Enterprise Assets Management EGN 5622 Enterprise Systems Integration Fall, 2015.

Enterprise AssetsEnterprise Assets ManagementManagement

EGN 5622 Enterprise Systems Integration EGN 5622 Enterprise Systems Integration

Fall, 2015 Fall, 2015

Enterprise Enterprise Assets Assets ManageManagement (EAM)ment (EAM)

Concepts & TheoriesConcepts & Theories

Asset AccountingAsset Accounting

Tracking the financial consequences associated with the entire lifecycle of an asset, from acquisition to disposal (retirement).

Assets can be categorized as tangible, intangible, and financial

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Asset Accounting ClassificationAsset Accounting Classification

Tangible assets◦ Fixed assets◦ Leased assets◦ Assets under construction

Intangible assets◦ Intellectual property◦ Patents◦ Trademarks

Financial assets◦ Securities◦ Long term notes (debts)◦ Mortgages

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Asset Accounting ComponentsAsset Accounting ComponentsAsset Asset

accountingaccounting

Intangible Intangible assetsassets

Tangible Tangible assetsassets

Financial Financial assetsassets

- Fixed assets- Fixed assets- Leased assetsLeased assets- Assets under Assets under constructionconstruction

- Intellectual Intellectual propertyproperty- PatentsPatents-TrademarksTrademarks

- SecuritiesSecurities- Long term Long term notes (debts)notes (debts)- Mortgages- Mortgages

Asset Accounting in corporate Asset Accounting in corporate financial structurefinancial structure

Chart of AccountsGeneral Ledger Accounts

◦Balance sheet accounts◦Income statement accounts◦Reconciliation accounts

Subsidiary ledgers (sub ledgers)◦Accounts Receivable (customers)◦Accounts Payable (vendors)◦Assets

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Asset AccountingAsset AccountingAssets are assigned to

◦ company code◦ Business area

Accounting data of assets are maintained in asset sub-ledger accounts.◦ E.g. Acquisition costs and depreciation

Asset sub-ledger accounts are created when asset master record is created and associated with a reconciliation account in the general ledger

Sub-ledger account and the master record share the same account number

Companies maintain separate reconciliation accounts for different types of assets

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Asset AccountingAsset Accounting

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Example of Asset Reconciliation Example of Asset Reconciliation Accounts in GLAccounts in GL

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Asset Accounts (AA) Structure Asset Accounts (AA) Structure ExampleExample

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Asset Management (Lifecycle)Asset Management (Lifecycle)Asset master Asset master creation (AA)creation (AA)

Vendor masterVendor master

Outgoing Outgoing paymentpayment

Asset Asset Transfer (AA)Transfer (AA)

Within/outsideWithin/outsideCompany codeCompany code

Asset Asset AdditionAddition

(AA)(AA)

Asset Asset Acquisition Acquisition

(AA)(AA)Vendor invoiceVendor invoiceExternalExternal

Cost centerCost center

Asset Asset ReportReport (AA)(AA)

Customer/ScrapingCustomer/Scraping

Depreciation Depreciation ChargeCharge

Asset Asset RetirementRetirement

(AA)(AA)

Customer Customer PaymentPayment

Customer Customer InvoiceInvoice

Customer Customer MasterMaster

Business Business AreaArea

Plant/locationPlant/location

Major Activities in Asset Major Activities in Asset Management (Lifecycle)Management (Lifecycle)Asset AcquisitionAsset DepreciationAsset Retirement

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Asset AcquisitionAsset AcquisitionAsset acquisition is concerned with acquiring assets

via internal or external processes◦ Internal:

production process or project systems

◦ External: 3 external options for purchasing assets, Purchase from an established vendor using the

purchasing process (different GL accounts) Purchase from an established vendor without using the

purchasing process (manual entry in GL and sub-ledger; similar to AP accounting)

Purchase from a one-time vendor or a vendor for whom master data are not maintained (via clearing account).

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Asset Acquisition With a Clearing Asset Acquisition With a Clearing AccountAccount

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Goods receipt

Asset DepreciationAsset DepreciationAsset depreciation is concerned with the decrease

in the value of an asset over timeDepreciation can be planned or unplannedDepreciation methods are used

◦Straight line◦Double declining balance

Usefulul lifeResidual valueBook valueDepreciation areas: parallel valuation for each fixed

asset for different purposes such as cost accounting or tax purpose.


Straight Line DepreciationStraight Line Depreciation


Double Declining Balance Double Declining Balance DepreciationDepreciation


Financial Statements Based on Financial Statements Based on Depreciation Areas (parallel Depreciation Areas (parallel valuation)valuation)


Asset RetirementAsset Retirement

Concerned with the disposal or retirement of an asset after its useful life

Retirement may be:◦Revenue generating (sold)◦Non-revenue generating (scrapped)


Asset ExplorerAsset Explorer

Asset explorer provides an overview of all activities related to the asset, including:◦Acquisition data◦Planned and posted (actual) depreciation◦Drill-down details for:

Master data Transactions Documents

◦Depreciation posting run (for an assumed useful life)

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Asset Explorer (continued)Asset Explorer (continued)

Asset explorer can:display connections from the Asset

Explorer to the G/L accounts, vendor accounts, the cost center, and the Purchase Order of the Asset

display planned values, as well as values already posted for analyzing asset values

Asset Explorer InterfaceAsset Explorer Interface


Asset management linked to Asset management linked to financial accountingfinancial accounting


Enterprise Assets Enterprise Assets Management (EAM)Management (EAM)

SAP Implementation SAP Implementation

SAP Module ViewSAP Module View

Integrated SolutionClient / Server

Open Systems

FinancialAccounting

Controlling

Fixed AssetsMgmt.

ProjectSystem

Workflow

IndustrySolutions

ProductionPlanning

Sales &Distribution

MaterialsMgmt.

HumanResources

PlantMaintenance

QualityMgmt.

Create Asset MasterCreate Asset Master

Purchasing an AssetPurchasing an AssetAsset MasterAsset Master

One way to skip the step of creating an Asset in the books is to directly go to the Purchase Order, and click the button pointed to.

Purchasing an AssetPurchasing an Asset

Asset ExplorerAsset Explorer

Lab 3 Exercises Lab 3 Exercises (Due date 10/3/2015)(Due date 10/3/2015)

1.Create asset2.Purchase asset3.View Asset Explorer

Enterprise Assets Management EGN 5622 Enterprise Systems Integration Fall, 2015.

Documents

Transcript of Enterprise Assets Management EGN 5622 Enterprise Systems Integration Fall, 2015.