Asset Capitalization using SAP S/4HANA in Field Inventory Management (FIM)

Madhava Rao Kunchala

Abstract: In the realm of medical industries, effective asset management is paramount, especially concerning capitalized products earmarked for field use or consigned arrangements. This paper explores an innovative approach within SAP S/4HANA to address the complexities of managing such assets. The proposed framework advocates for the individual amortization of capitalized products allocated for field use, whether pooled or consigned to house accounts, while maintaining their presence on the medical industry inventory balance sheet at zero value. This strategy is designed to mitigate double counting, ensuring accurate asset tracking and financial reporting. By aligning with the capabilities of SAP S/4HANA, this approach enables seamless tracking of assets and facilitates the posting of depreciation expenses or monthly costs of goods sold (COGS), particularly in the context of flex rental contracts. Unlike previous methodologies, assets are managed individually, offering granular visibility and control over each quantity of eligible capitalized products This innovative amalgamation of inventory management and fixed asset accounting within SAP S/4HANA underscores its capacity to accommodate the distinctive needs of the medical industry. Ultimately, this approach empowers certain assets to exhibit the characteristics of inventory while adhering to the rigors of fixed asset accounting standards.

Keywords: SAP S/4HANA, Medical industries, Asset management, Amortization, Inventory visibility, Fixed asset accounting

How to Cite?: Madhava Rao Kunchala, "Asset Capitalization using SAP S/4HANA in Field Inventory Management (FIM)", Volume 13 Issue 5, May 2024, International Journal of Science and Research (IJSR), Pages: 1429-1432, https://www.ijsr.net/getabstract.php?paperid=SR24523123535, DOI: https://dx.doi.org/10.21275/SR24523123535