1. Objective

2. Scope

3. Definitions

4. Responsibilities

5. Deadlines

6. Information SAP extraction

7. Create a ticket 

8. Update SAP transaction 

1.Objective 

The purpose of this document is to demonstrate how to correctly execute internal control FXA.01.08 - Review of assets under construction (AUC) older than 6 months (over 500k €) and older 1 year. The aim is to detect if there is any AUC without any new costs for the last 6 months without capitalization to the fixed asset (FXA).

According the IAS 16, the depreciation of an asset begins when it is available for use, ie when the asset is in the location and conditions necessary for it to be capable of operating in the manner intended by management. This rule defines the commissioning date (final asset creation) and the launch of the depreciation. When investments costs are capitalized at the end of the project, the amount recorded on Assets Under Construction (AUC) is settled to final assets register and AUC balance should be equal to 0.

2. Scope

This internal control applies to both PF2 and WP2 systems.

AUC > 500k€ and older than 6 months 

AUC > older than 1 Year

3. Definitions

SBS MAC SU - Syensqo Business Services, Management Accounting Service Unit 

I&D - Investment and Divestment 

AUC - Asset under construction

FXA - Fixed asset

WBS - Work Breakdown Structure

PM - Project Manager

4. Responsibilities

The owner of this internal control is the SBS SU MAC I&D key user for each region.

SBS SU MAC is responsible for executing the report and sent to Project Managers for review and comments. 

Exception for DT Projects (starting by "IT" in the description, example Project HA/I22001 - IT11800-PC for Newcomers), the list should be sent to the WW Points of Contact for the Capitalizations (using Distribution List "

").

5. Deadlines

SBS SU MAC should send the report to the Project Managers until the middle of the quarter (ex: Closure Q3 → send report middle August).
Project Managers have a 30 day response deadline to justify non capitalized sleeping AUC and request their capitalization, if needed, or provide the expected capitalization date. If the Project Managers do not answer until the defined deadline, a reminder must be sent to them, including the MAC SU I&D key user on the loop and also with GBU controller and country accounting director.

6. Information SAP Extraction

SAP transaction

PF2 - Z1A_AUC_SLEEP

WP2 - ZWFA81B

Steps:

• Selection
  
  

- Company Code: extract only 1 company in each report, to avoid issues in terms of performance;

- Plant: could be extracted a specific plant or a range of plants inside of a company code;

- Business Area, GBU: could be extracted a specific business area/GBU or a range of business area/GBU inside of a company code;

- BFC heading: could be extracted a specific heading or a range of headings (A21900 - Tangible assets under construction, A20090-  Intangible assets under construction and A20960 - Development costs under construction);

- AuC number: could be extracted an asset under construction number or a range of asset under construction number inside of a company code;

- Posting date: define the accumulate position in the end of the month (example: Q3→ 08.2021 -> 28.02.2021)

- WBS Date of Last PEC, used to exclude the WBS-elements with movements between this date and the posting data (example: if we field 31.12.2020 in WBS Date of last PEC and Posting Date 06.2021, the transaction will report only the list of WBS-elements, considering the position of 30.06.2021, without any movement since 31.12.2020).

For extraction regarding the internal control the mandatory fields are: Company code, BFC Heading (only for assets under construction), Posting date, and WBS Dare of last PEC. 

• Report

PF2 - Use layout /I&D S AUC as following:

WP2 - Use layout /I&D S AUC 2 as following:

Column AsstValDat identify the last day that the WBS had movements (acquisitions, retirements, etc). 

Extract to excel file and add 2 columns at the end with the scope "WBS Negative" and "AuC > 500 KEUR". 

Insert formulas like the following:

With this 2 additional columns with formulas it is easier to know exactly each WBS/AUC are mandatory to be justified  (AUC>500k € and AUC<0). This way if you have AUC/WBS with negative amounts or >500k € you can immediately identify them and you can send the list to the Project Manager with those AUC/WBS underline. 

7. Create a ticket

Create a ticket sending the excel file to the project manager. As example the following text:

"Dear all,

In the frame of Capex internal controls, we're sending attached the list of assets under construction (AuC) that didn't receive any costs in the past 6 months. The purpose of this report is to help you to identify eventual projects that should already be put into service.

For projects/WBS that should remain for now as AuC, we would like to request your comments on columns "Justification Sleeping" and "Expected Date of Capitalization". These comments will be uploaded in SAP and will help in future analysis/extractions and audit questions.
Please feel free to contact in case of any doubts.

Please remember that we should have your feedback within 30 days. 

We thank you in advance for your cooperation on this internal control."

• Project Managers contacts -  project manager contact should be in the project header master data under the "Person Responsible Number" field; if this field is not properly filled (all projects are first created with the COLMAR). You can also check historical data contacts in the previous tickets.

SAP transaction CJ03:

Specific contacts for WP2 - Companies from France

• IT projects → WBS starting with "SE.II" and "SE.IT" and "RI.II" or finishing with " ISAM, ISIM, ISAL, ISIL, ISAO, ISIO";
• Research and Development → WBS starting with "RR" and "RA";

You should check the correct contacts with the R&I controller and the IT controlling team. 

• Receiving feedback from Project Managers - How to update in the SAP transaction?

PF2 - Z1A_AUC_SLEEP

WP2 - ZWFA81B

8. Update SAP transaction

Create SAP justification 

When in the transaction, double click in the project and select "Create a note"

The title of the note should start with "JA_" and after the project code:

Save and go back. 

Update the expected date of capitalization

When in the transaction, double click in the project and field the "Finish date".

Save and go back.

• If the Project Managers do not answer until the defined deadline, a reminder must be sent to them, including the MAC SU I&D key user on the loop and also financial controller and country accounting director.