ASSET PROCESS ยท APPROVE
How is capital investment approved?
Investment requests connect business justification, expected cost, timing, ownership, and approval before an asset is purchased or built.
How SAP controls it
Investment programs, appropriation requests, budgets, availability control, workflows, and settlement rules govern authorization.
A plant requests a packaging machine and receives a controlled capital budget after financial review.
PRACTICAL DECISION
Separate the investment decision from the accounting result
An approved capital request authorizes spending within a defined purpose and limit. It does not, by itself, prove that every later cost qualifies for capitalization.
FOLLOW THE EVIDENCE
How to work through this capability
Name the decision
Record the business outcome, asset owner, expected life, estimated cost, timing, and alternatives. Separate the approval to spend from the later decision about which costs become asset value.
Give spend a home
Assign the request to the appropriate investment or project object, set the approved budget and tolerance, and identify who can approve changes when scope or price moves.
Follow commitments and actuals
Compare purchase commitments and posted costs with the approved amount. Investigate overruns before settlement rather than treating an available budget as evidence of accounting eligibility.
CHECK THE RESULT
What evidence should agree?
A useful review pack links the request, approval, budget version, responsible cost object, purchase commitments, actual postings, and change approvals. Finance should be able to explain both why the spend was authorized and how each cost will later be classified.
If a machine is approved at one amount but installation costs rise, revise the forecast and seek the required approval. Do not hide the overrun by changing an asset value or settling unrelated costs.