Technical Clearing Account in New Asset Accounting

[ShivaGoud]

Dear SAP Consultants,

I am aware that SAP has introduced technical clearing account concept in New Asset accounting and I also know how to configure and how it works like creating separate accounting documents for operation and valuation part. 

My question is what is the purpose of this technical clearing account with practical example and how it impacts different accounting principle. Please provide practical answer to understand the concept and not how to map in SAP and how it works in SAP.

Thanks in advance.

Regards

Shiva

[VijaykumarV · Accepted solution]

Hi Shiva,

As you are already aware about how Technical clearing account functionality works in SAP and wants to know practical example and reason for this, let me give you a practical example.

Lets say Company is having a 2 Accounting principles - Local GAAP and IFRS. 

Asset Acquisition postings - System will post split accounting into Operation and Valuation part.

Operation part -

• Vendor Account CR ( All Ledgers - Accounting principles )
• Technical Clearing Account DR ( All Ledgers - Accounting principles )

Now comes the second party i.e. Valuation part. System will post accounting document for each accounting principle. So 2 accounting documents will be posted. 

First accounting document of valuation part :

• Asset Account DR ( Local GAAP )
• Technical Clearing CR ( Local GAAP )

Second accounting document of valuation part :

• Asset Account DR ( IFRS )
• Technical Clearing CR ( IFRS )

Coming to your question, why this split of operation and valuation part and logic behind this. 

As each accounting principle will have different rules on accounting. This will help to post document accordingly to accounting principle.

So take an example - Asset Cost - 100 & Freight Cost -10

IFRS might consider Total Asset cost as 110 but Local GAAP will consider Asset cost as 100 and Freight cost as an expense. Also we have a separate depreciation area for Accounting principles.

I hope this will help you to understand the concept.

Regards

Vijaykumar

[ShivaGoud · Accepted solution]

Thank you