What is ordinary depreciation in SAP FI-AA - Asset Accounting?

SAP Term: ordinary depreciation

• Component: FI-AA

• Component Name: Asset Accounting

• Description: The planned distribution of the acquisition costs of an asset over the course of its useful life using a depreciation method. Ordinary depreciation depicts the value reduction caused by the wear and tear on the asset during normal use. Therefore, the calculation of depreciation should be based on the normal expected useful life.

Smart SAP Assistant

• Key Concepts: 
  Ordinary depreciation is a method of asset depreciation used in SAP FI-AA Asset Accounting. It is the most commonly used method of depreciation and is based on the straight-line method, which calculates the same amount of depreciation for each accounting period. This method is used when the asset's value decreases at a constant rate over its useful life. 
  
  How to use it: 
  In SAP FI-AA Asset Accounting, ordinary depreciation can be set up by entering the asset's acquisition value, useful life, and salvage value into the system. The system will then calculate the amount of depreciation for each accounting period. This amount can be adjusted if necessary. 
  
  Tips & Tricks: 
  When setting up ordinary depreciation in SAP FI-AA Asset Accounting, it is important to ensure that the useful life and salvage value are accurate. This will ensure that the system calculates the correct amount of depreciation for each accounting period. 
  
  Related Information: 
  Ordinary depreciation is just one of several methods of asset depreciation available in SAP FI-AA Asset Accounting. Other methods include accelerated depreciation, declining balance depreciation, and sum-of-the-years digits depreciation.