What is value-as-new insurance in SAP FI-AA - Asset Accounting?

SAP Term: value-as-new insurance

• Component: FI-AA

• Component Name: Asset Accounting

• Description: An insurance using the asset value as new as the base value. You can define an index series for determining the insurable value that takes price increases into account, and enter this index series in the asset master record.

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• Key Concepts: 
  Value-as-new insurance is a type of insurance that covers the cost of replacing an asset with a new one of the same type and quality. This type of insurance is typically used for assets that are expensive to replace, such as machinery or equipment. It is offered by many insurance companies and is available for both physical and intangible assets.
  
  How to use it: 
  In SAP Asset Accounting (FI-AA), value-as-new insurance can be used to protect assets from damage or destruction. The insurance can be set up in the system so that if an asset is damaged or destroyed, the cost of replacing it with a new one of the same type and quality will be covered by the insurance policy.
  
  Tips & Tricks: 
  When setting up value-as-new insurance in SAP Asset Accounting, it is important to make sure that the policy covers all of the assets that need to be protected. Additionally, it is important to review the policy regularly to ensure that it is still valid and up-to-date.
  
  Related Information: 
  Value-as-new insurance can also be used in other areas of SAP, such as Materials Management (MM) and Plant Maintenance (PM). Additionally, there are other types of insurance policies available for protecting assets, such as replacement cost insurance and depreciation coverage.