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Asset Impairment
December 6, 2013 | 5,430 Views |

Julie (PHAN THI THU HUONG)

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FIN Asset Accounting

aa | accounting | asset | fi | fi aa | financial | fixed asset

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1. PURPOSE:

An asset that is worth less on the market than the value listed on the
company’s balance sheet due to an unexpected or sudden decline or antiquity

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innovation change, this could be the result of physical demage to the asset.

2. REQUIREMENT:

IFRS requirement, Impairment of some Asset could be carried out.

3. CONFIGURATION STEP:

3.1. Go to tcode OABW to check revalue APC in the depreciation area where
you want to post. This would help in identifying the area where the Impairment
will have to posted.

3.2. Go to tcode OAYR and select your company code. Then click on the
posting rule.

In the book depreciation area, go to Other posting settings. Check on “Post

revaluation”.

This setting is required for posting the impairment amount.

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3.3. Go to tcode AO90 and create a revaluation APC for each fixed asset
class and clearing account Revalutaion APC.

The revaluation APC has to be a reconciliation account and the revaluation

clearing is P/L account.

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3.4. Go to tcode AO84 to create Transaction type, example “Z80”, “Z81”,

“Z82”, “Z83”

– Z80: Impairment Loss (Prior-Yr acq.)

– Z81: Impairment Loss (Curr-Yr acq.)

– Z82: Reversing an Impairment Loss (Prior-Yr acq.)

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– Z83: Reversing an Impairment Loss (Curr-Yr acq.)

3.5. Go to tcode ACSET and select the company code, then choose Book
depreciation area, add account assignment object “KOSTL” – cost center and
account assignment type “Depreciation Run”.

This setting is required cost center for posting the impairment GL account
when Depreciation Run.

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4. BUSINESS SCENARIO:

– Post impairment asset: Tcode ABAW:

Now, go to tcode ABAW, select the asset to be impaired. Put the transaction
type as Z81, press Enter.

In the next screen give an asset value date, amount to be posted as

Impairment. Now, click Save.

An asset accounting document will be generated.

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NOTE: This impairment amount will NOT be posted automatically. Once

depreciation run takes place then only the amount gets posted to GL account.

a. Impair loss

b. Reverse Impair loss

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– Run depreciation: for a period in tcode AFAB:

a. Impair loss

b. Reverse Impair loss:

End

Alert Moderator

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26 Comments
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Sethuraman Ganesamurthy

February 18, 2014 at 10:10 am

Good one Julie.

Thanks for sharing.

RAHEEM BAKSH

February 19, 2014 at 5:41 am

Hi Julie Phan

Excellent Document

Regards

Raheem

Sada Bandla

February 19, 2014 at 11:05 am

Hi

Nice documentation thank you for sharing knowledge.

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Julie (PHAN THI THU HUONG) Post author

February 20, 2014 at 2:20 am

Thank you very much, guys!

Gopikrishna Mallireddy

March 4, 2014 at 10:14 am

Hi Julie,

Very useful document. Thanks for the efforts.

In this i have a doubt..

When we run impairment loss system has reduced impairment loss from
APC Value and it is showing Acquisition value as 900 its okay.

When we reverse the same impairment loss why it is showing Acquisition

value as 1100 instead of 1000?

Regards,

Gopikrishna Mallireddy

Shaik Md Abubakar Siddiq

February 20, 2014 at 6:02 am

Helo Julie…

Very Use full Documentation for me as of now…Good Work and thanks for your Wonder
full Efforts.

Santosh Visave

February 20, 2014 at 10:56 am

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Hi Julie,

Very nice document, keep it up….

Santosh Visave

Pankaj Pareek

February 20, 2014 at 3:49 pm

Hi Julie,

Nicely explained implementing the asset impairment.

Thank you for sharing it.

Regards

Pankaj Pareek

Jazib Tariq

February 21, 2014 at 6:02 am

Hi Julie,

Nice Document

Kishore Kumar Pasumarthy

March 4, 2014 at 7:03 am

Thank you very much, guys!

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Ravi Sankar Venna

March 4, 2014 at 10:29 am

Thanks for the document.

The inherent design problem of Impairment is it would only considered from the next
year for calculating the ordinary depreciation. Even after posting the impairment, there
would not be any difference in the current year’s ordinary depreciation, this is the design
of the system, we may have to live with it. But, most of the clients are not happy.

Julie (PHAN THI THU HUONG) Post author

March 18, 2014 at 7:15 am

Thank you very much for your valuable information, Sir Ravi.

I noted this point.

Satyendra .

March 11, 2014 at 3:49 pm

many thanks for the document !!!

Best regards

Satya

sreehari tokala

April 8, 2014 at 7:30 am

Thank you very much Julie………..

It’s very help full Document to implement .

Thanks & Regards,

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Sreehari. Tokala

Warren Nash

April 29, 2014 at 8:13 am

Good document Julie.

Regards

Waza

Lakshmi Sama

June 10, 2014 at 6:58 am

Hello Julie,

Nice document and you explained the concept in a good manner anyone can understand
it easily

Thanks & Regards,

Lakshmi S

Muhammad Javed

June 13, 2014 at 1:45 pm

Dear Julie,

Nice explanation about impairment concepts, process and configuration.

Thanks for sharing.

Regards
Javed

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Ganesh K.B.

June 18, 2014 at 12:56 pm

Hi Julie,

Very nice document with clear examples.

Regards,

Erwin Leitner

June 29, 2014 at 7:51 am

Hello,

Thank you very much for excellent information.

“Mrs. SAP”

all the best Erwin

Pankaj Bansal

June 29, 2014 at 3:48 pm

Very Helpful!

All the best!

Mukthar Ali Ahamed N

September 18, 2014 at 8:55 am

Good explanation…Thank you for sharing your knowledge.

All the best

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Mukthar

Kishore Kumar Pasumarthy

September 23, 2014 at 12:27 pm

Hi Julie,

Thanx For Your Information…….

Regards,

Kishore.P

pawan Gupta

March 19, 2016 at 3:17 am

Hello Julie,

We have a requirement in which we have to revalue an Asset with out Accumulated

Depreciation impact.

Regards

Pawan Gupta

Lisa Zhang

March 30, 2016 at 6:14 am

Good sample and detail customizing explaination!

Karteek k
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May 18, 2016 at 5:53 am

Hi,

Nice document. Beautiful explanation. Thanks for sharing your knowledge.

Regards

Karthi

pawan Gupta

August 23, 2016 at 5:40 pm

Hello Julie,

We have implemented Asset impairment functionality but we are facing issue in profit
center determination, when depreciation posted with more than one profit center as per
assignment of asset then in impairment g/l account is not splitting as per profit center
assigned in asset but constant is determined.we want impairment split as per profit
center in asset.

Can you please guide on it

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