Reconciliation problems from Financial Accounting to Asset Accounting
Best Practices that I follow
Prepare & Plan; Have a formal step-by-step document that details each task during the closing process. It should encompass;
Detailed timeline (when to perform this step)
In-depth explanations (how to perform steps; insert screenshots)
Required resources (who will perform the step)
Dependencies (whom to coordinate with)
Start Early; This process takes approximately 3-4 weeks to close the Asset Fiscal year
Begin at the start of your Period 12
Start by running test runs (to see if errors & warnings pop up)
Collaborate; You’ll need support from other teammates in FI, CO, PS, and Investment Management.
Final settlement has to be first run for Controlling thus, teamwork is essential
The #1 Mistake
Not Closing the sub-ledger before the General ledger; the sub-ledger (Asset Accounting) must be closed before the General ledger (Financial Accounting)
Steps to Close Asset Accounting (sub-ledger)
Step 1:Recalculate Values
Run Transaction code AFAR to recalculate all asset values. This ensures that all planned depreciation reflects the current depreciation setting.
Step 2: Incomplete Assets
Run Transaction code AUVA (Program: RAUNVA00) to find all incomplete Assets. This data mines mandatory missing master records.
Step 3: Unposted Assets
It’s good housekeeping and not a mandatory step.
Run Transaction code S_ALR_87012056 (Program: RAANLA01) to find all unposted assets (Assets created but not utilized)
Pay attention to the creation date (Pose a question. Why are these assets here, are they planned for acquisition, or are duplicates?)
Step 4: Delete Assets
This process is also not mandatory as it’s only part of good housekeeping.
Delete Assets in the previous step (3) since they have never been capitalized.
Note: Be careful as there is no undo button
Step 5: Depreciate Period 12
Run depreciate Transaction code AFAB for your last period according to your end-month closing procedure.
Make sure all capital investment measures have been successfully settled before running depreciation.
Step 6: Reconcile Financial Accounting to Asset Accounting
Here, you’ll be reconciling your sub-ledger to the General ledger
Re-use reports in Asset Accounting such as Total Depreciation (Transaction code AR03) or Asset Balance (Transaction code AR01) and compare the balances to Finance balance displays (Transaction codes FS10N, FBL3N) for all Acquisitions Costs and Posted Depreciation accounts.
Note: All accounts must match to a penny (Acquisition cost accounts and depreciation accounts)
Step 7: Year-end Change
Run Transaction code AJRW (Program RAJAWE00) to open the new Fiscal year in Asset Accounting.
Note: This is not related to any FI period
Step 8: Year-end Close
Run Transaction code AJAB (Program RAJABS00) to close the Asset Accounting Fiscal Year.
Execute in a Test run and if there are any errors then fix them. Otherwise, you can then uncheck the test run and run the program in the background.
Step 9: Reporting (Optional)
This is not mandatory but rather a good housekeeping activity.
Run all asset reports and download them (Save them to a report repository)
Include: Asset History Sheet, Total Depreciation, Acquisitions, Retirements and Transfers
Additional steps to consider if adjustments are to be made in the already closed period
Step 1: Undo Close
Why re-open the year?
Last minute transactions; late invoice, redo settlement, repeat depreciation
Long after closing the fiscal year; Tax adjustments, Audit adjustments, Reconciliation problems, Data inconsistencies.
To open all depreciation areas, run Transaction code OAAQ, and change the fiscal year in AA
To open only a specific depreciation area, run Transaction code OAAR and change the fiscal year for the specific depreciation area. This is often done for Tax purposes (Tax depreciation area)
Note: This transaction applies only to the Asset Accounting Year and not the Financial Accounting Year
Step 2: How to Close the Asset Accounting Fiscal Year Again
Neither Transaction codes OAAQ & OAAR can be used to close the fiscal year in Asset Accounting.
Closing the Asset Accounting Fiscal year requires going through the usual steps (1-9) again
At the minimum, you have to run Transaction code AJAB in test mode and correct any errors reported then you can uncheck the test run and execute the program in the background
I hope the above procedures can guide you too as we draw closer to the year end.