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1.1 manual value correction (complete unwatermarked pdf version obtained by author Wechat ficodk) is capitalized after 1.1.1

Post-capitalization is to add or decrease the value of assets across fiscal years. For example, the acquisition of an asset in June last year starts to depreciate in July, and the purchase value is 12000.00CNY. In February this year, it was found that part of the cost of the asset was omitted when it was capitalized, and the actual capitalized value should be 13350.00CNY. In this case, the differential 1350.00CNY needs to be capitalized.

The following examples illustrate the post-capitalized business scenario and accounting processing.

Suppose the asset uses the straight-line depreciation method, the useful life is 5 years, the salvage value is zero, and the depreciation amount is calculated as follows

Monthly depreciation: 12000CNY / 5 years / 12 months = 200.00CNY

Depreciation: 200.00CNY * 6 months = 1200.00CNY

Depreciation in January 2014: 200.00CNY

In February 2014, it was found that the original capitalization amount was incorrect, and the difference 1350.00CNY was further capitalized, as shown in figure 8x111.

SAP menu à Accounting à Financial Accounting à fixed assets à ABNAN-bookkeeping Capital

Figure 8? 111

The accounting vouchers are generated as follows

Borrow: fixed assets-mechanical equipment 1350.00CNY

Loan: accumulated depreciation-135.00CNY of machinery and equipment (depreciation from July to December 2013)

Loan: non-operating income 1215.00CNY

The system automatically adjusts the planned depreciation for 2014 as follows

February: 245.00CNY (to supplement the insufficient depreciation of 01 months 22.50CNY)

March: 222.50CNY (depreciation of each monthly plan in 2014 is 13350.00CNY/5 year / 12 months)

April 2004 and subsequent months: 222.50CNY

1.1.1 value added (Write-Ups)

Value-added can be used for cross-year depreciation adjustment, generally used for depreciation code or missetting of useful life resulting in insufficient or excessive depreciation, and can also be used for capitalization value adjustment caused by subsequent loans. The reversal of unplanned depreciation also uses this service, but in China, unplanned depreciation is generally used for the provision for impairment of assets, and accounting standards stipulate that the provision for impairment of fixed assets is not allowed.

Appreciation can usually be understood as the revision of the depreciation amount accrued, by adjusting the accumulated depreciation account balance to increase or decrease the book value of the asset, and then capitalization is often used to modify the purchase value, directly increasing or decreasing the asset account balance.

The following examples illustrate value-added business scenarios and accounting processing (follow the example assets in the previous section).

Suppose the asset uses the straight-line depreciation method, the useful life is 5 years, the salvage value is zero, and the depreciation amount is calculated as follows

Monthly depreciation: 12000CNY / 5 years / 12 months = 200.00CNY

Depreciation: 200.00CNY * 6 months = 1200.00CNY

Depreciation in January 2014: 200.00CNY

In February 2014, it was found that there was an error in the provision of depreciation and it was necessary to reduce 1350.00CNY from the amount of depreciation accrued.

SAP menu à Accounting à Financial Accounting à fixed assets à Manual value Correction à ABZU-value added

Figure 8? 112

The accounting vouchers are generated as follows

Borrow: accumulated depreciation-mechanical equipment 1350.00CNY

Loan: non-operating income 1350.00CNY

(the account configured under the item "income from adding value on normal depreciation" in transaction code AO90)

The system automatically adjusts the planned depreciation for 2014 as follows

February: 250.00CNY (to supplement the insufficient depreciation of 01 months 25.00CNY)

March: 225.00CNY (depreciation of each monthly plan in 2014 is (12000CNY/ 5 years + 1350.00CNY/4.5 years) / 12 months)

April: 225.00CNY

It can be seen that the value-added amount 1350.00CNY affects the depreciation calculation of the current year and subsequent years.

1.1.1 unplanned depreciation

Due to some unpredictable events, such as partial damage of assets or significant changes in fair value, the book value of assets may be reduced by implementing unplanned depreciation by increasing the accumulated depreciation.

SAP menu à Accounting à Financial Accounting à fixed assets à Manual value Correction à ABAA-unplanned depreciation

Figure 8? 113

* Note that unplanned depreciation must be allowed in the corresponding depreciation range, otherwise the system will report an error.

Asset vouchers are generated after preservation, but accounting vouchers are not generated. Posting accounting vouchers for depreciation at the end of the period are as follows.

Borrow: depreciation expense-mechanical equipment 1350.00CNY

Loan: accumulated depreciation-mechanical equipment 1350.00CNY

Use the transaction code AW01N to view changes in the value of the asset.

Figure 8? 114

1.1.1 balance sheet revaluation

Through the revaluation of the balance sheet to adjust the purchase value of assets, the system re-calculates depreciation according to the revalued value, which is generally used in the provision for asset impairment.

SAP menu à Accounting à Financial Accounting à fixed assets à ABAW-balance sheet revaluation

Figure 8? 115

? Transaction type: determine the revaluation method, commonly used revaluation transaction types such as 891-year-ago revaluation (down), 892-current revaluation (upward), 893-year-ago revaluation (upward), 894-adjustment revaluation (downward).

Asset vouchers are generated after preservation, but accounting vouchers are not generated. Accounting vouchers are generated during the final depreciation operation as shown in figure 8: 116. Depreciation expense 150.00CNY is the adjustment of the posted depreciation amount of the current period (depreciation of the current month is recalculated after the provision for impairment).

Figure 8? 116

Execute the transaction code AW01N to see the change in asset value.

Figure 8? 117

? 2014 monthly planned depreciation: (① 2380000.00-② 238000.00) / ③ 120 months = 17850.00CNY.

① is the acquisition value, ② is the salvage value of the asset, and ③ is the remaining depreciation month, so it can be seen that the book value used to calculate depreciation is the APC amount less impairment provision.

? 2380000.00 monthly planned depreciation: (2380000.00-238000.00-④ 107100.00-⑤ 100000.00) / ⑥ 114months = 16972.81CNY.

④ is the accumulated depreciation amount in 2014, ⑤ is the unplanned depreciation amount, and ⑥ is the remaining depreciation month after deducting six months in 2014, which shows that unplanned depreciation has an impact on depreciation in the next year.

Related configuration

IMG à Financial Accounting (New) à assets Accounting à Special Assessment à fixed assets revaluation à revaluation balance sheet à OABW-determine the scope of depreciation

Figure 8? 118

IMG à Financial Accounting (New) à Asset Accounting à Special valuation à fixed assets revaluation à revaluation balance sheet à AUFW-definition of revaluation measure

Figure 8? 119

IMG à Financial Accounting (New) à Asset Accounting à Integrated General Ledger Accounting à AO90-Distribution General Ledger account

Allocation of impairment preparation related accounts, pay attention to the need to allocate the asset impairment loss account as a controlled asset-liability account.

Figure 8? 120

IMG à Financial Accounting (New) à Asset Accounting à Special Assessment à fixed assets revaluation à revaluation balance sheet à AO84-defines the business types of revaluation

Figure 8? 121

IMG à Financial Accounting (New) à Asset Accounting à Integrated General Ledger Accounting à depreciation posting to General Ledger Accounting à OAYR-specify intervals and posting rules

Figure 8? 122

1.1.1 discussion on the preparation method of impairment

Article 56 of the Enterprise Accounting system stipulates: "the enterprise shall inspect the fixed assets item by item at the end of the period. If the recoverable amount is lower than the book value due to the continuous decline in market price, or due to obsolete technology, damage, long-term idle and other reasons, the provision for impairment of fixed assets shall be included." The book value here refers to the net amount of the original value of fixed assets after deducting accumulated depreciation and provision for impairment of fixed assets; the recoverable amount refers to the higher of the net sales price of fixed assets and the expected present value of future cash flows expected from the continuous use of fixed assets and disposal at the end of their useful life. Article 42 stipulates: "in the balance sheet, the provision for impairment of fixed assets shall be reflected as an impairment of net fixed assets.

Both unplanned depreciation and balance sheet revaluation can be used in the asset impairment provision business, with the following differences:

? Unplanned depreciation: the unplanned depreciation in the current year does not affect the planned depreciation in the current year, and the planned depreciation will be recalculated from next year.

Depreciation after impairment (current year) = (capitalized value-accumulated depreciation-salvage value) / remaining use month

* accumulated depreciation does not include unplanned depreciation for the current year

Depreciation after impairment (subsequent year) = (capitalized value-accumulated depreciation-salvage value) / remaining use month

* accumulated depreciation includes provision for unplanned depreciation or impairment in previous years.

Salvage value = capitalized value * salvage rate

? Balance sheet revaluation: the planned depreciation is recalculated based on the new book value from the month in which the impairment provision is made.

Depreciation after impairment = (capitalized value-accumulated depreciation-revaluation amount-salvage value) / remaining use month

Salvage value = (capitalized value-revaluation amount) * salvage rate

It can be seen that there are differences in the depreciation amount calculated by the two methods, and the asset salvage value is inconsistent, the author thinks that the balance sheet revaluation is closer to the requirements of accounting standards, and the transaction code AS02 can be used to manually adjust the salvage value of fixed assets.

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