Fixed Assets Acquisition with Asset Under Construction: Business Process

To acquire an asset over a period of time (for example: building a warehouse) we use an Asset Under Construction (AUC). In this video, I explain the full process from project creation, AUC, Partial Settlement, and Final Settlement.
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[@asmitapandey4307]

You truly deserve the t-shirt...I haven't seen someone so intelligent like you and at the same time helping other aspirants with your great knowledge sharing skills...😃😃

[@AbdullahGalal]

Thanks a lot Asmita! and thanks a lot for supporting the channel for the last 8 months! it's thanks to you and the other supporters that I create new videos

[@asmitapandey4307]

@@AbdullahGalal I follow you on LinkedIn and tried contacting you there...I wanna discuss more on SAP...

[@nniaejemezu7037]

You did Justice to the subject. Thank you so much.

[@AbdullahGalal]

Welcome Nnia

[@vasureddy6901]

Bro, the way of explanation is so amazing and I'm really a fan of your training, thanks a lot ☺️

[@AbdullahGalal]

Happy to hear that! thank you Vasu 😁

[@Sravanthi1111]

I am asset accounting consultant, I still like to watch training videos because any doubts that I missed to work on in my busy work life are getting clarified here so easily

[@AbdullahGalal]

Glad to help Sravanthi :) ..and thanks a lot for supporting the channel Happy new year ✨

[@Sravanthi1111]

@@AbdullahGalal happy new year

[@anujasharma3179]

Just amazing way of explanation.. Thanks a lot for teaching us ❤

[@AbdullahGalal]

It's my pleasure

[@siddireddybangarureddy3939]

Waiting for next part

[@Kadutrindad]

Very good!

[@AbdullahGalal]

Thank you! Cheers!

[@justintimberlake600]

Thanks Abdulla, King as usual! Are you planning to make a playlist for assest accounting? If yes, I would be very much interested.

[@AbdullahGalal]

Thank you Saleem! Yes I'll continue making videos on Fixed Assets inchallah

[@ayaosama7551]

Thaanks mr Abdullah

[@AbdullahGalal]

Very welcome

[@KatiaRivas-qq8fq]

Many thanks indeed for all these tutorials, they are awesome!! I have a question as I havent seen it in the videos. About transaction CJIC to assign the final settlement element for WBS, what do you think about its usage in terms of business cases? As if things can be planned the final settlement should be entered from CJ20N for instance. Or which other advantage will CJIC give? HUGE THANKS in advance!

[@moftyhossain2794]

Thank you for the nice tutorial. I don't understand why SAP uses expense GL here and needs to run a settlement to move the balance from expense GL to AUC. Could you please clear it?

[@OmarAl93]

Thanks Abdulla for the wonderful explanation. According to IFRS, are OPEX inccured during the project phases capitalized and assigned as WBS? or they go into P/L instead of the balance sheet. For instance, electricity bills, staff wages for the projects? best

[@AbdullahGalal]

OPEX goes to P&L directly ..anything that doesn't is CAPEX

[@ugurh5213]

Hi Abdullah, Thanks! What about Unilateral assets in combination with expense postings to WBS elements? Expenses settle to AUC in one ledger, but stay on PL on the other ledger. Is that only possible with UPA or already in prior releases?

[@AbdullahGalal]

The video on Unilateral assets is coming soon 😉

[@monikasharma2200]

Hi Abdullah, hope you are doing good I have question - if a company is using group reporting and parent company is Germany which follows calendar from Jan to Dec but other subsidiaries follows April to March how we handle such condition in SAP S4? Can we assign different fiscal year varient to all other company codes?

[@dhuhasya]

Oh please answer this question galal, I have a same case in here 😂

[@davidds9435]

there is a case that we have a project which is given to 1 vendor to build the asset, and the vendor will charges based on progress of the project (milestone).. so we must appoint this to AUC account directly instead of expense ... on the project, vendor will does everything including the material ... and my question is how will you threat this ? as mine will directly goes to AUC account ... as your videos, for me, the company builds the project by self, i meant for design, construction etc ... as mostly we just do auction about the projects and the winner vendor will builds it ..

[@AbdullahGalal]

My example also works for a vendor doing it for us. Every time the vendor ask for money I will book that against expenses (construction fees for example) and will settle to AUC every month ..same process

[@davidds9435]

@@AbdullahGalal the issue is posting date .. Settlement will goes to the end of month .. here, most clients have to post at the invoice date .. so i m just ask, perhaps have any idea about it ..

[@gouravbose8105]

Hi Abdullah, in SAP, which module will help us to understand the breakeven value after the completion of the warehouse/ building if we give in rental? Let's say during construction we post all expenses and now after completion we give in rental income so is there any possibility to determine in which year/period we reached to breakeven?

[@AbdullahGalal]

That's a tough one Gourav 😀 Well I don't have any experience in rentals..REFX should include something for this right? What do you think ?

[@lauraborghero5107]

Thanks Abdullah, can we define settlement rule of AUC by percentage? for example AUC asset 60% and final asset 40%?

[@AbdullahGalal]

You want to settle the AUC to another AUC and a final asset? what's the business case?

[@khathaanton2553]

Hi, does the asset under construction theory also considered canada. IFRS OR ASPE? thanks very much appreicated!

[@AbdullahGalal]

I've no details about Canada IFRS or ASPE so can't confirm

[@helenesaoud63]

Hi , is there a module for asset under construction on sap? If yes, does it oblige me of years of depreciation, once transferred to the correspondant fixed asset , does it take automatic depreciation years of life of this asset😊

[@AbdullahGalal]

we create the final asset and mention the useful life but it doesn't start counting till we settle the AUC to it

[@hishamhassan905]

Hi Abdullah, when you will post the next video? .... Is it possible to settle 2 AUC asset to one asset?

[@hasithabuddika6849]

Yes, You can settle 2 AuCs to one asset through internal order settlement in SAP.

[@AbdullahGalal]

Thank you Buddika, agree

[@andyjohnson9714]

Video actually starts at 3rd minute