Chart of Depreciation

Chart of Depreciation

Definition

The chart of depreciation contains the list of defined depreciation areas. It also contains rules for the evaluation of assets that are valid in a given country or economic area. Each company code is allocated to one chart of depreciation. Several company codes can work with the same chart of depreciation. The chart of depreciation and the chart of accounts are completely independent of one another.

Depreciation is a non cash expenditure which is allowed to be charged to Profit & Loss Account. In India, the depreciation allowed under companies act and the Income tax act are different. This requirement can be met by creating two different depreciation areas.

Implementation Consideration

SAP supplies typical reference charts of depreciation for each country. They have different depreciation areas and depreciation keys depending on that country’s specific requirements. You cannot use these charts of depreciation directly. You must create your own chart of depreciation by copying the reference chart of depreciation. Delete any depreciation areas that are not needed.

Creating Chart of Depreciation

IMG Path: Financial Accounting (New) > Asset Accounting > Asset Accounting (Lean Implementation) > Organizational Structures > Copy Reference Chart of Depreciation/Depreciation Areas

We can’t create a new Chart of depreciation from the scratch. We have to copy the country specific reference Chart of Depreciation provided by SAP to create a new one.

Specify Description of Chart of Depreciation

Change the name of Chart of Depreciation here.

Assign to Company Code

The next step in Chart of Depreciation is assignment to Company Code

IMG Path: Financial Accounting (New) > Asset Accounting > Asset Accounting (Lean Implementation) > Organizational Structures > Assign Chart of Depreciation to Company Code

Here we can assign the newly created Chart of Depreciation to the Company Code. One Chart of Depreciation can be assigned to multiple Company Codes.

Once Chart of Depreciation is assigned to Company Code, we can start working on the same.

Reference Material

 Chart of Depreciation

Tags#

Assign Chart of Depreciation, SAP Chart of Depreciation,