11 Steps to a Successful Year-End Close for Fixed Assets
- by Thomas Michael, Senior SAP Product Expert, Michael Management Corporation
- November 15, 2004
Year-end closes often present problems both big and small. You can minimize these problems for both the current and subsequent year-end closes by following these simple steps.
The Fixed Asset module (Asset Accounting) is used to manage and supervise fixed assets within SAP R/3. It is a subsidiary ledger to the G/L, providing detailed information on master records and transactions as they relate to a company's fixed asset portfolio. As it provides values directly to the FI module, it plays a vital role in a company's financial records. In addition, it is integrated with a variety of other areas such as Investment Management, Project System, and Controlling.
I have learned that as an SAP fixed asset consultant for more than 12 years, I always know what I will be doing at the beginning of each year — helping my clients through their year-end closing problems. These problems range from easily fixed — such as not opening the new fiscal year correctly — to very difficult — such as reconciliation differences between the fixed asset subledger and the G/L in prior years.
With the proper year-end closing procedure, however, you can avoid most of these problems. As a result, I realized the need for a formal year-end closing guide for fixed assets and put together the following 11 steps. Note that this process is not "one size fits all." It is meant to apply to the greatest number of SAP functional experts.
You may need to add steps depending on the functionality your company uses. For example, if you are using fixed asset features such as interest calculations, revaluations, or periodic postings, you have to insert steps to complete your year-end closing process.
Step 1. Recalculate all asset values. Run program RAAFAR00 (transaction AFAR) to recalculate all asset values (Figure 1). This ensures that the planned asset values (such as depreciation, revaluations, etc.) reflect the most current configuration changes. This step does not create any postings nor will it change already posted values; it simply updates the planned amounts to reflect any configuration changes that may have happened in the past. This is a critical first step and, if omitted, it can lead to the dreaded "depreciation not completely posted" error later on. Note that only open fiscal years can be recalculated.
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