What is depreciation of tangible fixed assets in SAP FI-LC - Consolidation?

SAP Term: depreciation of tangible fixed assets

• Component: FI-LC

• Component Name: Consolidation

• Description: The process of reducing the value of a tangible asset by spreading its acquisition or production costs over the useful depreciable life of the asset. This reduction in the value can also be achieved by making a value adjustment as of the balance sheet key date. Depreciation is relevant in because of the effect it has on the calculation and posting of eliminated hidden reserves goodwill.

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• Key Concepts: 
  Depreciation of tangible fixed assets is a process used to spread the cost of an asset over its useful life. This process is used to account for the decrease in value of an asset due to wear and tear, obsolescence, or other factors. In SAP FI-LC Consolidation, depreciation of tangible fixed assets is used to calculate the net book value of an asset. 
  
  How to use it: 
  In SAP FI-LC Consolidation, depreciation of tangible fixed assets is calculated by entering the asset’s purchase price, estimated useful life, and estimated salvage value into the system. The system will then calculate the depreciation amount for each period and update the asset’s net book value accordingly. 
  
  Tips & Tricks: 
  When calculating depreciation of tangible fixed assets in SAP FI-LC Consolidation, it is important to ensure that the estimated useful life and salvage value are accurate. This will ensure that the depreciation amount is accurate and that the asset’s net book value is correctly calculated. 
  
  Related Information: 
  For more information on depreciation of tangible fixed assets in SAP FI-LC Consolidation, please refer to the SAP Help documentation.