Tips on How to Open the Prior Fiscal Year in Asset Accounting for Tax Depreciation Adjustments
There are several steps necessary to open a prior fiscal year in SAP Asset Accounting (FI-AA) and allow tax depreciation adjustments to individual asset records. Some of the steps are obvious, but one is not, and my goal is to clarify them all. These steps are necessary for posting updates or adjustments for bonus depreciation, adjustments for repair and maintenance regulations (481a), or other tax depreciation adjustments that are specific to tax and not Financial Accounting (FI) depreciation areas. One important thing to note is that the FI books are never opened during this process. They remain closed throughout, and no updates are made that affect or update closed financial periods.
Before any tax adjustments are made, it may be necessary to create or modify one of the transaction types needed for the posting process. Using transaction code AO78, you can create or modify asset transaction types. With transaction code OAXE, you can modify which areas are posted with a transaction type. In Figure 1, from OAXE, you can see that the transaction type will only post the tax areas 10, 12, 13, and 14.
The next step in the process to open a prior fiscal year is done using the transaction code OAAR. This code opens the prior tax years. In Figure 2, you can see the fiscal years that are closed for 2015, and where the tax areas are opened for 2014, for company code C001. This allows you to make adjustment postings in the areas 10 to 15 without having the SAP General Ledger accounting periods opened for the same time frame. Using this process, you do not need to open the accounting periods via transaction code OB52. Keep in mind that in the scenario I describe here I assume that your tax depreciation areas are set up as statistical in nature and that they do not update any FI ledger balances.
The second step in the tax adjustment process is to post the specific value modification to the asset. If multiple assets are to be posted, it would be a good idea to have the entries prepared in advance and have a tool to help automate the process. Typically, transaction code ABSO can be used to post the tax adjustment.
In Figure 3, you can see the transaction being posted via ABSO, where only the tax areas are being updated. To see the Overview of Posted Areas screen from within the ABSO transaction and after the values are entered, click the menu item Extras > Line Items or press the Shift + F1 keys. This shows that you are only going to update tax areas 10 and 12 to 14.
Next, I review the asset in transaction code AW01N to see that the posted values are successful. In Figure 4, you can see the posting you made via transaction code ABSO is now on the asset values screen. The transaction type Z61 is set up to update the Unplanned Depreciation section for the tax areas. One item to note is that the Z61 transaction type will show up in the Transactions section for other areas, but will have a value of 0.00 for the posting (Figure 5).
Now that I have covered how to open the fiscal period and post the adjustment, you need to close the fiscal year so that no additional postings are entered by mistake. In transaction code AJAB, you can close the four tax areas that you opened earlier. In Figure 6, you can see the company code C001 is ready to be closed, but ironically, the message displayed says that no closing is required. You know that the other areas are opened so uncheck the test box and go ahead and submit the job in the background. The SAP system is only checking for areas that post to ledgers, and none of the tax areas do this because they are only statistical in nature. Once the year is closed, you can consider the tax update or adjustment process to be completed.
In closing, if this is the first time you are attempting tax area adjustments in prior years, it is very important to have an FI-AA expert close by or on hand to provide guidance. One word of caution: be sure to test all the activity in the SAP test environment so that you know what to expect in the production environment. For more details or guidance from SAP directly on bonus depreciation, see SAP Note 505069 – Special Tax Depreciation USA. Another SAP note to review is SAP Note 29694 – Deprec.recalc.for prv.yr despite yr-end close in FI, which explains what to do when a depreciation recalculation is triggered due to master data changes or updates, despite the fiscal year already being closed in FI.
(Note: All of the tax depreciation adjustments that I have mentioned in this article are applicable only to US tax depreciation.)
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