ORACLE FINANCIALS USER GUIDE International Institute of Tropical Agriculture FIXED ASSET

Author: Creation Date: Last Updated: Control Number: Version: Oracle Implementation Team October 15, 2001 January 02, 2002

FIXED ASSET USER GUIDE OUTLINE TABLE OF CONTENTS A. Fixed Asset Purchases Procedure and Accounting B. General Ledger Responsibilities (i) Creating Adjustment Journals ( Actual and Encumbrance) (ii) Tracking Fixed Asset Purchase Order 1. Fixed Assets Recording and Maintenance 1.1. 1.2. 1.3. 1.4. 1.5. 1.6. 1.7. Creating assets manually (Quick and Detail Additions) Making adjustment on costs Making adjustments on depreciation methods/life years Correcting Current Period Additions Error Changing asset category for single assets Changing asset categories for group of assets Making transfers between Cost Centres or Personnel

2. Fixed Assets Retirement 2.1. 2.2. 2.3. 2.4. 2.5. 2.6. Fully Retiring Assets (Single Asset) Partially Retiring Assets Fully Retiring Assets (Group of Assets) Selling or trashing Fixed Assets Correcting Retirement Error Reinstating Mass Retirement Transaction

3. Period End Closing and Reports 3.1. 3.2. 3.3. 3.4. 3.5. Running Depreciation Rolling back Depreciation Running final Depreciation Creating Journal Entries Running Reports

A.

RULES FOR THE FIXED ASSETS MODULE

Fixed Assets Module is the first data entry point for all of the fixed asset items. General Rules
1. Errors, which are made in the Fixed Asset Module, will not be corrected in General Ledger. However, the users will be warned by the person responsible for posting in GL and the correct transaction will be posted to GL again. Both the wrong and the correct entries will be posted in GL. 2. There will be no integration between the AP and FA Modules. Manual account manipulations will be made when the invoice is entered in AP Module (please refer to Processes Section of this user guide for the detail transactions) 3. Expense Items will be entered in FA Module with ZERO COST, while their related invoices will be entered to AP Module with the current cost.

System Required GL Adjustments

FA Purchases 1. When the AP Accrual Account is changed to Asset Accrual, and posted, the AP Accrual Account's balance need to be debited in GL with an adjustment journal (please refer to FA User guide, Process Section for the detail transaction) 2. An Encumbrance Journal to debit the related Asset Expense account has to be raised.

B.

FIXED ASSET PURCHASING PROCEDURE AND ACCOUNTING

PROCEDURE
Fixed Asset purchases procedure starts from the Requisition where the requester will create a Request for Purchase (REQ) directly in Oracle. The requisition will pass through a fund checking (in FA Purchases Expense account) and approval. This will be approved through the approval hierarchy, which the requester belongs to. At this stage an encumbrance called COMMITMENT is created by the system. After approval of the requisition, a Purchase Order (PO) will be created and after approval sent to the Fixed Asset Supplier. On creating a PO the Commitment Encumbrance will be reversed and an OBLIGATION encumbrance created. The Receiving process will also be handled in the PO module where the Invoice is matched with the PO. The receiving process would release the encumbrance (obligation) by the system and the actual transaction charges sets in. Invoicing and payment will be handled in the Accounts Payable (AP) Module. As there is no integration between the AP and the FA module no Mass Additions will be created in the AP, hence all assets will be MANUALLY entered in the FA and NOT through mass additions process. Also since there is no integration between AP and FA, the invoicing process would have created a charge to an Expense Accrual account instead of Asset Clearing account where the Asset Additions in FA would have credited. Therefore two GL adjustment entries would have to be made (an Actual Journal and an Encumbrance Journal) to clear these accounts and the FA Purchases Expense account encumbered.

ACCOUNTING
Here listed, you will see the accounts to be used during the entire process. In some transactions, these accounts may not be defaulting but has to be modified by the users. PROCESS ENCUMBRANCE Encumbrance Type PO Requisition Commitment Purchase Order Commitment Obligation Receiving Obligation AP Invoice Payment FA Additions GL Adjustment 01.8061.9999.000 000000.0000000 01.995x.xxxx.0000 00000.0000000 01.995x.xxxx.000 000000.0000000 01.6789.xxxx.000 000000.0000000 01.3351.0000000 00.0000000 01.1911.0000000 00.0000000 01.995x.xxxx.000 000000.0000000 01.8061.9999.0000 00000.0000000 01.1981.0000000 00.0000000 01.6789.xxxx.000 000000.0000000 01.3351.0000000 00.0000000 01.1210.0000.000 01.8061.9999.000 000000.0000000 01.995x.xxxx.000 000000.0000000 01.995x.xxxx.0000 00000.0000000 01.8061.9999.0000 00000.0000000 01.995x.xxxx.000 000000.0000000 01.8061.9999.0000 00000.0000000 Debit Credit ACTUAL Debit Credit

01.1981.0000000 00.0000000 01.995x.xxxx.000 000000.0000000

Account Description
Account Description 01.995x.XXXX.000000000.0000000 Fixed Asset Purchases Budget (Expense) Account with a Cost Centre 01.8061.9999.000000000.0000000 Reserve for Encumbrance (RFE) Account 01.6789.XXXX.000000000.0000000 AP Expense Accrual with a Cost Centre 01.3351.0000.000000000.0000000 AP Accrual Local Suppliers 01.1911.0000.000000000.0000000 Fixed Asset Cost Account (Bldg. & Infrs) 01.1981.0000.000000000.0000000 Fixed Asset Clearing Account 01.1210.0000.000000000.0000000 Citibank N.Y. Current Account Note: The encumbrance type transactions are only triggered by the user but carried out by the system and the users have no interfering points with the encumbrance accounting except for the point that they choose the Charge/Budget account when they raise a Requisition.
C. GENERAL LEDGER RESPONSIBILITIES

To do this you need to have a GL User Responsibility.

Transaction Process
(i)a. Creating Adjustment Journal Actual

Navigation
GL > Journal > Enter

Task
1. Navigate to Journals > Enter 2. On the Find Journals window, click on New Journal. 3. On the Journals (IITA SOB) New window that appears, enter the following on the Journal Header: Journal: This is the Journal Identity. Enter FA Adjustment with a number (e.g. FA_Adjustment_01) Period: This is the Accounting Period Category: Choose ADJUSTMENT from the List of Values as the Journal Category for this transaction Description: Optionally enter the description of the Journal. Control Total: Enter the amount of the Journal (Optional). 4. Enter the following on the body of the Journal. Line: Enter any absolute number from 1. Tab and enter the account combination as 01.1981.0000.000000000.0000000 (Debit) and 01.995x.XXXX.000000000.0000000 (Credit) 5. Save your work. The Journal is now ready for posting. 1. Navigate to Journals > Encumbrance 2. On the Find Journals window, click on New Journal. 3. On the Journals (IITA SOB) New window that appears, enter the following Journal Header information: Journal: This is the Journal Identity. Enter FA Encumbrance with a number (e.g. FA_Encumbrance_01) Period: This is the Accounting Period Category: Choose ADJUSTMENT from the List of Values as the Journal Category for this transaction Encumbrance Type: Select Invoice from the List of values.

(i)b. Creating Adjustment Journal Encumbranc e

GL > Journal > Encumbrance

Transaction Process

Navigation

Task
Description: Optionally enter the description of the Journal. Control Total: Enter the amount of the Journal (Optional). 4. Enter the following on the body of the Journal. Line: Enter any absolute number from 1. Tab and enter the account combination as 01.995x.XXXX.000000000.0000000 (Debit) and 01.8061.9999.000000000.0000000 (Credit) 5. Save your work. The Journal is now ready for posting.

(ii). Tracking Fixed Asset Purchase Order

GL > Reports > Request > Standard

1. Navigate to Request and choose Standard. Submit New Request window appears. 2. Choose Single Request and click OK. 3. On Submit Request window, complete the following particulars: Name: Choose from the List of Values, General Ledger (180 Char). For Parameters choose the following: - Type: Entry Item - Currency: USD - Balance Type: Actual - Starting Period: - Ending Period: - Flexfield from: 01.9951.1001.000000000.0000000. - Flexfield To: 01.9957.3999.000000000.0000000 (for CUNR). - For CRES and NCPJ account 7510 7570 and Cost Centre 4000 8999 should be used. - Click Ok to return to Submit Request Window To print the report, click on Options. Upon Completion window appears. Go to Print the Output To and choose the Printer and number of copies. Click Ok to return to Submit Request window. Click Submit.

FA01 Fixed Assets Maintenance TRANSACTION NATURE

1.1a Creating a Fixed Asset manually (Quick Additions)

NAVIGATION
Asset>Asset Workbench>

TASKS
1. Navigate to the Asset Workbench function. 2. On the Find Assets window click on QuickAdditions. 3. Fill in the Asset details such as Description, Tag No., Category, Book, Cost, Date in Service and Assignment (Employee Name, Expense Account & Location) on the Quick Additions window

TRANSACTION NATURE
1.1b Creating a Fixed Asset manually (Detail Additions)

NAVIGATION

TASKS
and click on DONE.

Asset>Asset Workbench

1. Choose Assets > Asset Workbench from the Navigator window. 2. Choose New. 3. In the Asset Details window, enter a Description of the asset. 4. Enter the asset Category. 5. Enter the number of Units. 6. If you are adding a subcomponent asset, enter the Parent Asset number. If you are adding a leasehold improvement, enter the leased asset number. 1. Enter the Manufacturer and Model of your asset. 2. Enter the Warranty Number if you want to assign a pre-defined warranty to an asset. 9. Use the list of values to choose a lease number if you are adding a leased asset in a leased asset category. 10. Choose whether to include the asset in physical inventory comparisons. By default, the In Physical Inventory check box is set according to the asset category you specified, but you can override that value here. 11. Enter additional information, such as Property Type and Class, and whether the asset is Owned or Leased and New or Used. 12. Optionally choose Source Lines to enter purchasing information such as the Supplier Name and Purchase Order Number for the asset. 13. Choose Continue to continue adding your asset. Attention: The Detail Additions process requires you to provide descriptive, financial, and assignment information in the Asset Details, Books, and Assignments windows.

To enter financial information for a new asset:

1. Assign your asset to a corporate depreciation Book. 2. Enter the current Cost. Note: If this is a leased asset, and you previously calculated the cost to capitalize for the lease in the Lease Payments window and you have not overriden the result of the capitalization test, Oracle Assets automatically enters the Cost to Capitalize amount in the Current Cost field, and you can change it. 3. Enter the Salvage Value. 4. Specify the assets Date In Service. 5. Indicate whether you want to Depreciate

TRANSACTION NATURE

NAVIGATION

TASKS
the asset. 6. If necessary, override the Depreciation Method and associated depreciation information defaulted from the category. 7. Choose Continue to continue adding your asset.

. To assign your asset to an employee, depreciation expense account, and location: Suggestion: Choose a predefined
distribution set from the Distribution Set poplist to automatically assign the appropriate distribution(s) to your new asset. 1. Optionally enter the Employee Name or Number of the person responsible for the asset. 2. Enter the default Expense Account to which you want to charge depreciation. Oracle Assets defaults the natural account segment from the category and the book. 3. Enter the physical Location of the asset. 4. Choose Done to save your work. 1. Navigate the Asset function. 2. Open the Asset Workbench window. 3. Find the Asset to be adjusted. 4. Choose the Asset and click on BOOK. 5. Adjust the Current Cost in the Depreciation section. 6. Click on DONE to complete the process 3. 4. 5. 6. 7. Navigate the Asset function. Open the Asset Workbench window. Find the Asset to be adjusted. Choose the Asset and click on Book. Adjust the Method/Life Years & Months in the Method section. 8. Click on DONE to complete the process

1.2

Making Adjustment on Cost

Asset>Asset Workbench>Books

1.3

Making adjustment on Depreciation Methods/Life Years

Asset>Asset Workbench

1.4

Correcting Current Period Addition Errors

Asset>Asset Workbench

To delete an asset you added in the current period:

1. Choose Assets > Asset Workbench from the Navigator window. 2. Find the asset you want to delete. Note: For best performance, query by asset number or tag number since they are unique values. 3. Choose Open. 4. From the menu, select Edit, Delete Record. 5. Save your change to delete the asset from the system.

To change descriptive, financial, or assignment information for an

TRANSACTION NATURE

NAVIGATION

TASKS asset you added in the current period:

- Correct any information for an asset added in the current period in any of the following windows: Asset Details, Source Lines, Books, and Assignments. 1. Navigate the Asset/ Asset Workbench function 2. On the Find Assets screen fill in the necessary particulars and click on FIND. 3. Click on OPEN on Asset Screen. 4. On the Asset Details screen, change the CATEGORY and click on DONE.

1.5

Changing Asset Category for Single Asset

Asset>Asset Workbench>Open

1.6

Changing Asset Categories for Group of Assets

Mass Transaction>Reclassifi cation

1. Navigate Mass Transactions > Reclassification window. 2. On the Mass Reclassification screen, enter the Asset Book. 3. Enter Category in the Assets to Reclass section. 4. Enter New Category in Reclass section. 5. Click on Preview. 6. Run Concurrent Manager. 7. Re-query the Asset and click on Run. 1. Navigate the Asset Workbench in the Asset function. 2. Fill the necessary particulars and click on FIND button. 3. On the Assets window click on Assignment button. 4. On Assignment screen, Line 1 enter no. of units to change (with a minus sign) in Unit Change. 5. Tab to Line 2 and enter the no. of units to change, Employee, Expense Account or Location as the case may be. 6. Click on Done to save the transaction.

1.7

Making transfer between Cost Centre or Personnel

Asset >Asset Workbench > Assignment

FA02 Fixed Assets Retirement TRANSACTION NATURE

2.1 Fully Retiring Assets (SINGLE ASSET)

NAVIGATION
Asset>Asset Workbench> Retirement

TASKS
1. Navigate to Asset>Asset Workbench window. 2. Enter the Asset to retire on the Find Assets Screen and click on FIND. 3. Choose Retirements. 4. Enter the Depreciation Book and Retirement Date. This must be in the current fiscal year. 5. Enter the Retirement Details (e.g. Retirement Type, Units Retired or Cost Retired etc). Here enter total units or Full Cost to be retired. 6. Click on Done to complete the process 7. Run the Calculate Gains & Losses program in Depreciation function 1. Steps 1 - 3 as above. 2. Enter the number of units or cost to retire. NOTE: If partially retire by units, choose Continue to specify which units to retire in the Assignments window. 1. Navigate Mass Retirements window 2. Enter the Book from which to retire (IITA_ASSET_BOOK). 3. Enter the date for the mass retirement 4. Enter Retirement Type, Proceeds of Sale and costs of removal 5. Choose whether to Retire only fully Reserved Assets or Assets not fully Reserved or All Assets. 6. Enter one or more of the selection criteria for the mass retirement e.g. Expense Account, Location, Employee Name & Number etc. 7. Choose Retire 8. Review the reports 9. Run the Calculate Gains and Losses program. 1. Same as (2.1) above except that the Retirement Type is Sale or Trashing.

2.2

Partially Retiring Assets

Asset>Asset Workbench>Retirement

2.3

Fully Retiring Assets (GROUP OF ASSETS)

Mass Transaction> Retirement

2.4

Selling or Trashing Fixed Asset

Asset>Asset Workbench

2.5

Correcting Retirement Error

Asset>Asset Workbench

1. Choose Assets>Asset Workbench from the Navigator window. 2. Find the asset to reinstate. 3. Choose Retirements.

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TRANSACTION NATURE

NAVIGATION

TASKS
4. Query the retirement transaction to reinstate. 5. If the retirement status is PROCESSED, choose Reinstate. If it is PENDING, choose Undo Retirement. 6. Calculate Gains & Losses to reinstate the asset if the status is Processed. 1. Navigate to the Mass Retirements window. 2. Use the mass transaction number to query the mass retirement transaction to be reinstated. 3. Choose Reinstate. 4. Re-run the calculate gains & losses program if this was done before the reinstatement.

2.6

To Reinstate a Mass Retirement Transaction

Mass Transaction> Retirement

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FA03 Period End Closing and Reports TRANSACTION NATURE

3.1 Run Depreciation

NAVIGATION
Depreciation>Run Depreciation

TASKS
1. Navigate the Depreciation function 2. Open the Run Depreciation window. 3. Fill in the Book and Period Parameters. 4. Do not choose Close Period option. 5. Click on Run 6. Review the log files and report after the request completes. 1. Select Rollback Depreciation program in Depreciation Function. 2. Fill the Parameters requirement (e.g. Book) on the Submit Request Screen. Click OK. 3. Click Submit and Run the Request on the Concurrent Manager. 1. Same as Run Depreciation except that Close Period option is ticked. 1. Navigate to Journal Entries and open Standard Journal window. 2. On the Submit Request screen fill in the required parameters such as Book and Period. Click Ok. 3. Click on Submit to submit a concurrent process to create journal entries for GL. 4. Review the log file after the request completes. NOTE: Remember that after Create Journal Entries activity, all journals are already posted to GL. There is no need to have a Journal Import in GL. And the general ledger period for which you want to create journal entries must be open.

3.2

Roll back depreciation

Depreciation>Rollback Depreciation

3.3

Run Final Depreciation

Depreciation>Run Depreciation

3.4

Create Journal Entries

Journal Entries>Standard

3.5

Running Reports

Other>Requests

To run a standard report, listing, or request set:

1. Open the Submit Requests

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NAVIGATION

TASKS
window. 2. Choose whether to run a request or request set, then choose the request or request set you want to run. 3. Enter the request parameters. 4. Choose Submit to submit your request. 5. Review the status of your request.

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