amortization charges in the canditon type excise will calculate base price and amortization charges .
regards
jrp

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Dear All,
Is there any standard report available in SAP for getting details related to Amortization.
Regards
Meruta

Hi
Amortization is nothing but like depreciation only...even if you do amortization that should be with dep.key only....in that case any report whcih shows the dep...is enough...
VVR

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Is there a functionality in SAP wherein a certain prepaid expenses were incurred but subject to amortization for a certain no of periods. In this case, system will amortise automatically the actual expenses allocated to each periods.
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Robert

I think you can do this with creating accrual object......
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what do you mean Asset Construction Management & Amortization or definition of both in SAP PS.
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Fixed asset that is in the process of being completed at the time the balance sheet is being produced.
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http://help.sap.com/erp2005_ehp_04/helpdata/EN/4f/71daf9448011d189f00000e81ddfac/frameset.htm
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BOND purchase : accrued interest calculation in amortization log

hello,
When purchasing a bond, accrued interest is to be paid on top of the clean price.
Common market practice for day counting of accrued interest is : value date of the purchase - previous coupon date, meaning that the purchaser paid to the seller the coupon days upto but not including the purchase day (seems obvious). Hence, in the transaction in SAP we DE- flag "include" for the calculation date => we are in line with the broker's confirmation.
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Hello Carl,
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In TS01 you can define it with the flag, how accrued interest is calculated, but TPM1 calculates always inclusive.
Otherwise it may lead to inconsistencies. For example, if you would have two purchases of the same ID and in one deal you set the flag, but in the other not, so which deal should TPM1 consider?
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BR,
Tomislav

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Dear All,
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Now, this is the reverse case. We dont know how to do the configuration for this.
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Mullairaja

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Amortization in SAP

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