1) ASSET ACQUISITION
The entry that gets generated on processing this transaction is as follows:
Dr Asset a/c
Cr Vendor a/c
The asset value dates are mentioned at the time of purchase. The asset value dates determine the date from which the depreciation would be calculated.
2) RETIREMENT/SALE OF AN ASSET
The entries that get generated are as below: (with notional figures)
- When asset is sold
Dr. Accumulated Depreciation A/c
Dr. Loss on Sale of Asset A/c (if applicable)
Dr. Clearing Account from Asset Sale
Cr. Asset (APC Value) A/c
Cr. Profit on Sale of Asset A/c (if applicable)
- When the asset sold is cleared against the customer invoice
Dr. Customer A/c
Cr. Clearing Account from Asset Sale
- At the time of payment,
Dr. Bank Incoming A/c
Cr. Customer A/c
3) WRITE-UP OF AN ASSET
The accounting entry that gets generated is:
Dr Accumulated depreciation a/c
Cr Depreciation
4) DEPRECIATION POSTING RUN
The entries that get generated are as below:
Dr Depreciation a/c
Cr Accumulated Depreciation a/c
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