Assets under construction (AUC) are a special form of tangible assets. They are usually displayed as a separate balance sheet item and therefore require a separate account determination and their own asset classes. During the construction phase of an asset, all actual postings are assigned to the AUC. Once the asset is completed, a transfer is made to the final fixed asset.
In SAP Plant Maintenance, we can create a project order or investment order to capture the costs of the asset under construction. During the period and month-end processing will settle the costs from the project order/investment order to the asset under construction. This is done so that budget information can be entered for the AUC and tracking of the actual-to-budget can be performed. Once the project is completed, the final asset is created in the appropriate asset class, and the project order is set to technical completion(TECO) so that the next settlement will transfer the AUC asset value to the completed asset.
So, with the work order cycle in Plant Maintenance in mind, we can define a process wherein we can create a project order with asset under construction, then we can create a budget for the new asset; release the project order;post the invoice(s) and materials to project order;monitor project order execution;If the Project is already done, we technically complete the project order;come month end, we will settle all charges to the asset and then we can close the project order.