What is scrap value in SAP FI-AA - Asset Accounting?

SAP Term: scrap value

• Component: FI-AA

• Component Name: Asset Accounting

• Description: A part of an asset's value that is not depreciated. You can use one of these methods for scrap value memo value: Deduct the scrap value from the base depreciation value before the start of depreciation calculation. Define the scrap value as a fixed value at which depreciation is stopped cutoff value. You define the scrap value either as a set amount or as a percentage of APC acquisition and production costs.

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• Key Concepts: 
  Scrap value is a term used in SAP Asset Accounting (FI-AA) to refer to the estimated residual value of an asset at the end of its useful life. It is the amount that an asset can be sold for after it has been fully depreciated. 
  
  How to use it: 
  In SAP Asset Accounting, scrap value is used to calculate the depreciation of an asset over its useful life. The scrap value is subtracted from the original cost of the asset and the remaining amount is then divided by the number of years in the asset's useful life. This calculation results in the annual depreciation amount for the asset. 
  
  Tips & Tricks: 
  When setting up an asset in SAP Asset Accounting, it is important to set a realistic scrap value for the asset. If the scrap value is too low, then the annual depreciation amount will be too high and vice versa. 
  
  Related Information: 
  The scrap value of an asset can be changed at any time during its useful life. This can be done by going to transaction code ABAA and selecting “Change Scrap Value” from the menu.