Question

You are configuring depreciation areas in Asset Accounting. Which of the following settings is NOT permitted?

a) Accumulated depreciation calculation
b) Depreciation key assignment
c) Asset retirement configuration
d) Negative useful life

Answer 1

In Asset Accounting, accumulated depreciation calculation, depreciation key assignment, and asset retirement configuration are permitted settings, but setting a negative useful life for an asset is not permitted since it contradicts accounting principles.

Step-by-step explanation:

When configuring depreciation areas in Asset Accounting, all settings such as accumulated depreciation calculation, depreciation key assignment, and asset retirement configuration are permissible and commonly used. However, the setting negative useful life is not permitted. In accounting principles, an asset must have a positive useful life as it represents the period over which the asset is expected to be economically useful. A negative value would not make sense in the calculation of depreciation and does not align with the Generally Accepted Accounting Principles (GAAP) or International Financial Reporting Standards (IFRS).