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05Aug2014

Planned Depreciation Vs. Manual Depreciation

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Depreciation:

Depreciation is the wear and tear value of the fixed assets due to usage or lapse of time.

As per the statutory requirement of the each country or GAAP followed by the entity, depreciation is required to charge to the profit and loss account on a periodic basis during the Fiscal Year. The depreciation should be calculated considering the useful life and Depreciation Method prescribed in each statutory provisions.

Periodic Automatic Depreciation:

Depreciation which is charged periodically on regular basis is called the planned depreciation. We assign depreciation key in the asset master data to plan the depreciation. Depreciation is normally planned for a Fiscal Year but posted in each period. On the contrary, unplanned depreciation is a sudden happening of an event or occurrence not foreseen (there could be a sudden break out of a fire damaging an asset, which forces you to depreciate fully as it is no longer useful economically) resulting in a permanent reduction of the value of the asset. Based on the nature of the happening or events unplanned depreciation need to be calculated and post to Fixed Assets sub ledger. Some of statutory provision allowed special deprecation based on some special country specific requirement to promote to set of manufacturing plants, which is also addressed as part of the planned deprecation.

Unplanned depreciation is posted in sub ledger first using transaction code ABAA. There will not be any posting to General Ledger. Planned and unplanned depreciation can only be posted to General Leger in SAP using transaction AFAB as part of the period end process.

Manual Depreciation:

 Depreciation which is not posted as part of automatic calculation process can be posted manually using transaction code ABMA provided the base method in the depreciation Key is set up as “No Automatic Calculation”.

 

Issues in Manual Depreciation:

When you post manual depreciation without proper set up in the base method then system will give the following message:

Manual depreciation not allowed with depreciation key S004

Message no. AA633

Asset affected: 000000500048-0000

Diagnosis

It is not possible to have manual depreciation in combination with a depreciation key, which is used to forecast depreciation.

System Response

The document with manual depreciation cannot be posted.

Procedure

Choose a depreciation key which does not automatically forecast depreciation

Error and Resolution

Go to Financial Accounting (New) -> Asset Accounting -> Depreciation -> Valuation Methods -> Depreciation Key -> Calculation Methods -> Calculation Methods

Change the Depreciation Method to “ No Automatic Calculation”

 

Base Method

CATEGORIES Fixed Assets

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