hi frds

The fixed assets are valued differently for different
purposes ( business , legal etc). SAP manages different
valuations by means of  Depreciation Areas. There are
various depreciation areas like book depreciation , tax
depreciation, depreciation for cost accounting purposes etc.

A depreciation area decides how and for what purpose an
asset is evaluated. the depreciation area can be 'real' or a
'derived one' . You may need to use several depreciation
areas for a single asset depending upon the valuation and
reporting requirements.

thanking you
venkat
venkatanarayana.k@rediffmail.com
+91-9871905974

Hi,
Creating a new depreciation area after the production start
can really only represent a compromise. 
Define a new depreciation area in Customizing for Asset
Accounting. The new depreciation area cannot be solely for
handling investment support. Define the new depreciation
area so that it adopts its depreciation terms and posting
values from other depreciation areas. 
Check the depreciation terms in the asset class for the new
depreciation area, and change them if necessary. If you do
not want to manage the new depreciation area in all asset
classes, set it to inactive in the asset classes in which it
is not needed. 
Specify in FI-AA Customizing for the individual transaction
types, whether posting should always take place in the new
deprecation area, or whether posting is optional. Modify
especially the definitions for transaction types that only
post to certain depreciation areas (such as the
cost-accounting area), in case these transaction types
should also take the new area into account.
If you also want to manage investment support measures in
the new depreciation area.
the Asset Accounting component enables you to manage values
for assets in parallel in up to 99 depreciation areas. 
A depreciation area is always assigned to only one chart of
depreciation.
the keys for the automatic depreciation of assets in each
chart of depreciation. They are based on elements for
calculation (calculation methods, period controls, and so
on) that are available client-wide.
SAP supplies typical reference charts of depreciation for
each country. They have different depreciation areas and
depreciation keys depending on that country’s specific
requirements. You cannot use these charts of depreciation
directly. You must create your own chart of depreciation by
copying the reference chart of depreciation. Delete any
depreciation areas that are not needed.

The Depreciation component makes it possible to manage the
following types of depreciation in the system:

Automatically calculated depreciation types (can also be
planned manually):
Ordinary depreciation 
Special depreciation
Depreciation types that are normally planned manually:
Unplanned depreciation 
Transfer of reserves/reduction of APC
Depreciation keys control the automatic calculation of
depreciation in the system. These depreciation keys can be
modified. In this way, you can define your own methods for
calculating asset values.

Thank You.

In simple terms, Dep Area can be defined as the following.


Dep area = Dep method + Dep rate

Dep method is nothing but the method of depreciation like
the SLM (straight line method)or WDV (writtend down value
method)

Dep rate is nothing but the percentage of depreciation
applied like 6% or 8%

so dep area is a combination of both