Unify Programme Fixed Asset Accounting Process Overview

Unify Programme Fixed Asset Accounting Process Overview.

Agenda Slide. 01 Introduction 02 Fixed Asset Overview 03 Asset Master Data 04 Asset Management 05 Asset Reporting 06 Roles and Responsibilities 07 Summary.

[Audio] Jen: Spelling. 3. Module Introduction. This module provides an overview of the fixed asset accounting process This module is intended for: RTR: Master Data ECC Finance Project Analysist GL Manager GL Accountant Strategies & guidelines must be adhered to; contact your Super User for details if unsure Before commencing this module, you should have completed Introduction to Unify, SAP Navigation and Introduction to Record to Report Refer to the BP310_Unify_Fixed Asset Accounting for more detailed information available from your Super User.

Course Objectives. At the end of this session, you will be able to: Describe the overall end-to-end process for Fixed Asset accounting Highlight the activities performed by the relevant roles Identify the integration between Fixed Asset accounting and Investment Management, Purchasing and Project Systems Accounting processes.

[Audio] A centrally managed, real time and integrated solution Increased internal controls around the creation of asset master records and accounting for fixed asset transactions Allow easy, automatic posting of depreciation Provides flexible reports for analysis of fixed asset data.

[Audio] Depreciation run will be executed on legal entity( Company Code) level Sub-asset concept for managing shared assets Will be routed through the asset under construction process No purchase orders may be linked to an asset directly Miscellaneous direct asset purchases no detailed project structure created, but would instead use a placeholder WBS All asset acquisitions are controlled through the capital expenditure process Capital projects settle to an asset under construction monthly Assets Purchased without a WBS Element will be created to a cost centre Master data Governance process in project systems Asset Master data needs to be integrated with Project systems through the use of settlement rules. It is a completely new functionality so needs to be properly trained, communicated and embedded within the organization. Fixed Asset Capitalisation Impact of WBS settlement process. Regardless of whether this activity is performed centrally or locally by the BU, it is a completely new functionality so needs to be properly trained, communicated and embedded within the organization. Timing of Asset Master data creation Change in the timing of Asset creation under the process of Asset under construction in project system in SAP compared to current practice. AUC asset master will namely be created automatically when creating the WBS master data. Asset Scanning using bar code function Even if scanning functionality will be made available for assets, scanning of assets would not be able to be used by all Business Units due to the hazardous places (e.g. research chemicals or Mac Smith some areas). Common Asset Master Data creation form Need to establish a common asset master data creation form across all business units to provide consistent input for the data maintenance process. Current functionality of Project systems in Fine chemicals In Fine chemicals current project functionality caters for fully integrated milestone, revenue and billing plan. - Revenue is recognised automatically and invoices are generated based on completed milestones/dates. There will be a significant functionality loss with UNIFY. Impact of defining the company code at the level of the legal entity. As explained in more detail in BPD " Close Books, Consolidate and Perform Financial Reporting", the depreciation run will be executed on legal entity level. This implies that the deadlines of depreciation run and other asset related cut off dates at period-end will involve coordination between the different BU's. This is a cultural change compared to today. Shared assets When using the sub-asset concept for managing shared assets, significant increase in asset master data expected due to the number of shared assets. Raised by Neil Parkin and Ian Crawford ( R&CE and PT) Year End Closing Year End carry forward and closing will happen at company code level..

[Audio] Project Accounting activities are carried out through the standard SAP module - Project Systems. All asset acquisitions will be facilitated by the Project Systems ( PS) module, in other words all asset acquisitions across business units in Johnson Matthey will be routed through the asset under construction process ( AuC) (Either AuC Tangible Asset or AuC Intangible Asset) and no purchase orders may be linked to an asset directly. In the case of miscellaneous direct asset purchases such as the purchase of an automobile, JM would not have a detailed project structure created, but would instead use a placeholder WBS. All asset postings will be automatically posted onto the GL from transactions processed in the asset accounting subsidiary ledger. All asset acquisitions are controlled through the capital expenditure process to ensure that all acquisitions undergo budgetary check. The capital projects settle to an asset under construction monthly so that asset related expenditure is reported in the balance sheet and not as an expense in the income statement for the period. There will be no automation of the asset transfer process between 2 legal entities of Johnson Matthey. Instead JM will follow a 2-step process which consists of the retirement of the asset in the source legal entity and the acquisition of the asset in the target legal entity (issuing an invoice where necessary) Tax depreciation is only used for tax reporting purposes. There is no requirement to post tax depreciation to General Ledger. Purchases under a certain limit do not need to be capitalised, as they can be expensed to a Cost Centre on the P&L. There is no need to route this through the CAPEX process in these cases. Only straight line and unit of production depreciation calculations are required. Two depreciation methods will be used. Straight Line Method ( SLM): This is the simple method of depreciation. It charges equal amount of depreciation each year over useful life of asset. Unit of production depreciation: ( ZUP1 and ZUP2) Johnson Matthey will use the unit of production method of depreciation for certain types of assets. This method is occasionally used in Johnson Matthey and requires the prior approval of the Group Reporting Controller AuC need to allow for negative values Assets Purchased without a WBS Element and only to cost centre.

Agenda Slide. 01 Introduction 02 Fixed Asset Overview 03 Asset Master Data 04 Asset Management 05 Asset Reporting 06 Roles and Responsibilities 07 Summary.

Asset Accounting Overview. Asset Accounting (AA): records all accounting transactions relating to the management of assets is configured to apply JM’s policy and principles in respect of depreciation serves as a subsidiary ledger to the General Ledger, providing detailed information on transactions involving fixed assets AA involves processes like master data maintenance, acquisition of fixed assets, depreciation of assets, manage assets and finally disposal of assets All asset acquisitions will be automatically created as part of the CAPEX project build by the Project Systems (PS) module all asset acquisitions across business units in Johnson Matthey will be routed through the asset under construction process (AuC) (Either AuC Tangible Asset or AuC Intangible Asset) no purchase orders may be linked to an asset directly but to a WBS Element of a project.

[Audio] Jen: Step needed between AUC & Depreciation Procurement: Purchase orders can be booked against WBS elements. This allows for commitment reporting on projects. Project Accounting: Project Accounting covers the entire project life cycle starting from project planning to project closing and in this cycle the Asset construction and the capitalisation play a major part..

JM Fixed Assets. 11. Project Accounting activities are carried out through the standard SAP module - Project Systems.

Training Modules for Assets. 12. Module Unify Role Description Create and Maintain Asset Master Data Master Data Administrator Master Data SAP Finance GL Accountant This module describes the process and system steps for create and maintain asset master data Fixed Asset Accounting Process Overview FI Controller GL Accountant GL Manager This module provides an end-to-end process overview for Fixed asset accounting Acquire Fixed Asset GL Accountant GL Manager Project Analyst This module provides an end-to-end process for how Fixed Asset is acquired from PS via AuC and finally settled to the Fixed asset Asset Depreciation FI Controller GL Accountant GL Manager This module provides an understanding of the different depreciation methods and asset classes in use within JM to comply with the Group Control Manual and IFRS Asset Retirement Fixed Asset Accountant GL Accountant GL Manager This module provides a description of the asset retirement process in SAP.

Training Modules for Assets. 13. Module Unify Role Description Intracompany Asset Transfer Fixed Asset Accountant GL Accountant GL Manager This module provides a description of the process and system steps for transfer of a fixed asset to different asset master within the same legal entity Inter company Asset Transfer Fixed Asset Accountant GL Accountant GL Manager This module explains the process for transfer of a fixed asset to another legal entity Asset Impairment Fixed Asset Accountant GL Accountant GL Manager This module describes the asset impairmemt process and demonstrates the system steps on how ro post an asset impairment Asset Write Up Fixed Asset Accountant GL Accountant GL Manager This module provides a description of the asset write up process and demonstrates the system steps on how to post an asset write up Asset Reporting Fixed Asset Accountant FI Controller GL Accountant GL Manager This module provides a list of the reports available for Asset reporting.

Option A: Asset Uncollected Capital Option B: Asset Under Collection Option C: Asset Under Construction.

Option A: Perform Disposal of Assets Option B: Withhold Asset for Capitalisation Option C: Manage Asset Option C: Acquire Fixed Assets Option C: Maintain Depreciation of Assets.

Agenda Slide. 01 Introduction 02 Fixed Asset Overview 03 Asset Master Data 04 Asset Management 05 Asset Reporting 06 Roles and Responsibilities 07 Summary.

[Audio] Jen: Need to update you with Data load conversation.

[Audio] Notes: All FI Master Data are created and maintained by the Global Data Services Master Data Governed data objects are requested via change request forms in the MDG tool Non MDG data objects are created directly in SAP Unify All data objects are subject to agreed GDS Service Level Agreements.

[Audio] Creating an asset master data is the first step that must be executed, either automated in the Project systems module or in the Fixed Asset Accounting process to enable the master data required to post asset values in the SAP system to be capitalised and commence depreciation An Asset is capitalised at the point of utilisation Every Asset will be set up with a unique asset number and assigned a depreciation key which defines the agreed method of depreciation together with the useful life per Group policy An asset master data is the SAP object that represents a physical asset, an intangible asset or a financial asset which needs to be managed in the assets register for Johnson Matthey The asset masters are used to track the acquisition value, the cost centre / WBS element allocation, the acquisition dates, the type of asset and the depreciation drivers of an asset. Investment projects are collecting capitalized costs and are being settled into fixed assets at the completion of the project lifecycle.

Asset Class. Insert footer here. 20. Asset Class Description 20000 Goodwill on Acquisition 21000 Capitalised Software 21001 Capitalised Development 21002 Acquired Research and Technology 21003 Patents, Licences and Trademarks 21004 Acquired Customer Orders 21005 Acquired Customer Relationships 21099 Other Intangible Assets 21500 Assets Under Construction - Intangible Assets 22000 Freehold Land 22001 Freehold Buildings 22002 Improvements to Operating Lease Buildings 22003 Finance Leased Land and Buildings 22004 Other Finance Leased Assets 22005 Plant and Machinery 22006 Fixtures and Fittings 22007 Tools and Equipment 22008 Motor Vehicles 22500 Assets Under Construction - Tangible Assets 22510 Strategic Spares.

Option A: Asset Class creation Option B: Main asset master data Option C: Depreciation management Option D: Sub-assets master data.

Option A: Useful life of an asset Option B: Splits out asset and sub-asset Option C: These are not used in master data.

Agenda Slide. 01 Introduction 02 Fixed Asset Overview 03 Asset Master Data 04 Asset Management 05 Asset Reporting 06 Roles and Responsibilities 07 Summary.

Asset Acquisition. GL Manager raises a request for the creation of a WBS element The Asset (AuC) is automatically created as the WBS is created based on the Investment Profile (Budget) The capital projects settle to the assets under construction on a monthly basis so that asset related expenditure is reported as capitalized item in the balance sheet and not as an expense in the income statement for the period.

Asset Acquisition. 25. Master Data (MDG). GL Manager.

Sub-Assets. Sub-assets will be created in order to manage shared assets across business units within same legal entity of Johnson Matthey and also to track the life of a component of an asset The components of an asset will be created as sub-assets only if the value thereof represents a significant amount of the asset and the expected useful life of the component is different to that of the main asset This will only be available in Wave 2 of the SAP rollout.

Settlement to Final Asset. Costs for assets (AuC) are collected as using a WBS Element and once the asset is complete, these costs are transferred to the fixed asset(s) in the asset ledger When the settlement is carried out on the project, an intra-company transfer is made between the asset under construction and the asset in the fixed assets register.

Asset Explorer Asset Leading Ledge: - 01 200k • ledger group • 200k Objects roted to asset Cost Center Adrm • Cost • so Co:-npanyCcde posted ConvarSons Johnson Matthey parameters Planned values Book depreciation IFRS St&t Change Year •end APC AcqustOn vabe Ordnary deprec. Wrteups Vale adb_ßtmert '00k vaue 66, 67- 333,33 GBP 400,00 GBP 66,67- GBP 333,33 GBP Transactions AssetVaDate Amount TType type name IEOd. dep. Crw Acug of GBP 66,67- GBP.

Asset Depreciation. Depreciation is the process of recognising the reduction of the value of an asset over time due to wear and tear associated with the usage of the asset by the business The value by which an asset is reduced over a period is reported as an expense. Depreciation starts in the month when the asset is available to use It ends with disposal, a scrap / residual value or reclassification as held for sale Johnson Matthey will set up a number of depreciation areas per country as required in order to fulfil legal and management requirements.

Asset Depreciation. Insert footer here. 30. GL Manager.

Asset Depreciation. Three depreciation areas have been agreed within Johnson Matthey: 01 Book Depreciation IFRS 20 Cost Accounting 51 Investment Support (grants and subsidies) Two depreciation methods will be used. Straight Line Method (SLM): This is the simple method of depreciation. It charges equal amount of depreciation each year over useful life of asset. Unit of production depreciation : (ZUP1 and ZUP2) Johnson Matthey will use the unit of production method of depreciation for certain types of assets. This method is occasionally used in Johnson Matthey and requires the prior approval of the Group Reporting Controller.

[Audio] There are two common reasons for write-ups: Incorrect Acquisition or Installation cost: Subsequent correction to the acquisition and production costs of a fixed asset. For example, if you neglected to add expenditures and costs linked with the acquisition or assembly of an asset to its APC (Acquisition and Production costs) in a fiscal year that is now closed. Need to find transaction code. Incorrect Depreciation Amount: The value adjustments ( depreciation) that you calculated in the past were too high. You must now correct this error using a write-up in the current fiscal year (e.g. due to incorrect depreciation terms used in the asset master). Activity List.

Asset Write-up. GL Accountant. GL Manager. Start.

[Audio] Jen: Possibly. Inter/Intra Asset Transfers.

Intra Asset Transfers. 35. Master Data (MDG). GL Manager.

Asset Retirement. Asset disposal (retirement) is the removal of an asset or part of an asset from the asset register The GL Accountant has to confirm the type of retirement (Retirement without revenue or Retirement with revenue) Retirement without revenue is the process of scrapping the asset. It creates a posting to remove the acquisition cost and the accumulated depreciation from the books and recognize gain/loss (if any) If the retirement concerns a retirement with revenue , the system allows posting revenue to a Customer along with the asset retirement.

Asset Retirement. 37. GL Accountant. GL Manager. Start.

Option A: True Option B: False. Learning Checkpoint.

Option A: Delete from Master Data Option B: Capitalisation of an Asset Option C: Removal from the Asset Register.

Option A: Sharing of an asset Option B: A component of an asset Option C: Copy of an asset.

Agenda Slide. 01 Introduction 02 Fixed Asset Overview 03 Asset Master Data 04 Asset Management 05 Asset Reporting 06 Roles and Responsibilities 07 Summary.

Asset Reports. Asset reporting allow you to track, manage, depreciate and account for assets There are various reports for asset management to support General Ledger account balances, management decisions, tax filing and physical property tracking.

Report Types. By Asset Number By Asset Class Asset Balances for Group Assets Total Depreciation Ordinary Depreciation Special Depreciation Unplanned Depreciation Write-Ups Depreciation Comparison Manual Depreciation Changes to Asset Master Records.

Agenda Slide. 01 Introduction 02 Fixed Asset Overview 03 Asset Master Data 04 Asset Management 05 Asset Reporting 06 Roles and Responsibilities 07 Summary.

GL Accounting Roles and Responsibilities. 45. Master Data SAP Finance.

Agenda Slide. 01 Introduction 02 Fixed Asset Overview 03 Asset Master Data 04 Asset Management 05 Asset Reporting 06 Roles and Responsibilities 07 Summary.

What do I Stop, Start, Continue?. 47. Stop. Start.

Additional Asset Processes for Month-End Training.

Key Terminology. 49. Term Definition Investment Management The Investment Management (IM) component provides functions to support the planning, budgeting investment, and financial processes for CAPEX Project Systems Module in SAP for capital planning and budgeting, with individual capital project budget allocations entered into SAP Work Breakdown Structure Hierarchical view of the tasks to be performed in a project WBS Elements Components / parts of the project that can be used to split the project work. Cost/revenue collectors for the project. Cost Object A naming convention for a WBS Element, Cost Centre and Internal Order AuC Asset under construction (AuC) i s automatically created when WBS is Released Asset Single physical asset which is used by Johnson Matthey Sub-Asset Created in order to manage shared assets across business units within same legal entity of Johnson Matthey.

Key Terminology (Contd). 50. Term Definition Asset Transfers A 2-step process which consists of the retirement of the asset in the source legal entity and the acquisition of the asset in the target legal entity Miscellaneous Assets Direct asset purchases such as the purchase of an automobile, using a placeholder WBS Asset Classes Are used to define the category of asset for example, land and buildings or plant and machinery Useful Life A period during which an asset is expected to be usable for the purpose for which it was acquired Net Book Value The value of an asset in the accounting book which is calculated using the historical cost of the asset less any accumulated depreciation Asset Value Date The date of an asset transaction from the accounting point of view. For example, the date of asset capitalisation or retirement.