Planning Investment Projects and Depreciations with Integrated Financial Planning for SAP Analytics Cloud

[hartmut_koerner]

Introduction

Integrated Financial Planning is a comprehensive content package for SAP Analytics Cloud that covers planning of operating expenses, of product costs, of sales and profitability, of CAPEX, and of financial statement. With the CAPEX module, capital expenses are planned on an aggregated level, not on single investment projects. Therefore, depreciations only can be taken into account on a global level but not forecasted from the single investment projects.

In this blog post I want to show how this content package can be extended with an investment project planning and a depreciation forecast. The proposed solution does not reinvent the wheel but simply puts existing puzzle pieces together by combining the Integrated Financial Planning content with the existing depreciation forecast in S/4HANA and the transfer programs that bridge between the new SAC based and the classical planning.

Architecture and Solution Idea

1. Create investment projects in SAP S/4HANA


2. Plan expenses for the investment projects in SAP Analytics Cloud


3. Write back WBS plan data to SAP S/4HANA via ACDOCP into the classical planning table (COSP_BAK)


4. Run depreciation forecast on those plan data and include the already capitalized assets. Result is posted into the classic cost center planning (table COSP_BAK)


5. Import resulting depreciations on cost centers via ACDOCP into SAC and combine them with the other cost center expense planning

Solution in Detail

Step 1: Define an investment project and its WBS elements in SAP S/4HANA

• In the project builder in SAP S/4HANA (transaction CJ20N) define an investment project and assign an investment profile. The investment profile determines other relevant parameters like asset class and the depreciation settings.


• Create WBS elements and maintain their depreciation simulation data: Capitalization date, useful life, depreciation key and assigned cost center


• The depreciation parameters can be maintained under Edit -> WBS element -> Investments programs -> Depreciation simulation data:

Step 2: Plan investment costs on WBS element in SAP Analytics Cloud

You can use the story Project Expense Planning (SAP_FI_IFP_IM_OPEX_ProjExpenses) for this purpose. In this example, I plan costs of overall 120.000 EUR for a project:

 

Step 3: Transfer WBS plan to ACDOCP and classical planning

• Export the WBS plan data to SAP S/4HANA into table ACDOCP. Please look at the documentation how to configure this write-back


• Run transfer program R_FINS_PLAN_TRANS_CO_S4H_2_ERP to move the WBS plan data from table ACDOCP to the classical planning. For details see here and also the program documentation


• You can check the result in transaction CJR2 (Cost element planning for WBS elements😞

Step 4: Run Depreciation Forecast

Run depreciation forecast (Transaction AR13, Program RAKOPL02). The depreciation forecast can include both capitalized assets and planned capital investments. It is important to include both because otherwise a part of the planned depreciations will be missing.

• Check Select assets and filter on the respective capitalized assets (not used in the example here)


• In section Planned capital investments check Select WBS Elements and filter on the respective projects or WBS elements


• In section Settings choose your depreciation area


• In section Planning periods set the year that you want to do the forecast for


• In section Further settings for planning set the plan version and check Activity-type independent planning and Planning on cost centers

You can check the result in the planning report (transaction KSBL) or in the cost center planning itself (transaction KP06):

In the screenshot in step 1 we see that the total amount of 120.000 EUR is depreciated linearly over 10 years (i.e. 1.000 EUR in each period) starting from May 2023 and the depreciation is assigned to cost center LN02_CTR_1. The depreciation account (here: 481000) is determined in the customizing via the account determination of the asset class and the account assignment to the depreciation area.

Step 5: Transfer Depreciations on Cost Centers to ACDOCP and SAC

• Run transfer program R_FINS_PLAN_TRANS_CO_ERP_2_S4H to move the depreciations on the cost centers to table ACDOCP. For details see here and also the program documentation


• Import the cost center plan data from ACDOCP into SAP Analytics Cloud. Please look at the documentation how to configure this import


• You can check the result in the story Cost Center Expense Planning (SAP_FI_IFP_IM_OPEX_CCtrExpenses):

Conclusion

Depreciation forecast is an essential functionality for an integrated financial planning solution. Only with the right depreciation values on the production cost centers, the activity cost rates can be calculated properly. This blog post shows how the existing depreciation forecast functionality in SAP S/4HANA can be combined with the Integrated Financial Planning for SAP S/4HANA content in SAP Analytics Cloud to reach this goal.

For additional information, please see the following references:

Integrated Financial Planning - An Overview

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