SAP ERP Financials and FICO Handbook

6.5 AA 249
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Like AUC, Low Value Assets (LVA) is also a special class of
assets. Generally, you maintain this asset class for those assets
that need to depreciate in the same year. In the depreciation
area at the company code level, you set your maximum amount
for low value for assets acquisition and purchase orders.
Due to special accounting requirements, leased assets are also
considered special assets. During the lease period, the leased
asset is the property of the lessee or the manufacturer. From the
lease and accounting point of view, there are two kinds of lease:
(1) capital lease and (2) operating lease. With a capital lease,
the lesser will break the total lease cost into capital costs and
interest. The capital cost will be capitalized and depreciation will
be calculated. The interest component will be charged to the
P&L account as a financial cost of the financing activities. With
an operating lease, the lesser will charge the lease payment as a
periodic cost in the P&L account.
FIGURE 6.18 Leasing assets