Table of Contents
1. Objective and Scope
2. Reference Documents
3. Definitions
3.1 Responsibilities
3.2 Abbreviation
4. Retirement Processes
4.1 Asset retirement by Sale
4.1.1 Asset Retirement by sale with Customer
4.1.2 Asset Retirement by sale without Customer
4.3 Asset Retirement by Scrapping
4.4 Internal Asset Transfer
4.5 Partial Asset Retirement
5. Retirement process reliability check Define a name for this check???
1. Introduction
This guide provides clear steps for processing the retirement of fixed assets at Syensqo for WP2 system. Following these procedures helps ensure accurate records and compliance. Please use this guide as a reference during any of the retirement processes described here.
2. Reference Documents
IAS 16 Property, Plant and Equipment - Syensqo Financial Reporting Guide
Asset Removal Template (Needs to be updated for Syensqo / How to attach file here?)
3. Definitions
3.1 Responsibility
| Position | Description |
|---|---|
Cost-center Person Responsible (not limited to) | Are responsible to communicate with Plant controller and provide necessary information to initiate the asset retirement |
| Plant Controller (FRA) | Finance Responsible Assigned will provide the necessary approval and documentation through the appropriate Portal (Currently Service One, to be changed to SyRa in 2025 August) |
| CAM | Must be consulted if any local or accounting guidance is required |
Management Accounting Team (SU MAC) | Responsible to make the posting inside SAP and check the reliability of the postings performed in SAP |
3.2 Abbreviation
| Acronym | Description |
|---|---|
| FRA | Finance Responsible Assigned |
| CAM | Company Accounting Manager |
| SU MAC | Service Unit - Management Accounting |
| AA | Asset Accounting |
| DA | Depreciation Area |
| BU | Business Unit |
| CC | Cost-Center |
| TCM |
4. Retirement Process
Retirement of fixed assets is the process of removing assets that are no longer in use from company records. This ensures our asset register remains accurate, improving the financial reporting, facilitating asset management and compliance with accounting standards and Fixed Asset Internal Controls.
When a fixed asset is retired, the transaction type determines how it is reported in the financial consolidation process. In Syensqo’s consolidation system, specific flows are used to categorize these transactions:
Flow F30 – Retirement by Scrapping:
When an asset is scrapped (disposed of without generating revenue), the transaction is recorded under flow F30. This flow captures the removal of the asset from the books due to scrapping, ensuring that the loss and the reduction in asset value are correctly reflected in consolidated financial statements.Flow F33 – Retirement by Sale:
When an asset is sold, the transaction is recorded under flow F33. This flow captures both the removal of the asset and the proceeds from the sale. It ensures that any gain or loss on the sale, as well as the inflow of cash or receivables, are properly reported in the consolidated accounts.
Using the correct consolidation flow ensures that each type of asset retirement is accurately classified and reported at the group level. This supports transparency, consistency, and compliance with accounting standards during the consolidation process.
**Should we consider adding an explanation of flows and impacts of the retirement on BFC, P&L, B/S, etc? SyGPT can provide great concepts about it.
4.1 Asset retirement by Sale
Asset sales can be made with or without customer posting, it is responsibility of SU MAC to oversee the process and understand which option and transaction will be used. Generally Intercompany Team will process the customer invoice, if not, we have other means to post the complete process. CAM can be consulted for this decision. Is this correct?
| With Customer | Without Customer | |
|---|---|---|
| Customer Invoice | X | - |
Revenue Recognition | X | - |
| Asset Cost | X | X |
| Asset Depreciation | X | X |
| Gain/Loss Calculation | X | X |
4.1.1 Asset Retirement by sale with Customer
When retiring an asset by sale with customer in WP2, it is important to monitor the asset values in depreciation areas 02 (IFRS Impairment) and 31 (Local Impairment). If these areas show no amounts or do not exist, it means the asset was not impaired. This check determines which transaction type should be used for the retirement.
| Single Asset Check - AW01N - Asset Explorer | Mass Asset Check - AR01 or AR02 - Asset Balances / History Sheet |
|---|---|
|
|
Once impairment check is done, the sale process can be registered using transaction F-92 and inserting the following fields:
- Date
- Posting date
- Doc. Type - DR for Customer Invoice
- Company Code
- Currency/Rate
- Document Header Text
For the first line item, we debit the Customer using Posting Key 01 and the Customer Account (1)*.
(1)* The Customer Account can be found using transaction FBL5N and looking using the option below:
Insert the Amount the asset is being sold for and the text to identify the line item.
The next line will be the revenue account posting using a Credit, Posting Key 50 and the account 98673010 - Disposal Fixed Assets - Income:
In this line item it is necessary to input the following fields:
- Amount - Same as the previous line item (Revenue for the asset sale)
- Tax Code - CAM or TCM contact may be consulted as it depends on the Country Accounting treatment of fixed assets Sales
- Tax Jurisdiction - May be necessary depending on the tax code
- Cost center - It is important here to use the cost-center CCCC-84* as it will use a Cycle allocation rule appropriate for Fixed Assets sale
- Asset - Leave it blank, this particular field will be populated automatically in the next step.
- Asset Retirement - Make sure to flag this option, it will prompt you to fill the asset number correctly.
- Text
After everything is filled out and you press enter to register the information, you will be prompted a window to "Create Asset Retirement".
- Asset
- Asset Sub-number
- Transaction Type (2)* - Refer to the table, this selection will be based on the check of depreciation areas 02 and 31 made previously.
- Asset Value Date - Date used to determine when a transaction affects the value of an asset. ( e.g. Asset sale registered in July but using the asset value date as of January)
- One of the options:
- Complete Retirement - If an asset is being fully sold
- Amount Posted - Partial APC amount of an asset being sold
- Percentage Rate - % Based amount of an asset being sold
- Quantity - If an asset has a quantity (e.g. 20 units), you can use this to sell a partial amount (e.g. 10 units)
(2)* Transaction types of asset retirement without impairment are:
- 210 Retirement with revenue (prior year acquisition)
- 260 Retirement of current-year acquisition with revenue
- 290 Retirement: Transaction type for proportional values
Transaction types of asset retirement with impairment are:
- Z21 Retirement with revenue GAIN (Revenue amount > net NBV)
- Z26 Retirement of current-year acquis. with revenue GAIN
- Z28 Retirement with revenue LOSS (Revenue amount < net NBV)
- Z29 Retirement of current-year acquis. with revenue LOSS
Once everything is filled out, go to Document and Simulate for SAP to add further necessary postings for this sale.
The next screen should contain the postings following postings:
- 001 - Debit - Customer Invoice
- 002 - Credit - Revenue Recognition
- 003 - Credit - Asset Costs Disposal from Balance Sheet
- 004 - Debit - Asset Depreciation Disposal from Balance Sheet
- 005 - Debit - Revenue to calculate Gain or Loss
- 006 - Gain or Loss with Asset Disposal
- Credit - if Gain with asset Disposal
- Debit - if Loss with asset Disposal
4.1.2 Asset Retirement by sale without Customer
When retiring an asset by sale with customer in WP2, it is important to monitor the asset values in all areas that might have amounts and accele.
Before performing any retirement it is required to monitor the net book value of the asset.
If the asset has a net book value higher than 250 K Eur, in order to confirm the P&L impact it is mandatory to get this retirement confirmed by the project manager or requester with copy to the ID Regional Manager in order he can follow the topic.So, to check the net book value, go to transaction AW01N and insert the asset number and the company code: