What is capitalization structure in SAP IM - Investment Management?

SAP Term: capitalization structure

• Component: IM

• Component Name: Investment Management

• Description: An object in which you specify the percentage rates for the portions of costs that are not to be capitalized. You can specify these percentage rates per cost element group and activity type group. You define the capitalization structure for each company code. It is identified by means of a capitalization key. You enter the capitalization key in the master data of the capital investment measure. If necessary, you can define different versions of the capitalization structure for the individual depreciation areas of an asset under construction belonging to a capital investment measure.

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• Key Concepts: 
  Capitalization structure in SAP Investment Management (IM) is a way of organizing and managing capital investments. It is used to track and manage the costs associated with capital investments, such as the purchase of assets, the construction of buildings, and the acquisition of land. The capitalization structure also helps to identify and analyze the return on investment (ROI) of each investment. 
  
  How to use it: 
  The capitalization structure in SAP IM is used to track and manage the costs associated with capital investments. It can be used to identify and analyze the ROI of each investment, as well as to compare different investments. The capitalization structure can also be used to create reports that provide insight into the performance of investments over time. 
  
  Tips & Tricks: 
  When setting up a capitalization structure in SAP IM, it is important to ensure that all costs associated with an investment are accurately tracked and accounted for. This includes both direct and indirect costs, such as taxes, insurance, and maintenance costs. Additionally, it is important to ensure that all investments are properly categorized according to their purpose and risk level. 
  
  Related Information: 
  The capitalization structure in SAP IM is closely related to other financial management tools, such as budgeting and forecasting. Additionally, it can be used in conjunction with other SAP modules, such as Materials Management (MM) and Plant Maintenance (PM), to provide a comprehensive view of an organization’s investments.