What is obligation type in SAP FI-AF-ARO - Asset Retirement Obligation Management?

SAP Term: obligation type

• Component: FI-AF-ARO

• Component Name: Asset Retirement Obligation Management

• Description: A type of financial obligation for which provisions need to be made, for example, asset retirement obligations and warranty provisions.

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• Key Concepts: 
  Obligation type is a component of the FI-AF-ARO Asset Retirement Obligation Management module in SAP. It is used to define the characteristics of an obligation, such as the type of asset, the retirement date, and the retirement cost. The obligation type also determines how the retirement cost is calculated and how it is posted to the general ledger. 
  
  How to use it: 
  In order to use obligation type, you must first create an obligation type in SAP. This can be done by navigating to the FI-AF-ARO Asset Retirement Obligation Management module and selecting “Create Obligation Type”. Once you have created an obligation type, you can assign it to an asset or a group of assets. This will allow you to track the retirement cost for each asset or group of assets separately. 
  
  Tips & Tricks: 
  When creating an obligation type, it is important to consider how the retirement cost will be calculated and posted to the general ledger. This will ensure that all costs associated with the asset retirement are accurately tracked and accounted for. Additionally, it is important to review any existing obligation types before creating a new one, as this will help ensure that all costs are properly accounted for. 
  
  Related Information: 
  For more information on using obligation type in SAP, please refer to the SAP Help documentation or contact your local SAP support team. Additionally, there are many online resources available that provide detailed instructions on how to use this feature in SAP.