FIAA Overview of New DCP

SAPs New SAP s New
Depr ec i at i on
Cal c ul at i on i n ERP 6.0
Nathan Genez & Eric Barlow
Managing Partners
Serio Consulting LLC
Cont ent s
New Depreciation Calculation in ERP 6.0
Upgrade Considerations
Wrap-Up
Cont ent s
Wrap-Up
Who i s Ser i o Consul t i ng?
f f S Founded by a group of former SAP America Platinum
Consultants with over 40 years combined SAP experience
Focused on the Capital Management area of SAP across both
SAP ERP and SAP BW
Project Systems (PS)
Investment Management (IM)
Asset Accounting (FI-AA)
Professional Service Offering:
SAP Implementations and Upgrades SAP Implementations and Upgrades
Quality Assurance and Configuration Reviews
Advanced Capital Management reporting solutions including BW
Advanced Tax solutions Advanced Tax solutions
Remote On-Demand consulting
http://www SerioConsulting com/
Source: Nathan Genez & Eric Barlow, New DCP Overview, slide #4
http://www.SerioConsulting.com/
Sc ope of New Depr ec i at i on Cal c ul at i on (New DCP)
What does the New Depreciation Calculation refer to?
How depreciation amounts are calculated / planned
It does not refer to
How depreciation is posted
The process to gather depreciation figures and post them to the G/L
is covered by the depreciation posting program RAPOST2000
What Val ues Ar e Af f ec t ed?
All planned values including:
Planned ordinary depreciation
Planned special depreciation Planned special depreciation
Interest
Inflation
Revaluation
Why Was t he Cal c ul at i on Changed?
A period interval-based calculation is more intuitive and easier
to understand
Support of time-dependent depreciation parameters
Support of method changeover and base value determination on
a period level
More flexibility to support customer and country specific More flexibility to support customer and country specific
requirements via Business Add-Ins (BAdIs)
Potentially greater performance
Better handling of rounding accuracy issues related to large
amounts with no decimals (e.g., currency JPY)
and many other reasons (mostly country specific) y ( y y p )
Tec hni c al Requi r ement s
Delivered in SAP ERP 6.0 as part of the Enterprise
AddOn for Financials (EA-FIN)
Not possible to release for earlier SAP ERP or SAP R/3 versions Not possible to release for earlier SAP ERP or SAP R/3 versions
EA-FIN must be active
The new calculation cannot be disabled using
standard methods other than deactivating EA-FIN
Ol d: Tr ansac t i on-Based Cal c ul at i on
Prior to SAP ERP 6.0, depreciation was always
calculated in detail on every transaction line item
Whenever a transaction is posted a depreciation amount was Whenever a transaction is posted, a depreciation amount was
calculated
The asset line item table contained fields for:
O di d i ti t ti Ordinary depreciation on transaction
Special depreciation on transaction
Ol d: Tr ansac t i on-Based Cal c ul at i on (c ont .)
All transactions were interpreted sequentially
First posting served as the baseline calculation
All subsequent postings were adjustments to the All subsequent postings were adjustments to the
original posting
Annual depreciation = sum of the depreciation of the p p
individual transactions
This approach could make the verification of depreciation
figures difficult figures difficult
Ex ampl e of Tr ansac t i on-Based Cal c ul at i on
Scenario
Straight line depreciation
Total Acquisition Cost (APC) / Total Useful Life (UL) Total Acquisition Cost (APC) / Total Useful Life (UL)
Useful life = 10 years
12 period calendar fiscal year: January December (e.g., K4)
Period control = pro rata determination
The following two transactions are posted: g p
Transaction Amount / Percentage Time
I iti l A i iti $12000 J 1 Initial Acquisition $12,000 January 1
Partial Retirement (current year) $3,000 October 1
Ex ampl e of Tr ansac t i on-Based Cal c ul at i on (c ont .)
Date Transaction Type Transaction
Amount
Period
Factor
Rate Base Value Calculated
Depreciation
Jan 1 Initial Acquisition $12,000 12 / 12 10% $12,000 - $1,200
Total - $1,200
Date Transaction Type Transaction
Amount
Period
Factor
Rate Base Value Calculated
Depreciation
Jan 1 Initial Acquisition $12,000 12 / 12 10% $12,000 - $1,200
Oct 1 Partial Retirement - $3,000 3 / 12 10% - $3,000 $75
Total - $1,125
R/3 4.7
R/3 4.7
Asset Explorer
R/3 4.7
displayed the
depreciation
amounts
calculated for
each line item
Asset Line Item table displayed the amounts in
additional detail
R/3 4.7
New : Per i od I nt er val -Based Cal c ul at i on
Depreciation calculation is based on period intervals
(time segments)
All transactions in the same period interval are aggregated and All transactions in the same period interval are aggregated and
used to calculate depreciation as a single number
All line items are aggregated by their appropriate period
All periods are aggregated to get an annual value
Annual depreciation = sum of the depreciation of the
period inter als period intervals
New : Per i od I nt er val -Based Cal c ul at i on (c ont .)
SAP ERP 6.0 no longer calculates depreciation or
interest on asset line items
ERP 6.0
What I s a Per i od I nt er val ?
Initially, there is just one time interval per year,
depreciation area, and amount type
N t t d h t h New segments are created whenever an event changes
the assets value, such as:
Transactions within fiscal year Transactions within fiscal year
Time-dependent master data changes
Shutdown or multiple shift intervals
D i ti t h Depreciation parameter changes
Changes to depreciation method
Multilevel method changes within a fiscal year
Method changeover occurs at the end or within the UL
Mor e I nf or mat i on on Per i od I nt er val s
The number of period intervals depends on the number
of fiscal periods with changes that affect the assets
depreciation calculation p
The more transactions posted
Or the more depreciation parameter changes
Made across more periods will yield more depreciation
period intervals
The ma im m n mber of depreciation period inter als is The maximum number of depreciation period intervals is
the same as the number of normal fiscal periods
Ex ampl e of Per i od I nt er val -Based Cal c ul at i on
12 11 10 9 8 7 6 5 4 3 2 1
Period Interval 1
Date Transaction
Type
Transaction
Amount
Prd
Int
Prd Interval
Duration
Rate Base Value Depreciation
Per Interval
Jan 1 Initial
Acquisition
$12,000 1 12 months 10% $12,000 - $1,200
Acquisition
Total - $1,200
Ex ampl e of Per i od I nt er val -Based Cal c ul at i on (c ont .)
12 11 10 9 8 7 6 5 4 3 2 1
Period Interval 1
Period Interval 2
Date Transaction
Type
Transaction
Amount
Prd
Int
Prd Interval
Duration
Rate Base Value Depreciation
Per Interval
Jan 1 Initial
Acquisition
$12,000 1 9 months 10% $12,000 - $900
Acquisition
Oct 1 Partial
Retirement
- $3,000 2 3 months 10% $9,000 - $225
Total - $1,125
ERP 6.0
Period Interval = 1 - 12
Percentage
Period Factor
Base Value
Percentage
Final Annual
Depreciation
ERP 6.0
Final Annual
Base Value
Final Annual
Depreciation
Period Interval 1 = 1 - 9
Period Interval 2 = 10 - 12
Period Factor
Percentage
Compar i son of Ol d vs. New Cal c ul at i ons
Is there a difference in the final calculated amount
between these two approaches?
NO NO
The annual depreciation amount is identical between
both approaches for most all scenarios. both approaches for most all scenarios.
Cont ent s
Wrap-Up
Conf i gur at i on Requi r ement s
No configuration is required as part of the
new calculation
No changes are necessary to the depreciation areas or No changes are necessary to the depreciation areas or
depreciation keys
No migration of data is required g q
The final depreciation amounts calculated by SAP
should be the same before and after the upgrade *
Small amount differences might occur in some situations
Pr oc ess
SAP recommends that all customers recalculate values
(RAAFAR00) immediately after the technical upgrade
Also consider recalculating prior to the upgrade as part of a Also consider recalculating prior to the upgrade as part of a
formal system close process
Enhanc ement s
Existing user exits are no longer processed by the new
depreciation calculation
SAP d li d BAdI i li t ith th SAP-delivered new BAdI is compliant with the
new calculation
BAdI FAA EE CUSTOMER BAdI FAA_EE_CUSTOMER
Method SET_BASE_VALUE replaces AFAR0001
Method SET_PERCENT_AMOUNT replaces AFAR0002
Method DEFINE CHANGEOVER YR replaces AFAR0003 Method DEFINE_CHANGEOVER_YR replaces AFAR0003
A migration of the business logic must be made to these
new BAdIs if the new calculation is used new BAdIs if the new calculation is used
Repor t i ng
Since depreciation is no longer calculated on a line item
basis, all asset transaction reports will show $0.00 as
the depreciation amount p
SAP Note 949701 will hide the depreciation figures so that the
report is not misleading
C id ti t hi t h t i th t b k t Consider creating an asset history sheet version that breaks out
depreciation by type for each period
Asset Ex pl or er
In addition to the normal Asset Explorer, there is an
alternative version that always uses the old
depreciation calculation p
Allows you to compare the calculations between the old and
new depreciation calculations without deactivating the
Enterprise AddOn Enterprise AddOn
Transaction Description
AW01N Current Depreciation Calculation (New)
AW01 AFAR Old Depreciation Calculation AW01_AFAR Old Depreciation Calculation
Asset Ex pl or er AW01N New Depr ec i at i on Cal c
ERP 6 0 ERP 6.0
Asset Ex pl or er AW01_AFAR Ol d Depr ec Cal c
ERP 6 0 ERP 6.0
Cont ent s
Wrap-Up
Resour c es
Relevant SAP Notes
949701 Fix for asset line item reports
965032 Explanation of small differences post upgrade 965032 Explanation of small differences post upgrade
988238 Information related to new calculations impacts on
year end closing
Resour c es (c ont .)
SAP ERP 6.0 Documentation on New DCP
http://help.sap.com/saphelp_erp2005vp/helpdata/en/44/07e6a80f
2e5920e10000000a155369/frameset.htm
SAP ERP 6.0 release notes
http://help.sap.com/erp2005 ehp 02/helpdata/en/43/68805bb88f2 http://help.sap.com/erp2005_ehp_02/helpdata/en/43/68805bb88f2
97ee10000000a422035/frameset.htm
Information for Enterprise AddOn EA-FIN
http://help.sap.com/erp2005_ehp_02/helpdata/en/44/558b1099c9
3672e10000000a114a6b/frameset.htm
SAP Developer Network (SDN) Wiki
www.sdn.sap.com/irj/sdn/wiki > ERP Financials > Financial
Accounting > Asset Accounting
SAP Developer Network (SDN) Blog Series
www.sdn.sap.com/irj/sdn/wiki > ERP Financials > Financial
Accounting > Asset Accounting
SAP Financials Expert
Discover the Logic and Parameter Changes in the New
Depreciation Calculation (January 2007) p ( y )
Thank you f or your at t ent i on
Nathan Genez
Managing Partner
Serio Consulting LLC g
227 Sandy Springs Place
Suite D238
Atlanta, GA 30328
T 1-713-240-0421
E nathan.genez@SerioConsulting.com
http://wwwSerioConsulting com http://www.SerioConsulting.com
Eric Barlow
Managing Partner
Serio Consulting LLC
227S d S i Pl 227 Sandy Springs Place
Suite D238
Atlanta, GA 30328
T 1-404-667-0447
E eric.barlow@SerioConsulting.com
http://www.SerioConsulting.com
http://www.SerioConsulting.com

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