Group Assets: What is SAP Doing in S/4HANA?

Previous Blog:  Group Assets: What are They?

Migrating to S/4HANA

When SAP first released S/4HANA, group assets were still available exactly as they were in ECC.  There was no change in functionality, depreciation treatment, or reporting.  Same old same old.  This is true up to the current S/4HANA 2020 OP release.

However, SAP released a new OSS note just a few weeks ago with an update on their plan regarding this functionality; 3014869 S4TWL – Group Assets

The note says that group assets are now covered in the S/4HANA Compatibility Scope which means that it’s about to be deprecated. The Compatibility Matrix is like school detention… you don’t want your kid’s name (i.e., functionality) to show up on the Compatibility Matrix list.

In the Excel matrix in note 2269324 Compatibility Scope Matrix for SAP S/4HANA it is further mentioned that there is no alternative solution proposed or being developed.  See below:

Going back to note 3014869… it says that SAP is evaluating alternatives for group assets specifically in the Oil&Gas upstream segment.  What they’re referring to here is the Units-of-Production (UOP) depreciation method that is commonly implemented along with group assets. 

SAP is definitely working on something here and it will be, architecturally, different than a depreciation key.  One of the problems with the current UOP process is you can end up with thousands of depreciation keys… a 1:1 assignment between the key and the asset (an oil well) which pollutes the listing of depreciation keys.  Not good.  This new UOP object will be an improvement in that regard.  I’ll have more on this in another blog when it’s released.

What Should We Do?

The group asset / UOP functionality is only implemented in a very specific instance so this change in functionality won’t affect 95% of the SAP customer base.  Unless you’re using those items, there is no loss or change in your SAP solution.  You can upgrade and not have to worry about this change (though you should still be going over the simplification list with each release).

However, if you are in the ~5% slice of the customer base that uses this functionality, you’ll want to pay attention to it.  SAP is working to replace the UOP side and we will have plenty of information on this when it’s been tested and released.  That should be a relatively smooth transition and will hopefully allow customers to clean up their depreciation keys.  And in the meantime… if you need the functionality then you have to implement it.  There isn’t much choice here in my opinion.

As for the group asset functionality itself… well, this definitely had some weaknesses as it was meant to support composite depreciation.  There were issues around the A/D calculation during retirements that were particularly troublesome to explain.  I’m not sad to see it go.  And, hopefully people won’t be mis-implementing this in the future as I’ve seen in the past.