SAP Financial Accounting (SAP FI) Practice Exam

In which phase of the depreciation process is the depreciation expense recorded?

1. During the initialization phase

2. When running fiscal year change

3. During the ordinary depreciation run

4. After the asset is sold

The correct answer is: During the ordinary depreciation run

The depreciation expense is recorded during the ordinary depreciation run. This phase is specifically designed for calculating and posting depreciation for fixed assets over a defined period. When the ordinary depreciation run is executed, it generates the necessary journal entries that reflect the depreciation amounts in the financial statements, ensuring that expenses are recognized in the relevant accounting period. This process aligns with the matching principle in accounting, which states that expenses should be matched with the revenues they help to generate within the same timeframe. Therefore, the ordinary depreciation run is a critical process in the SAP FI module, ensuring accurate financial reporting and compliance with accounting standards. The other phases mentioned, such as the initialization phase or running the fiscal year change, do not involve the actual recording of depreciation expenses. The initialization phase is focused on setting up the depreciation parameters, while the fiscal year change is related to transitioning from one fiscal year to another. Additionally, recording depreciation after the asset is sold is not typical, as depreciation is meant to allocate the asset's cost over its useful life, not in response to its sale.