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SORP system config - depreciation automatic entry hits retained earning a/c

Former Member
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Hi,

Could anybody help.

Before :

When depreciation is run (AFAB) for a single asset, the following entries were created

Cr(75) - Accum Depr Account (B/S)

Dr(40) - Depreciation acct (P&L)

Then the user does a manual entry as below :

Cr(50) Depreciation account (P&L)

Dr(40) Capital Adj Acct (B/S)

This was fine -

Now the SORP config is done and there is a problem with depreciation postings :-

After SORP config :

All automated :

Cr(75) - Accum Depr Account (B/S)

Dr(40) - Depreciation acct (P&L)

Cr(50) Retained Earnings account (Statement of Movement on General Fund) (B/S)

Dr(40) Capital Adj Acct (B/S)

Any clue why is it happening ?

The second entry should be like the manual entry above .

But It Credits retained earnings account (not Depreciation account)

Checked all the account assignments - but I could not see anything there.

Any help would be appreciated.

Thanks in advance & regards

WD

Accepted Solutions (0)

Answers (3)

Answers (3)

Former Member
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The problem is resolved externally

Former Member
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This message was moderated.

Former Member
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Further to my question above, thereason for depreciation runhitting retained earnings account is found out.

It is due to the configuration described at the bottom -

The SMGFB account is configured as a retained earning B/S account in SAP

Could anyone kindly explain what is the purpose of SMGFB account ?

Is it necessary to configure this GL Account as a retained earnings account ?

SAP SORP dcumentation says the following :

-


Setting Up Line Item Schemes

You are required to set up line item schemes for the following purposes:

􀁸 When you post depreciation, you have to neutralize the effect of depreciation on the

revenue by debiting the capital adjustment account (CAA) and crediting the

Statement of Movement on the General Fund Balance (SMGFB)

􀁸 When you post impairment due to the consumption of the economic benefit of the

asset, you have to neutralize the effect of impairment on the revaluation reserve by

debiting the CAA account and crediting the SMGFB.

-