How to define depreciation area for SAP Asset Accounting

How to define depreciation area for SAP Asset AccountingWe define depreciation area to calculated depreciation for different purpose. If your legal requirement is different from other requirements then you define a depreciation area as book depreciation area and specify the calculation procedure there by which when system calculate depreciation it will be calculating as per the legal requirements. Same way we define for income tax purpose. For internal reporting we created cost depreciation area.

To define it we have to use below path;

SPRO > Financial Accounting > Asset Accounting > Valuation > Depreciation Area > Define Depreciation Area

Double click on it

SAP will provide you standard DEP area which can be used for your business. If you want to create another DEP area specific to your business process then you can do so by selecting a DEP area which closely resembles to your choice and click on “COPY AS” or Press F6. 

Customize your DEP area as per your business process and save it.

How to specify Depreciation Area Type

You can specify depreciation area type by assigning any of the value mentioned below;

01  Valuation for trade bal. sheet

02  Special dep. reserves (special tax depreciation)

03  Valuation for tax bal. sheet (diff. from trade bal. sheet)

04  Net worth valuation

05  Insurance valuation

06  Group valuation

07  Cost-acc. valuation

08  Investment support

09  Manual Revaluation

10 US: Federal tax ACRS / MACRS

11 US: SMACRS – State modified MACRS

12 US: ALTMIN – Alternative minimum tax

13 US: ACE – Adjusted Current Earnings

14  US: E&P – Earnings & Profits

15  Austria:  investment incentive

16  Stock indicator for real estate management of insurances

17  DEP area for handling inflation (hard currency)

18  Balance sheet according to other guidelines (e.g. IAS)

19  Property Tax (Russia)

20  Transport Tax (Russia)

To do that you need to use transaction code OADC or path;

SPRO > Financial Accounting > Asset Accounting > Valuation > Depreciation Areas > Define Depreciation Areas

While defining you must define one depreciation area as “Valuation for trade bal. sheet”.

Determine Depreciation areas in the asset class

You can set it for the asset class as active or inactive. In this step you assign different values in combination of asset class, COD and depreciation areas.

You assign screen layouts, depreciation key and useful life here by which these determines when you use the DEP area for the company code.

SAP Asset masters are created under asset class and dep terms are assigned to these asset classes instead of assigning it to asset master. The reason is, asset masters assigned to asset class are using same depreciation terms.

To do than you can use transaction code OAYZ or below path;

SPRO > Financial Accounting > Asset Accounting > Valuation > Determine depreciation areas in the asset class

Select your asset class and double click on depreciation area.

From here you can activate or deactivate it.

You can also deprecation key, useful life and screen layouts.

Asset accounting is treated as a sub module in SAP financial accounting module. Asset accounting is integrated with general ledger accounting module. Due to which general ledger accounts as assigned to account determinations are picked up when SAP hits the transactions related to those asset classes to which these are assigned. In general ledger accounts you will not get line item wise break up for your asset classes. When you use asset master to display transactions related to assets you will be getting line item wise break up for your transactions. By using asset accounting sub module you can run various report for different asset masters separately.

Editorial Staff at Yourfinancebook is a team of finance professionals. The team has more than a decade experience in taxation and personal finance.