What is proportional value adjustment in SAP FI-AA - Asset Accounting?

SAP Term: proportional value adjustment

• Component: FI-AA

• Component Name: Asset Accounting

• Description: The value adjustments that are calculated for part of an asset, up to the time of its retirement. &EXAMPLE& Ordinary depreciation Revaluation Investment support

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• Key Concepts: 
  Proportional value adjustment is a feature in SAP FI-AA Asset Accounting that allows for the adjustment of asset values in proportion to the changes in the asset’s useful life. This feature is used to ensure that the asset’s book value is kept up to date with its current market value. 
  
  How to use it: 
  To use the proportional value adjustment feature, first enter the new useful life of the asset into the system. The system will then automatically adjust the asset’s book value in proportion to the new useful life. This adjustment will be reflected in the asset’s balance sheet and depreciation calculation. 
  
  Tips & Tricks: 
  It is important to remember that the proportional value adjustment feature only works if the new useful life of the asset is entered into the system. If this step is not completed, then the asset’s book value will not be adjusted and its balance sheet and depreciation calculation will be inaccurate. 
  
  Related Information: 
  For more information on proportional value adjustment, please refer to SAP Help documentation or contact your local SAP support team.