Process document Asset Under Construction in SAP

Asset Under construction is treated separately in Asset Accounting. A specialasset class exists for Asset Under Construction. The Process to be followed can be as below. The steps to be followed to capture the activities against an asset under construction can be taken care by following the process steps. Legally also Asset Under construction needs to be shown under a different head in the Financial Statement. No depreciation is to be calculated and charged on AUC until the same has been capitalized.

SAP provides it own process and functionality to cater AUC process till its capitalization. Let us see step by step the process followed.

1. A Capital Investment Order (With Asset Under Construction Master Record) is created. All the costs incurred in the construction of the AUC is captured through different applications to an Internal Order or Plant maintenance Order.

2. AUC Master Record is created simultaneously as the Order is created in the system. All the Costs posted to the Order is preliminary settled on this AUC on a periodic basis. This helps in showing the AUC in Financial Statements under the AUC head.

3. In the Order a preliminary Rule is automatically created by the system once a Capital Investment Order is created to settle all the cost to the AUC as 100% settlement.

4. Invoices, Down Payment, Purchase Orders, direct expenses incurred are posted with the CO object (Order).

5. Final Settlement rules are maintained in the AUC to settle to the Main Assets. Rules can be created Line items wise or on percentage basis and transferred to the Main Assets.

6. Once the Asset is Capitalized , the depreciation can be checked and posted in the Asset Accounting.

Proess Flow Diagram

Configuration steps required for AUC

1. Create Capital Investment Order Type

2. Create Asset Class For Asset Under Construction

3. Number Ranges for AUC Assets

Once the Order is created in the same transaction an AUC is created as per the AUC asset class linked in the CO Order type (Capital investment Order). Therefore a preliminary settlement rule with 100% settlement to the AUC asset is defaulted by the System as settlement rule as shown below.

The Final settlement or Partial settlement can be done to capitalized an AUC asset. For both distribution rules needs to be maintained in the system as below to settle the costs to the final receiver Asset. The below rules signifies that all the items posted to the below AUC Asset needs to be distributed to the asset Number 400000-0 and 400001-0 ,70% and 30% respectively.

Rahi Shah