What is 'cutoff value' in SAP FI-AA - Asset Accounting?

cutoff value - Overview

• Component: FI-AA

• Component Name: Asset Accounting

• Description: The net value of a fixed asset, below which the SAP System does not continue to calculate depreciation. For particular types of valuation for example, net worth tax valuation in some countries it may be beneficial to have depreciation end when a given value is reached. The cutoff value can be entered as a specific amount, or a percentage of acquisition and production costs. The cutoff value can be used in one of the following ways: Deduction of the cutoff value from the base value for depreciation before depreciation calculation starts Definition of the cutoff value as a fixed value at which depreciation stops

cutoff value - Details

• 
  Key Concepts: 
  Cutoff value is a feature in SAP Asset Accounting (FI-AA) that allows users to set a limit on the amount of depreciation that can be posted for an asset. This limit is set in the asset master record and is used to prevent over-depreciation of an asset. 
  
  How to use it: 
  To set a cutoff value for an asset, go to the asset master record and select the “Cutoff Value” tab. Enter the desired cutoff value and save the record. The cutoff value will then be applied to all future depreciation postings for that asset. 
  
  Tips & Tricks: 
  It is important to note that the cutoff value will only apply to future depreciation postings and will not affect any existing postings. Additionally, it is important to ensure that the cutoff value is set correctly as it can have a significant impact on the financial statements of the company. 
  
  Related Information: 
  For more information on setting a cutoff value in SAP Asset Accounting, please refer to SAP Help documentation or contact your local SAP support team.