SAP Financial Accounting (SAP FI) Practice Exam

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What is required in addition to the depreciation key to begin asset depreciation?

Investment portfolio
Financial reporting framework
Start date and useful life
Annual budgeting report

The correct answer is: Start date and useful life

To begin asset depreciation, it's essential to define both the start date and the useful life of the asset in addition to the depreciation key. The start date indicates when the depreciation process should commence, which is typically aligned with the asset's acquisition date. Useful life, on the other hand, represents the period over which the asset is expected to be used, affecting how the depreciation expense is calculated over the asset's lifespan. This combination of information is crucial, as it directly influences the timing and amount of depreciation that will be recorded in the financial statements. Without establishing these details, the system cannot accurately calculate the asset's depreciation, rendering the depreciation key alone insufficient. The other options relate to broader financial management concepts. An investment portfolio pertains more to managing a collection of investments, a financial reporting framework details the overall structure for financial reporting, and an annual budgeting report is focused on planning for financial resources in the upcoming fiscal period. While these elements are important in a financial context, they do not directly impact the initiation of asset depreciation as the start date and useful life do.