Inflation-Based Revaluation of Fixed Assets

  • by Chirag Chokshi, Solution Architect, SAP Financials
  • April 27, 2015
Learn the configuration done for monthly inflation-based revaluation. This configuration needs slight changes based on the frequency and inflation calculation methodology required for a specific implementation.
Learning Objectives

By reading this article, you will learn:

  • Step-by-step configuration for inflation-based revaluation of fixed assets
  • Asset master data fields related to inflation adjustment
  • SAP transactions to revalue fixed assets based on the inflation index
Key Concept

Inflation-based revaluation is a statutory requirement for several high-inflation countries. These countries publish an inflation index for revaluation of the fixed asset base of the company.

In countries with high inflation, the company’s financials often require adjustments to reflect the impact of inflation. Because fixed assets are long-term assets, they need revaluation based on an inflation index.

SAP provides functionality to revalue fixed assets based on an inflation index at a stipulated revaluation frequency (monthly, half-yearly, or annual). To make your SAP system ready for inflation-based revaluation, several configuration tasks need to be done. I explain the configuration steps, master data setup, and the business process for inflation-based revaluation.

To explain the configuration for inflation-based revaluation, I use an example of a chart of depreciation 1MX (for Mexico).

The chart of depreciation 1MX is a sample template chart and should never be used in a production system. I use the chart of depreciation 1MX only as an example. Usually, the best practice is to copy the SAP-delivered chart of depreciation to a newly created chart of depreciation and use that new chart of depreciation. This is mainly required if any changes need to be done to the SAP-delivered chart of depreciation to meet the local requirement; then changing 1MX is not a good practice, as you lose track of what SAP has delivered with the installation.

For my example, a chart of depreciation 1MX (for Mexico) is configured for explaining inflation-based revaluation. To complete this configuration, execute transaction code OAOB and follow IMG menu path Accounting  > Asset Accounting > Organizational Structures > Assign Chart of Depreciation to Company Code . This action displays the screen shown in Figure 1. In this screen, a fixed asset for company code 6000 fixed assets is used for explaining SAP system transactions and master data setup.

Figure 1
Assignment of the chart of depreciation to a company code


Chirag Chokshi

Chirag Chokshi is a solution architect for SAP Financials. He has worked on SAP Financials since 2001 and specializes in implementing the Financial Accounting (FI) and Controlling (CO) modules along with their integrated areas for companies in industries such as consumer products, the chemical process industry, pharmaceuticals, the public sector, industrial machinery, and component manufacturing. He has worked on various complex projects, including global rollouts, greenfield implementations, and SAP system upgrades. In addition, he has developed various preconfigured solutions with a focus on SAP Financials. 


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