Best Practices in SAP FI-Asset Accounting
Content
Global Best Practices for Fixed Assets Thomas Michael Michael Management Corporation
Overview • Glo lob bal Fi Fixe xed d Ass sse et Sy Syst ste em – Cl Clie ien nt • • • •
Example Gl Glob oba al F Fix ixed ed As Asse sett V Vis isio ion n & Go Goa als Global B Be est P Prractic ice es Global C Ch hallenges Elements of Success
• Wrap up / Q&A
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Intro In tro - Lear Learni ning ng Obj Object ectiv ives es • Sev Severa erall lar large ge mu mult lti-n i-nat atio iona nal, l, multi multi-ye -year ar implementations covering North/South America, Europe, Asia • Un Unde ders rsta tand nd ho how w a llar arge ge Gl Glob obal al C Com ompa pany ny approached the development of a single global solution set • Ho How w tto oa app ppro roach ach a G Glob lobal al AA Des Desig ign n ttem empl plat ate e • Ex Expl plai ain n th the e ke key y el elem emen ents ts ffor or g glo loba ball be best st practices www.michaelmanagement.com
What we’ll cover • Glo lob bal Fixe ixed As Asse sett Sys ysttem – Cl Clie ien nt Example • Glo loba ball F Fix ixed ed As Asse sett V Vis isio ion n&G Goa oals ls • Glo lob bal B Be est P Prractices • Elements of Success • Wrap up / Q&A
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Global Glo bal Fixed Fixed Ass Asset et Syst System em – Client Client Example • U. U.S. S. b bas ased ed Com Compa pany ny d doi oing ng bu busi sine ness ss iin n mo more re than 160 countries worldwide with over 300 consumer brands • @8 80 0c cou ount ntrie ries sw worl orldw dwide ide wit with hg gen ener eral al o offi ffice ces s and/or manufacturing plant sites • Cur Curre rent ntly ly ha have ve 56 cha charts rts of depr deprec ecia iatio tion n in global SAP 4.5b client (increase of 22 COD’s since 2002)
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Global Glo bal Fixed Fixed Ass Asset et Syst System em – Client Client Example (cont’d) • @ 1M 1MM M as asse sett re reco cord rds s in g glo loba ball SA SAP P 4. 4.5b 5b c clie lient nt • @1 135 35 as asse set-h t-hol oldin ding gc com ompa pany ny cod codes es in g glob lobal al SAP 4.5b client (increase of 55 since 2002) • In fis fiscal cal ye year ar 20 2004 04,, c clie lient nt ha had d$ $2B 2B in c cap apita itall spending (AUC assets)
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Global Glo bal Fixed Fixed Asset Asset Syst System em – SAP Stati Statistic stics s • Ov Over er 15 15,00 ,000 0c clie lient nts s wo world rldwid wide ea are re liv live eo on nA Asse ssett Management module • Ov Over er 7 70 0 co coun untr trie ies/ s/la lang ngua uage ges s su supp ppor orte ted d
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What we’ll cover • Glo lob bal Fixe ixed As Asse sett Sys ysttem – Cl Clie ien nt Example • Glo loba ball F Fix ixed ed As Asse sett V Vis isio ion n&G Goa oals ls • Glo lob bal B Be est P Prractices • Elements of Success • Wrap up / Q&A
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Global Fixed Assets Vision & Goals • Def Define ine gl glob obal al cha chart rt of de depr prec eciat iatio ion n tto o sat satisf isfy y both US and local requirements: – US GAAP a and nd loca locall coun country try GAAP rules/reporting – US tax a and nd loca locall count country ry tax ru rules/repo les/reporting rting – Global Insuran Insurance ce val valuation uation reportin reporting g • On One es set et of as asset set cla classe sses su use sed da acr cross oss th the eg glo lobe be • Dev Devel elop op a s sta tand ndar ard ds set et of w wor ork kp pro roce cesse sses s to be used across the globe
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Global Fixed Assets Vision & Goals (cont’d) • Min Minimi imize ze ava availa ilabl ble e op optio tions ns s such uch as d dep epre recia ciatio tion n keys, transaction types, reports, etc. • Im Imple pleme ment nt a g glob lobal al s sta tand ndar ard d ffor or tthe he int integ egra ratio tion n between Fixed Assets and EC-PCA as well as EC-CS (business segment reporting) • Sec Secure ure a s sing ingle le c clie lient nt th that at hous houses es al alll Ca Capit pital al Projects and Fixed Assets for all countries – global reporting from one place!
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What we’ll cover • Glo lob bal Fi Fixe xed d As Asse sett Sy Syst ste em – Cl Clie ient nt Ex Exam ampl ple e •• G Gl Glob obal al Fixe Fi xed d As Asse sets ts Vis Visio ion n & Go Goal als s lo lob bal B Be est P Prractices – Local vs. Group req requirements uirements – Global Chart of Depreciation – Asset Class desi design gn – Standard Business Processes – Minimize Options – Consolidations (A (AA A and PCA / EC-CS)
• Elements of S Su uccess - Wrap up / Q Q& &A www.michaelmanagement.com
Global Glo bal Best Best Prac Practice tices s – Local Local vs. vs. Group Group requirements • Re Real aliz ize e ttha hatt y you ou ne need ed to fu fulf lfililll le lega gall reporting requirements in each country • Depreciation a arrea 01 - LOCAL G GA AAP • De Depr prec ecia iati tion on ar area eas s3 30/ 0/31 31 a are re fo forr GR GROU OUP P GAAP • Re Rese sear arch ch lo loca call re requ quir irem emen ents ts a and nd tthe heir ir consequences PRIOR to initial design – France’s area 05 for deferred gain gain/loss /loss – RARUECK01 – Italy’s need ffor or specific asset history sheet format – Germany’s need for detailed asset class format – Etc. pp. www.michaelmanagement.com
Global Glo bal Best Best Prac Practice tices s – Global Global Chart Chart of Depreciation CoD USA Chart of depreciation
Chart of depreciation
USA
Germany
Depreciation areas 01 10 11 12 13 20 30 31
Depreciation areas
Book depreciation Federal tax ACRS/MACRS Alternative Minimum Tax Adjusted Current Earnings Corporate Earnings & Profits Cost depreciation Consolidated balance sheet in local currency Consolidated balance sheet in reporting curr.
32 Book depreciation in group currency 33 State modified ACRS
99 Insurance
CoD Germany
01 02 03 10 15 20 30 31 32 41 51
Book depreciation Special tax depreciation Special depreciation reserve Valuation of net assets Balance sheet for tax purposes Cost-accounting depreciation Consolidated balance sheet (local curr.) Consolidated balance sheet (group curr.) Book depreciation in group currency Investment support (reducing APC) Investment support as a reserve
99 Insurance
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Global Glo bal Best Practi Practices ces – Global Global Chart Chart of Depreciation • Cre Creat ate e ttwo wo de depr preci eciat ation ion ar area eas sp per er re repo port rting ing requirement, in local currency and one in USD. Thisone captures historical exchange rate values rather than using translation methods. – Both areas use sam same e depreciation key a and nd life – Example: Area A (US GAAP) is set to local currency; area B (US GAAP) is set to USD
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Global Glo bal Best Practi Practices ces – Global Global Chart Chart of Depreciation • Glo Globa bally lly,, rres eserv erve e ce cert rtain ain de depr prec eciat iation ion ar area eas s 01-20 for specific reporting etc. purposes (i.e. 01-20 GAAP, related Tax, Insurance, and 21-29 for local use (GAAP and Tax); regions can meet any additional local needs outside of this range
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Global Glo bal Best Best Prac Practice tices s – Asset Asset Class Class Desig Design n • In order order to use an asse assett cla class ss acro across ss the the globe, each country using the asset class must be able to use the same account determination for both U.S. GAAP and Local GAAP reporting (if other posting areas exist) • Enab Enable les s glob global al rep repor ortin ting g by asse assett cla class ss
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Global Glo bal Best Practi Practices ces – Asset Asset Class Class Design Design • Enab Enable les s eas easie ierr asse assett life life chang changes es acro across ss tthe he globe (via workflow), when needed • Scre Scree en lay layou outt – use use a set set of of glo globa ball rul rules es or the SAP delivered layout rule but a country can their own as needed in order to meetcreate local needs
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Global Glo bal Best Best Prac Practice tices s – Asset Asset Class Class Design Design • Glob Globa alllly y defin efined ed fiel field ds: – Eval. group 1 (i.e. California California ADR reporting) – Eval. group 2 (i.e. Insurance Insurance reporting) – Property Indicator (Real vs. vs. Personal property) – Standard set of depreciation keys/lives keys/lives for US GAAP, US tax, California ADR, and Insurance depreciation areas • Use Use as as man many yu use serr ffie ield lds s (ta (tabl ble eA ANL NLU) U) as necessary www.michaelmanagement.com
Global Glo bal Best Best Prac Practice tices s – Asset Asset Class Class Desig Design n Tips & Tricks • Re Rea alize lize th the e di diff ffer eren ence ce bet etwe ween en th the e A- an and d B-segment (A-segments usually not company/country specific) • Do Don’ n’tt s set et up as asse sett cla class sses es by us usef eful ul lif life e (e.g.. M&E 5yr (e.g 5yrs., s., M& M&E E 7y 7yrs, rs, substitutions) e etc. tc. – use mor more e sophisticated tools such as • Yo You u wi willll n nee eed d mo more re d det etai aile led d as asse sett cl clas asse ses s for certain more detailed countries building (e.g. asset Germany classes, requires e.g. Buildings, Bldgs-Warehouses, BldgsOffice/Retail, Bldgs-Sheds, etc.) www.michaelmanagement.com
Global Glo bal Best Best Pract Practices ices – Standa Standard rd Busin Business ess Processes Standard Business Processes aka ‘The 80/20 rule’ • Fix Fixed ed Ass Asset ets sc cor ore eb bus usine iness ss the pr proce ocesse sses s(only a are re the same or very similar across globe 3 core processes in AA) – Master Dat Data a – Transactions – Periodic Proce Processing ssing
• 80 80% % of you yourr co conf nfig igura urati tion on s sho houl uld d be tr tran ansf sfera erable ble to other countries, 20% may be country-specific
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Global Glo bal Best Best Prac Practice tices s – Standa Standard rd Busine Business ss Processes Standard set of work processes: • Cr Crea eatte/ e/Ch Chan ange ge master ster re reco cord rds s • Divestiture ha handling • Asset s sa ales tto o tth hird p pa arty • Handling o off a as sse sett rre eserves • Re Reve vers rsal als s of as asse sett re reti tire reme ment nts s • Ha Hand ndlling of as asse setts ttra rade dedd-iin •• • •
Ha Hand ndli ng of ers de defe rred ed ch char ge as asse sets ts As Asse set tling ttra ransf nsfer sferr be betw twee een narge c com ompa pani nies es & c cou ount ntri ries es Settlements o off A AU UC a as ssets St Stan anda dard rdiz izat atio ion n of as asse sett re repo port rts s www.michaelmanagement.com
Global Glo bal Best Best Prac Practice tices s – Minimi Minimize ze optio options ns • Ov Over er 70 700+ 0+ ca calc lcul ulat atio ion n ke keys ys… … • Ov Over er 23 2300 00+ +d de epr prec ecia iati tio on k key eys… s… • …y …yet et ma many ny do th the e sa same me th thin ing: g: – M150, NA0 – M200, DG20 – LINx – straight line
• Ov Over er 23 230+ 0+ tr tran ansa sact ctio ion n typ types es… … • Over 2 20 00+ ass sse et rre eport rts s…
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Global Glo bal Best Practi Practices ces – AA and and PCA PCA / EC-CS EC-CS • Gl Glob oba al c con onfi fig gur urat atio ion n it item em -- ma make ke th the e ti time me-dependent screen time-independent time-independent (transa (tra nsactio ction n ORFA ORFA;; ‘Master ‘Master Da Data’) ta’) – aut automat omatic ic FI postings upon business segment changes • Al Alll ba bala lanc nce e sh shee eett po post stin ings gs m mus ustt re refl flec ectt a Consolidation transaction type
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Global Glo bal Best Practi Practices ces – AA and and PCA PCA / EC-CS EC-CS • Al Alll po post stin ings gs ((ba bala lanc nce e sh shee eett an and d P& P&L) L) m mus ustt reflect a profit center; 3KEH table reflects defaul def aultt prof profit it cen center ter fo forr each a accou ccount nt – just in case! • Lin Link kA AA A ttran ransa sacti ction on typ type e tto oE EC-C C-CS S ttra ransa nsact ctio ion n type via TABW table • Us Use e ar area eas s 30 30/3 /31 1 fo forr co cons nsol olid idat ated ed G Gro roup up reporting
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What we’ll cover • Glo lob bal Fixe ixed As Asse sett Sys ysttem – Cl Clie ien nt Example • Gl Glob obal al Fi Fixe xed d As Asse sets ts Vi Visi sion on & G Goa oals ls • Glo lob bal B Be est P Prractices • Global C Ch hallenges • Elements of Success • Wrap up / Q&A
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Global Challenges • In Inco corp rpor orat atin ing g lo loca call ne need eds s in into to a US b bas ased ed company • Su Supp ppor orti ting ng and and c com ommu muni nica cati ting ng w wit ith h mu mult ltii language based SAP users • Dis Distri tribu butio tion n of ne new ww work ork pr proc oces esses ses as wel welll a as s training end user in several countries • Time z zo one d diifferences
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What we’ll cover • Glo lob bal Fixe ixed As Asse sett Sys ysttem – Cl Clie ien nt Example • Gl Glob obal al Fi Fixe xed d As Asse sets ts Vi Visi sion on & G Goa oals ls • Glo lob bal B Be est P Prractices • Global C Ch hallenges • Elements of Success • Wrap up / Q&A
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Elements of Success • Gl Glob oba al C Cha hart rt of De Depr prec ecia iati tio on •• Lo Loca vcs. Grou equ irem eme ent nts s Ascal selt vs. lasGr s oup dep sigrreq n uir • St Stan anda darrdiz ize e bu bus sin ines ess s pr proc oce ess sse es - 80/2 80/20 0 rule • Do yo your ur ho home mewo work rk PR PRIO IOR R tto od de esi sig gn • ‘B ‘Be een the herre, done that’ re reso sou urce ces s
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Key Learnings • It iis s cr crit itic ical al to to in invo volv lve e key key cu cust stom omer ers s (T (Tax ax,, Corporate Accounting) when developing global processes/configuration for new requirements • Re Real alize ize tha thatt lloc ocal al le lega gall rreq equir uirem emen ents ts have have to be met • Co Cons nsid ider er th the e in inte tegr grat atio ion no off SA SAP P wi with th it its s other modules
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Key Learnings • Glo Globa ball sta stand ndar ardi diza zatio tion n pu puts ts ever everyon yone e on makes the same system pag page e support – acro across sseasier the glo globe because be!! This everyone should be doing things the same way. • Mu Must st ha have ve a an ne exc xcel elle lent nt co comm mmun unic icat atio ion n process to make it work. • Do Docu cume ment ntat atio ion nm mus ustt b be ek kep eptt u up p tto o dat date e and easily accessible thebe end users • Gl Glob obal al st stan anda dard rdiz izat atio ion nby c can an do done ne successfully! www.michaelmanagement.com
What we’ll cover • Glo lob bal Fixe ixed As Asse sett Sys ysttem – Cl Clie ien nt • • • •
Example Gl Glob obal al Fi Fixe xed d As Asse sets ts Vi Visi sion on & G Goa oals ls Glo lob bal B Be est P Prractices Global C Ch hallenges Elements of Success
• Wrap up / Q&A
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Q&A • Comments • Questions • Co Cont ntac actt Th Thom oma as Mi Mich cha ael at [email protected] Download this presentation at: www.michaelmanagement.com
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