FI / FICOadvanced

FICO Asset Accounting Part 5: Acquisitions, Transfers and Retirements with MM, AP and CO

Key takeaway

Post asset transactions correctly: acquisition via purchase order (account assignment A), direct supplier invoice or assets under construction with settlement; intra- and intercompany transfers; retirements with revenue or scrapping; and how CO and GL receive the postings.

Explanation

📌 KEY POINTS
✅ Acquisition via MM: PO item with account assignment A capitalizes at GR (valuated) or invoice (non-valuated).
✅ Direct acquisition with supplier: F-90 (or equivalent app) posts asset and payable together.
✅ Assets under construction (AuC) collect costs and are settled to final assets (AIAB/AIBU).
✅ Transfers (ABUMN) move values between assets; retirements post revenue, gain/loss (F-92/ABAON) or scrapping (ABAVN).
⚠️ Retiring an asset without its accumulated depreciation computed up to the retirement date gives wrong gain/loss.

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▶ WHERE WE ARE
Part 4 covered architecture. Now transactions.

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▶ 1. ACQUISITION VIA MM

PO account assignment A; GR/IR at GR or invoice.

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▶ 2. ACQUISITION VIA FI

F-90 with supplier; or clearing account.\n\n━━━━━━━━━━━━━━━━━━━━\n▶ 3. AuC\n• Collect costs (often from projects/orders); settle when complete.

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▶ 4. TRANSFERS

Intra-company (ABUMN), intercompany (specific transactions).

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▶ 5. RETIREMENTS

Sale with revenue; scrapping; pro-rata depreciation up to retirement.

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▶ STEP BY STEP

Acquire via PO with account assignment A.
Settle an AuC to a final asset.
Retire an asset with revenue.

✅ CHECKPOINT: gain/loss equals revenue minus net book value at retirement.

Code example

ABAP Code

===== POSTINGS =====Acquisition via F-90: Dr APC 50,000 | Cr Supplier 50,000AuC settlement AIBU: Cr AuC 200,000 | Dr APC buildings 200,000Sale ABAON/F-92: NBV 20,000, revenue 25,000 → Dr Customer/clearing 25,000 | Dr Acc. depr. | Cr APC | Cr Gain 5,000 ===== TRANSACTIONS =====ABUMN transfer | ABAVN scrapping | AW01N check values

Real project scenario

During a plant expansion, capital costs stayed on AuC for months because settlement rules were missing. Once final assets were created and settlement rules maintained, depreciation started correctly and the balance sheet reflected completed assets.

Common mistakes

AuC not settled.
Wrong account assignment.
Retirement without simulation.
Transfers via manual GL.
Missing revenue link.

Best practices

Settle AuC promptly.
Use account assignment A correctly.
Simulate retirements.
Use transfer transactions.
Document intercompany transfers.

Interview angle

Questions: "How is an asset acquired via MM?", "What is AuC?", "How is gain/loss on sale calculated?"
Strong answer: MM/FI acquisition, AuC settlement, transfers, retirements and gain/loss logic.

Practice this lesson

Quick check

1. When an asset is sold to an external customer and revenue must be recognized alongside the reduction of the asset's value, which category of transaction type should be used?

2. Capital costs stay on an asset under construction for months after completion. What is missing?

3. How are accumulated costs typically transferred from an Asset Under Construction (AUC) to a completed fixed asset once construction is finished?

Interview questions

1. Suppose you inherit an existing Asset Accounting solution. How would you review it before making a change?

Answer it in your own words first, then compare.

2. A plant expansion project spends heavily on capital items. How do you handle acquisitions, AuC and later disposals?