FIXED assets are valued differently for different purposes (business, legal, ETC.). SAP manages these different valuations by means of ‘Depreciation Areas.’ There are various depreciation areas such as book depreciation, tax depreciation, and depreciation for cost-accounting purposes, etc.

A depreciation area decides how and for what purpose an asset is evaluated. The depreciation area can be ‘real’ or a ‘derived one.’ You may need to use several depreciation areas for a single asset depending on the valuation and reporting requirements. The depreciation areas are denoted by a 2-character code in the system. The depreciation areas contain the depreciation terms that are required to be entered in the asset master records or asset CLASSES.

SAP comes delivered with many depreciation areas; however, the depreciation area 01—Book Depreciation is the major one.

The other depreciation areas are:

•  Book depreciation in group currency
•  CONSOLIDATED versions in local/group currency
•  Tax balance sheet depreciation
•  Special tax depreciation
•  Country-specific valuation (e.g., net-worth tax or state calculation)
• Values/depreciations that DIFFER from depreciation area 01 (for example, cost-accounting reasons)
•  Derived depreciation area (the difference between book depreciation and country-specific tax depreciation).

Fixed assets are valued differently for different purposes (business, legal, etc.). SAP manages these different valuations by means of ‘Depreciation Areas.’ There are various depreciation areas such as book depreciation, tax depreciation, and depreciation for cost-accounting purposes, etc.

A depreciation area decides how and for what purpose an asset is evaluated. The depreciation area can be ‘real’ or a ‘derived one.’ You may need to use several depreciation areas for a single asset depending on the valuation and reporting requirements. The depreciation areas are denoted by a 2-character code in the system. The depreciation areas contain the depreciation terms that are required to be entered in the asset master records or asset classes.

SAP comes delivered with many depreciation areas; however, the depreciation area 01—Book Depreciation is the major one.

The other depreciation areas are: