SAP - Asset Revaluation Process

Asset Revaluation Process in SAP

This below asset revaluation process based on below SAP note.

SAP Note 1427160 - Serbia: Base value for depreciation after revaluation
Note Language: English Version: 2 Validity: Valid Since 22.01.2010

Revaluation of Fixed Assets

Revaluation of fixed assets is the process of increasing or decreasing their carrying value in case of major changes in fair market value of the fixed asset. International Financial Reporting Standards (IFRS) require fixed assets to be initially recorded at cost but they allow two models for subsequent accounting for fixed assets, namely the cost model and the revaluation model.

Cost Model

In cost model the fixed assets are carried at their historical cost less accumulated depreciation and accumulated impairment losses. There is no upward adjustment to value due to changing circumstances.

Revaluation Model

In revaluation model an asset is initially recorded at cost but subsequently its carrying amount is increased to account for any appreciation in value. The difference between cost model and revaluation model is that revaluation model allows both downward and upward adjustment in value of an asset while cost model allows only downward adjustment due to impairment loss.

After revaluation depreciation calculation method change from cost model to Revaluation model.


Depreciation =  Revaluation Amount/Remaining useful life.

Some requirement
1) Once in a Year and at the Year End period
2) Old Asset transfer to new Asset. (LSMW for mass)
3) Depreciation will start at beginning of next month.
4) Unplanned depreciation need to charge (if required). 
Example - Capitalization period 15th Jan and Depreciation start date 1st Feb. So need to charge 15 days depreciation as unplanned depreciation to the asset.