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Introduction Integration Overview Basics Asset Flex Fields and Identifiers Asset Inquiry Asset Process Flow Important Setups Asset Types Mass / Asset Additions Reclassification Financial / Depreciation Information Changes Asset Transfers Revaluation Physical Inventory
Maintenance Retirement Unplanned Depreciation Mass Transactions Journals Tax Books Budget Books Data Purge
Fixed assets, constitute the durable capital base of an enterprise, traditionally the “property, plant and equipment” necessary to deliver products and services expanded to include investments in non-tangible assets like software, Trade Marks and Brands, Good Will etc.
Asset management encompasses asset location, assignment, controlling to asset maintenance: Administration There are basically two types of Asset Books: Corporate Books: Where are all assets are created or captured, accounted, depreciated and retired as per the GAAP rules. Tax Books: Tax books use the asset data of the Corporate book but account, depreciate and retire as per the tax rules.
Integration – Oracle Assets
Note: Only main integration points depicted in the diagram.
Three Types of Asset Books feasible: Corporate Book Tax Book Budget Book Assets can be directly added only to „Corporate‟ Book but can be copied to „Tax‟ Book. There are two ways of creating an Asset: Manual Mass Additions . nothing like „Opening‟ of periods At any point in time. Unlike other sub ledger modules. Entries from FA support only „Functional Currency‟. though entries are permitted to be entered in future periods.Basics Fixed Assets does not consider „Multi Org‟ features. only ONE period can be opened. Budget Book operates on „Categories‟ / „Expense Accounts‟ a combination of which can be entered.
Asset Flexfields There are three Asset Flexfields that drive Fixed Assets. Asset Key Flexfield: This supplements the asset number with descriptive information that can used to meet the company‟s needs.financial identifiers (Co. A/c No. Category Flexfield: An asset‟s category determines its financial treatment in Oracle Assets. The depreciation is derived as under: An Asset in Mass Additions must be assigned to an Asset Category Asset life and Depreciation method used to compute the which dictates the Depreciation per period . Dept. etc). Asset Key Flexfield groups assets by non.
Asset Flexfields Depreciation computations depend on such factors as the type of depreciation. county and city in which an asset is located. Its segments usually comprises Country. State/ Province/ Department/ Land. The full lifetime depreciation treatment of an asset can be established by the cost of the item and the Asset Category assigned to it as it enters the system. . depreciation life and the depreciation method. Location Flexfield: It is used for recording the physical location of asset.
Provides an additional asset identifier. usually assigned by the manufacturer. Links asset records with depreciation and other transactions. Internal Provides bar code tracking of assets. may be imported. Same as Asset ID if generated. Generated Purpose Identifies the asset in FA forms and reports. Source User-assigned or generated. User-assigned. Asset ID No Serial Number Yes External User-Assigned . bar codes. forms and Reports. usually imported.Asset Identifiers Tagging with Asset Identifiers: There are four unique identifiers with each asset as enlisted below: Identifier Asset Number Optional? No Use External. Tag Number Yes External.
„Financial Information‟ „Transaction History‟. If „Multiple Reporting Currencies‟ (MRC) is applicable. . depreciation in each of the book to which the asset has been assigned and also the complete listing of transactions + its details. „Transaction History‟ reflects every transaction and its accounting details. then the other currency information can also be seen. „Financial Information‟ – shows complete cost. Search in this window must be for a given book (only „Corporate‟ and „Tax‟) and either of „Reference No‟ or „Asset Numbers‟.Asset Inquiry Two options are available with in Oracle Assets for an Asset Inquiry.
Asset Process Flow – PO / AP / FA Enter Purchase Order Create Invoices in AP Transfer AP accounting lines to GL Transfer Asset lines from AP to FA Create Assets in FA Manage Assets Run Depreciation and Close Transfer Accounting lines from FA to GL .
FA Set Up SETUP FLOWCHART: .
Accounting Rules. Natural Accounts and Journal Categories Used for defaulting flexfields and asset numbering for an org. Where the account codes. Location. from-to date and Prorate Date. prorate convention are attached to the asset category For defining global level parameters for each corporate book – Calendar. rate. Defined as Independent and dependent segments (ex Country. Building). State. Used for defaulting AP and HRMS parameters .FA Set Up – (Contd…) The various steps required for setting up FA are as under: Set up Step Set of Books Asset Key Flexfield Asset Category Flexfield Location Flexfield Quick Codes Fiscal Year Calendars Prorate / Retirement Convention Depreciation Methods Asset Categories Book Controls System Controls Financial System Options Description Defining the set of books to be used for the org (defined in GL). Defined as Independent and dependent segments (ex Major and Minor category). Default codes used in various forms For defining the Fiscal year of an org used for financial reporting For defining Fiscal Calendar and Prorate Calendar To define Prorate/Retirement convention with DPIS. depreciation method. For grouping assets to be used in reports for analysis etc. Used for defaulting in Asset Categories.
FA Set Up – Fiscal Year Enter a Fiscal Year Name and Description. One can set up multiple fiscal years with different names. . Specify the start and end dates of each fiscal year for a fiscal year name. Create fiscal years from the oldest date placed in service through at least one fiscal year beyond the current fiscal year. Enter the Fiscal Year one is defining. Depreciation will fail if the current fiscal year is the last fiscal year. Enter the start and end date of each fiscal year.
. Enter the Period Name. One calendar can be used for multiple depreciation books. no of Periods per Year and the Period Suffix. Enter the start and end dates of this period. The depreciation program uses the depreciation calendar and divide depreciation flag to determine what fraction of the annual depreciation expense to take each period. Description. Make the period names identical to the periods set up in GL.FA Set Up – Fiscal / Prorate Calendar Enter a Calendar Name. Choose Fiscal or Calendar to append either the fiscal or calendar year to get the accounting period name. Set up at least one period before the current period. The Fiscal Year Name. The depreciation program uses the prorate calendar to determine the prorate period which is used to choose the depreciation rate. and as both the depreciation and prorate calendar for a book. Each book requires a depreciation calendar and a prorate calendar.
.FA Set Up – Prorate/Retirement Convention Enter a Prorate Convention Name. Enter date ranges and corresponding prorate dates for assets where the date placed in service is between the From Date and the To Date. Description and Fiscal Year Name. instead of the period that corresponds to the prorate date. Select the Depreciate When Placed in Service check box to start taking depreciation in the accounting period that corresponds to the date placed in service.
Enter no of Yrs & Months of asset Life and the Prorate Periods per year (for Calculated and Table Methods). Choose Strict Calculation Basis to always use the cost or NBV as of the beginning of the fiscal year as the calculation basis. (for Calculated and Production method it defaults to Cost) Choose whether to depreciate an asset in the year it is retired.FA Set Up–Depreciation Methods Enter a depreciation Method name and Description Select depreciation method from:: Calculated. Enter basic rates and adjusting rate or loading factor (for Table and Flat rate Methods) . Production. Choose Exclude Salvage Value to exclude the salvage value from the depreciable basis if one has a flat-rate method that uses NBV as the calculation basis. Table. Choose the Rates button to enter rates in the Depreciation Rates window. Flat Formula Select the calculation basis as cost or NBV.
One can define corporate. Tax and Budget. and budget depreciation books which must be set up before one can add assets to them. description and choose the class from Corporate. Prorate Calendar and Current Open Period name for this book. tax. FA updates this date each time on depreciation run. one can set up multiple tax and budget books that are associated with it. Enter Depreciation Calendar. Enter the date on which depreciation was last calculated for this book. Allow GL Posting to create journal entries for this book. For each corporate book. Enter the GL SOB for which journal entries are to be created. Enter the method for dividing the annual depreciation amount over the periods in the fiscal year for this book: Evenly to divide depreciation evenly to each period By Days to divide it proportionally based on the no of days in each period Choose whether to depreciate assets in this book that are retired in their first year of life. One can set up multiple corporate books that create journal entries for different GL SOB or to the same set of books.FA Set Up – Book Controls Enter the Book name. .
specify revaluation rules: Revalue Accumulated Depreciation else FA transfers the accumulated depreciation to the revaluation reserve account. Allow Mass Copy into this tax book. Life Extension Factor FA multiplies the life extension factor by the asset original life to determine the asset's new. To Allow Revaluation. Life Extension Ceiling To limit the depreciation adjustment when revaluing fully reserved assets. .FA Set Up – Book Controls (Contd…) Allow Amortized Changes to allow amortized changes Allow Mass Changes to allow mass changes in this book. adjustments. Allow Cost or Expense Ceilings to an asset Allow CIP Assets to be able to automatically add CIP assets to tax book when adding them to corporate book. Revalue YTD Depreciation Retire Revaluation Reserve Amortize Revaluation Reserve Revalue Fully Reserved Assets Maximum Revaluations Enter the maximum no of times an asset can be revalued as fully reserved. Enter the minimum time to hold an asset for FA to report it as a capital gain when one retires it. choose whether to copy additions. extended life. retirements. and/or salvage value. Allow Reserve Adjustments to allow changes to the accumulated depreciation in tax book.
. or to a single account for the net gain or loss. Enter Inter company Receivables and Payables clearing account numbers. Enter GL a/c to use as an offset account for the entry against accumulated depreciation when you perform reserve adjustments. Enter Deferred Depreciation Reserve and Deferred Depreciation Expense accounts. Enter the Account Generator default segment values for this book's journal entries.FA Set Up – Book Controls (Contd…) Retirement Accounts Set up gain and loss accounts so that FA creates individual journal entries for each component of the gain/loss amount to separate accounts.
Enter the GL category to use for capitalized and CIP journal entries .FA Set Up – Book Controls (Contd…) Enter the Journal Source of GL entries. This source labels the journal entries that come from FA.
. Enter the Location. Enter the Starting Number at which FA is to begin automatically numbering (only numerical sequence) the assets. which controls what dates are valid to place assets in service and on what date to begin your calendars. Category.FA Set Up – System Controls Enter the Enterprise Name that is to appear on reports. Enter the Oldest Date Placed In Service. and Asset Key Flexfield structures to be used.
enter the Bonus Expense and Bonus Reserve a/c. Click to enter the default depreciation rules. FA creates journal entries for this account to reflect additions. retirements.FA Set Up . Depreciation Exp Segment to which depreciation is to be charged and Accumulated Depreciation a/c which is the contra-account for the asset cost account for this category. transfers. revaluations. If bonus rates have been set up. cost changes. if one amortizes revaluation reserve. if one revalues accumulated depreciation. reclassifications. CIP Cost a/c and CIP Clearing a/c are used to reconcile CIP asset costs to GL.Asset Categories Enter a Category name and Description Check Capitalize to charge items in this category to an asset account and to depreciate items in this category. FA uses Asset Cost a/c to reconcile asset costs to GL. Enter the Property Type and Class to which the assets in this category usually belong. Revaluation Amortization a/c is used to amortize the revaluation reserve over the remaining life of the asset after one revalues it. . Choose Lease. For manual asset additions and cost adjustments. or Non-Lease from the Category Type Choose Owned or Leased from Ownership. & capitalizations. Leasehold Improvement. Check In Physical Inventory to include assets under this category in physical inventory comparisons. Revaluation Reserve a/c is used for the change in net book value due to revaluation. FA uses Asset Clearing a/c to reconcile AP and FA.
and whether assets in this category Use ITC Ceilings. Use Depreciation Limit to depreciate an asset beyond the recoverable cost in the years following the useful life of the asset. the category. and the book. If this category is for a tax book.FA Set Up . Enter a default subcomponent life Rule to determine the default life of the subcomponent asset based on the life of the parent asset Enter the Prorate Convention and Retirement Convention to assign to assets. Enter a Default Salvage Value % for this category. indicate whether assets in this category are eligible for Investment Tax Credit (ITC). enter the asset Life in Years and Months. and range of dates placed in service. enter UOM and production Capacity to be used to depreciate assets Enter the date Placed in Service range for which these category defaults are effective. When you add an asset. Enter the bonus rule to be used for assets Enter the depreciation Method that to be used: For life-based method. Check Straight Line for Retirements and enter the parameters if one is setting up an asset category with a 1250 property class in a tax book. book. enter default values for the Basic Rate and Adjusted Rate that to be used to depreciate assets For a units of production method. Enter either a depreciation expense or cost ceiling if this category is for a tax book Enter a Price Index to run reports that use the revalued asset cost to calculate gains and losses. the depreciation rules default according to the date placed in service of the asset. For flat-rate method. .Asset Categories (Contd…) Check Depreciate to depreciate assets in this book and category.
. „Parent Asset Transactions Report‟ can be used for perusing transactions which have been done on Parent Assets just to ensure that the same are done on „Child Assets‟ as well. Entire cost charged in one period. Can „Add‟ / „Transfer‟.Asset Types Capitalized – Assets that show up on Balance Sheets. Generally. depreciated. Monitor of a PC. Group – Collection of „Member Assets‟. CIP or WIP (Construction or Work In Progress Assets) – Assets which are not yet complete and capitalized. Expensed – Which are not depreciated. Parent – Assets which have sub components that can be tracked separately – Ex.
Oracle Assets maintains an audit trail by moving lines in the DELETE queue to the interim table FA_DELETED_MASS_ADDITIONS. lines in „Post‟. „Merged‟ queues become „Posted‟. Lines can be added / split / merged. „Post‟ – Additions which actually become „Assets‟. „Cost Adjustment‟. After running „Delete Mass Additions‟. Also. „Delete‟ [lines to be deleted] queues. After „Post Mass Additions‟ process. „Delete Mass Additions‟ process – removes lines in „Posted‟ [already become assets]. . Can not merge split lines. purge deleted mass addition lines. „Clean Up‟ – Deletion of unnecessary and posted mass additions. „Review‟ – Those which are desired to become assets. Only mass addition lines on „New‟ / „On Hold‟ queues can be merged.Mass Additions Steps in „Mass Additions‟ process are: „Create‟ – Entry of invoices in “Payables” and interfacing these to Assets or upload of assets from other legacy applications using “Mass Additions” interface. these lines will not appear in the „Mass Additions‟ window.
“Mass Additions Create” process from Payables transfers asset lines only once.Mass Additions The „Purge Mass Additions‟ from Oracle Assets program deletes mass additions from the interim table „FA_DELETED_MASS_ADDITIONS‟. When purging the interim table. By setting the „FA: Default DPIS to Invoice Date‟ profile option to „Yes‟. The items in the interim table are the audit trail from the mass addition lines marked „DELETE‟ and removed using Delete Mass Additions. This means that 1 distribution line = 1 transfer to a „Corporate‟ Book. . This permits defaulting the date placed in service to the invoice date. even though the invoice date is in a future accounting period. the audit trail is lost.
Create assets from one or more invoice distribution lines in Oracle Payables. book. New Additions: Use the Detail Additions process to manually add complex assets which the Quick Additions process does not handle: Assets that have a salvage value Assets with more than one source line Assets to which the category default depreciation rules do not apply Subcomponent assets Leased assets and leasehold improvements Mass Additions: Use the Mass Additions process to add assets automatically from an external source. or information from any other feeder system using the interface. One has to run the Mass Additions Create report from AP/Project etc to populate the data to FA Mass addition table and then must prepare the mass additions to become assets before posting them to Oracle Assets. and the date placed in service.Asset Addition Use one of the following processes to enter new assets Quick Additions: Use the Quick Additions process to quickly enter ordinary assets when one must enter them manually. asset information from another assets system. . and the remaining asset information defaults from the asset category. One can enter minimal information in the Quick Additions window. CIP asset lines in Oracle Projects.
Click to enter Assets using New additions Click to enter Click to find the Assets using Quick Asset details. Additions .Quick Additions Enter The Parameters Here To Find An Existing Asset.
Asset Type (Capitalized. Expensed). Asset Key.Quick Additions (Contd…) Enter Asset Description. Serial No. Asset Category. Enter the Asset Book. Asset Cost and DPIS Enter Employee Name. Inv & PO No. CIP. Tag No. . No of Units. Supplier Name. Depreciation Expense A/c and the Asset Location.
Parent Asset No (to link a sub-component to a main component). Bought (New or Existing). Manufacturer Name. CIP. Asset Type (Capitalized. Warranty No. No of Units.Enter Asset Description. Enter the Lease No. Property Type (Personal. Asset Category. Own etc). Asset Model No. Asset Key. Expensed). In Physical Inventory. Description and Lessor Name if Asset is leased New Additions . In Use. Ownership (Owned or Leased). Serial No. (Asset No to be entered only if Manual Numbering) Tag No. Property Class.
. Enter the Invoice No.New Additions (Contd…) Enter the Supplier No. PO no and Project Details if applicable. Line no and Invoice Description Click to Continue entering additional details.
DPIS and Prorate Convention Depreciation Method. Salvage Value (if any). Check on Short Fiscal Year (if applicable) . Check on Amortized Adjustment and Amortize NBV over Remaining Life to amortize any changes in Depreciation Rate / other Adjustment over the Life of the Asset. Bonus Rule (if applicable).New Additions (Contd…) Enter the Corporate Depreciation Book and Comment if any. Months (gets defaulted from Category which can be overridden). Enter the Original Cost. Life in years. Check the Depreciate Flag.
Depreciation Expense Account and Asset Location details. Click to save and generate the Asset as displayed in the Message box.New Additions (Contd…) Enter the Employee Name. .
Mass Addition Queues .Mass Additions The mass additions process lets one add new assets or cost adjustments from other systems to the main system automatically without reentering the data.
Mass Additions (Contd…) Review Mass Additions Post Mass Additions to FA Clean Up Mass Additions Create Mass Additions from Invoice Distributions in Payables .
Mass Additions (Contd…) The Queue Name Should be “ On Hold”. Click to store the Queue name as Post. Enter the Relevant Asset Details Change the Queue Name to “ Post”. . Click to view / change the Assignments.
Depreciation Expense Account and the Asset Location Details.Mass Additions (Contd…) Enter the Employee Name. Click to Change the status of Mass Additions to Post .
Mass Additions (Contd…) Select the Program and Select the Corporate Book for which Mass Additions have to be Posted. A Post Mass Additions report is generated which shows all the lines which have got posted or with error. . The Queue Name is changed for these assets to Posted..
Books: To view the entire details of Cost. . NBV. Quick Addition: To enter assets quickly. Retirements: To retire Assets. Assignments: To view / modify the employee and location assignments.Asset Workbench New: To enter assets in detail. Open: to view the summary of the Asset. Source Lines: To view/enter the Purchase source. Sub-components to define/view the subcomponents under a Parent Asset. DPIS etc of the asset.
When choosing to have assets inherit depreciation rules. reclassification is always to a different „Category‟. “Mass Reclassification” feature can be used any number of times in a period. Oracle Assets creates journal entries to transfer the cost and accumulated depreciation to the asset cost and accumulated depreciation accounts of the new asset category. Also. When an asset is reclassified in a period after the entered period. However. DFF information can be optionally copied. to be checked for any assets that need to inherit depreciation rules.Reclassification Changing asset descriptive information other than category and units has no financial impact. but does not adjust for prior period expenses. Done when creating journal entries for GL. „Allow Mass Changes‟ check box in the Accounting Rules region of the Book Controls window. . Can‟t reclassify in a prior period. can also choose to amortize the resulting adjustments by checking the „Amortize Adjustments‟ check box on the „Mass Reclassifications‟ window. If not . Oracle Assets also changes the depreciation expense account to the default depreciation expense account for the new category. adjustments will be expensed. Depreciation rules are inherited both in „Corporate‟ and „Tax‟ books as applicable for the respective categories.
Reclassification „Preview‟ – Before submitting the process. To preview the changes before actually submitting them. The report lists all the assets that the mass reclassification process will reclassify. Then „Run‟ to reclassify.To review the changes to category and depreciation rules. „Review‟ . .
capacity and unit of measure (in the corporate book). and revaluation ceiling. prorate convention. rate. the period in which the asset was added) After running Depreciation(I. . any period after the period in which the asset was added) [Including fully reserved (depreciated) assets] Can change cost.Financial / Depreciation Information Change Matrix. „Mass Change‟ exclude CIP and Retired Assets.e. bonus rule. salvage value. Also. When What Sr. life.e. depreciation method. just be sure of some restrictions. 1 Before running Any Information Depreciation (I. 2 3 Retired Assets None changeable.No. depreciation ceiling. generally.
.only once per asset.Asset Transfers Can transfer assets between employees. but the transfer must occur within the current fiscal year. Transfer date in a prior period . depreciation expense accounts. and locations. To consider the following: Transfer date can be in a prior period for a particular transfer.
Revaluation Can revalue all categories. . all assets in a book or selective assets.
. „In Physical Inventory‟ – checkbox determines if a specific asset would be included in the Physical verification.Physical Inventory To compare books and physical balances only in Corporate Books. the „UNIT_RECONCILE_MTH‟ field FA_INV_INTERFACE table would be updated with a unit reconciliation code. of Units. / Tag No. Upon completion of the entry process. Need to include the the following information – I. Location. . After running „Physical Inventory Comparison‟ program.e Asset No. / Serial No. Physical Inventory details can either be entered or enter in ADI. No. can run the „Physical Inventory Comparison‟ Program.
Physical Inventory Available reports that can be used are: „Physical Inventory Comparison‟ Report. Physical Inventory data can be purged once an „End Date‟ is entered for a specific run. . „Physical Inventory Missing Assets‟ Report.
Physical Inventory-Enter (Contd…)
Enter/ Load the following details in Physical Inventory:- No of Units, Asset No; if required – Enter / load Asset Key, Model, Manufacturer and Category. The Status on entry is New. After running the Comparison program, the status changes accordingly.
Physical Inventory-Run Comparison
Enter the Physical Inventory Name, Category and Location for which the Comparison program is to be run. Click on Run to submit the concurrent program.
Physical Inventory-View Comparison
Reflects the Status of Adjustments to be carried out against each Asset No against each parameter of Units and Location.
Enter the requisite parameters to find the results of Physical inventory comparison.
User defined „Events‟ [Ex. „Regular Maintenance‟ or „Periodic Service‟ etc.,] can be scheduled for “Corporate Books”. Can be for a specific period – „From‟ and „To‟ date(s) and for a combination of range of „Asset Nos.‟, „Date Placed In Service‟, „Category‟, „Location‟, „Asset Key‟. Events, Frequency and Commencement Date can be created by the Users. Additionally, details of “Suppliers” can also be entered.
Cost or Unit retirements feasible. Assets that have multiple distributions and one or more values do not meet the mass retirement selection criteria. Prior period retirement not feasible for assets with „Unplanned‟ depreciation. For reinstatements. Also.Retirement Entire or Partial retirement feasible. Exceptions to retirement are: Assets with transactions dated after the retirement date entered. can‟t retire in „Units‟ in Tax Books. only the last one can be reinstated. However. CIP Assets cannot be partially retired. „Mass Retirements‟ / „Mass Retirements Exception‟ reports are automatically run. in case of multiple partial retirements. . assets retired during a prior fiscal year. Can perform multiple partial retirements in a period. between these suggest to calculate “Gain / Loss”. Gain/Loss = Proceeds of Sale – Cost of Removal – Net Book Value Retired + Revaluation Reserve Retired. However.
Retirement statuses can be „Pending‟ or „Processed‟.Retirement Retirement can be independently done from any book or „Mass Copy‟ can be set up in „Book Controls‟ window. the retirement transaction is deleted. In the case of „Mass Retirements‟ lump sum sale proceeds / cost of removal are pro prated in the ratio of individual asset current cost to total current cost of all the assets. If a processed retirement is re instated. When a pending retirement is re instated . . then status is changed to „Reinstate‟ – should rerun either depreciation or gain / loss program to re instate.
Calculate Investment Tax Credit recapture for retired assets in a tax book.Retirement Run the ‘Calculate Gains and Losses’ program to: Calculate gains and losses resulting from retirements. . Correct the accumulated depreciation for reinstated assets. if applicable.
Retirement Convention (If retiring an asset before it is fully reserved). Comments if any. . Cost of Removal. One can separately retire these subcomponents if necessary. choose Subcomponents to view the subcomponents asset (s) affected by the retirement transaction. Cost Retired.Retirement Enter the Retirement Date. Purchase Details If a parent asset is to be retired. Retirement Type. Sale Proceeds. To reinstate an asset wrongly retired.
Closing a Depreciation Period While running depreciation. one cannot perform any transactions on those assets unless depreciation is rolled back or the current period is closed. If all of the assets depreciate successfully. If certain assets have not depreciated successfully. Basic Depreciation calculation: . If the period is not to be closed. FA gives the option of closing the current period. then once depreciation has been processed for an asset in the current open period. FA automatically closes the period and opens the next period for the book. these assets are listed in the log file created by FA on running depreciation.Depreciation Running Depreciation Run depreciation to process all assets in a book for a period.
& Close the current period Depreciation expense is calculated as follows: Depreciation Expense = (Current Cost – Recoverable Cost) * Basic Rate . FA divides the annual depreciation by the number of days the asset depreciates in the fiscal year and multiplies the result by the number of days in the appropriate accounting period. Depreciation Rate Calculation Basis FA calculates depreciation using either the recoverable cost or the recoverable net book value as a basis. The prorate date is based on the date placed in service and the asset prorate convention. by the rate. including the basic rate. Spreading Depreciation Across Expense Accounts Finally. To allocate it according to the number of days in each period. the divide depreciation flag. and the depreciate when placed in service flag to determine how much of the fiscal year depreciation to allocate to the period for which depreciation was run. The depreciation program submits three separate requests to: Calculate gains and losses for retired assets and catch up depreciation for retired and reinstated asset. The depreciation program calculates depreciation expense and adjustments. FA allocates the periodic depreciation to the asset assignments. and updates the accumulated depreciation and year–to–date depreciation. Calculate depreciation expense and adjustments for the period. To allocate depreciation evenly to each of the accounting periods. Determining the Depreciation Rate For life–based depreciation methods. multiplied by the fraction of year the asset was held. Allocate Annual Depreciation Across Periods After calculating the annual depreciation amount. The reporting authority‟s depreciation regulations determine the amount of depreciation to take in the asset‟s first year of life. and bonus rate. Flat–rate methods calculate annual depreciation as the depreciation rate multiplied by the recoverable cost or net book value. If the depreciation method uses the asset cost. Flat–rate depreciation methods determine the depreciation rate using fixed rates. FA calculates the fiscal year depreciation by multiplying the recoverable net book value as of the beginning of the fiscal year. Determining the Prorate Period FA uses the prorate date to choose a prorate period from the prorate calendar. FA uses the depreciation method and life to determine which rate table to use. Calculate Annual Depreciation Calculated and table–based methods calculate annual depreciation by multiplying the depreciation rate by the recoverable cost or net book value as of the beginning of the fiscal year. it uses the prorate period and year of life to determine which of the rates in the table to use. adjusting rate. FA calculates the prorate date when an asset is initially entered. Then. FA calculates the fiscal year depreciation by multiplying the recoverable cost by the rate. FA divides the annual depreciation by the number of depreciation periods in the fiscal year to get the depreciation per period. If the depreciation method uses the asset net book value. FA does this according to the fraction of the asset units that is assigned to each depreciation expense account in the Assignments window. or after the latest amortized adjustment or revaluation. Depreciation Calculation Run the depreciation program independently for each depreciation book.Depreciation Prorate Date FA prorates the depreciation taken for an asset in its first fiscal year of life according to the prorate date. FA uses depreciation calendar.
It accepts the amount entered. FA depreciates the asset until the accumulated depreciation equals the recoverable cost. FA takes additional depreciation in the last period of the asset‟s life so that the asset becomes fully reserved. and adds the retroactive depreciation to the current period. Year–End Processing One can close the year independently in each depreciation book. resulting in a one–time adjustment in depreciation expense for the period. FA calculates depreciation using the recoverable cost. or the cost ceiling. Period Close FA automatically closes the book‟s current period and opens the next on running the depreciation program. FA does not recalculate the accumulated depreciation. then FA expenses the missed depreciation in the period asset is depreciated first. Rate Adjustments. Prior Period Transfers If one back dates an asset transfer within the same fiscal year. While adding an asset if the Depreciate flag is unchecked. Prior Period Retirements / Reinstatements If one back dates a retirement within the same fiscal year. . Retroactive transfers do not impact the total depreciation. FA automatically calculates depreciation from the retroactive amortization start date. Prior Period Amortized Adjustments If one back dates an amortized adjustment. and redistributing it proportionally to the ”to” accounts. FA stops depreciating the asset when it becomes fully reserved. Capacity Adjustments Prior Period Transactions Method Prior Period Additions If an asset is entered with a date placed in service before the current accounting period.Depreciation Depreciation Calendar The depreciation calendar determines the number of accounting periods in a fiscal year. The recoverable cost is calculated as the lesser of either the cost less the salvage value less the investment tax credit basis reduction amount. Suspend Depreciation One can suspend depreciation by unchecking Depreciate in the Books window. Life Adjustments. If the accumulated depreciation is too low. Prorate Calendar The prorate calendar determines what rate FA uses to calculate annual depreciation by mapping each date to a prorate period. FA automatically creates the depreciation and prorate periods for new year when the depreciation is run for the last period of the previous fiscal year. Recoverable Cost For depreciation methods with a calculation basis of cost. FA then computes the gain or loss using the resulting net book value. effectively shortening the asset life. which corresponds to a set of rates in the rate table. FA automatically calculates the missed depreciation and adjusts the accumulated depreciation on the next depreciation run. FA automatically reallocates depreciation expense by reversing some of the depreciation charged to the ”from” account. If the asset‟s accumulated depreciation is too high. Depreciation Adjustments. If accumulated depreciation is provided while adding the asset. Adjustments The following are some examples of financial adjustments one can expense or amortize: Recoverable Cost Adjustments. FA automatically adjusts the depreciation for the year by the appropriate amount. The depreciation program automatically resets year–to–date amounts on a book the first time the depreciation program is run on that book in a fiscal year.
Then. For assets using the straight–line method. update the projected amounts when the actual production for the period is known and required to actually depreciate the asset. depending on whether Depreciate When Placed In Service is checked for the prorate convention. the production information needs to be cleared. depreciation starts in the first accounting period that either the date placed in service or the prorate date falls into. the annual depreciation expense gets reduced over time. In both cases. Also.Depreciation Flat–rate methods use a calculation basis of either the recoverable cost or recoverable NBV to calculate annual depreciation. Instead. Can enter production for dates in the future to calculate depreciation projections for future periods. before retirements for assets using this production method. For assets using other life– based depreciation methods. depreciation starts in the first accounting period that the prorate date falls into. Assets depreciating under flat–rate methods with a calculation basis of recoverable NBV do not become fully reserved. . Oracle Assets allocates the first year‟s depreciation to the depreciation periods remaining in the fiscal year.
or flat–rate to production only in the period in which the asset is added. Can change the method from calculated. table. Oracle Assets uses the production amount entered to calculate the catch up depreciation.Depreciation Cannot enter production for a construction–in–process (CIP) asset before capitalizing it. Production Method in “Tax Book” feasible only if it is the same basis in “Corporate Book”. can‟t enter or upload units of production assets with accumulated depreciation. cannot enter production for a an asset before its prorate date. add the asset with zero accumulated depreciation. Similarly. Also. If using a prorate convention such as actual months. Change in “Corporate” book is also restricted only if not using “Production” method in “Tax” Book. and then provide the life–to–date production amount for the current period in the periodic production table using the Periodic Production window. Instead. can enter production for the period in which the asset is added. .
One has to roll back depreciation and then again run with close option. Once closed the period defaults to the next period. FA doesn‟t create JVs for that period. If period is not closed. Click to launch the concurrent process for running depreciation. Check whether to close the period on running depreciation.Run Depreciation Select the Corporate Book for which depreciation is to be run. The period is by default the current open period. Lot of can reports also do not reflect the depreciation. .
Rollback Depreciation Select the Corporate Book for which depreciation is to be rolled back. The period is by default the current open period. .
Even for existing “Group Assets” feasible – not for fresh one. Can‟t be run in „Reporting Currency‟ for hypothetical assets. After entry of parameters. „Run‟ – initiates “What–if Depreciation Report” or the “Hypothetical What–If Report”. This can be run for assets either already existing or purely hypothetical. Has no impact on the existing data and no changes are made.Depreciation Forecast To forecast depreciation for groups of assets in different scenarios without making changes to data in Oracle Assets. Can also be run for reporting set of books in that specific currency. .
Enter the Projection Calendar to specify how to summarize the projection. Check Asset Detail to print a separate depreciation amount for each asset. Enter the No of Periods for which to project depreciation Enter the Starting Period for projection. All of them must use the same Account structure. Check Cost Center Detail to print a separate depreciation projection amount for each cost center.Depreciation Analysis-Projections Depreciation projections are estimates of actual depreciation expense which can be projected for any depreciation book. The fiscal year name for the Calendar and each Book must be the same. One can run depreciation projection only for the current depreciation parameters set up in the system. Enter the Book (s) that to include in projection. .
Enter Asset Parameters for which the What-if is to be run.Depreciation Analysis . Enter the Corporate Book. Enter the Relevant Depreciation Scenario Parameters for running the What-if .What-if Analysis Select the Relevant Tabbed region for FA assets or Hypothetical assets. Start Period and No of Periods for which Analysis is to be carried out.
. Enter unplanned depreciation for an asset in both the corporate and/or tax books.and the net book value of the asset. can handle any other unplanned depreciation (Ex.) Can perform the following: Enter unplanned depreciation amounts by asset and book for any current period during the useful life of an asset.Unplanned Depreciation Intended mainly for Germany & Netherlands Also.] Change the depreciation method after entering unplanned depreciation..temporary restrictions in special economic periods etc. [Immediately updates the year–to–date and life–to–date depreciation.
the asset will continue to depreciate at the same rate it depreciated during the last fiscal year of the asset‟s normal useful life. For assets using a straight–line depreciation method. Can‟t perform following transactions on an asset that is beyond its normal useful life: Cost Adjustments Life Adjustments Salvage Value Adjustments Revaluations Prior Period Transfers Invoice Transfers Addition of a Mass Addition to an Existing Asset Date Placed In Service Change Prorate Convention Change Depreciation Method Change Invoice Adjustments Prior–Period Retirements .Depreciation Beyond Useful Life Can depreciate an asset in the years following its useful life if the asset uses a straight–line or flat–rate depreciation method. can use the „Set Extended Life‟ window to control the amount of depreciation expense taken for each period. If extended life is not specified in years.
Either „Start‟ and „End‟ Dates must be entered or both left blank. validated for – „Date Placed In Service‟ to be within the Warranty Period. Employee details can be optionally attached to the warranty.Warranties Enables tracking Vendor warranties on assets. In the „Asset Workbench‟ for any specific asset. against „Warranty Number‟ any record previously defined can be attached. Currency can be selected. (only if warranty contains dates). No Standard Report appear to be available for reporting on warranties. Asset to Warranty relationship is currency specific. . However.
Oracle Assets tracks payments under operating leases. for informational purposes. . and the asset cost to the lessor of the ‘Fair Value’ or the ‘Present Value’ of the payment schedule for any assets assigned to the lease. Criteria for capitalization defined in FASB standards are – any one of : The ownership of the asset transfers to the lessee at the end of the lease (Test 1) A bargain purchase option exists (Test 2) The term of the lease is more than 75% of the economic life of the leased asset (Test 3) The present value of the minimum lease payments exceeds 90% of the fair market value of the asset at lease inception (Test 4) When setting up a lease. can enter information that Oracle Assets uses to automatically calculate the present value of the payment schedule. application defaults the lease type to ‘Capitalized’. or leases which do not meet any of the criteria. If the lease meets one of the four tests. and to determine if any of the tests listed above are met.. Accommodates different lease payments like „Purchase‟ / „Renewal‟ / „Balloon‟ etc. Can also create amortization schedules.Leased Assets Permits testing of leased assets in accordance with GAAP whether to capitalize or not.
. Can be changed. From “Payables” – “Payables Open Interface Import” can be run with „Source‟ as „Oracle Assets‟ for importing these as Invoices. No specific standard reports for Leased Assets appear to be available. The capitalized value is automatically defaulted as the “Fair Value”. The invoice number is designated as „FA-<<Lease No.>>-<<Running Sr. Lease Payments can be transferred to “Oracle Payables” . of Invoice>> The exported invoice information would be available in AP_INVOICES_INTERFACE and AP_INVOICE_LINES_INTERFACE.No.Leased Assets In the “Asset Workbench” the defined lease can be attached to an asset having category definition set up as “Leased” asset. Only leases of the „Type‟ – “Capitalized” are available for selection.
Click on Preview to get an overview of the impact and details of transfer. . Once finalized. Enter the Transfer Date and Comments. The transfer can be done for a particular category or for all categories. The Transfers can be done in the following ways: From one range of Expense A/c to another. From one location to another From one employee to another employee.Mass Transactions-Transfers Select the Corporate Book. use the Mass Transaction No to query (generated on preview) and Click on Run to launch the transfer process.
Specify the asset numbers or dates placed in service or category for which the Mass Change applies. the adjustments will be expensed in the current period. Review: to get an overview of the changes taken place on running .Mass Transaction–Changes Select the Corporate Book and Enter the Change Date. Preview: to get an overview of the impact and details of transfer. Run: Once finalized. If Amortize Adjustments is not selected. Enter the Before and After details for the requisite changes to take place. use the Mass Transaction No to query (generated on preview) and Click on Run to launch the change process.
Life Extension Ceiling limits the amount of depreciation one can back out when fully reserved assets are revalued. . Override revaluation rules if reqd. Comments and Revaluation Date. Enter a +ve or –ve Revaluation % . Enter the Asset Category and / or Asset No to be revalued.Mass Transaction–Revaluations Enter the Corporate Book. Revalue Fully Reserved Assets that are depreciating under a life-based method and enter a Life Extension Factor to extend the asset life so its revalued cost can be depreciated over one or more periods Maximum Revaluations does not revalue a fully reserved asset if the revaluation exceeds the maximum number of times one can revalue an asset as fully reserved.
Inherit Depreciation Rules of New Category to have all rules inherited or no rules by ensuring the check box is not checked. Optionally specify the Other Asset Selection criteria for Reclassifying Enter the New Category of the Asset Copy Descriptive Flexfield Information to New category Descriptive flexfield information will be copied only if assets are being reclassified within the same major category and should be set up with the same segments in both the old and the new category.Mass Transaction–Reclassifications Enter the Corporate Book. . Comments and Reclassification Date. Amortize Adjustments to amortize the resulting adjustments else adjustments will be expensed.
or reinstate the mass retirement transaction in the Mass Retirements window. Review the reports. Select the Asset Type to be retired. Retirement Type.Yes check box Retire only assets that are not fully reserved . When one is ready to process the pending mass retirement transaction. Retirement Date. . Choose whether to: Retire only fully reserved assets. One can also adjust a resulting individual retirement transaction in the Retirements window. run the Calculate Gains and Losses program. One can also Prepare and Post Mass Retirement from the Prepare and Post windows.Mass Transaction–Retirements Enter the Corporate Book. Whether to retire subcomponents attached to this parent asset and Comments. Total Sale Proceeds & Total Cost of Removal (FA prorates these amounts across the assets selected for the mass retirement according to each asset's cost. Click on Retire to automatically run the Mass Retirements Report and the Mass Retirements Exception Report.No check box Retire all assets specified in the window .do not check the boxes Click on Create to Create the Mass Transaction. Enter one or more of the selection criteria for mass retirement. Click on Discard to reinstate the Assets wrongly retired.
FA Accounts FA creates journal entries for the following GL accounts: Accumulated Depreciation. FA automatically creates transaction journal entries for GL. Journal Entries The create journal entries process creates journal entries for the appropriate GL SOB. FA reverses a portion of the depreciation expense posted to the ”from” depreciation expense account and posts it to the ”to” depreciation expense account For prior period retirements. Net Book Value Retired Gain and Loss. Asset Accounting Creating journal entries is a two step process: 1. FA creates journal entries that reverse the depreciation taken for periods after the retirement prorate date Depreciation Adjustments FA creates separate journal entries for adjustments to depreciation expense and current period depreciation. Revaluation Reserve Retired Gain and Loss Reviewing Journal Entries After sending journal entries from FA to oner general ledger. one can review or change entries in that general ledger. asset cost. CIP Clearing. If Oracle GL is not used. FA creates journal entries that summarize the activity for each account for each transaction type. Deferred Depreciation Expense. f one use a different general ledger. or retirements: For a prior period addition. if one has set up the journal entry category for that transaction type for that book. and other accounts.Journal Entries Creating Journal Entries for the GL FA creates journal entries for depreciation expense. FA creates journal entries for the missed depreciation For a prior period transfer. Proceeds of Sale Gain. Loss. Loss. change or correct oner entries. Depreciation Adjustment. Run the Create Journal Entries program to create journal entries to GL. Deferred Accumulated Depreciation. Revaluation Reserve. Prior Period Transactions FA creates adjusting journal entries to depreciation expense and accumulated depreciation accounts when prior period additions are entered. run the depreciation program for each book which closes the current period and opens the next period. CIP Cost. 2. Intercompany Payables. Intercompany Receivables. one can copy the journal entry information from the GL tables. At the end of each accounting period. use the Enter Journals window in Oracle GL to review. Depreciation Expense. Any GL One can create journal entries for any GL. transfers. Asset Clearing Asset Cost. . and Clearing. Cost of Removal Gain. and Clearing. one can review or modify journal entries in oner general ledger before posting them. One can review these journal entries in GL and post them. If one integrate FA with Oracle GL. Revaluation Amortization.
.Standard Click to Launch the concurrent program.Journal Entries . Select the Corporate Book and the period for which Journal Entries are to be generated and transferred.
.Journal Entries.Roll Back Select the Corporate Book and the period for which Journal Entries are to be rolled back.
Periodic Mass Copy: Use Periodic Mass Copy each period to keep tax book up to date with corporate book. Original Cost. Capacity and unit of measure for units of production assets. . The current fiscal year in tax book determines which assets Initial Mass Copy copies into tax book. Initial Mass Copy does not copy any transactions on CIP assets or expensed items. The Periodic Mass Copy program copies addition. maintain asset information in corporate book. one need not copy reclassifications or transfers from one book to another. defaulting the asset life according to the subcomponent life rule defined for the tax category and the parent asset life. Initial Mass Copy does not copy assets retired before the end of that year. One can run periodic mass copy on each tax book after each period in the corporate book is closed. When the Initial Mass Copy program copies an asset into a tax book. Then copy the subcomponent asset. FA copies new assets and transactions made in corporate book during one accounting period in the current fiscal year into the open period of tax book. the following basic financial information comes from the corporate book: Cost. Initial Mass Copy: Use Initial Mass Copy to initially populate tax book by adding existing assets to a tax book. FA calculates the net book value of assets that have zero accumulated depreciation in the tax book. and opens the next period. Finally. copy the parent asset first.• Date Placed in Service. and reinstatement transactions to tax book from the current period in the associated corporate book. Initial Mass Copy copies all the assets added to corporate book before the end of the current tax fiscal year into the open accounting period in tax book. Set up the depreciation method for the subcomponent asset life before the method and life can be used . The remaining depreciation information comes from the default category information for tax book according to the asset category and the date placed in service. It does not combine transactions. One can create as many tax books as required. Units. and then update tax books with assets and transactions from corporate book. it does not copy revaluations. For subcomponent assets. Salvage Value. and only copies transactions from a closed accounting period in the associated corporate book. retirement. Tax books also share Production amounts with their associated corporate books for assets depreciating under units of production. When this initial period is closed. Periodic Mass Copy copies all qualifying transactions for an asset one at a time.Tax Books TAX BOOK MAINTENANCE: Copy assets and transactions from corporate book to tax books automatically using Mass Copy. Since tax books share the category and assignments with their associated corporate book. adjustment.
Enter production more than once a period if necessary. or maintained in another system and uploaded using the production interface. Import production information to FA: Use an import program or utility to export data from feeder system and populate the production interface table. .Production Use the Production Interface: Production information can be entered manually. Production Amount. FA uses that information to calculate depreciation for units of production assets. or one can load it automatically from a feeder system using the Upload Periodic Production program. Assign Values to Required Columns in the production interface Table: Customize the Production Interface SQL*Loader Script Production Information: For each asset and date range for which one wants to enter a production amount. Run the Production History report to review the status of all imported items. Start Date and End Date Upload Production into FA Enter Production Amounts: One can enter or update production amounts for assets depreciating under units of production. One can enter production information online. Run the Upload Production program to move production information into FA. Use the Periodic Production window to review or change the production information. Prepare and analyze the production information on any feeder system and then automatically transfer the production information into FA. one must specify the following information in the SQL*Loader script: Asset Number.
.Upload Select the Corporate Book for which Production information is to be loaded from the interface Table.Production .
.Enter Select the Corporate Book and other Parameters for which Production information is to be entered / reviewed.Production .
.Production – Enter (Contd…) Enter the Asset No. From and To Dates and the Production info based on the UOM of the Asset.
Budget Book Budget Book entries for a combination of „Category‟ and „Expense‟ Account. for the same category with a different account new budget can be entered. budget can always be entered for one year at a time. . Can not post to a GL Set of Books. Recommended for easier administration. to set for every „Major‟ category default „Minor‟ segment values so that generic depreciation policies can be set at this level to be used for projections. Should be entered for all the periods in a fiscal year. Also. [Max. Projections use the category rules. 12 periods] Budget can only be entered for Categories which have been defined for the corresponding „Corporate Book‟. .I.e. Partial budget entries not allowed. Budget always enterable only from the first period of the „Current Fiscal Year‟ set up in „Book Controls‟. Can compare actual cost of assets acquired and budgeted by running „Budget-toActual Report‟.
However. and how many records were processed. it does not remove the asset identification. Maintains an audit trail of which fiscal years have been archived. and restored. purged. .Purge of Data Purge program removes the depreciation expense and adjustment transaction records for the book specified. As a measure of security “Purge” should be enabled in “Book Controls” window otherwise. including assets retired or that are fully reserved during any fiscal year. not feasible. and assignment information for the assets. financial.
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