Many companies using SAP need to run Assets accounting. When an asset is being physically created, the company needs to account for costs. These costs often form a part of a balance sheet that is called “Assets under construction”.
SAP gives you an option to to accumulate costs of Assets under Construction (AuC) on the assets in a special Asset Class. Creating an asset is often a project, which lasts some time and requires additional reporting.
There is an SAP functionality to separate costs per different projects using either Internal Orders or WBS elements. These two objects, Internal Orders (IOs) and Work Breakdown Structure Elements (WBS Elements) are very similar in many aspects, while WBS elements have a more advanced functionality. However, for the purpose of this article I will only mention IOs. There is an absolute mirror in the WBS elements configuration.
It is quite logical that these elements of SAP functionality: IOs, AuCs and Assets are linked to each other. The functionality in general looks this way:
That is a simple logic and it works if you only have one class of AuC. But many companies prefer to split costs of AuCs, for example between tangible and non-tangible assets. Can you set this up in SAP?
Let SAP Expert guide you!
This is the SAP configuration that you run in the Internal Orders section of IMG:
Controlling – Internal Order – Actual Postings – Settlement – Maintain Source Structure
Here you define the source structure, splitting your cost elements between at least two Source Assignments. Let’s call them “Tangible” and “Non-tangible”. Each Source Assignment contains a range or a group of cost elements. SAP automatically checks that cost elements do not overlap and gives you an error message if they do.
The second step is to create a Model Order. The purpose of this model order is to be a template for the future Internal Orders, and also to hold an assignment to Investment Profile.
You can create, edit or display Model Orders in the IMG node
Investment Management– Internal Orders as Investment Measures – Master Data – Orders – Define Model Orders.
You may need to create a special Order Type for Model Orders, which you can do in a nearby configuration node. Also, you will need to assign a Model Order to the Order type of regular Internal Orders.
The third step is to create an Investment Profile, which will define the parameters for settlement of Internal Orders to Assets Under Construction.
Investment Profiles are managed in IMG node
Investment Management – Internal Orders as Investment Measures – Master Data – Define Investment Profile
The most important bit here is to tick the checkbox “AuC per source structure/assignment”.
Once created, you can assign Investment Profile to the Model Orders in the same IMG node.
If you want to split costs of projects between different Assets under Construction, probably with a different assignment of GL accounts, you need to have at least two different classes of AuCs.
You create these classes in the IMG node
Investment Management – Internal Orders as Investment Measures – Master Data – Assets under Construction – Define Asset Classes
You can also do the same in the Assets Accounting section of the IMG. There is no difference. The thing to remember is that AuC class should have the radiobutton “Status of AuC” set to “Investment Measure”.
The last part of the configuration is linking all the different components to each other: Investment Profile, Source Structure and AuC classes.
You can do this in the IMG node
Investment Management – Internal Orders as Investment Measures – Master Data – Define Assignment of AuC Classes per Source Assignment
You can see that my Investment Profile is assigned to different parts of Source Assignment. Each record in this table has details, where the relevant AuC class is specified.
Now the configuration is complete. Let’s now see how it all works.
As long as these two AuCs have different GL accounts, you can now report these costs separately.
Have you used the Settlement Assignments on your projects?