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Legacy Asset Takeover

in a Progressive Go-
Live Scenario
Safety
Purpose Understand the limitation of SAP regarding this
functionality and Understand the workaround solution
Agenda
SPACER
Understanding the issue
Overview of possible solutions
Evaluate solutions
Decide on solution
Discuss timetable for solution implementation and assign roles
Conduct Open discussion
Expectations Decide on go-forward approach
Roles Facilitator: Patrick McCarthy
Notes: Nilay Mehta
Timekeeper: Volunteer
What Should have been What should ideally happen
possible Asset Accounting General Ledger
01 Dep Area Date of Posting Value

Company adopts a Legacy Asset - Pigments01


Progressive Go-Live
Asset Capitalisation as on Jan 1, 2006
Strategy wherein multiple
businesses within a single Legacy Data Transfer
legal entity go-live at (as on Oct 31, 2007)
APC Value 12,000.00 October 31, 2007 12,000.00
different points of time. Accumulated Depreciation till end of previous year 1,200.00 October 31, 2007 1,200.00
Current Year Depreciation 1,000.00 October 31, 2007 1,000.00

It should have been SAP Calculated Depreciation 200.00 Nov 30 & Dec 31 2007 200.00
possible to have different NBV at Dec 31, 2007 9,600.00 9,600.00

legacy data asset transfer SAP Calculated Planned Depreciation for 2008 1,200.00 Last date of each month 1,200.00
dates within the system from January 2008
NBV at Dec 31, 2008 8,400.00 8,400.00
for each such go-live.
Alongside is an example Legacy Asset - Inks01
of two fixed assets within
Asset Capitalisation as on Jan 1, 2006
the same company code to
explain what we would Legacy Data Transfer
have liked SAP to allow us (as on Feb 29, 2008)
APC Value 12,000.00 February 29, 2008 12,000.00
to do : Accumulated Depreciation till end of previous year 2,400.00 February 29, 2008 2,400.00
Current Year Depreciation 200.00 February 29, 2008 200.00

SAP Calculated Planned Depreciation for 2008 1,000.00 Last date of each month 1,000.00
from March 2008

NBV at Dec 31, 2008 8,400.00 8,400.00


What SAP does not support What will really happen
Asset Accounting General Ledger
01 Dep Area Date of Posting Value
Unfortunately, SAP is
Legacy Asset - Pigments01
designed to accept only
one Legacy Asset Asset Capitalisation as on Jan 1, 2006
Takeover Date per
Company Code Legacy Data Transfer
(as on Oct 31, 2007)
APC Value 12,000.00 October 31, 2007 12,000.00
Accumulated Depreciation till end of previous year 1,200.00 October 31, 2007 1,200.00
Current Year Depreciation 1,000.00 October 31, 2007 1,000.00

SAP Calculated Depreciation 200.00 Nov 30 & Dec 31 2007 200.00

NBV at Dec 31, 2007 9,600.00 9,600.00

SAP Calculated Planned Depreciation for 2008 1,200.00 Last date of each month 1,200.00
from January 2008
This means that it is not
possible to load assets of NBV at Dec 31, 2008 8,400.00 8,400.00
different businesses in Legacy Asset - Inks01
the same company code
on two different takeover Asset Capitalisation as on Jan 1, 2006
dates
Legacy Data Transfer
(as on Oct 31, 2007) (we cannot change this date)
Alongside is an example APC Value 12,000.00 October 31, 2007 12,000.00
of how the data would Accumulated Depreciation till end of previous year 1,200.00 October 31, 2007 1,200.00
Current Year Depreciation 1,200.00 October 31, 2007 1,200.00
appear (completely
incorrect) in Asset NBV at Dec 31, 2007 9,600.00 9,600.00
Accounting if we were to
still try and upload the SAP Calculated Planned Depreciation for 2008 1,200.00 Last date of each month 1,200.00
from January 2008
second lot of assets into NBV at Dec 31, 2008 8,400.00 8,400.00
the same company code :
Impact
Due to not being able to have more than one legacy data takeover date
per company code, the takeover values as on February 29, 2008 will
appear as if these assets had been taken over on October 31, 2007 in
Asset Accounting

Since the February assets would be loaded into the system as if they
had been taken over in October, the financial entries would also logically
need to be done in October 2007

This would mean opening up the Fiscal Year 2007 and creating postings,
which would surely attract audit objections. It would also change data
which has already been extracted and rolled up into Magnitude
Method 1 : SAPs Recommendation SAP's Recommendation
Asset Accounting General Ledger
SAPs Recommendation 01 Dep Area Date of Posting Value

SAP recommends Legacy Asset - Pigments01

that legacy data Asset Capitalisation as on Jan 1, 2006

takeover should Legacy Data Transfer


(as on Oct 31, 2007)
happen at a single APC Value 12,000.00 October 31, 2007 12,000.00
Accumulated Depreciation till end of previous year 1,200.00 October 31, 2007 1,200.00
date Current Year Depreciation 1,000.00 October 31, 2007 1,000.00

SAP Calculated Depreciation 200.00 Nov 30 & Dec 31 2007 200.00


NBV at Dec 31, 2007 9,600.00 9,600.00
In case of
SAP Calculated Planned Depreciation for 2008 1,200.00 Last date of each month 1,200.00
progressive takeover from January 2008
NBV at Dec 31, 2008 8,400.00 8,400.00
of assets, the
subsequent legacy Legacy Asset - Inks01
assets should be Asset Capitalisation as on Jan 1, 2006

loaded into the Acquisition Posting 9,400.00 February 29, 2008 9,400.00

system as SAP Calculated Planned Depreciation for 2008 1,000.00 Last date of each month 1,000.00
Acquisitions in the NBV at Dec 31, 2008 8,400.00
from March 2008
8,400.00
current year
Method 1 : SAPs Recommendation
Pros

Simple to load
No need to open previous fiscal year for posting
YTD Net Book Value is correct in both Asset Accounting and GL Accounting
The takeover values as on February 29, 2008 will appear as if these assets had been
taken over on February 29, 2008 in Asset Accounting

Cons

The historical acquisition value and the accumulated depreciation value of the legacy
assets is not captured in the system and therefore not available for reporting

Since it is not possible to use the standard legacy data takeover program to load these
assets, these are posted in the system as Acquisitions and therefore show up on
reports as if they are assets acquired during the year with no NBV at the FY start
Method 2 : Workaround Solution
SAP's Recommendation

Workaround Solution Asset Accounting


01 Dep Area Date of Posting
General Ledger
Value

While there is no possibility at all Legacy Asset - Pigments01

to avoid the constraint imposed Asset Capitalisation as on Jan 1, 2006

by SAP of treating subsequent Legacy Data Transfer


(as on Oct 31, 2007)
asset postings as Acquisitions, APC Value 12,000.00 October 31, 2007 12,000.00
what we recommend is to load Accumulated Depreciation till end of previous year
Current Year Depreciation
1,200.00 October 31, 2007
1,000.00 October 31, 2007
1,200.00
1,000.00
the legacy data as Gross SAP Calculated Depreciation 200.00 Nov 30 & Dec 31 2007 200.00
Postings, for which we would NBV at Dec 31, 2007 9,600.00 9,600.00

create a custom transaction type SAP Calculated Planned Depreciation for 2008 1,200.00 Last date of each month
from January 2008
1,200.00

NBV at Dec 31, 2008 8,400.00 8,400.00

Since the legacy takeover will not Legacy Asset - Inks01

Asset Capitalisation as on Jan 1, 2006


happen via the conventional
takeover programs, there will be Acquisition Posting - Gross Accumulated Value
Acquisition Posting - Accumulated Depreciation
12,000.00 February 29, 2008
2,400.00 February 29, 2008
12,000.00
2,400.00
no need to separately load Asset SAP Calculated Planned Depreciation for Feb 2008 200.00 February 29, 2008 200.00
Data and GL balances. Both these SAP Calculated Planned Depreciation for 2008 1,000.00 Last date of each month
from March 2008
1,000.00

activities will happen NBV at Dec 31, 2008 8,400.00 8,400.00

simultaneously

Legacy assets taken over via this


solution would be very easily
identifiable via Evaluation Groups
functionality in Asset Accounting
which we would turn on to
support multiple releases and
takeovers in the same company
code
Method 2 : Workaround Solution
Pros
Simple to load
No need to open previous fiscal year for posting
YTD Net Book Value is correct in both Asset Accounting and GL
Accounting
Historical acquisition value and the accumulated depreciation
value of the legacy assets is captured in the system and therefore
available for reporting
The takeover values as on February 29, 2008 will appear as if these
assets had been taken over on February 29, 2008 in Asset
Accounting
Cons
Since it is not possible to use the standard legacy data takeover
program to load these assets, these are posted in the system as
Acquisitions and therefore show up on reports as if they are
assets acquired during the year with no NBV at the FY start. These
reporting gaps can be mitigated via various options (see slide 11)
Method 2 : Workaround Solution
Test Results
We tested this workaround solution in the Sandbox environment by running
each of the Asset Accounting reports in the Company User Menu on assets
taken over via this workaround solution :

Report Report
S_ALR_87010173 - Revaluation S_ALR_87012013 - Depreciation Comparison
S_ALR_87010175 - Depreciation Posted to Cost Center S_ALR_87012015 - Manual Depreciation
S_ALR_87011963 - Asset Balances S_ALR_87012018 - Depreciation and Interest
S_ALR_87011964 - Asset Balances S_ALR_87012026 - Depreciation
S_ALR_87011965 - Asset Balances S_ALR_87012033 - Gain for Transfer of Reserves
S_ALR_87011966 - Asset Balances S_ALR_87012035 - Depreciation
S_ALR_87011967 - Asset Balances S_ALR_87012039 - Asset Transactions
S_ALR_87011968 - Asset Balances S_ALR_87012041 - Asset Balances
S_ALR_87011969 - Asset Balances S_ALR_87012048 - Asset Transactions
S_ALR_87011970 - Asset Balances S_ALR_87012050 - Asset Acquisitions
S_ALR_87011979 - Physical Inventory List S_ALR_87012052 - Asset Retirements
S_ALR_87011990 - Asset History Sheet S_ALR_87012064 - Depreciation
S_ALR_87011994 - Asset Balances S_ALR_87012075 - Asset History
S_ALR_87012004 - Depreciation S_ALR_87012936 - Depreciation Simulation
S_ALR_87012006 - Depreciation S_P99_41000192 - SAP Standard Variant
S_ALR_87012007 - Depreciation ARQ0 - FIAA - Ad hoc reports
S_ALR_87012008 - Depreciation
S_ALR_87012009 - Depreciation
Method 2 : Workaround Solution
Gaps and Mitigation
Based on the testing done, the following gaps still remain despite the workaround
solution (these gaps will be visible only in the year that the subsequent asset takeover
happens) :

Type of Report Gap Plan for Mitigation


Depreciation The columns APC FY A custom report needs to be developed which will be able
Reports and Asset Start, Dep FY Start, to recognise whether the asset has been loaded via the
Histort Sheet Bk Val FY Start are conventional method or the workaround solution and
blank for the accordingly pick up values from different places to display
workaround solution. the Previous Years information correctly
Asset Transactions The subsequent We will create report variants that will exclude the new
and Asset legacy asset takeover transaction type that we intend to create for the workaround
Acquisitions loaded through the solution so that these current year reports display only the
Reports workaround solution true current year acquisitions.
appears as a
transaction of the
current year
Data Load The column Previous We will use Asset Transactions report along with a report
Validation Query Years is blank for the variants that will include only the new transaction type that
(ARQ0) workaround solution. we intend to create for the workaround solution so that this
report displays only the data loaded via the workaround
solution.
Open discussion

Which solution will best suit Sun


Chemicals reporting needs ?

Any Concerns ?