Hi, today I want to post a blog about Interest Calculation on fixed assets, how to configure and how to run.
You can calculate imputed interest of an asset and also be able to post it into G/L account. This usually happens on cost accounting depreciation.
There are three prerequisite you must ensure before posting depreciation on an area.
- Specify that interest should be managed in the depreciation area.
- Define depreciation posting in this company code and in this depreciation area so that interest should be posted.
- Use a depreciation key that has an interest key assigned to it for calculating interest (or define such a key yourself).
These are stated on sap help document. Now I will go into each criteria of the above 3 checks.
- First check: Depreciation Area
IMG path: Asset Accounting – Integration with the General Ledger – Define How Depreciation Areas Post to General Ledger
- The depreciation area must be a real depreciation so that you can assign depreciation key and calculate depreciation base on the key. If the depreciation area is a derived area, you can only see it as formula resulted from other area and no way to calculate using a depr. key.
- As interest cannot be posted separately, it can be only posted with depreciation run, you have to choose posting to GL as “Area posts APC and depreciation area as periodic basis”.
- The last one, interest calculation posts a positive amount, so you should allow only positive values or zero only. Else, it is not going to calculate interest for you!
2. Second check: Depreciation Area Posting
IMG Path: IMG path: Asset Accounting – Integration with the General Ledger – Post depreciation to the General Ledger – Specify Intervals and Posting Rules
This checks if interest should be posted in the area for each company code.
In addition to the configuration of depreciation area, you have to assign account for posting:
IMG: Asset accounting – Asset Accounting (Lean Implementation) – Organizational structures – Depreciation Areas – Specify Allowed Depreciation Types for Depreciation Areas (Tcode: OABZ)
Once you have ticked the option to allowed interest calculation, go to assign depreciation account for account determination (Tcode: AO90). Now you can see additional section called “interest account assignment”. Assign account for posting interest there.
3. Last check: Depreciation key
IMG Path: Asset Accounting – Depreciation – Valuation Methods – Depreciation Key – Maintain Depreciation Key (Tcode : AFAMA)
In the depreciation key you want to use, add one more assignment with depreciation type “Interest”. Then assign appropriate calculation methods as your business requirement on calculating interest.
After completing configuration, you assign the key in asset master and see if the asset is going to calculate interest.
At period-end closing, you run depreciation and the interest amount is also post at the time of depreciation. Below is the asset explorer screenshot, after all configurations: