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Fixed Assets Glossary

Accumulated depreciation
The total depreciation taken for an asset since it was placed in service. Also known as life-todate depreciation and depreciation reserve.
Asset key
Each fixed asset is allocated a key on the system. This details your department code and which
register of assets it is recorded on
Asset type
Either expensed, capitalized or construction-in-progress
Assignment
Shows the location of the asset, the details of the employee who is responsible for it (if recorded)
and the GL account which the depreciation will be charged
Books
Shows the financial information regarding the cost, depreciation and treatment of the asset within
the FA module
Capitalized assets
Capitalized assets are assets that you depreciate (spread the cost expense over time).
Capital project
A project in which you build one or more depreciable fixed assets
Construction-in-process (CIP) -via the Project module: EMBS
You construct CIP assets over a period of time rather than buying a finished asset. The system
lets you create, maintain, and add to your CIP assets as you spend money for material and labor
to construct them. When you finish the assets and place them in service (capitalize them), the
system then begins depreciating them.
Date placed in service
The calendar date on which you start using an asset-often taken as the date of the suppliers
invoice
Depreciate

To depreciate an asset is to spread its cost over the time you use it. You charge depreciation
expense for the asset each period. The total depreciation taken for an asset is stored in the
accumulated depreciation account.
Expensed asset
An asset that you do not depreciate, but charge the entire cost in a single period
Oracle Assets does not depreciate an expensed asset, or create any journal entries for it. You can,
however, use Oracle Assets to track expensed assets. The Asset Type for these assets is
Expensed.
Fixed asset
An item owned by your business and used for operations. Fixed assets generally have a life of
more than one year, are acquired for use in the operation of the business, and are not intended for
resale to customers. Assets differ from inventory items since you use them rather than sell them.
Parent asset
A parent asset has one or more subcomponent assets. First you add the parent asset. Then, you
add the subcomponent asset and assign it to the parent asset in the Additions form. You can
change parent/subcomponent relationships at any time.
Prorate date
Oracle Assets uses the prorate date to calculate depreciation expense for the first and last year of
an assets life.
Recoverable costs
The purchase price excluding VAT.It does not include the element of non- recoverable VAT
Source line
Shows details of the supplier, the invoice and purchase order and the project/grant if applicable
Tag number
Your own departmental reference number
What is Depreciation?
Procedure to use for calculating depreciation and create journals that will be posted to the
General Ledger. This is also to be used to close the period.
The depreciation program calculates depreciation expense and adjustments, and updates the
accumulated depreciation and year-to-date depreciation.
When we run depreciation, the depreciation program submits three separate requests to:

Calculate gains and losses for retired assets and catch up depreciation for retired and
reinstated assets

Calculate depreciation expense and adjustments for the period, and close the current
period

Run the reserve ledger report Depreciation expense is calculated as follows:


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Depreciation Expense = (Current Cost Recoverable Cost) * Basic Rate< /FONT >
What is Roll Back Depreciation?
This is used to reverse the following processes:
1. Calculated depreciation in Fixed Assets
2. Created journal in Fixed Assets
3. Posted journal in General Ledger
What is Forecast Depreciation?
Oracle Assets estimates depreciation expense for the periods for which you project depreciation
based on the financial information for your existing assets at the start of that period. The
projection includes additions, transfers, and reclassification transactions you perform in the
current period.
It ignores other asset transactions you make in the current period, such as the depreciation
adjustment for retroactive additions and retroactive transfers you enter in the current period.
The program also ignores fully reserved and fully retired assets. Depreciation projections are
estimates of actual depreciation expense. You can project depreciation expense for any
depreciation book.
The standard depreciation process in EBS
Depreciation computations depend on such factors as the type of depreciation (Life, units of
production, or flat rate), the depreciation life and the depreciation method.
The asset category specifies a default depreciation method to be used with an asset. You will
usually want to set up categories in such a way that you do not need to override the defaults they
establish.
Prior to running the Deprecation process you have to unsure that these reports submission is
completed.

Select Depreciation from the navigation menu and then select Calculate Gains and
Losses. Here oracle Assets will automatically run this report when Depreciation is ran,
but the forecast report will not be accurate if there are any retirements pending.

Run the Projections report which will project depreciation expense for a specific
depreciation book. Use this report to review project depreciation expense for your assets
for each book you request. This report is sorted by, and prints the total depreciation for
each balancing segment, cost center, and expense account. You can request asset detail at
the Cost Center and/or Asset level.

Step 1.0 :Run depreciation on corporate book.


The depreciation program automatically calculates gains and losses for unprocessed retirements,
calculates depreciation expense and depreciation adjustments, and generates the appropriate
Reserve Ledger and Journal Entry Reserve Reports . Ensure that the close period box is
unchecked. This trial run enables an opportunity to review depreciation calculations and work
any errors prior to running your final period depreciation.
Step 2.0 : Run Create Journal
This process creates all of the depreciation, transfer, reclassification, capitalization, addition,
adjustment and retirement journal entries for all of the transactions within the asset sub-ledger. It
also transfers these journals to the general ledger once they have been created.
Please take a note oracle Assets journals updated the GL tables rather than the GL interface
tables.
Step 3.0 : Reconcile FA sub-ledger to the General Ledger and Accounts Payable

Using the Period Close reports reconcile the FA Clearing, Cost and Depreciation amounts
to the appropriate GL accounts.

To reconcile the cost accounts with GL, you can run the cost summary and cost detail
report. The summary report can only be sorted by balancing segment and asset account. A
detail (by asset) version is also available for these reports.

Depreciation expense reconciliation can be done using the Journal Entry Reserve Ledger
report. This report provides details on all active assets in addition to those assets that you
might have retired during the year.

Run GL Accounts Analysis Report for details on GL transaction activities for reconciling
any account balance discrepancies.

If we are happy with the reports we can go ahead to Run the Depreciation Process again (Step
4.0) otherwise, we will perform these processes;

Sub Step 3.a Rollback Journals

Sub Step 3.b Rollback Depreciation

Sub step 3.c Necessary adjustments and for rewind the whole process again

Step 4.0 :Run the Depreciation Process Again


Once you are satisfied with the reconciliation, the process with the close period box checked, the
process closes the current depreciation period and opens the next period calendar.
Step 5.0 :Copy transactions to tax books
This process copies the transaction that occurred in the corporate book during a period to a tax
book using the Periodic Mass Copy functionality as opposed to the Initial Mass copy.
The timing of the Periodic Mass Copy process will depend on what type of calendar has been
assigned to the Tax Book. If its Monthly, then the copy process should occur each month after
the Corp Book is closed.
Step 6.0 :Run these reports for the verification of the Copy Process
1. The Tax Addition Report shows you asset additions and capitalization for the period
range you selected. The report is sorted by Balancing Segment, Fiscal Year Added, Asset
Account, and Asset Number. It prints totals for Asset Account, Fiscal Year, and Balancing
Segment.
2. The Financial Adjustments Report shows you all of the adjustments you made to the
financial information for your assets for the Book and Period you choose. Asset Number
sorts the report and by when the transaction was effective.
3. The Tax Retirements Report shows you all the Gains and Losses and any Investment Tax
Credit (ITC) Recapture for your asset retirements. This report sorts by Balancing
Segment, Fiscal Year Placed in Service Date, Asset Account, and Asset Number. The
report prints totals for each Fiscal Year and Balancing Segment.
These three reports provide all the details on Assets copied from Mass Copy.
Step 7.0 :Run depreciation on tax books.
Depreciation is calculated separately on each tax book according to the depreciation methods and
life defined for each tax book. The same process for running tax depreciation applies as detailed
in Step 1.0 discussed above.
Step 5 to 7 is required if your company is maintaining tax books, else this become optional.