What is imputed interest in SAP FI-AA - Asset Accounting?

SAP Term: imputed interest

• Component: FI-AA

• Component Name: Asset Accounting

• Description: The interest, which represents the interest gain lost because of the capital tied up in assets. For cost-accounting purposes, it can make sense to calculate interest on the capital tied up in assets. In certain countries, it also required to calculate interest on the production costs of assets under construction.

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• Key Concepts: 
  Imputed interest is a concept used in SAP Asset Accounting (FI-AA) to calculate the interest that is due on an asset. It is calculated based on the purchase price of the asset, the expected useful life of the asset, and the current market rate of interest. The imputed interest is then added to the asset's book value, which is used to calculate depreciation. 
  
  How to use it: 
  In SAP Asset Accounting, imputed interest can be calculated by entering the purchase price of the asset, the expected useful life of the asset, and the current market rate of interest into the system. The system will then calculate the imputed interest and add it to the asset's book value. This book value is then used to calculate depreciation. 
  
  Tips & Tricks: 
  When calculating imputed interest in SAP Asset Accounting, it is important to ensure that all relevant information is entered accurately. This includes the purchase price of the asset, its expected useful life, and the current market rate of interest. It is also important to remember that imputed interest should be added to the asset's book value before calculating depreciation. 
  
  Related Information: 
  For more information on imputed interest in SAP Asset Accounting, please refer to SAP Help documentation or contact your local SAP support team. Additionally, there are many online resources available that provide detailed explanations and examples of how imputed interest works in SAP Asset Accounting.