Glossary

Asset
An asset is one of the companys operating assets which can be identified on the closing key date as an individual economic unit and which is used in permanent business operations. If an asset is represented in the system by several asset master records (asset subnumbers), it is referred to as a (complex) economic unit. In this case, the individual components (sub-numbers) are called assets.

company). Depending on the terms of the lease agreement, leased assets are distinguished from conventionally rented assets in that they can be included on the balance sheet. Under certain circumstances, the lessee must capitalize leased assets. For this purpose, the system provides the capital lease method.

Asset line item

Line items serve as detailed records of the actual business transactions pertaining to an asset. With each transaction, a line item is created for every depreciation area to be posted. This line item includes the transaction type, the asset value date, the posted amount, the depreciation and interest pertaining to the transaction and possibly the proportionate value adjustments.

Account assignment
The account assignment defines for each company code and depreciation area the accounts which were posted in financial accounting for a business transaction.

Asset class
The asset class is the main criterion for grouping fixed assets according to operational and legal requirements. Control parameters and default values for the depreciation calculation and other master data must be defined for each asset. Each asset master record is assigned to one and only one asset class.

Accounting period
The accounting period is a period within a fiscal year during which transaction figures can be recorded.

Acquisition and production costs

Acquisition and production costs are the upper limit for the valuation of an asset in the balance sheet. If the asset is purchased, the purchase costs include all costs pertaining to the purchase plus incidental acquisition costs minus any reductions. If the asset is acquired by in-house production, the production costs include direct and indirect material, direct and indirect labor costs, special direct production costs and appropriate administration costs (these can be included).

Asset history report

The asset history report is a special report which makes it possible to file master data and changes in value of particularly important assets in printed form (asset chart). SAP script forms which are specific to asset classes make it possible to freely define the list layout and the displayed information of the report.

Asset history sheet

The asset history sheet is a standard report at year-end closing. The asset history sheet must be shown in the notes to the balance sheet and provides an overview of the changes in value of the individual balance sheet items of the fixed assets as well as an overview of expansion costs.

Asset sub-number
The asset sub-number, together with the main asset number, uniquely defines an asset in the system. The asset sub-number makes it possible to represent a complex asset. The asset is identified by the main asset number. Its individual parts or subsequent acquisitions can be represented by sub-numbers. Separate master data must be defined for each subnumber.

Asset, leased
A leased asset was not purchased but is being leased from a lessor (manufacturer or leasing

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Glossary

Asset under construction

Assets under construction are assets of the reporting company which are still in the process of completion. Generally, assets under construction are a separate balance sheet item of a companys fixed assets. FI-AA makes it possible to carry assets under construction purely for accounting reasons by means of asset master records of special asset classes. Furthermore, the R/3 IM (Investment Management) application makes feasible the controlling-oriented management of capital investment measures in the form of internal orders or projects.

flows which can be recorded and shown as monetary amounts in accounting.

Chart of depreciation
The chart of depreciation contains defined depreciation areas. Control parameters for these depreciation areas can be defined for each depreciation chart. Each company code is assigned to one and only one chart of depreciation. Several company codes can work with one chart of depreciation.

Company code
The company code is an organizational unit which reports independently.

Asset value date

The asset value date is the value date of an asset transaction from the perspective of asset accounting. The system uses the transaction type and the appropriate depreciation key to determine from the asset value date the beginning/ending period for the depreciation calculation for the corresponding balance sheet changes.

Depreciation
Depreciation is defined as amounts that are determined based on scheduled calculation and that serve to record the decline in value of the operating funds.

Depreciation area
The depreciation area represents the valuation of assets for a given purpose (such as commercial balance sheet, tax balance sheet, and costaccounting values). In addition to real areas, you can define derived areas, the values of which are calculated from two or more real depreciation areas.

Backlog calculation
Backlog calculation is a revaluation of past cumulative depreciation to facilitate revaluation of an assets current net book value. The revalued net book value is the difference between the revalued acquisition and production costs and the revalued cumulative depreciation. In general, revaluation is used to compensate for inflation.

Depreciation key
The depreciation key defines the calculation of depreciation amounts. Specifically, the depreciation key controls the calculation of scheduled depreciation, special depreciation, and interest by asset and by depreciation area.

Business area
In financial accounting, the business area is an organizational unit which is not legally independent but for which balance sheets can be prepared for internal reporting purposes.

Depreciation type
The depreciation type classifies the various value adjustments of fixed asset values based on their justification: Y Y ordinary depreciation special depreciation non-scheduled depreciation

Capital lease method

The capital lease method capitalizes leased assets in the amount of the net present value of future lease payments.

Chart of accounts
The chart of accounts, defined by accounting, is an ordered list of categories of values or value

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Y Y

transfer of reserves interest

Investment support measure

An investment support measure is a subsidy for investments made. Such subsidies are usually granted by public administrations for investments in certain branches or regions. In FI-AA, investment support measures can be shown as reductions on the assets side or as value adjustments on the liabilities side.

Down payment
A down payment is a payment for goods or services that has not yet been rendered. On the balance sheet, down payments must be shown separately from other receivables or payables. One distinguishes between down payments to suppliers (shown under fixed and current assets) and down payments from customers (shown under liabilities).

Lessor
A lessor is a business partner with which a business relationship exists that allows the use of equipment or facilities for a limited time and against compensation.

Economic unit
An economic unit is a tangible asset, a right, or another economic value that is permanently available to the company. An economic unit can be represented in the system by one or several asset master records.

Main asset number

A main asset number together with a company code and asset sub-number uniquely identifies an asset in the system. It identifies an asset as a valuation unit if it is represented by several master records (sub-numbers).

Insurance type
The insurance type is a criterion for distinguishing insurance according to the type of risk covered.

Master area
The master area is a depreciation area which carries the values for commercial balance sheet preparation. In the chart of depreciation, the master area is always listed at the top. No values from other areas can be transferred to the master area.

General ledger
The general ledger is a financial accounting ledger which is defined for the preparation of legally required closing reports.

Ordinary depreciation Group

The group is a set of companies which is legally required to prepare completely consolidated financial statements as well as a group management report. Ordinary depreciation is the scheduled apportionment of the acquisition costs of an asset over its useful life by means of a depreciation method. Ordinary depreciation reflects the decline in value of an asset through normal wear and tear. The calculation of period depreciation must therefore be based on the average useful life.

Group asset
A group asset is the combination of several assets for the purpose of a common, summarized depreciation calculation. A group asset is represented in the system by its own master record.

Period control
Period control determines the beginning or end of the depreciation calculation in the acquisition or retirement of an asset. Particularly with acquisitions, legal provisions of many countries permit a simplifying correction of the depreciation effective date (asset value date) from the posting.

Interest (assets/imputed)
Interest which represents the loss of interest earned because capital is tied up in fixed assets.

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Plant

Glossary

The plant is an organizational unit representing a production facility within a company.

concession period without taking into account the actual wear and tear of the asset.

Special item Post-capitalization

Post-capitalization corrects asset book values which have been reported too low because they were not capitalized in the past. A special item is an entry on the liabilities side of the balance sheet resulting from the difference between the maximum depreciation allowed by tax law and the depreciation called for by commercial law. You can form tax free (open) reserves from untaxed profits based on tax law provisions, but must show them separately as a special item on the liability side of the balance sheet. Taxes are due on these reserves during later periods (tax deferral effect).

Proportional value adjustment

Proportional value adjustment is the depreciation for a partial asset that is being retired, calculated up to the date of retirement.

Reconciliation account
A reconciliation account is a general ledger account which is further differentiated in a subledger account. It serves to reconcile the subledger (such as assets) with the general ledger (such as the asset portfolio on the balance sheet).

Subsidiary ledger - assets

A subsidiary ledger - assets is a financial accounting ledger which is defined to reflect changes in the values of assets.

Transaction type Replacement value

Replacement value is the valuation of assets at a current valuation rate and differs from the acquisition/production costs. The replacement value of an asset is influenced, for instance, by price changes due to inflation or by technical progress. Transaction type classifies the operational transactions in fixed assets (such as acquisition, retirement, transfers, and so on) and determines the processing of these transactions within the system.

Transfer of old data

The transfer of old data is the transfer of data from a previous system. This includes transfer of asset master data, balances of the corresponding balance sheet accounts, and transactions from the beginning of the fiscal year to production startup.

Revaluation
Revaluation is the increase of the historical acquisition costs of an asset to compensate for inflation. Revaluation makes it possible to valuate assets at replacement values (which differ from acquisition and production costs).

Transfer of reserves Shortened fiscal year

A shortened fiscal year occurs when the fiscal year rhythm is shifted. The shortened fiscal year covers the period between the end of the previous fiscal year, which is based on the old rhythm, and the beginning of the following fiscal year, which is based on the new rhythm. Transfer of reserves is the transfer of hidden reserves that were disclosed by the sale of assets to replacement assets. The gains on sale thereby diminish the acquisition and production costs for the newly acquired assets. If such hidden reserves are not transferred during the year of their disclosure for lack of new acquisitions, a reserve reducing the profit must be formed during that year. During the following years, this reserve must be transferred to the assets acquired during that period.

Special depreciation
Special depreciation is a depreciation for tax reasons. This type of depreciation generally permits a percentage depreciation within a tax

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Unplanned depreciation
Unplanned depreciation is a value adjustment based on a decline in the value of a permanent asset. Reasons for unplanned depreciation include damage by fire or natural disaster, as well as technological progress.

Valuation of net assets

Valuation of net assets is the valuation of a fixed asset according to the criteria of capital taxation. Property values can be carried in a separate depreciation area.

Write-up
A write-up reverses a depreciation which was posted during a fiscal year that has been closed.

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