UPA & Asset Accounting in S/4HANA (Part 5): Group Assets and UOP Depreciation

Blog Series:
Group Assets: What are They?
Group Assets: What is SAP Doing in S/4HANA?

I posted a blog on group assets awhile ago (links above) because they are not widely known about or understood amongst SAP customers.  As I said then, they’re not the same thing as the other ‘groups’ within the SAP Finance area the way that a profit center group or cost element group are.  They’re a specific type of master data record that has specific depreciation functionality.  This is often used within the Oil&Gas and Utilities industries and are definitely a core part of a successful implementation of SAP Fixed Assets for those companies. 

What’s Changed with Group Assets?

To review, SAP had previously announced that the group asset functionality was under review as it continues it’s re-development efforts within S/4HANA.  From a development or solution perspective, SAP used to focus on delivering small non-disruptive solutions that were quick to implement and rollout.  That’s where the enhancement package framework came from.  But not anymore.  SAP isn’t shy about disruption because the customer base has specifically asked for it.  Or, at a minimum, they’ve said that they’re fine with it so long as SAP delivers legitimate innovation and business transformation capability.  That’s where the new UPA and Intelligent Asset Accounting (IAA) solution comes in. 

Once UPA is active, the group asset functionality is no longer accessible.  You get the message below when you try and execute something like transaction [AS21].

How Important Is This?

For starters, there were some limitations around group assets that made them troublesome to deal with.  Of all the items in fixed assets that were both difficult and tedious to work with, having to troubleshoot and justify a depreciation figure in a complex group asset scenario (usually involving a retirement) was the most dreaded for me.  So, personally I’m not sad to see it go.

However, if you work in this area and have a lot of Unit of Production (UOP) depreciation requirements/scenarios and frequently used group assets, SAP has a new solution for that as well in IAA. 

The group asset master record is now obsolete and can’t be implemented anymore.  The configuration for it isn’t in the IMG and as shown above, the transaction codes don’t work.  Since SAP has moved to an entirely new asset master record, the group asset indicator (XANGLR) doesn’t exist anymore either.

What’s the Replacement to Group Assets?

Simply put, there is none.  At least not directly.  

But is there a way to associate different asset records together so that they can be easily reported on as a single ‘group’?  Yes.  You can use the Asset Super Number or a user field of your own choosing to tag multiple assets as belonging to the same group (drill well, depletable unit, PIS vintage, etc.).  You could even use a combination of those fields to create your own flat hierarchy if you wanted to.

What about the UOP Part?

Consistent with most everything else in UPA Asset Accounting, SAP has rolled out an entirely new solution to handle UOP depreciation.

First, if you haven’t handled UOP depreciation before, it required a specific type of depreciation key.  This key was assigned to the group asset at the depletable unit level which was frequently the drill well.  The key had to use a base method using one of two depreciation methods ‘T’ or ‘S’.

Then the volumes were entered against the key.  This had to be done monthly but was frequently automated using an upload program.

The main issue with this is that most upstream Oil&Gas companies had thousands of wells which required thousands of depreciation keys.  This really wasn’t a great design but the only way to accomplish this requirement.  In my opinion, there should just be a single depreciation key ‘UOP’ and then a separate object where the production volumes would be maintained.

Usage Object

SAP finally has fixed this by introducing a new item called the Usage Object.  It has nothing to do with the depreciation key so we have some separation now between the two.  It also can be assigned to multiple assets which might be useful for other unit based depreciation requirements where a pool of assets all depreciate uniformly.

Let’s walk through the process. 

There is now a dedicated app to maintain the volumes.  It is not in the standard Fixed Assets area so you’ll have to add it or search for it.

Below is a completed usage object.  Note the following:

• It has an activation status.
• It’s company code dependent.
• The total units and period units are now maintained in separate panels (tables).
• The total units needs an entry that has a Valid To entry out to 12/31/9999.
• Not shown is another section further below where you can see the assigned fixed assets and change documents.

A UOP based depreciation key is still required.  But when you assign it, you’ll get a hard error if a usage object is not assigned.

In the detail area of the asset valuation, the usage object is assigned.

After saving and posting to the asset ($1M), the asset valuation is shown below.  You can see the planned ordinary depreciation is calculated at 11,261.

The depreciation schedule is shown below.  I’ve only entered volumes for a single period (scroll up to see it) so only P1 has a calculated amount.

I think this is a better design than what we had before.  As I alluded to, the depreciation key list will be a lot cleaner and there are some more options about how these usage objects might be setup.  For an O&G customer, it’ll probably still be at the well/asset level but I can forsee some other options regarding customers in the utilities area.