Basic Concepts of Asset Reporting

The drawing up of a balance sheet is the presentation of the values of assets and liabilities. Fixed assets are part of and generally the major part of the assets of a company. Within accounting, asset accounting is responsible for creating this asset presentation, if necessary according to multiple accounting regulations. The SAP Asset Accounting solution (FI-AA) is a tool that enables you to do this.

Anyone who has tried to sell a car knows this problem: what is the current monetary value of the car? There is hardly any question that is more difficult to answer, particularly when the car in question is your own. Every owner thinks it is worth a lot; every interested party thinks it is worth less. The task of accounting is to report the assets and liabilities of a company at a specific date in a monetary value. This monetary value must be determined for each object individually and documented in a book. The book is called the inventory, and the monetary value, because it is recorded in a book, the book value.

This theoretical valuation for thousands of objects on a key date can only be performed in accordance with a standard set of rules — a set of rules that stipulates how the individual objects are to be valued. The term „accounting regulation“ is used here. As there are numerous such accounting regulations, the values of the individual objects and, in end effect, the assets of a company, are different depending on the regulation applied. Accounting can be performed based on the principles of US GAAP, IFRS, or other local legislation.