SAP FI Practice Exam 2025 – Complete Preparation Guide

The implementation of parallel accounting in asset accounting requires multiple depreciation areas. This is because parallel accounting allows an organization to maintain different accounting records for various standards or regulations, such as local GAAP and IFRS. By having multiple depreciation areas, each one can reflect the specific rules and methods required for each accounting standard, enabling the company to implement the necessary financial reporting standards effectively.

Using multiple depreciation areas ensures that the organization can calculate and report depreciation according to different rules, which means they can fulfill their accounting obligations in various jurisdictions or for different stakeholder requirements. Each depreciation area can be customized to utilize different depreciation methods and rates, accommodating the diverse financial reporting requirements of the organization. Consequently, this flexibility is critical for compliance and accurate financial management in diverse regulatory environments.