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Tableofcontents Tableofcontents

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Introduction Introduction

Table of contents
1. Objective and Scope
  1.1. Objective of this document
  1.2. Scope
2. Reference Documents
3. Definitions
  3.1. Responsibility
  3.2. Abbreviations
4. ASSET RETIREMENT, TRANSFER AND SALES
  4.1. Asset Retirement by scrapping (without revenue): ABAVN
      4.1.1. Posting to perform the retirement by scrapping (ABAVN)
      4.1.2. BFC manual correction when scrapping assets which Net Book Value is not zero
  4.2. Asset Sales to Third Parties
      4.2.1. Assets sale (ABAON)
  4.3. Group Internal Asset Transfer
      4.3.1. Transfer of Assets
Single                Single Assets (ABUMN)
Mass                Mass Transfer
      4.3.2. Treatment of redeemable Spare Parts
  4.4. Intercompany asset transfer (ABT1N)
  4.5. Profit Elimination
  4.6. Reverse a Sale, Scrapping or a Transfer Posting
5. ATTACHMENTS

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Objective Objective

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1.

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Objective and Scope

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  1.1. Objective of this document

This document describes the process of asset retirement as well as asset sales and group internal transfers (including elimination of internal profits)

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  1.2. Scope

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Application Application

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This operating procedure (OP) applies to PF1 PF2 system.

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2. Reference Documents

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(N/A)

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3. Definitions

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  3.

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1. Responsibility

Project Manager or Technical Controller (Industrial Function / IT / GBU/ Regulatory Affairs/ Research & development) are responsible to provide to SU MAC the necessary information to perform the movements in SAP.

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SU MAC is responsible to make the posting inside SAP and check the reliability of the postings performed in SAP

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  3.2 Abbreviations

PS: Project System (Sap module)
WBS: Work Breakdown Structure of a project in SAP PS
MC: Material Code
AuC: Asset under construction
PM: Project Manager
CAM: Company Accountant Manager
SU MAC : Service Unit Management Accounting

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  4.1. Asset Retirement by scrapping (without revenue): ABAVN

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      4.1.1. Posting to perform the retirement by scrapping (ABAVN)

To make a posting for asset retirement, call up transaction ABAVN.
Pay attention to the following button:
"Change company code"- Insert the company that you intend to post.
Make the required entries:
Asset
Document date
Asset value date
Text e.g. reason for posting



Before saving the posting, it is possible to simulate it by clicking the "Simulate" button . Finally: do not forget to save your posting!
In case of partial retirement, you have, in addition to the above mentioned entries, click on tab "Partial retirement" and insert
Amount to be posted or
Percentage rate or
Quantity (e.g. for capitalized spare parts)

In case of more than one asset to be posted in the same company code, click on button "Multiple assets"  . Make the required entries (Document date, Asset value date and text). Insert the asset numbers in the list of assets:

Before saving the posting, it is possible to simulate it, by clicking the "Simulate" button . Finally: do not forget to save your posting!

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      4.1.2. BFC manual correction when scrapping assets which Net Book Value is not zero

Remark: This step should be done monthly in BFC until the end of the year!
Whenever we have a retirement by scrapping for an asset with a net book value (NBV) different of zero, done in PF2 as explained above, it generates an issue when balancing company in BFC.
When we have a retirement by scrapping posted as document below

We can consult the movements in BFC flows by running Asset History Sheet report, BFC version: 

Transaction: AR02
Report date: Last day of closing month
Depreciation Area: 50 (group)
Sort Variant: ZBFC
History Sheet Version: ZBFC
This will give us the following report:

These amounts will be uploaded into BFC as they are in PF1PF2: 

However, as we can see, flow F33 is not balanced in BFC, which will give us a blocking control.


This way, we will have to do the following manual adjustment in BFC, in order to balance F33:

If we check the original document of the retirement used as example here here 

We can see that the amount reclassified from F33 to F25 is exactly the difference between the gross value and the cumulated depreciation, which is the "amount to be depreciated" at the moment that the asset was retired.
So, we can resume the manual adjustment to be done as:
When there is a retirement by scrapping of an asset with NBV > 0
We should reclassify in BFC the amount to be depreciated of this asset from F33 to F25.
This will solve our issue and the blocking control related to these figures.

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  4.2. Asset Sales to Third Parties

Asset sales are always charged via service invoice to the customer. The revenues have always to be assigned to assets. In case of a total amount for a group of assets, it has to be split up.

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      4.

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2.1. Assets sale (ABAON)

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Posting
Transaction ABAON is similar to ABAVN (24.1.21.). The difference is the additional field for revenue. You have to insert
Document date
Asset value date
Text
Revenue.

Before saving the posting, it is possible to simulate it by clicking the "Simulate" button . Finally: do not forget to save your posting!
The posting for partial retirement as well as multiple assets works similar to ABAVN (24.1.21.) with additional field for revenues.

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  4.3. Group Internal Asset Transfer

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      4.3.1. Transfer of Assets

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Normally these transfers are without cash out (of the Solvay Syensqo group), except property transfer tax or similar expenses.

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Seller side:
The postings on seller side are similar to asset sale to third parties. Merely the partner information has to be inserted on tab "Additional details":


Purchaser side: The purchaser has to create a WBS element and an asset master. The WBS element will be charged via CROCO invoice.

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Mass Transfer

Mass transfer of assets requires special requisites in the SAP system. Ask SU MAC I&D key user and/or the SU MAC for support (see also section 2.4).

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      4.3.2. Treatment of redeemable Spare Parts

GENERAL PRINCIPLE
The redeemable spare parts are managed by means of warehouse records, but only in quantity because its price on record is zero; it means that the consumptions are free of charge. The value of these pieces is registered in fixed assets and the cost centers receive the expenses by depreciation.
The following criteria are valid, both for the replacement of the current pieces, and for those of new creation.

CRITERIA
1. - A spare part is considered redeemable if its value is over to 3.000 € and belongs to a single facility.
2. - The owner of each facility is also responsible for their redeemable spare parts.
3. - The administrative management of these kinds of pieces will be centralized by the stock manager.
4. - In order to easily recognize these sorts of pieces in any document that makes reference to them, the short and long texts are prefixed by the character "$", which allows to identify them. 
5. - When a breakdown takes place and an available redeemable spare part is used, the stock manager will consult the responsible for the Maintenance Service or the owner of the facility, regarding the destination of the piece removed: 
  a) It should be repaired.
  b) It is not repaired and a new one has to be bought.
  c) It should neither be repaired nor purchased.
6. - For the acquisition of a spare part that was not a fixed asset until the present and now we need to convert it into one, an investment budget will always be necessary. 

PROCEDURES
For the cases specified in the 5th point, we need to define the procedure that has to be followed for their appropriate treatment.
We have to bear in mind that, in every case, the removed piece has been replaced by one on record with value zero; that is, without charge.

a) It should be repaired.

The damaged piece is repaired through a maintenance order. The Maintenance Service will make a negative booking on this order. When the repair is finished, the spare part is returned to the warehouse with value zero and the maintenance order will receive all the repair expenses. 

b) It is not repaired and a new one is purchase
Before the purchase, the stock manager will request from the piece owner his agreement and the budget to buy this piece.
Then, the stock manager will ask the accountants for a budget order and will register two bookings on the record:

1. One positive type 'N' (not warehouse)
2. One negative type 'L' (return to warehouse)
   Starting from this, the purchase order will be created and, when the material arrives, the receipt is entered on the budget order and the piece is returned to the record with value zero.
   
   Then, a new piece asset has to be created by the Accounting Service (Transaction AS01). The creation procedure is the same as for another fixed asset but paying special attention to three specific fields:
   Asset Class
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   Quantity and Unit of Measure: The number of pieces that have been purchased with the same budget order and the unit of measure (usually PC=Piece).
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   Material Number: It is the record identification
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   At the same time, Accounting will write off the damaged piece in the fixed assets, following this procedure:

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To transfer the value of the redeemable piece asset, that has been taken out of the warehouse (with an asset class Z_X9) to a new facility asset (asset class ZX_0) which has to be created (transaction AS11) as a sub-number of the corresponding facility asset (the redeemable piece assets are associated to different accounts from the facility assets).
For the transfer, we have to use the transaction ABUMN
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To find the piece from the facility that was sent to scrap, to proceed to its disposal. If this element isn't easy to find (it can belong to a group), we will write off from the facility a value equal to 50% of this redeemable spare part value.

For the partial retirement, we have to use the transaction transaction ABAVN


And then, click "Partial Retirement"

c) It should neither be repaired nor purchased
Accounting will write down the damaged piece, following the procedure explained in the previous point.
The stock manager, on the other hand, will delete the corresponding record, with the authorization of the piece owner.

PARTICULAR CASES
Exceptional situations are analyzed here. These situations will always demand a previous negotiation with the owner.

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The same as in the previous case, but the new piece to replace the one from the warehouse will be charged on a special order created by Accounting to collect the expenses relating to the accident. 
In this case, the piece always has to be replaced.

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In field "Asset" you have to enter the asset you want to transfer.
You have two options to transfer the values to:
An existing asset
or by a new asset
Fill-in Document date, Posting Date, Asset value date.

Important to consider when you perform an Interco Transfer:
How has this operation to be reported in BFC, as Transfer (Flow F70) or as Sale (Flow F30 on seller side)?
1) If it has to be reported as Transfer (Flow F70) you have to put in the Text ZZZ + additional non formatted texts, as well as ZTT (second screen) in transfer variant.
   
2) If it has to be reported as purchase (Flow F20 on the buyer side) ZZZ has not to be used in the text. The transfer variant depends on the specific parameter of the transaction (contract).

For Flow F70 the text field needs to start with "ZZZ" for Transfer (Flow F70).

Use the Transfer Variant ZTT on "Additional Details" tab.


When the posting is reflected in FI side the system will read the code "ZZZ" and will use automatically the transaction type F70, in the FI posting. 2.1)

For intercompany transfer with Flow F30 / F20 F20 
"ZZZ" has not to be put in front of the text as mentioned above.



For both cases there are 3 possible values:

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1. No revenue, this means that in the sending company the difference between Acquisition and Accumulated Depreciation will be posted as Lost, In the receiving company will be posted in a waiting account B742000000 and 2742000000

2. Manual Revenue. This means you have to enter the value of the "Sale", in this case the system calculates the difference between Acquisition and Accumulated depreciation versus the revenue. If the result is negative, it is a lost if it is positive it is a gain. The amount entered in Manual revenue is posted on accounts B742000000 and 2742000000

3. Rev from NBV. In this case the system posts the net book value of the depreciation area selected as revenue. This result neither in profit nor in loss in the depreciation area selected. The revenue is posted on accounts B742000000 and 2742000000.

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Profit Elimination

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If a sale, scrapping or a transfer was made by mistake, the posting can be reversed by using transaction AB08.



Select the line that belongs to the posting to be reversed (check Transaction type and Text to be sure ) and click on button.

The system simulates the reverse post:

Save the document in order to post it.

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