AUC is Asset under construction where some assets are in construction phase and cost needs to
capture through internal order for the time being. Once asset is fully completed then cost would
be transferred to another cost object (E.g. Cost center, Order etc...) and settle with final asset.
E.g. XYZ Company constructing building for their office. While construction many expenses are
attached to it. Till the time it is created we cannot charge it in building account hence we need to
create AUC account where cost will be stored.
Assets under construction (AUC) are a special form of tangible assets. They are usually displayed
as a separate balance sheet item and therefore require a separate account determination and their
own asset classes. During the construction phase of an asset, all actual postings are assigned to the
AUC. Once the asset is completed, a transfer is made to the final fixed asset
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Assets under construction (AUC) - Internal Orders as Investment Measures
AUC is Asset under construction where some assets are in construction phase and cost needs to
capture through internal order for the time being. Once asset is fully completed then cost would
be transferred to another cost object (E.g. Cost center, Order etc...) and settle with final asset.
E.g. XYZ Company constructing building for their office. While construction many expenses are
attached to it. Till the time it is created we cannot charge it in building account hence we need to
create AUC account where cost will be stored.
Assets under construction (AUC) are a special form of tangible assets. They are usually displayed
as a separate balance sheet item and therefore require a separate account determination and their
own asset classes. During the construction phase of an asset, all actual postings are assigned to the
AUC. Once the asset is completed, a transfer is made to the final fixed asset.
Asset under construct. With line item settlement
Specifies that the assets under construction in this asset class are managed with the option for final
line item settlement to receiving assets or cost centers
Asset under Construction for Investment Measures
Specifies that the assets under construction in this asset class can be created solely in relation to
capital investment measures (internal orders or WBS elements).
The assets in this class cannot then be directly created and posted in Asset Accounting. The assets
can only be processed by means of the order or the WBS element, to which they are assigned.
(Exception: Investment support and retirements for investment measures that are managed for
summary settlement)
Assets under
construction
Investment
Management
Internal Orders as
Investment
Measures
Projects as
Investment
Measures
Line Item
Settlement
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Internal Orders as Investment Measures
This type of internal order is basically no different from other internal orders. However, it does
have a few special system functions that make it possible to evaluate such internal orders from the
bookkeeping, as well as the management accounting perspectives. Of particular importance, you
can specify that the system create one or more accompanying assets under construction for each
investment order. The asset under construction provides the parallel bookkeeping functionality for
the investment order.
Project prerequisites
The Overhead Cost Controlling - Overhead Orders (CO-OM-OPA) component is
implemented.
The Asset Accounting (FI-AA) component is implemented.
The recommendation of using Investment orders to capture the costs of AUC assets during the
period and month-end processing will ‘settle’ the costs from the Investment order to the AUC.
This is done so that budget information can be entered for the AUC and tracking of the actual-to-
budget can be performed. Once the AUC is completed, the final asset is created in the appropriate
asset class, and the Investment order is set to complete so that the next settlement transfers the
AUC asset value to the completed asset.
I. Configuration Steps for Internal Orders as Investment Measures (Pre-requisites):
Asset accounting configuration steps should be available in the system.
A. AUC-Asset Accounting configuration steps:
1. Specify Account Determination for AUC
2. Create Screen Layout Rules for AUC
3. Define Number Range Interval
4. Create AUC Asset class
5. Create Main Asset class
6. Define Screen Layout for Asset Master Data
7. Determine Depreciation Areas in the Asset Class
8. Creation of GL (Acquisition & production cost for AUC)
9. Assign G/L Accounts for account determination
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B. Investment Management configuration steps (IO-IM):
a) Actual Postings - Settlement
10. Maintain Allocation Structures
11. Maintain Source Structure
12. Maintain Settlement Profiles and assign allocation structure with settlement profile
13. No ranges for settlement documents
b) Planning & Budgeting
14. Maintain Planning Profiles
15. Maintain Budget Profile
16. Maintain Number Ranges for Budgeting
17. Define Tolerance Limits for Availability Control
c) Internal Orders as Investment Measures
18. Create Investment profile.
19. Define Assignment of AuC Classes per Source Assignment
d) Order Master Data
20. Model Order and Assign Investment Profile to Model Order
21. Define Status Profiles
22. Create Order type and assign Settlement profile, planning profile, budget profile and Status
profile to Order type
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Note: -
With reference to the ‘Order Category’(Eg: Internal Order, Production Order ,
Model Order etc.…) we can create orders type
Order type is linked to number ranges
With reference to ‘Order Type’ we can create ‘n’ number of orders
OrderType
Settlement profile
Planning profile
Budget Profile
Modle Order
Asset class
Status Profile
Investment Profile
Order category
Eg: IO, PO, MO
etc...
No Ranges
Allocation Structure
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II Investment Order settlement Procedural Steps (End User):
1. Create IO as well as AUC & Release Order
2. Book the cost in investment order (With Po/Without PO)
3. Settle the cost to AUC Asset (Automatic) & Display the documents
4. Check the asset explorer
5. Create main Asset master & linked to Main asset in settlement rule
6. Settle AUC asset to Main asset (Full) &Display the documents.
7. Asset explorer Main &AUC Asset: AW01N
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I. Configuration Steps:
1. Specify Account Determination for AUC
In this step, you define the account determinations for Asset Accounting (key and description).
The key of an account determination must be stored in the asset class
In this way, the account determination links an asset master record to the general ledger accounts
to be posted for an accounting transaction using the asset class.
SAP Menu Path SPRO →Financial Accounting (New)→ Asset Accounting
→Organizational Structures→ Asset Classes→ Specify Account
Determination
Transaction code S_ALR_87009195
2. Create Screen Layout Rules for AUC
In this step, you create your screen layout rules. The screen layout specifies the status of the fields
in the asset master record. You use the screen layout to determine if fields are required entry or
optional entry fields, or if they are suppressed completely, for example.
In this step, you create only the keys and descriptions of the screen layout controls. You define the
the field group rules for the screen layouts themselves in the step Master Data.
You can enter a screen layout rule in one of two places: either in the part of the asset class valid in
the entire client, or in the part of the asset class valid for the chart of depreciation. The screen
layout rule is then valid either for all assets in the asset class, or for all assets in the asset class/chart
of depreciation.
SAP Menu Path SPRO →Financial Accounting (New)→ Asset Accounting
→Organizational Structures→ Asset Classes→ Create Screen Layout
Rules
Transaction code S_ALR_87009209
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3. Create Number Range Interval for AUC
SAP Menu Path SPRO →Financial Accounting (New)→ Asset Accounting
→Organizational Structures→ Asset Classes→ Define Number Range
Interval
Transaction code AS08
4. Define Asset Classes for AUC
Define Asset Classes:
In this step. You define the asset classes. The asset class is the most important criteria for
structuring fixed assets from an accounting point of view. Every asset has to be assigned to exactly
one asset class. The asset class is used to assign the assets (and their business transactions) to the
correct general ledger accounts. Several asset classes can use the same account assignment. You
can see that it is possible to make finer distinctions at the level of the asset class than at the level
of the general ledger accounts. The most important tasks of the asset classes are:
The assignment of default values when creating assets (particularly depreciation terms)
The grouping of assets for reporting purposes
You define the asset classes in the system in a series of steps. The asset class is structured in three
parts:
Control parameters
Default values for general master data
Default values for depreciation terms in the chart of depreciation
You can assign depreciation terms to an asset class for any number of charts of depreciation. This
makes it possible to manage an asset class catalog that is valid for an entire corporate group,
independent of the country-specific charts of depreciation.
In this step, you define the asset classes and their control parameters. In further steps, you add
further to the asset classes by supplying default values for certain logical field groups in the asset
master record.
Note
Structuring assets for accounting is not dependent on the technically oriented structuring in the
PM (Plant Maintenance) component. PM has its own terms for classification (functional location,
equipment) that are based on the requirements of plant maintenance. You can set up a relationship
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between the PM and FI-AA components by entering the asset number in the master record of the
related piece of equipment. In this way, you can select all pieces of equipment that belong to an
asset.
Recommendation
The number of asset classes needed varies greatly, depending on the size of your organization. In
many cases, the number 50 is usually appropriate. Generally, you should at least group together
assets with the same depreciation terms into an asset class. In any case, it must be possible to
clearly assign new assets to an asset class when they are entered in the system.
Defining the asset classes is fundamental to SAP Asset Accounting. Therefore, you should carry
out this step with considerable care and attention.
Requirements
You must have created a chart of depreciation.
You must have defined number ranges for assigning the main asset number.
Standard settings
SAP supplies predefined asset classes as examples (1-8).
Activity
1. In the overview screen, enter the key of the asset class, a short text and a description of the asset
class.
2. Then maintain the control parameters in the detail screen. The following specifications are very
important:
Account determination
Screen layout control (define the screen layout control in the step Master data).
Number range for the assignment of the asset main number
Assignment of sub-numbers - (internal or external)
SAP Menu Path SPRO →Financial Accounting (New)→ Asset Accounting
→Organizational Structures→ Asset Classes→ Define Asset Classes
Transaction code OAOA
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5. Create Main Asset class
SAP Menu Path SPRO →Financial Accounting (New)→ Asset Accounting
→Organizational Structures→ Asset Classes→ Define Asset Classes
Transaction code OAOA
Note: Repeat the steps 01 to 04 and use assignments in Main asset class.
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6. Define Screen Layout for Asset Master Data
SAP Menu Path SPRO →Financial Accounting (New)→ Asset Accounting →Master
Data→ Screen Layout→ Define Screen Layout for Asset Master Data
Transaction code OA77
In this step, you define the screen layout control for asset master data. The screen layout control
contains the specifications for the field groups in the asset master record. You enter the screen
layout control in the asset class. This method allows you to structure the master record individually
for each asset class.
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7. Determine Depreciation Areas in the Asset Class
SAP Menu Path SPRO →Financial Accounting (New)→ Asset Accounting →Valuation→
Determine Depreciation Areas in the Asset Class
Transaction code OAYZ
Generally, the assets in an asset class use the same depreciation terms (depreciation key, useful
life). Therefore, you do not have to maintain the depreciation terms in the asset master record.
Instead, they can be default values from the asset class.
In this step, you determine the depreciation terms that are to be used in your asset classes.
Depending on the definition in the screen layout control used, these depreciation terms are offered
either as optional or mandatory defaults when you create an asset.
For each asset class, you can maintain as many charts of depreciation with their depreciation areas
as you need. This allows you to use the asset class in all countries belonging to the client.
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8. Creation of settlement cost element (Acquisition & Production cost for AUC) :FS00
9. Assign G/L Accounts for Account determination.
SAP Menu Path SPRO →Financial Accounting (New)→ Asset Accounting →Integration
with General Ledger Accounting→ Assign G/L Accounts
Transaction code AO90
In this step, you specify the balance sheet accounts, special reserve accounts, and the depreciation
accounts for Asset Accounting.
B. Investment Management configuration steps (IO-IM)
a) Actual Postings – Settlement
11. Maintain Allocation Structures
During settlement, costs incurred under the primary and secondary cost elements by a sender are
allocated to one or more receivers. When you settle by cost element, you settle using the
appropriate original cost element.
An allocation structure comprises one or several settlement assignments. An assignment shows
which costs (origin: cost element groups from debit cost elements) are to be settled to which
receiver type (for example, cost center, order, and so on).
You have two alternatives in settlement assignment:
You assign the debit cost element groups to a settlement cost element.
You settle by cost element - that is, the debit cost element is the settlement cost element.
For example, if the required capital spending for an asset you are building yourself is to be
monitored. These costs are settled by cost element to an inventory account in Asset Accounting at
the end of the year, or when the measure is complete.
Each allocation structure must fulfil the following criteria:
Completeness
An allocation structure is assigned to each object to be settled. All cost elements in which costs
are incurred, must be represented in the appropriate allocation structure.
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Uniqueness
Each cost element in which costs are incurred may only appear once in an allocation structure.
Only one settlement cost element may be assigned to a source within a particular allocation
structure
SAP Menu Path SPRO → Investment Management → Internal Orders as Investment
Measures → Settlement → Maintain Allocation Structures
Transaction code OKO6
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12. Maintain Source Structure
In this activity, you define the source structures used when settling and costing joint products.
A source structure contains several source assignments, each of which contains the individual cost
elements or cost element intervals to be settled using the same distribution rules.
In the settlement rule for the sender you can define one distribution rule, in which you specify the
distribution and receivers for the costs for each source assignment.
Example:
The object in question has incurred both direct and overhead costs. The direct costs are to be
divided 50% each between a fixed asset and a cost center, while the overhead is to be settled in
full to an administration cost center in CO.
To do this, you would create a source structure with two source
Assignments:
1. Direct cost elements
2. Overhead cost elements
SAP Menu Path SPRO → Investment Management → Internal Orders as Investment
Measures → Settlement → Maintain Source Structure
Transaction code OKEU
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13. Maintain Settlement Profiles and assign allocation structure with settlement profile
In the settlement profile, you define a range of control parameters for settlement. You must define
the settlement profile before you can enter a settlement rule for a sender.
If you want to settle the costs each time to just one cost center or just one G/L account, you need
a settlement profile. As you cannot maintain the settlement parameters during settlement to a
receiver, you must save the settlement profile either in the order type or in the model order or
reference order.
Recommendation
The settlement profile includes, among other things, the retention period for the settlement
documents. You should bear in mind the following when you determine the retention period.
The settlement documents take up additional storage capacity. When a posting period is finally
locked against further postings in Financial Accounting and Controlling, you can clear the
settlement documents. However, you should build in a safety margin, as you will need the
settlement documents if you have to cancel any settlements or repeat the period end close.
SAP Menu Path SPRO → Investment Management → Internal Orders as Investment
Measures → Settlement → Maintain Settlement Profiles
Transaction code OKO7
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13. No ranges for settlement documents
SAP Menu Path SPRO → Controlling → Internal Orders → Actual Postings → Settlement
→ Maintain Number Ranges for Settlement Documents
Transaction code KO8N
Click controlling area XXX and press . Following pop-up will appear
Double click on no 01 Standard accounting document
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b) Planning & Budgeting
14. Maintain Planning Profiles
SAP Menu Path SPRO → Investment Management → Internal Orders as Investment
Measures → Planning and Budgeting → Maintain Planning Profiles
Transaction code OKOS
15. Maintain Budget Profile
SAP Menu Path SPRO → Investment Management → Internal Orders as Investment
Measures → Planning and Budgeting → Maintain Budget Profile
Transaction code OKOB
Budgeting allows the allocation of an amount of money to a certain order and control the
consumption that is made of it, establishing availability controls.
This transaction creates the budget profiles that indicate the conditions under which the budget
will be allocated, with which funds will be allocated to the order and what actions will be taken in
case limits are exceeded.
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16. Maintain Number Ranges for Budgeting
In this IMG activity, we define number ranges for change documents in budgeting. For every
posting within Controlling, SAP System creates a numbered document.
SAP Menu Path SPRO → Controlling → Internal Orders → Budgeting and Availability
Control → Maintain Number Ranges for Budgeting
Transaction code OK11
If we press , we can access to create intervals.
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17. Define Tolerance Limits for Availability Control
It’s possible to define one or more tolerance limits for the different activity groups within a
budget profile. When these tolerances are reached, the system can trigger specific actions
(warning, warning with mail, error message).
SAP Menu Path SPRO → Investment Management → Internal Orders as Investment
Measures → Planning and Budgeting → Define Tolerance Limits for
Availability Control
Transaction code S_ALR_87005405
c) Internal Orders as Investment Measures
18. Create Investment profile.
In this step, you define investment profiles. The investment profile controls the following activities
(among others) when you create a capital investment measure:
Creation of an asset under construction belonging to the capital investment measure
Creation of the master data for the depreciation simulation/forecast
You assign an investment profile to a capital investment measure by means of the profile data in
the order or WBS element.
Activities
1. Define investment profiles according to your requirements. In particular, make the following
specifications:
Set the indicator for the parallel management of an asset under construction.
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If you do not set the indicator, it is not possible to have parallel management of the
investment measure in Asset Accounting. However, it is still possible to enter depreciation
simulation data in the measure and include it in the depreciation forecast in Asset
Accounting.
Stipulate the asset class which is to be used when the asset under construction is created.
Determine the asset class which is to be used when the depreciation simulation data is
created.
2. You might want to manage more than one asset under construction per investment measure. In
that case, you have to set the indicator "AuC per origin assignment." The system then creates a
separate asset under construction per origin assignment in the origin structure that is being used.
It settles the assets under construction to the cost elements in the origin assignment.
3. Specify whether the investment measures that use this investment profile should be managed in
summary form or line item form. In this context, "summary" means that you can only enter blanket
distribution rules, which apply to all debits posted to the measure or to certain cost elements (using
an origin structure).In comparison to line item settlement, summary settlement offers better
performance. However, when you use summary settlement, the system cannot display the orgins
of the line items from the completed assets back to the debits originally posted on the investment
measure.
4. Assign your investment profiles to the WBS elements in question.
Projects
Enter a default value for the investment profile in the project profile of the work breakdown
structure or the standard work breakdown structure.
Orders
Enter a default value for the investment profile in the control data of the model order. Then enter
the model order in the order type. In the case of maintenance or service orders, assign the
investment profile to an order type directly.
5. Stipulate the form in which the apportionment rules are to be entered for the depreciation
simulation (apportionment by percentage, amount, equivalence number, and so on)
6. Use the "Reconcile with actual settlements" indicator to control the screen setup for the
depreciation simulation in orders/projects, thereby also stipulating whether actual settlements
already made should be displayed.
SAP Menu Path SPRO → Investment Management → Internal Orders as Investment
Measures → Master Data → Define Investment profile
Transaction code OITA
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19. Define Assignment of AuC Classes per Source Assignment
SAP Menu Path SPRO → Investment Management → Internal Orders as Investment
Measures → Master Data → Define Assignment of AuC Classes per
Source Assignment
Transaction code OITB
The following step is only necessary if you want to settle the debits posted on one capital
investment measure, according to cost elements, to several different assets under construction.
There is an indicator in the investment profile that controls the creation of assets under construction
at the time the capital investment measure is being created. The indicator specifies that the system
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does not create only one asset under construction, but one asset under construction for each origin
assignment in the origin structure. This way, it is possible to settle different cost elements to
different assets under construction.
In this step, you assign a separate asset class for each origin assignment to investment profiles for
the creation of the respective asset under construction.
e) Order Master Data
20. Create Model Order and assign investment profile in Model order
SAP Menu Path SPRO → Investment Management → Internal Orders as Investment
Measures → Order Master Data → Screen Layout → Define Model
Orders.
Transaction code KO01
1. Model orders are not orders in the commercial sense, but serve merely as references for
creating normal orders. Model orders contain default values for the orders in an order type.
You need to enter the model order as the reference order in the order type.
2. The system checks to see if the entries exist in the model order. When you create settlement
rules, it also checks to see whether the settlement receivers match the organization units you
entered. A model order does not contain any dependent objects such as assets under
construction, even if you entered an investment profile.
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21. Define Status Profiles
A status is an indicator which provides two basic functionalities as follows
1. The status informs the user that a particular processing state has been reached. For example,
the status of an internal order may indicate that the order has been created and released, a
settlement rule has been entered, or a particular business transaction has been executed.
2. The status influences the business transactions which can be performed for an order. A status
can allow a business transaction, trigger a warning message or prohibit a business transaction
altogether. If a warning message is issued, it is up to the user whether the business transaction
is carried out or not.
Internal orders in SAP pass through four standard statuses, as described below:
Created: In this stage actual posting is not possible.
Released: When an internal order is released, all business transactions are permitted.
Technically completed: In this stage no changes relating to planning are permitted.
Closed: No cost relevant business transactions are allowed when an internal order is
closed.
New user-defined statuses can be created to control when particular business transactions are
permitted. A user-defined status enhances and updates the standard system statuses.
SAP Menu Path SPRO → Controlling→ Internal Orders→ Order Master Data→ Status
Management→Define Status Profiles
Transaction code OK02
Press to create new status profile.
Press button
Select Z_SP01 and click on and update status as per the client requirement.
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Press yes and select object type as IO
Save
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Then double-click on the new profile record to drill down into setup of user statuses and
maintain the following data:
Press to browse into the overview of available operations and complete as it follows:
Note: Select the influence as per the requirement, if not required select as no Influence
22. Create Order type
SAP Menu Path SPRO → Controlling → Internal Orders → Order Master Data → Define
Order Types.
Transaction code KOT2
An order type has a large amount of control information important to order management. This
information includes a range of default values that are used when creating a new order with this
order type.
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Save
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II Investment Order settlement Procedural Steps (End User):
1. Create IO as well as AUC & Release Order
SAP Menu Path SPRO → Controlling → Internal Orders →Master Data → Special
Functions → Order
Transaction code KO01
Note: Order and AUC asset created
Note: Release the order after order creation
2. Book the cost in investment order (With Po/Without PO)
SAP Menu Path SAP Menu → Accounting → Financial Accounting → General Ledger
→Document Entry → Enter G/L Account Document
Transaction code FB50
Save
Document 100000123 was posted in company code XXX
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3. Settle the cost to AUC Asset(Automatic) & Display the documents
SAP Menu Path Accounting →Controlling → Internal Orders →Master Data → Special
Functions →Order
Transaction code KO88
Note: No settlement rule assigned for the order INV_ORD_04
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Note: Remove test run and execute.
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Click on display accounting document
Double click on accounting document,
From the menu environment Document environment accounting documents
Check Settlement rule after AUC settlement: KO88
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4. Check the asset explorer
SAP Menu Path SAP Menu → Accounting → Financial Accounting → Fixed Assets
→Asset → Asset Explorer.
Transaction code AW01N
5. Create main Asset master & linked to Main asset in settlement rule
SAP Menu Path SAP Menu → Accounting → Financial Accounting → Fixed Assets → Asset
→ Create
Transaction code AS01
The asset 20000000063 0 is created
Note: Assign main asset in Investment order: KO02
Note: - Mark status of the order as ‘TECO’ once asset construction work is completed so that next
step is to capitalize the AUC cost accumulated so far.
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6. Settle AUC asset to Main asset (Full) &Display the documents.
SAP Menu Path Accounting →Controlling → Internal Orders →Master Data → Special
Functions →Order
Transaction code KO88
Click on Execute
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Note: - Remove the test run check box & and execute updated run.
Click on display accounting document
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Double click on accounting document,
From the menu environment Document environment accounting documents
7. Asset explorer Main &AUC Asset: AW01N
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Reference:
https://help.sap.com/saphelp_46c/helpdata/en/4f/71e7f4448011d189f00000e81ddfac/frameset.htm
https://blogs.sap.com/2016/07/28/procurement-of-assets-under-construction/