Asset Depreciation Pre

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Configuration Rationale and Design ECC_FI_AA_Asset Depreciation

9/29/2010

Version 1.0


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8.7 Sp ecify Max . Amount for Low-Value Assets + Asset Classes ........................................................ 12 8.8 Sp ecify Rounding of Net Book Value and/or De p reciation .......................................................... 13 8.9 Sp ecify Changeover Amount ...................................................................................................... 13 8. 10 Sp ecify Memo Value ................................................................................................................... 13 8. 11 Sp ecify Other Versions on Com p any Code Level ......................................................................... 13 8.

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Sp ecify Other versions on De p reciation Area Level ..................................................................... 13

8. 13 Define Reduction Rules for Shortened Fiscal Years ..................................................................... 13 8. 14 Determine De p reciation Areas ................................................................................................... 13 8. 15 Assign Accounts ......................................................................................................................... 13 8. 16 Define Unit of Production De p reciation ...................................................................................... 13 8. 17 Determine De p reciation Areas ................................................................................................... 13 8. 18 Calculate Ordinary De p reciation Before S pecial De p reciation ..................................................... 14 8. 19 Assign Accounts ......................................................................................................................... 14 8. 20 Determine De p reciation Areas ................................................................................................... 14 8. 21 Assign Accounts ......................................................................................................................... 14 8. 22 Define Base Methods ................................................................................................................. 14 8. 23 Define Declining Balance Methods ............................................................................................. 14 8. 24 Define Maximum Amount Methods ........................................................................................... 14 8. 25 Define Multi-Level Methods ....................................................................................................... 14 8. 26 Maintain Period Control Methods .............................................................................................. 14 8. 27 Maintain De p reciation Key ......................................................................................................... 15 8. 28 Define Time-De pendent Period Controls .................................................................................... 15 TEST...................................................................................................................................................... 15 9 Unit Tests ....................................................................................................................................... 15


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DOCUMENT HISTORY

1 Change History

2 Contact Information

Role Name Phone / EmailConfiguration Designer

Configuration Builder

Other Process Team Re p (indicate

Process Area)Sub- Process Team Lead orProcess Team Lead

3 Approval Detail

Version Date Summary of Changes Author

1 . 0 9 / 29 / 2010 Initial Draft James Palmer

Version Date Name & Position of Approver Signature


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DESIGN

4 Rationale for Settings

4.1 Define Depreciation Areas(SPRO > Financial Accounting (New) > Asset Accounting > De p reciation Areas > Valuation)

This configuration is managed in the Asset Master Data configuration rationale task DefineDep reciation Areas . Please see that document for the detailed settings .

4.2 Specify T ransfer of APC Values(SPRO > Financial Accounting (New) > Asset Accounting > De p reciation Areas > Valuation)

This configuration is managed in the Asset Master Data configuration rationale task S pecify the use of p arallel currencies . Please see that document for the detailed settings .

4.3

SpecifyT

ransfer of DepreciationT

erms(SPRO > Financial Accounting (New) > Asset Accounting > De p reciation Areas > Valuation)

This configuration is managed in the Asset Master Data configuration rationale task S pecify the use of p arallel currencies . Please see that document for the detailed settings .

4.4 Set up Areas for Parallel Valuation(SPRO > Financial Accounting (New) > Asset Accounting > De p reciation Areas > Valuation)

This configuration will be p art of the localization p rocess . Some de p reciation areas may be created for

Latin American countries to reflect parallel accounting .

4.5 Determine Depreciation Areas in the Asset Class(SPRO > Financial Accounting (New) > Asset Accounting > Valuation)

Com p any ABC will allow all de p reciation areas in each asset class . Within this activity, the defaultde p reciation key, useful life and screen layout for de p reciation are also assigned p er book of


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de p reciation . The federal tax books and the new state tax books keys are set to use acceleratedde p reciation . The old state tax book 4 2 uses a se parate de p reciation key and is used mostly forCalifornia as that state does not allow the accelerated methods . See the attached s p readsheet for thedetailed design of the configuration .

DetermineDepreciation Areas in

4.6 Deactivate Asset Class for Chart of Depreciation(SPRO > Financial Accounting (New) > Asset Accounting > Valuation)

Com p any ABC has not defined any asset classes which should be deactivated in either ZUS A or ZCANcharts of de p reciation .

4.7 Specify Max. Amount for Low-Value Assets + Asset Classes(SPRO > Financial Accounting (New) > Asset Accounting > Valuation > Amount S pecifications (Com panyCode/De p reciation Area)

No Asset classes will be evaluated for Low Value Assets . The default setting for each asset class is 0 . Byentering a 0 , no maximum amounts will be checked for LV A.

4.8 Specify Rounding of Net Book Value and/or Depreciation(SPRO > Financial Accounting (New) > Asset Accounting > Valuation > Amount S pecifications (Com panyCode/De p reciation Area)

Each de p reciation area will round the net book value to whole units of currency at the end of the fiscalyear . To facilitate this p rocess, the following settings will be made for each com pany code andde p reciation area .

Field Company ABC Setting Description of settingNet book value at year end No Indicates that the net book

value of an asset should berounded to whole units of currency at the end of thefiscal year .

Automatically Calculated

Dep reciation

No Used to indicate that

automatically calculatedde p reciation (ordinary andsp ecial de p reciation) on anasset should be rounded towhole units of currency .

Rep lacement Value No Used to indicate rounding forde p reciation areas which usean index value


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Arithmetic Rounding Yes Asset values will round u p ordown

Round U p No Asset values will always roundup

Round Down No Asset values will always round

down

4.9 Specify Changeover Amount(SPRO > Financial Accounting (New) > Asset Accounting > Valuation > Amount S pecifications (Com panyCode/De p reciation Area)

Com p any ABC does not use changeover amounts . Changeover amounts are s p ecified when thede p reciation key is set to use the changeover method changeover as soon as the remaining value is lessthan the changeover amount . No configuration is necessary in this task .

4.10 Specify Memo Value(SPRO > Financial Accounting (New) > Asset Accounting > Valuation > Amount S pecifications (Com panyCode/De p reciation Area)

Memo values are not used by Com pany ABC. No configuration needs to take p lace in this activity .

4.11 Specify Other Versions on Company Code Level(SPRO > Financial Accounting (New) > Asset Accounting > Valuation > Fiscal year > Fiscal Year Variants)

No settings are required in this task . Asset accounting will use the same fiscal year variant as thecom pany codes .

4.12 Specify Other Versions on Depreciation Area Level(SPRO > Financial Accounting (New) > Asset Accounting > Valuation > Fiscal year > Fiscal Year Variants)

In this task, it is possible to s p ecify an alternate fiscal year version for certain de p reciation areas . Forexam p le, the book de p reciation may be 13 periods but tax de p reciation should use 12 periods .

At Com p any ABC, alternate fiscal year versions are not needed at the de p reciation area level .

4.13 Define Reduction Rules for Shortened Fiscal Years(SPRO > Financial Accounting (New) > Asset Accounting > Valuation > Fiscal year > Shortened FiscalYears)

Shortened fiscal years are not used by Com p any ABC. No configuration is necessary in this task .


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4.14 Determine Depreciation Areas(SPRO > Financial Accounting (New) > Asset Accounting > De p reciation > Ordinary De p reciation)

In this task, the values allowed for ordinary de p reciation are configured . For all de p reciation areas, allvalues are allowed for ordinary de p reciation . This configuration is maintained in the Asset Master Data

configuration rationale task Define How De p reciation Areas Post to the General Ledger . Please seethat document for the detailed configuration design .

4.15 Assign Accounts(SPRO > Financial Accounting (New) > Asset Accounting > De p reciation > Ordinary De p reciation)

In this task, the GL accounts for de p reciation p ostings are configured . This configuration is handled inthe Asset Master Data configuration rationale . Please see that document for the detailed settings .

4.16

Define Unit of Production Depreciation(SPRO > Financial Accounting (New) > Asset Accounting > De p reciation > Ordinary De p reciation)

Unit of Production de p reciation is not used at Com p any ABC.

4.17 Determine Depreciation Areas(SPRO > Financial Accounting (New) > Asset Accounting > De p reciation > S pecial De p reciation)

In this task, the values allowed for S pecial de p reciation are configured . Only books 5 3 and 54 allowspecial de p reciation . In these books, only negative values and zero values are allowed . This

configuration is maintained in the Asset Master Data configuration rationale task Define HowDep reciation Areas Post to the General Ledger . Please see that document for the detailedconfiguration design .

4.18 Calculate Ordinary Depreciation Before Special Depreciation(SPRO > Financial Accounting (New) > Asset Accounting > De p reciation > S pecial De p reciation)

In this task, the order of de p reciation can be s pecified . At Com p any ABC, the s p ecial de p reciation iscalculated before ordinary de p reciation for tax books 5 3 and 54. The standard settings su pp ort thiscalculation . No configuration is necessary .

4.19 Assign Accounts(SPRO > Financial Accounting (New) > Asset Accounting > De p reciation > S pecial De p reciation)

In this task, the GL accounts for s pecial de p reciation postings are configured . This configuration ishandled in the Asset Master data configuration rationale . Please see that document for the detailedsettings .


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4.20 Determine Depreciation Areas(SPRO > Financial Accounting (New) > Asset Accounting > De p reciation > Un p lanned De p reciation)

In this task, the values allowed for un p lanned de p reciation are configured. All de p reciation areas allowun p lanned de p reciation . All values will be allowed for un p lanned de p reciation . This configuration is

maintained in the Asset Master Data configuration rationale task Define How De p reciation Areas Postto the General Ledger . Please see that document for the detailed configuration design .

4.21 Assign Accounts(SPRO > Financial Accounting (New) > Asset Accounting > De p reciation > Un p lanned De p reciation)

In this task, the GL accounts for un p lanned de p reciation p ostings are configured . This configuration ishandled in the Asset Master data configuration rationale . Please see that document for the detailedsettings .

4.22 Define Base Methods(SPRO > Financial Accounting (New) > Asset Accounting > De p reciation > Valuation Methods >Dep reciation Key > Calculation Methods)

Com p any ABC uses only the standard base methods for de p reciation calculation . No modifications arenecessary .

4.23 Define Declining > Balance Methods(SPRO > Financial Accounting (New) > Asset Accounting > De p reciation > Valuation Methods >Dep reciation Key > Calculation Methods)

The standard US S AP settings have been u p dated to include the Max Percentage rates for methods 003 ,00 5 , and 00 6. Additionally, the descri p tions are u pdated to reflect the percentage rates . These settingsaffect the rate at which assets that use the declining balance method de p reciate . If the de p reciation atany time goes above the maximum, it uses the max rate instead . If the de p reciation goes under theminimum, it uses the minimum rate . These methods are assigned to the de p reciation Keys . Com p anyABC has one additional declining balance method in Canada, so this was added to the methods for ZC ANchart of de p reciation . The detailed configuration is below .

Chart of Depreciation

Decl BalanceMeth

Description DecliningBalanceFactor

MaxPercentageRate

MinPercentageRate

ZUSA 001 0 . 00 x / 0 .0000% / 0 .0000% 0 . 00 0 . 0000 0 .0000 ZUSA 002 2 . 00 x / 20 .0000% / 0 .0000% 2 . 00 20 . 0000 0 .0000 ZUSA 003 1 .5 0x / 15. 0000% / 0 .0000% 1 .5 0 15. 0000 0 .0000 ZUSA 00 4 2 . 00 x / 0 .0000% / 0 .0000% 2 . 00 0 . 0000 0 .0000 ZUSA 00 5 1 .5 0x / 4 2 .0000% / 0 .0000% 1 .5 0 4 2 . 0000 0 .0000 ZUSA 00 6 1 .75 x / 17.5 000% / 0 .0000% 1 .75 17.5 000 0 .0000


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ZCAN 001 0 . 00 x / 0 .0000% / 0 .0000% 0 . 00 0 . 0000 0 .0000 ZCAN 002 2 . 00 x / 20 .0000% / 0 .0000% 2 . 00 20 . 0000 0 .0000 ZCAN 003 1 .5 0x / 15. 0000% / 0 .0000% 1 .5 0 15. 0000 0 .0000 ZCAN 00 4 2 . 00 x / 0 .0000% / 0 .0000% 2 . 00 0 . 0000 0 .0000 ZCAN 00 5 1 .5 0x / 4 2 .0000% / 0 .0000% 1 .5 0 4 2 . 0000 0 .0000 ZCAN 00 6 1 .75 x / 17.5 000% / 0 .0000% 1 .75 17.5 000 0 .0000 ZCAN 00 7 1 .5 0x/ 0 .0000% / 0 . 0000% 1 .5 0 0 . 0000 0 .0000

4.24 Define Maximum Amount Methods(SPRO > Financial Accounting (New) > Asset Accounting > De p reciation > Valuation Methods >Dep reciation Key > Calculation Methods)

Maximum amount methods are not used at Com pany ABC. The standard method exists and no changesare necessary .

4.25 Define Multi-Level Methods(SPRO > Financial Accounting (New) > Asset Accounting > De p reciation > Valuation Methods >Dep reciation Key > Calculation Methods)

The Multi-Level Methods used by Com p any ABC are detailed in the attached s p readsheet . One changemade was to ma p the customized methods to the standard methods in the new system to hel p facilitateany future u pgrades .

Define Multi-leve lmethods.xls

4.26 Maintain Period Control Methods(SPRO > Financial Accounting (New) > Asset Accounting > De p reciation > Valuation Methods >Dep reciation Key > Calculation Methods)

The standard p eriod control methods will not be used as they vary too greatly between the standardCanadian and US chart of de p reciation . Com p any ABC will configure the following p eriod controlmethods for both the ZUS A and ZC AN charts of de p reciation:

Ma int a in P riodControl Me thods ls

The period control methods control at what time the de p reciation starts during the period .

4.27 Maintain Depreciation Key(SPRO > Financial Accounting (New) > Asset Accounting > De p reciation > Valuation Methods >Dep reciation Key)


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In addition to using some of the standard de p reciation keys, Com p any ABC has created some customde p reciation keys to meet the de p reciation requirements of the business . The Keys beginning with a Ywill be created for both the ZUS A and the ZC AN charts of de p reciation . The Keys beginning with the Zare created for only ZUS A as they relate to bonus de p reciation . The attached s p readsheet defines thecustom de p reciation keys .

Ma int a in

ep rec ia tion K ey s ls

4.28 Define T ime-Dependent Period Controls(SPRO > Financial Accounting (New) > Asset Accounting > De p reciation > Valuation Methods > PeriodControl)

Com p any ABC does not require time de p endent period controls so no configuration is required in this

task . Normally period control is not de pendent on the fiscal year; this is ty p ically de pendent to s pecificcountries .

5 Process Integration PointsThis section will list the p rocess de pendencies including the B P31 5 and/or B P31 7 that theconfiguration is for as well as the related configuration rationales .

Related Process(es) / Sub- Process(es):e .g. BP31 5 Process Sale Ordere .g. BP31 7 Enter Business Partners

Related Configuration Rationale(s):e .g. Sales Order Items

6 Prerequisites/DependenciesThis section will list the p rocess the task or configuration that must take p lace for this configurationcan be com p leted .

e .g. Sales Order Items

7 Configuration IDThis section will list the location in the IMG where the configuration takes p laces as well as thetechnical name/ path for the object .

Configuration Path in S PRO:e .g. IMG Sales and Distribution Sales Ordere .g. SIMG_CFMENUOLSDVOV7


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BUILD

8 Build Documentation

8.1 Define Depreciation Areas

This configuration is managed in the Asset Master Data configuration rationale task DefineDepreciation Areas. Please see that document for the detailed settings.

8.2 Specify T ransfer of APC Values

This configuration is managed in the Asset Master Data configuration rationale task Specifythe use of parallel currencies. Please see that document for the detailed settings.

8.3 Specify T ransfer of Depreciation T erms

This configuration is managed in the Asset Master Data configuration rationale task Specifythe use of parallel currencies. Please see that document for the detailed settings.

8.4

Set up Areas for Parallel Valuation

No configuration necessary for R1 and R2. This will need to be addressed during localizationfor Latin America.

8.5 Determine Depreciation Areas in the Asset Class

ZUSA Company ABC USA Chart of Depreciation

8.6 Deactivate Asset Class for Chart of Depreciation

No configuration is necessary as no asset classes will be deactivated in ZCAN or ZUSA charts ofdepreciation.

8.7 Specify Max. Amount for Low-Value Assets + Asset Classes


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No Configuration is necessary.

8.8 Specify Rounding of Net Book Value and/or Depreciation

For all company codes, the following settings were maintained.

8.9 Specify Changeover Amount

No Configuration is necessary

8.10 Specify Memo Value

No configuration is necessary.

8.11 Specify Other Versions on Company Code Level

No Configuration is necessary

8.12 Specify Other versions on Depreciation Area Level


8.13 Define Reduction Rules for Shortened Fiscal Years


8.14 Determine Depreciation Areas

This configuration is maintained in the Asset Master Data configuration rationale task DefineHow Depreciation Areas Post to the General Ledger. Please see that document for the detailedconfiguration design.

8.15 Assign Accounts

This configuration is handled in the Asset Master data configuration rationale. Please see thatdocument for the detailed settings.

8.16 Define Unit of Production Depreciation




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This configuration is maintained in the Asset Master Data configuration rationale task DefineHow Depreciation Areas Post to the General Ledger. Please see that document for the detailedconfiguration design.

8.18 Calculate Ordinary Depreciation Before Special Depreciation

No configuration is necessary.




This configuration is maintained in the Asset Master Data configuration rationale task Define

How Depreciation Areas Post to the General Ledger. Please see that document for the detailedconfiguration design.



8.22 Define Base Methods

Company ABC uses only the standard base methods for depreciation calculation. Nomodifications are necessary.

8.23 Define Declining Balance Methods

8.24 Define Maximum Amount Methods

No configuration necessary. Company ABC does not use maximum amount methods.

8.25 Define Multi-Level MethodsZUSA Company ABC USA Chart of Depreciation:

8.26 Maintain Period Control MethodsZUSA > Company ABC USA Chart of Depreciation:


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8.27 Maintain Depreciation Key

8.28 Define T ime-Dependent Period ControlsNo Configuration is necessary.

T EST

9 Unit Tests

Microsoft Excel

Worksheet

Documents

Asset Depreciation Pre