What is SAP Inflation Accounting on Fixed Assets?

The method offer by SAP by execute SAP Inflation Accounting or Revaluation of Fixed assets consist in the calculation of the Fixed Asset trough INPC index or any other index defined.

This solution is developed to countries with a high inflation index where is necessary adjusting the Inflation over fixed assets periodically as a part of the close activities.

It can be used the INPC index disclosed or any other index depending of the enterprise necessities , it means apply the values in points or percentages, these can be applied in the same way over all fixed assets.

SAP Inflation Accounting on Fixed Assets

Update Inflation Indexes 

The system includes inflation indexes like model to different version of country.

These indexes can be used, but in this case is necessary modified inflation indexes. This model can be used like a basis to create the new ones.

asset accounting

In the end this procedure consists in update month by month, before execute the process of the revaluation.

This index can be provisional or definitive but always must to be store; in the other hand the system doesn’t carry out any calculation.

Is possible to update provisional or definitive value by an index. The update of the provisional values could be optional; it depends of the inflation Accounting requisites. In Mexico the index used is INPC (“Indice Nacional de precios al Consumo”). The value for the present month is know at the beginning of the next month, sometimes could be necessary to carry out the revaluation with an estimate index for later do the process with a definitive index.

When an index is created by first time is necessary to indicate the index value of first date and the last one. The system needs this information in order to do the calculation for the net inflation.

For instance if is created a new monthly index at the beginning of 20×2, you must to entry the corresponding values since 20×2 January 31 until 20×1 December 31.

Also See: How to do Month end Provision Entries in SAP? 

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