What is capitalization key in SAP IM - Investment Management?

SAP Term: capitalization key

• Component: IM

• Component Name: Investment Management

• Description: A structure that enables you to capitalize debits on an investment measure using different percentage rates for each depreciation area. The SAP System treats costs that do not require capitalization in a specific depreciation area as nonoperating expense. You define the capitalization key at the company code level, and enter it in the master data of an asset under construction.

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• Key Concepts: 
  A capitalization key is a feature of SAP Investment Management (IM) that allows users to define the capitalization of an asset. Capitalization is the process of recording the cost of an asset in the company’s books. The capitalization key determines how the cost of an asset is spread out over its useful life. 
  
  How to use it: 
  The capitalization key is used to define the capitalization rules for an asset. It can be used to determine how much of the cost of an asset should be recorded in each accounting period. The capitalization key also determines how depreciation is calculated for the asset. 
  
  Tips & Tricks: 
  When setting up a capitalization key, it is important to consider the useful life of the asset and how much of its cost should be recorded in each accounting period. It is also important to consider how depreciation will be calculated for the asset. 
  
  Related Information: 
  The capitalization key is part of SAP Investment Management (IM). It is related to other features such as depreciation keys, which are used to define how depreciation should be calculated for an asset.