Depreciation Areas

The depreciation areas are identified in the system by a two-character numeric key.
They contain depreciation terms that you can enter in the asset master record or in the asset classes.
Depreciation area 01 is the major depreciation area. Values and depreciations are posted to the general ledger.
You have to specify which depreciation types and special valuations (such as interest) are allowed in your depreciation areas. The standard depreciation areas already have the necessary settings.

Typical entries in Asset Accounting

On AcquisitionDebit Asset
Credit Vendor

Depreciation postingDebit Depreciation (P&L)
Credit Accumulated Depreciation (B/S)

On ScrappingDebit Loss on scrapping (P&L)
Debit Accumulated Depreciation (B/S)
Credit Asset