What is 'reserve for special depreciation' in SAP FI-AA - Asset Accounting?

reserve for special depreciation - Overview

• Component: FI-AA

• Component Name: Asset Accounting

• Description: An item on the liabilities side of the balance sheet containing value adjustments to fixed assets. Typically, these adjustments result when the maximum permitted tax depreciation exceeds the permitted book depreciation. In this case, the amount of tax depreciation exceeding book depreciation can be shown in the balance sheet as a liability special items with reserve.

reserve for special depreciation - Details

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  Key Concepts: 
  Reserve for special depreciation is a feature of SAP Asset Accounting (FI-AA) that allows companies to set aside a portion of their depreciation expenses for special purposes. This reserve can be used to cover the cost of repairs, replacements, or other expenses related to the asset. The reserve is calculated as a percentage of the total depreciation expense for the asset.
  
  How to use it: 
  In order to use the reserve for special depreciation feature, companies must first set up a special depreciation account in their SAP system. This account will be used to track the amount of money that is set aside in the reserve. Once the account is set up, companies can then enter the percentage of depreciation expense that they want to set aside in the reserve. The system will automatically calculate the amount of money that should be set aside and will update the account accordingly.
  
  Tips & Tricks: 
  It is important to remember that the reserve for special depreciation is not an expense and should not be treated as such. The money in this reserve should only be used for its intended purpose and should not be used for any other purpose. Additionally, it is important to keep track of how much money has been set aside in this reserve so that it can be used appropriately when needed.
  
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