Spotlight: Fixed Asset Revaluation with SAP’s RAAUFW02 Program

  • by Gary Byrne, Managing Editor, Financials Expert and SCM Expert
  • February 23, 2012
Revaluation of fixed assets is a common business event. Maybe your organization is going through a merger or acquisition, or maybe you are involved in a year-end fixed asset revaluation? Whatever the case may be, you want to make sure that you are following best practices for a fixed asset revaluation.

 

What are the best practices for a fixed asset revaluation? I asked Nathan Genez, a Financials Expert advisor and a managing partner at Serio Consulting, to comment on the processes involved when a company revaluates its fixed assets and to explain how SAP’s new program, RAAUFW02, facilitates this process.

What step during a fixed asset revaluation is the most complicated?

Validating and reconciling the data are probably the most intensive steps. The process of configuration and execution of the revaluation within SAP ERP is not overly complex, but the management of the values and ensuring that each asset is properly adjusted can be difficult. In addition, getting the asset to depreciate on a go-forward basis that is consistent with the revaluation can also prove tricky.

If an organization is preparing for a merger or acquisition, is a revaluation of fixed assets necessary before and after an M&A?

The revaluation is necessary after the M&A with the values baselined from the date of the M&A.

What question with regard to fixed asset revaluation do you receive most often from clients?

The most frequently asked question that I hear has to do with the adjustments of the asset’s value and how best to ensure that the go-forward depreciation is correct. A revaluation is similar to other types of fixed asset adjustments in that each debit or credit to the asset’s acquisition cost or depreciation reserve can cause the calculated amounts to behave differently depending on the configuration of the subledger. This topic area tends to require the most work and generates the most questions.

Gary Byrne

Gary is the managing editor of Financials Expert and SCM Expert. Before joining WIS in March 2011, Gary was an editor at Elsevier. In this role he managed the development of manuscripts for Elsevier’s imprint responsible for books on computer security. Gary also has held positions as a copy editor at Aberdeen Group, a Boston-based IT market research company, and as an editor at Internet.com, a publisher of content for the IT community. He also gleaned experience working as a copy editor for International Data Corp., a Framingham, MA-based IT market research company. He earned a bachelor of science degree in journalism from Suffolk University in Boston. He enjoys traveling, sailing as a passenger onboard schooners, and helping his wife, Valerie, with gardening during summer weekends. He’s a fan of all the Boston sports teams and once stood behind Robert Parish in a line at BayBank. He felt small and didn’t ask for an autograph. You can follow him on Twitter at @FI_SCM_Expert. His online footsteps can also be found in the SAP Experts group on LinkedIn.

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