Asset under constructions

Dear Experts,
I am new to this concept
When i am settlement of AUC to main i asset i want create one cost element for external settlement.
cost element catagery 22. My doubt is this cost element comes under expences or revenue.
Regards
venkataswamy

Hi
Category 22 is for the external settlement and not comes under expense or Revenue.Primery GL account will be under Profit and Loss account group only but in the Financial statement grouping -FSE3 generally it comes under Balance sheet --Asset --Intangible Assets.
But it depends on the Company decision also , it can be kept under Expense and gradually moved to Fixed Assets only as and when settled.
Mukta

Similar Messages

Settlement of WBS element down payments to an asset under constructions

The down payment (of the transactions tcode F-47 and tcode F-110), are
always settlement wbs element (tcode CJ88), we do not want to post down
payments to the receiving asset under construction (transaction type
180 or 181).
In the down payments are always taken into account in the settlement to
an asset. The settlement of the down payment is the actual reason for
the previous update of down payments in FI (Transaction type group
15). Furthermore, the settlement of down payments to assets should
not be capitalize.

When you search on this forum try to put Date range "ALL" to get more results. Please read below threads and you will get the solution.
MIRO:Transaction in area 15 contradicts the net book value rule
Transaction in area 01 contradicts the NBV
Looks like you have a negative balance in your WBS which you are trying to settle to FA.

Creation of internal order (investment order- asset under construction)

I want to capture the cost of asset under construction through internal order (controlling) not throgh Investment Measure module. How i can do this.

Hi
It is the same flow as explained by AP above
If Investment management module is active, then on settlement i believe the AUC asset is automatically generated. Therefore you have to define an asset master and then include this asset in the settlement rule of the IO. Thus on settlement the cost in the IO would flow to the asset
Thank You,

Error in dep run - Asset under construction

Hi!
Could someone please help me with the following:
My customer has a large amount of assets under construction (AuC) and also other assets. None of the assets under consctruction should have a depreciation key (or depreciation key 0000) and no depreciation accounts are allocated in transaction AO93 for AuC . But my customer now has incorrectly created a few AuC (that should NOT be depreciated at all) with depreciation key LINK. What happened?
1) Test run depreciation (AFAB) for all assets in period 1 during 2010. In test run no error log was created, everything looked fine.
2) Executed depreciation in background.
3) When looking at each of the assets in transaction AW01N I can see that all assets (both real assets and AuC with depreciation key) has depreciation posted in period 1. BUT, no depreciation has been posted in general ledger on any of the asset classes!
4) I have now changed the depreciation key on all AUC in AS02 to 0000 so that no depreciation will be calculated.
5) Trying to run AFAB again for period 2 but error message says that period 1 was terminated and that period 1 should be restarted.
6) Trying to run period 1 again in AFAB with restart but error message says "Account 'Acc.dep. accnt.for ordinary depreciation' could not be found for area 01" and refering to all of the incorrect AuC that I have corrected (to no depreciation key)
Please how can I go on? I want to reverse the depreciation in period 1 since I didn't get any posting i the general ledger. And then I want to make a new depreciation run only with correct assets (only depreciation on real assets, not on AuC).
Please help!
I am very thankful for any help!
Many many thanks in advance!
with regards,
Prabhakar

Hi,
I had the similar situation couple of months back. I followed below mentioned process and it worked out well.
1) Maintain GL account for depreciation in AO90
2) restart depreciation run for the relevant period
3) change the depreciation key to 0000
4) repeat depreciation run for the same period (It will post a reverse entry in the same month itself. So the net impact of depreciation in the same month is zero).
By the way I have a suggestion to prevent this issue in future.
You may not be able to detect this issue on test run if you execute on foreground mode because the test run execution is restricted to 1000 assets. If the error is on 1001th asset, you will not know.
Hence, always execute depreciation test run on background mode, check for any errors and execute production run only if there are no errors.
Hope this helps....
Best Regards,
Madhu

Error in depreciation run - assets under construction

Hi!
Could someone please help me with the following:
My customer has a large amount of assets under construction (AuC) and also other assets. None of the assets under consctruction should have a depreciation key (or depreciation key 0000) and no depreciation accounts are allocated in transaction AO93 for AuC . But my customer now has incorrectly created a few AuC (that should NOT be depreciated at all) with depreciation key LINK. What happened?
1) Test run depreciation (AFAB) for all assets in period 1 during 2010. In test run no error log was created, everything looked fine.
2) Executed depreciation in background.
3) When looking at each of the assets in transaction AW01N I can see that all assets (both real assets and AuC with depreciation key) has depreciation posted in period 1. BUT, no depreciation has been posted in general ledger on any of the asset classes!
4) I have now changed the depreciation key on all AUC in AS02 to 0000 so that no depreciation will be calculated.
5) Trying to run AFAB again for period 2 but error message says that period 1 was terminated and that period 1 should be restarted.
6) Trying to run period 1 again in AFAB with restart but error message says "Account 'Acc.dep. accnt.for ordinary depreciation' could not be found for area 01" and refering to all of the incorrect AuC that I have corrected (to no depreciation key)
Please how can I go on? I want to reverse the depreciation in period 1 since I didn't get any posting i the general ledger. And then I want to make a new depreciation run only with correct assets (only depreciation on real assets, not on AuC).
Please help!
I am very thankful for any help!
Many many thanks in advance!

Hi, Can you please how the issue is solved because i have the same problem which i need to resolve immediately. Please reply me as soon as possible
with regards,
Prabhakar

New Depreciation Area in Asset Master Data, for assets under construction.

Hi,
The issue is relating to New Depreciation area. We have created new Depreciation area as 80=IFRS. We had followed three steps
1. Create Depreciation area via OADB.
2. Activate Depreciation area via OAYZ.
3. Automatic opening of new depreciation are via AFBN and program RAFABNEW :-
3.1 u2013 Indicator: Leave values initial = ticked. Set this indicator if you want to open the newly created depreciation area without any values i.e. blank.
In this we have find that the old assets value has been copied. But when we are doing internal order settlement through KO88 i.e. from pre-cap to AUC we are not finding new Depreciation area 80=IFRS in AUC. We had checked in AW01N.
Letu2019s assume that creating a new deprecation area is normally not required since these assets are not depreciated. But During the final settlement, the new depreciation area should also automatically supplied with values from the reference depreciation area from the AUC(assets under construction) in the completed assets. But we doesnu2019t find any values of in Dep Key = 80 IFRS for final assets.
In Assets Class of AUC we had used Investmnet Measure as Status of AUC.
Kindly provide solution for the same.
Nikhil

Check Transfer Variant 5 (under Transactions->Intercompany Asset Transfers->Automatic Intercompany Asset Transfers->Define Transfer Variants):
5     Investment measure settlement
Your Transfer Method is most likely 1 now (without transfer to dependant areas), change it to:
4     Gross method with transfer of values to dependent areas
This should help.

Capitalize borrowing costs to asset under construction u2013 IAS23

Dear experts,
According to IAS 23 we are required to calculate interest on capital invested in an asset under construction.
Borrowing costs that are directly attributable to the acquisition, construction or production of a qualifying asset form part of the cost of that asset. Where funds are borrowed specifically, costs eligible for capitalization are the actual costs incurred less any income earned on the temporary investment of such borrowings. Where funds are part of a general pool, the eligible amount is determined by applying a capitalization rate to the expenditure on that asset. The capitalization rate will be the weighted average of the borrowing costs applicable to the general pool. The amount of borrowing costs that an entity capitalizes during a period shall not exceed the amount of borrowing costs it incurred during that period.
Detail scenario
The construction of a qualifying asset is controlled by an investment measures that are managed as projects - WBS elements and settled to an asset under construction periodically. The calculated interest shall update only the determine depreciation area set on the interest profile (OPIB).
The borrowing operations are managed by money market transaction on TRM (Prod. Category 550 Interest rate instrument).
Using the interest calculation function (CJZ2 - Individual Processing or CJZ1 - Collective Processing) we encountered several problems/ restrictions.
1 u2013 When funds are borrowed specifically to a qualifying asset for example, an interest rate instrument as a money market transaction on TRM should be capitalized according to the actual incurred borrowing cost and not by a capitalization rate. How to assign the value to the WBS element?
2 u2013 When funds are part of a general pool, although we can calculate and update the effective interest rate for each borrowing transaction (TMEZ) how to determine the weighted average capitalization rate by company code and define it on the Reference Interest Rates (OBAC) to be used in the interest calculation?
3 u2013 Even if the capitalization rate is defined and updated manually in the reference interest rate for the interest calculation, how to limit the amount of borrowing costs that will be capitalized during the period? The calculated interest in period shall not exceed the amount of borrowing costs it incurred during that period.
Is there any other functionality to support interest calculation and capitalization of borrowing costs to asset under construction according to IAS23 requirements?
Please advice.

Hi,
The interest rates for capitalization and for appropriation can be collected in separate cost centers and apportioned to WBS . If you incur interests at the group level,then using accrual apportion the relevant portion to the respective C/Codes.
For arriving the weighted average i assume you take the planned interest.For restricting the planned to the actual ones use the " Budget Manager" functionality,give the actual value,set zero tolerance.This will help restricting to the actuals.
Hope this helps.
Regards
Ramesh

Asset under construction-IM module

Hi,
I am planning to manage the asset under construction (AUC) by the PS module. This means to create the AUC through the WBS element, and finally settle to the final asset. For doing that I understand that the asset under construction class should be created as an investment measure.
I am asking if it is necessary to implement the IM module to manage the AUC by PS module.
If it is not necessary which is the difference of having IM implemented?
Regards,
Cecilia

Hi Cecillia,
To answer your questions:
You need to define specific asset class for AuC (status of AuC "investment measure" in OAOA)
You do not need to "implement" IM by creating investment programs but what technically make a internal order or WBS element an investment measure is the presence of an "investment profile" in their master record that will pilot the creation of the AuC. Investment profiles are defined in transaction code OITA that can be found of the IM part of the IMG
I second Ajay comment regarding the use of WBS elements (PS) vs. internal orders (CO) as investment measures: PS offers a lot more possibilities and options than CO but the set up, maintenance and daily use is much more complex. Take the time to consider both options.
Good luck and best regards
Thomas

Settlement of an Internal Order to Asset Under Construction

We are running SAP 4.7 and Iam trying to settle an Internal order to AUC and I get the following error
You cannot use this transaction type to post to this asset
Message no. AA834
Diagnosis
The transaction type entered belongs to transaction type group 15. According to the specifications for this transaction type group, posting with transactions types belonging to this group are only allowed in specific asset classes (for example, asset classes for assets under construction).
The asset to which you are posting belongs to class 18000 (chart of depreciation SEEF). You cannot post to this class using the transaction type you have entered.
Procedure
Check the asset number entered. You may want to allow posting with this transaction type group for the asset class of the asset.
**Please take note that the costs which have come on the internal oder are through GR( Goods receipt) and not down payment. Also note that last month, the order settled without any problems!**

Hi,
thanks for your answer.
I want to do that because of some french tax rules.
These rules say that goods, hours or services produced internally for the contruction of an asset can be "delivered" to itself.
So you can register output tax based on the value produced but you have also to register input tax for the same amount.
Finally the balance for VAT amount is 0.
I was interested to know if that was possible to automize. If not, there is still the possibility to make a separate postings at month end or year end.
Best Regards

WBS Elements and Asset Under Constructions have different Cost Centers

Hello Experts,
We have created a WBS element in one of the projects.
As per standard process, when we create the WBS Element the Asset under construction is also getting created through the settlement rule within the WBS.
These assets should have the same Cost Center as the WBS has. However we are in a situation wherein the Cost Center in the asset under construction is different than the Cost Center in the WBS.
I have checked the settings like automatic account assignment, etc but all settings look correct.
Can you please explain first what could be the reason for such a difference between Cost Centers in WBS and AuC's and what is the solution to avoid it in future?
Thanks in advance
Leena

Thanks for your replies...
@ Alex - There is no Investment Programme ID maintained for this WBS in question since there is no IM for this project.
@ Abdul - Please elaborate more on Validation and Substitution.
Regards,
Leena.

Asset Under Constructions - Settlement

Dear Gurus,
I am trying to do an Asset Under Construction - Settlement using T.Code AIBU, when i click on proceed, it gives me an error:
SYST: You cannot determine the period for rule 02 to 12/31/07
Message no. AA613
Diagnosis
The system could not determine depreciation periods on 12/31/07 for period control 02 of calculation key 0000.
What to do
Maintain the allocation of the periods for the period control you entered.
Proceed
If the period control you entered is a standard period control, you can set up the allocation of periods automatically.
Procecd
Could you guide me through this...
Thanks in advance for your help.
regards,
Raj

Hi,
Please check
Note 357375 - Settlement: AA613 for AuC intracompany transfer
There are two possibilities how to solve this problem:
a. Define period control 02 with Transactions OA84 or OAVH.
b. If you work with self-defined period controls, you can enter another period control instead of 02 in depreciation key 0000.
Rgds.

Asset Under Construction(AUC),During month end settlement run(via KO8G)

Hi Guys ,
please hlep on this AUC :
During month end settlement run (via tcode KO8G), if there are -ve (credit) values to be settled to an Asset Under Construction (AUC) asset which does not have sufficient +ve value in the current FY, the settlement run will prompt an error message "Balance for transaction type group 10 negative for the area 01". The TT posted via the settlement run is TT115. To get around, user has to raise a manual journal (via doc type AT) to post the -ve value to the same AUC asset via TT101. TT 115 and 101 are configured differently (see attached).
Since the Fixed Assets system does accept credit posting to AUC via a journal, is there a solution to make posting go through via the settlement run?
Regards,
Narra

You can settle the AUC value in one period and posting can be made in another period. in the same you can give the different asset value date in KO88 screen. The only limitation is this possible only if the fiscal year is same.
Give the asset value date as 15.07.2007 in KO88
Hope this will work
Radha

Down Payment Posting in Assets Under Construction

Hi
In case of AuC, when we post the down payment, the standard Accounting entry created is:
Vendor Advance A/c Dr
Asset Under Construction (Down Payment) Dr
     To Bank A/c
     To Asset Clearing A/c
When we Post the invoice , the A/c entry passed is
Asset under Construction A/c Dr
      To vendor A/c Cr
When we clear the down payment against the invoice
Vendor A/c Dr
Asset Clearing A/c Dr
     To Vendor Advance A/c
     To Asset under Construction (Down Payment)
My issue is:
1. Why the Asset account should be involved for making down payments? At the time of down payments, the accounting entry that should be passed by the system showuld be
Vendor A/c Dr
    To Bank A/c
2. What happens in the case of year end activities? Why does system create two entries for current assets?
regards
Sanil Bhandari

na

Settlement from internal order to asset under construction

HI All,
I have allocated some labors hours cost from production cost centers to real order which is created for allocating the internal cost to asset under construction.
when i allocate the labor hours by using the "KB21N" it has used the secondary cost element that is "Internal activity allocation" cost element "1200002".
i have given the source cost element "1200002" which is created as "internal activity allocation" and in settlement cost elements folder i have given receiving category is "FXA" and selected by cost element check box. i selected required entry field in settlement profile and assigned in order type.
when i do the settlement to asset under construction from internal order it is showing bellow errow.
"Settlement by cost element not possible due to secondary cost element
Message no. KD553
Diagnosis
You want to settle the secondary cost element 1200002 by cost element to an asset or G/L account, which is not allowed.
Procedure
Extend your allocation structure R3, so that secondary cost elements are not settled by cost element, but with a settlement cost element."
please let me know the problem and where i did mistake. give me the solution
thanks in advance
Mr.Rao

HI,
in your allocation structure R3 you entered in the view "Settlement cost element" that settlement receiver categoy FXA receives values "by cost element". This is only possible for primary cost elements. For internal activities do not tick "by cost element" but use a settlement cost element with cost element category "22".
best regards, Christian

Down payments request for Asset Under Construction

Hello Expert
while Down Payment request to vendors - for Asset Under Construction, system showing error.
Contact your system administrator (table error)
Message no. AA866
Diagnosis
No account has been entered for posting down payments in area 01 under the account assignment key IN95 (chart of accounts YAIN).
Procedure
Enter the account using the Customizing menu.
Pls Reply frinds.
regards,
Riten patel

Dear:
First check in OAYB that have AUC class been specified for down payments and then go to transaction AO90 and maintain the GL account for depreciation are 01 under the Balance Sheet account in the field Acquisition: Down Payment. It will resolve your issue.
Regards

Down payments for Asset Under Construction

Hi Experts,
Urgent!
My client paying advances to vendors, thru TC-F-48.
Previously there is no PO requirement ,now asper client requirement I put PO fild as requirement in posting key 29.
1)There is no problem for payment to vendors -for Raw materials.
2)while paying advance to vendors - for Asset Under Construction, system showing error.
*Error is:
Contact your system administrator (table error)
Message no. AA866
Diagnosis
No account has been entered for posting down payments in area 01 under the account assignment key 4800 (chart of accounts FTL).
Procedure
Enter the account using the Customizing menu.
Pls Reply frinds.
Regards
vinod

Hi Vinod,
I hope that you are following Valuated goods receipt concept.
Valuated goods receipt: Asset will be debited at the time of goods receipt
Non valuated good receipt: Asset will be debited at the time of invoice receipt
If you follow valuated goods receipt concept, then at the time of making down payment, AUC should not be debited (whatever the value date/ capitalization date be). Please refer SAP note number 310368 (valuated goods receipt paragraph) for reference. In that they have clearly mentioned the steps to make down payment against asset under construction Purchase Order without debiting to AUC and without any error message. You have to make F5 378 message number from error message to warning message and in posting key 29 and 39, you have to supress the asset related fields. If you have done the above settings, then system will not show any error message to update G/L account in AO90 transaction code for the Acquisition: down payments and Down payment clearing - 2nd and 4th field or for AUC related fields.
Hope this helps. Assign points if useful.
Regards
Dwarak.

Asset under constructions

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