What is retirement in SAP (FI-LC - Consolidation)?

SAP Term: retirement

• Component: FI-LC

• Component Name: Consolidation

• Description: A transaction in which a consolidation unit sells all or part of its investment in another consolidation unit to an investor outside the consolidation group. If the investment is sold to another unit within the same group, this is referred to as a transfer. It is therefore possible that an investment transfer within a hierarchy of consolidation groups could be considered a divestiture from the perspective of a single consolidation group.

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• Key Concepts: 
  Retirement in SAP FI-LC Consolidation is the process of removing an asset from the company’s balance sheet. This is done when the asset is no longer used or has reached the end of its useful life. The retirement process involves recording the asset’s value at the time of retirement, and then recording any gain or loss associated with the retirement. 
  
  How to use it: 
  In SAP FI-LC Consolidation, retirement is done by entering a retirement transaction in the system. This transaction will record the asset’s value at the time of retirement, and any gain or loss associated with it. The retirement transaction will also update the company’s balance sheet to reflect the change in asset value. 
  
  Tips & Tricks: 
  When entering a retirement transaction in SAP FI-LC Consolidation, it is important to ensure that all relevant information is included in the transaction. This includes the asset’s value at the time of retirement, any gain or loss associated with it, and any other relevant information such as depreciation or amortization. 
  
  Related Information: 
  Retirement in SAP FI-LC Consolidation is closely related to depreciation and amortization. Depreciation is a method of allocating an asset’s cost over its useful life, while amortization is a method of allocating an asset’s cost over its useful life and any associated interest costs. Both depreciation and amortization are important considerations when entering a retirement transaction in SAP FI-LC Consolidation.