Topics

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

Topics

Maintenance Retirement Unplanned Depreciation Mass Transactions Journals Tax Books Budget Books Data Purge

Introduction

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.

Purchasing

Assets

Payables

Projects

General Ledger

Basics

Fixed Assets does not consider Multi Org features. 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. Budget Book operates on Categories / Expense Accounts a combination of which can be entered. Entries from FA support only Functional Currency.

Unlike other sub ledger modules, nothing like Opening of periods

At any point in time, only ONE period can be opened, though entries are permitted to be entered in future periods. There are two ways of creating an Asset: Manual Mass Additions

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 companys needs. Asset Key Flexfield groups assets by non- financial identifiers (Co, A/c No, Dept. etc). Category Flexfield: An assets 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

Asset Flexfields
Depreciation computations depend on such factors as the type of depreciation, depreciation life and the depreciation method. 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.

Location Flexfield: It is used for recording the physical location of asset. Its segments usually comprises Country, State/ Province/ Department/ Land, county and city in which an asset is located.

Asset Identifiers
Tagging with Asset Identifiers: There are four unique identifiers with each asset as enlisted below:
Identifier Asset Number Optional? No Use External; forms and Reports. Source User-assigned or generated; may be imported. Same as Asset ID if generated. User-assigned; usually imported. Generated Purpose Identifies the asset in FA forms and reports.

Tag Number

Yes

External; bar codes. Internal

Provides bar code tracking of assets. Links asset records with depreciation and other transactions. Provides an additional asset identifier; usually assigned by the manufacturer.

Asset ID

No

Serial Number

Yes

External

User-Assigned

Asset Inquiry

Two options are available with in Oracle Assets for an Asset Inquiry.

Financial Information Transaction History.

Financial Information shows complete cost, depreciation in each of the book to which the asset has been assigned and also the complete listing of transactions + its details. If Multiple Reporting Currencies (MRC) is applicable, then the other currency information can also be seen. Transaction History reflects every transaction and its accounting details. Search in this window must be for a given book (only Corporate and Tax) and either of Reference No or Asset Numbers.

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:

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). For grouping assets to be used in reports for analysis etc. Defined as Independent and dependent segments (ex Major and Minor category). Defined as Independent and dependent segments (ex Country, State, Location, Building). 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, from-to date and Prorate Date. Used for defaulting in Asset Categories. Where the account codes, depreciation method, rate, prorate convention are attached to the asset category For defining global level parameters for each corporate book Calendar, Accounting Rules, Natural Accounts and Journal Categories Used for defaulting flexfields and asset numbering for an org. Used for defaulting AP and HRMS parameters

FA Set Up Fiscal Year

Enter a Fiscal Year Name and Description. One can set up multiple fiscal years with different names. Enter the start and end date of each fiscal year. Enter the Fiscal Year one is defining.

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. Depreciation will fail if the current fiscal year is the last fiscal year.

FA Set Up Fiscal / Prorate Calendar

Enter a Calendar Name, Description, The Fiscal Year Name, no of Periods per Year and the Period Suffix. Choose Fiscal or Calendar to append either the fiscal or calendar year to get the accounting period name.

Each book requires a depreciation calendar and a prorate calendar. One calendar can be used for multiple depreciation books, and as both the depreciation and prorate calendar for a book. The depreciation program uses the prorate calendar to determine the prorate period which is used to choose the depreciation rate. The depreciation program uses the depreciation calendar and divide depreciation flag to determine what fraction of the annual depreciation expense to take each period. Set up at least one period before the current period.

Enter the Period Name. Make the period names identical to the periods set up in GL. Enter the start and end dates of this period.

FA Set Up Prorate/Retirement Convention

Enter a Prorate Convention Name, Description and Fiscal Year Name. 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, instead of the period that corresponds to the prorate date.

Enter date ranges and corresponding prorate dates for assets where the date placed in service is between the From Date and the To Date.

FA Set UpDepreciation Methods

Enter a depreciation Method name and Description Select depreciation method from:: Calculated, Table, Production, Flat Formula Select the calculation basis as cost or NBV. (for Calculated and Production method it defaults to Cost)

Choose whether to depreciate an asset in the year it is retired.

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.
Choose Strict Calculation Basis to always use the cost or NBV as of the beginning of the fiscal year as the calculation basis. Enter no of Yrs & Months of asset Life and the Prorate Periods per year (for Calculated and Table Methods). Choose the Rates button to enter rates in the Depreciation Rates window. Enter basic rates and adjusting rate or loading factor (for Table and Flat rate Methods)

FA Set Up Book Controls

Enter the Book name. description and choose the class from Corporate, Tax and Budget.

Enter the GL SOB for which journal entries are to be created. Allow GL Posting to create journal entries for this book. Enter Depreciation Calendar, Prorate Calendar and Current Open Period name for this book. 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. Enter the date on which depreciation was last calculated for this book. FA updates this date each time on depreciation run.

One can define corporate, tax, and budget depreciation books which must be set up before one can add assets to them. One can set up multiple corporate books that create journal entries for different GL SOB or to the same set of books. For each corporate book, one can set up multiple tax and budget books that are associated with it.

FA Set Up Book Controls (Contd)

Allow Amortized Changes to allow amortized changes Allow Mass Changes to allow mass changes in this book. Enter the minimum time to hold an asset for FA to report it as a capital gain when one retires it.

Allow Reserve Adjustments to allow changes to the accumulated depreciation in tax book. 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.

To Allow Revaluation, specify revaluation rules:

Revalue Accumulated Depreciation else FA transfers the accumulated depreciation to the revaluation reserve account. 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.
Life Extension Factor FA multiplies the life extension factor by the asset original life to determine the asset's new, extended life. Life Extension Ceiling To limit the depreciation adjustment when revaluing fully reserved assets. Allow Mass Copy into this tax book, choose whether to copy additions, adjustments, retirements, and/or salvage value.

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, or to a single account for the net gain or loss.

Enter Inter company Receivables and Payables clearing account numbers.

Enter Deferred Depreciation Reserve and Deferred Depreciation Expense accounts.

Enter GL a/c to use as an offset account for the entry against accumulated depreciation when you perform reserve adjustments. Enter the Account Generator default segment values for this book's 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 GL category to use for capitalized and CIP journal entries

FA Set Up System Controls

Enter the Enterprise Name that is to appear on reports. Enter the Oldest Date Placed In Service, which controls what dates are valid to place assets in service and on what date to begin your calendars.

Enter the Location, Category, and Asset Key Flexfield structures to be used.

Enter the Starting Number at which FA is to begin automatically numbering (only numerical sequence) the assets.

FA Set Up - 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. Check In Physical Inventory to include assets under this category in physical inventory comparisons. Choose Lease, Leasehold Improvement, or Non-Lease from the Category Type Choose Owned or Leased from Ownership. Enter the Property Type and Class to which the assets in this category usually belong.

Click to enter the default depreciation rules.

FA uses Asset Cost a/c to reconcile asset costs to GL. FA creates journal entries for this account to reflect additions, retirements, cost changes, revaluations, transfers, reclassifications, & capitalizations. For manual asset additions and cost adjustments, FA uses Asset Clearing a/c to reconcile AP and FA. 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. If bonus rates have been set up, enter the Bonus Expense and Bonus Reserve a/c. Revaluation Reserve a/c is used for the change in net book value due to revaluation, if one revalues accumulated depreciation. Revaluation Amortization a/c is used to amortize the revaluation reserve over the remaining life of the asset after one revalues it, if one amortizes revaluation reserve. CIP Cost a/c and CIP Clearing a/c are used to reconcile CIP asset costs to GL.

FA Set Up - Asset Categories (Contd)

Check Depreciate to depreciate assets in this book and category. Enter the bonus rule to be used for assets Enter the depreciation Method that to be used: For life-based method, enter the asset Life in Years and Months. For flat-rate method, enter default values for the Basic Rate and Adjusted Rate that to be used to depreciate assets For a units of production method, 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, the depreciation rules default according to the date placed in service of the asset, the category, and the book.

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, book, and range of dates placed in service. 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.
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. If this category is for a tax book, indicate whether assets in this category are eligible for Investment Tax Credit (ITC), 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.

Asset Types

Capitalized Assets that show up on Balance Sheets. Generally, depreciated. CIP or WIP (Construction or Work In Progress Assets) Assets which are not yet complete and capitalized. Expensed Which are not depreciated. Entire cost charged in one period. Group Collection of Member Assets. Can Add / Transfer. Parent Assets which have sub components that can be tracked separately Ex. Monitor of a PC. 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.

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. Review Those which are desired to become assets. Lines can be added / split / merged. Post Additions which actually become Assets. Clean Up Deletion of unnecessary and posted mass additions. Also, purge deleted mass addition lines.

Only mass addition lines on New / On Hold queues can be merged. Can not merge split lines. After Post Mass Additions process, lines in Post, Cost Adjustment, Merged queues become Posted. Delete Mass Additions process removes lines in Posted [already become assets], Delete [lines to be deleted] queues. Oracle Assets maintains an audit trail by moving lines in the DELETE queue to the interim table FA_DELETED_MASS_ADDITIONS. After running Delete Mass Additions, these lines will not appear in the Mass Additions window.

Mass Additions

The Purge Mass Additions from Oracle Assets program deletes mass additions from the interim table FA_DELETED_MASS_ADDITIONS. The items in the interim table are the audit trail from the mass addition lines marked DELETE and removed using Delete Mass Additions. When purging the interim table, the audit trail is lost. Mass Additions Create process from Payables transfers asset lines only once. This means that 1 distribution line = 1 transfer to a Corporate Book. By setting the FA: Default DPIS to Invoice Date profile option to Yes. This permits defaulting the date placed in service to the invoice date, even though the invoice date is in a future accounting period.

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. One can enter minimal information in the Quick Additions window, and the remaining asset information defaults from the asset category, book, and the date placed in service. 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. Create assets from one or more invoice distribution lines in Oracle Payables, CIP asset lines in Oracle Projects, asset information from another assets system, 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.

Quick Additions

Enter The Parameters Here To Find An Existing Asset.

Click to enter Assets using New additions

Click to enter Click to find the Assets using Quick Asset details. Additions

Quick Additions (Contd)

Enter Asset Description, Tag No, Asset Category, Serial No, Asset Key, Asset Type (Capitalized, CIP, Expensed), No of Units, Supplier Name, Inv & PO No.

Enter the Asset Book, Asset Cost and DPIS

Enter Employee Name, Depreciation Expense A/c and the Asset Location.

Enter Asset Description, (Asset No to be entered only if Manual Numbering) Tag No, Asset Category, Serial No, Asset Key, Asset Type (Capitalized, CIP, Expensed), No of Units, Parent Asset No (to link a sub-component to a main component), Manufacturer Name, Asset Model No, Warranty No, In Use, In Physical Inventory, Property Type (Personal, Own etc), Property Class, Ownership (Owned or Leased), Bought (New or Existing); Enter the Lease No, Description and Lessor Name if Asset is leased

New Additions

New Additions (Contd)

Enter the Supplier No, PO no and Project Details if applicable.

Enter the Invoice No, Line no and Invoice Description

Click to Continue entering additional details.

New Additions (Contd)

Enter the Corporate Depreciation Book and Comment if any; 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.

Enter the Original Cost, Salvage Value (if any), Check the Depreciate Flag, DPIS and Prorate Convention

Depreciation Method, Life in years, Months (gets defaulted from Category which can be overridden), Bonus Rule (if applicable), Check on Short Fiscal Year (if applicable)

New Additions (Contd)

Enter the Employee Name, Depreciation Expense Account and Asset Location details.

Click to save and generate the Asset as displayed in the Message box.

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 Addition Queues

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. Enter the Relevant Asset Details

Change the Queue Name to Post.

Click to view / change the Assignments.

Click to store the Queue name as Post.

Mass Additions (Contd)

Enter the Employee Name, Depreciation Expense Account and the Asset Location Details.

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.

Asset Workbench

New: To enter assets in detail. Quick Addition: To enter assets quickly. Sub-components to define/view the subcomponents under a Parent Asset. Retirements: To retire Assets. Books: To view the entire details of Cost, NBV, DPIS etc of the asset. Source Lines: To view/enter the Purchase source. Assignments: To view / modify the employee and location assignments. Open: to view the summary of the Asset.

Reclassification

Changing asset descriptive information other than category and units has no financial impact. However, reclassification is always to a different Category. When an asset is reclassified in a period after the entered 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. Done when creating journal entries for GL. Oracle Assets also changes the depreciation expense account to the default depreciation expense account for the new category, but does not adjust for prior period expenses. Mass Reclassification feature can be used any number of times in a period. Cant reclassify in a prior period. When choosing to have assets inherit depreciation rules, can also choose to amortize the resulting adjustments by checking the Amortize Adjustments check box on the Mass Reclassifications window. If not , adjustments will be expensed. Depreciation rules are inherited both in Corporate and Tax books as applicable for the respective categories. Allow Mass Changes check box in the Accounting Rules region of the Book Controls window, to be checked for any assets that need to inherit depreciation rules. Also, DFF information can be optionally copied.

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. Review - To review the changes to category and depreciation rules.

Financial / Depreciation Information

Change Matrix. Also, generally, just be sure of some restrictions. Mass Change exclude CIP and Retired Assets.
When What

Sr.No.

Before running Any Information Depreciation (I.e. the period in which the asset was added)
After running Depreciation(I.e. any period after the period in which the asset was added) [Including fully reserved (depreciated) assets] Can change cost, salvage value, prorate convention, depreciation method, life, capacity and unit of measure (in the corporate book), rate, bonus rule, depreciation ceiling, and revaluation ceiling.

Retired Assets

None changeable.

Asset Transfers

Can transfer assets between employees, depreciation expense accounts, and locations. To consider the following:

Transfer date can be in a prior period for a particular transfer, but the transfer must occur within the current fiscal year; Transfer date in a prior period - only once per asset;

Revaluation

Can revalue all categories, all assets in a book or selective assets.

Physical Inventory

To compare books and physical balances only in Corporate Books. Need to include the the following information I.e Asset No. / Tag No. / Serial No. , Location, No. of Units. Physical Inventory details can either be entered or enter in ADI. Upon completion of the entry process, can run the Physical Inventory Comparison Program. In Physical Inventory checkbox determines if a specific asset would be included in the Physical verification. After running Physical Inventory Comparison program, the UNIT_RECONCILE_MTH field FA_INV_INTERFACE table would be updated with a unit reconciliation code.

Physical Inventory

Available reports that can be used are:

Physical Inventory Comparison Report; Physical Inventory Missing Assets Report.

Physical Inventory data can be purged once an End Date is entered for a specific run.

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.

Asset Maintenance

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.

Retirement

Entire or Partial retirement feasible. Cost or Unit retirements feasible. However, cant retire in Units in Tax Books. CIP Assets cannot be partially retired. Can perform multiple partial retirements in a period. However, between these suggest to calculate Gain / Loss. Gain/Loss = Proceeds of Sale Cost of Removal Net Book Value Retired + Revaluation Reserve Retired. Mass Retirements / Mass Retirements Exception reports are automatically run. Exceptions to retirement are:

Assets with transactions dated after the retirement date entered; 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, assets retired during a prior fiscal year. Also, in case of multiple partial retirements, only the last one can be reinstated.

Retirement

Retirement can be independently done from any book or Mass Copy can be set up in Book Controls window. Retirement statuses can be Pending or Processed.

When a pending retirement is re instated , the retirement transaction is deleted. If a processed retirement is re instated, then status is changed to Reinstate should rerun either depreciation or gain / loss program to re instate.

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.

Retirement

Run the Calculate Gains and Losses program to:

Calculate gains and losses resulting from retirements. Correct the accumulated depreciation for reinstated assets.

Calculate Investment Tax Credit recapture for retired assets in a tax book, if applicable.

Retirement
Enter the Retirement Date, Comments if any, Retirement Type, Cost Retired, Sale Proceeds, Cost of Removal, Retirement Convention (If retiring an asset before it is fully reserved), Purchase Details

If a parent asset is to be retired, choose Subcomponents to view the subcomponents asset (s) affected by the retirement transaction. One can separately retire these subcomponents if necessary.

To reinstate an asset wrongly retired.

Depreciation
Running Depreciation Run depreciation to process all assets in a book for a period. If certain assets have not depreciated successfully, these assets are listed in the log file created by FA on running depreciation. Closing a Depreciation Period While running depreciation, FA gives the option of closing the current period. If all of the assets depreciate successfully, FA automatically closes the period and opens the next period for the book. If the period is not to be closed, then once depreciation has been processed for an asset in the current open period, one cannot perform any transactions on those assets unless depreciation is rolled back or the current period is closed. Basic Depreciation calculation:

Depreciation

Prorate Date FA prorates the depreciation taken for an asset in its first fiscal year of life according to the prorate date. FA calculates the prorate date when an asset is initially entered. The prorate date is based on the date placed in service and the asset prorate convention. The reporting authoritys depreciation regulations determine the amount of depreciation to take in the assets first year of life.

Depreciation Rate Calculation Basis FA calculates depreciation using either the recoverable cost or the recoverable net book value as a basis. If the depreciation method uses the asset cost, FA calculates the fiscal year depreciation by multiplying the recoverable cost by the rate. If the depreciation method uses the asset net book value, FA calculates the fiscal year depreciation by multiplying the recoverable net book value as of the beginning of the fiscal year, or after the latest amortized adjustment or revaluation, by the rate.

Determining the Prorate Period FA uses the prorate date to choose a prorate period from the prorate calendar. Determining the Depreciation Rate For lifebased depreciation methods, FA uses the depreciation method and life to determine which rate table to use. Then, it uses the prorate period and year of life to determine which of the rates in the table to use. Flatrate depreciation methods determine the depreciation rate using fixed rates, including the basic rate, adjusting rate, and bonus rate.

Calculate Annual Depreciation Calculated and tablebased 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. Flatrate methods calculate annual depreciation as the depreciation rate multiplied by the recoverable cost or net book value, multiplied by the fraction of year the asset was held.

Allocate Annual Depreciation Across Periods After calculating the annual depreciation amount, FA uses depreciation calendar, 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. To allocate depreciation evenly to each of the accounting periods, FA divides the annual depreciation by the number of depreciation periods in the fiscal year to get the depreciation per period. To allocate it according to the number of days in each period, 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. Spreading Depreciation Across Expense Accounts Finally, FA allocates the periodic depreciation to the asset assignments. FA does this according to the fraction of the asset units that is assigned to each depreciation expense account in the Assignments window.

Depreciation Calculation Run the depreciation program independently for each depreciation book. The depreciation program calculates depreciation expense and adjustments, and updates the accumulated depreciation and yeartodate depreciation. The depreciation program submits three separate requests to: Calculate gains and losses for retired assets and catch up depreciation for retired and reinstated asset, Calculate depreciation expense and adjustments for the period, & Close the current period Depreciation expense is calculated as follows: Depreciation Expense = (Current Cost Recoverable Cost) * Basic Rate

Depreciation

Depreciation Calendar The depreciation calendar determines the number of accounting periods in a fiscal year. Prorate Calendar The prorate calendar determines what rate FA uses to calculate annual depreciation by mapping each date to a prorate period, which corresponds to a set of rates in the rate table. Period Close FA automatically closes the books current period and opens the next on running the depreciation program. YearEnd Processing One can close the year independently in each depreciation book. The depreciation program automatically resets yeartodate amounts on a book the first time the depreciation program is run on that book in a fiscal year. 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. Suspend Depreciation One can suspend depreciation by unchecking Depreciate in the Books window. While adding an asset if the Depreciate flag is unchecked, then FA expenses the missed depreciation in the period asset is depreciated first. Recoverable Cost For depreciation methods with a calculation basis of cost, FA calculates depreciation using the recoverable cost. The recoverable cost is calculated as the lesser of either the cost less the salvage value less the investment tax credit basis reduction amount, or the cost ceiling. FA depreciates the asset until the accumulated depreciation equals the recoverable cost. Adjustments The following are some examples of financial adjustments one can expense or amortize: Recoverable Cost Adjustments, Depreciation Adjustments, Life Adjustments, Rate Adjustments, 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, FA automatically calculates the missed depreciation and adjusts the accumulated depreciation on the next depreciation run. If accumulated depreciation is provided while adding the asset, FA does not recalculate the accumulated depreciation. It accepts the amount entered. If the accumulated depreciation is too low, FA takes additional depreciation in the last period of the assets life so that the asset becomes fully reserved. If the assets accumulated depreciation is too high, FA stops depreciating the asset when it becomes fully reserved, effectively shortening the asset life. Prior Period Transfers If one back dates an asset transfer within the same fiscal year, FA automatically reallocates depreciation expense by reversing some of the depreciation charged to the from account, and redistributing it proportionally to the to accounts. Retroactive transfers do not impact the total depreciation. Prior Period Retirements / Reinstatements If one back dates a retirement within the same fiscal year, FA automatically adjusts the depreciation for the year by the appropriate amount, resulting in a onetime adjustment in depreciation expense for the period. FA then computes the gain or loss using the resulting net book value. Prior Period Amortized Adjustments If one back dates an amortized adjustment, FA automatically calculates depreciation from the retroactive amortization start date, and adds the retroactive depreciation to the current period.

Depreciation

Flatrate methods use a calculation basis of either the recoverable cost or recoverable NBV to calculate annual depreciation. Assets depreciating under flatrate methods with a calculation basis of recoverable NBV do not become fully reserved. Instead, the annual depreciation expense gets reduced over time. For assets using the straightline method, depreciation starts in the first accounting period that the prorate date falls into. For assets using other life based depreciation methods, depreciation starts in the first accounting period that either the date placed in service or the prorate date falls into, depending on whether Depreciate When Placed In Service is checked for the prorate convention. In both cases, Oracle Assets allocates the first years depreciation to the depreciation periods remaining in the fiscal year. Can enter production for dates in the future to calculate depreciation projections for future periods. Then, update the projected amounts when the actual production for the period is known and required to actually depreciate the asset. Also, before retirements for assets using this production method, the production information needs to be cleared.

Depreciation

Cannot enter production for a constructioninprocess (CIP) asset before capitalizing it. Similarly, cannot enter production for a an asset before its prorate date. If using a prorate convention such as actual months, can enter production for the period in which the asset is added. Also, cant enter or upload units of production assets with accumulated depreciation. Instead, add the asset with zero accumulated depreciation, and then provide the lifetodate production amount for the current period in the periodic production table using the Periodic Production window. Oracle Assets uses the production amount entered to calculate the catch up depreciation. Production Method in Tax Book feasible only if it is the same basis in Corporate Book. Change in Corporate book is also restricted only if not using Production method in Tax Book. Can change the method from calculated, table, or flatrate to production only in the period in which the asset is added.

Run Depreciation
Select the Corporate Book for which depreciation is to be run. The period is by default the current open period. Check whether to close the period on running depreciation. Once closed the period defaults to the next period. If period is not closed, FA doesnt create JVs for that period. Lot of can reports also do not reflect the depreciation. One has to roll back depreciation and then again run with close option.

Click to launch the concurrent process for running depreciation.

Rollback Depreciation

Select the Corporate Book for which depreciation is to be rolled back. The period is by default the current open period.

Depreciation Forecast

To forecast depreciation for groups of assets in different scenarios without making changes to data in Oracle Assets. This can be run for assets either already existing or purely hypothetical.

Even for existing Group Assets feasible not for fresh one.
Can also be run for reporting set of books in that specific currency. Cant be run in Reporting Currency for hypothetical assets. Has no impact on the existing data and no changes are made.

After entry of parameters, Run initiates Whatif Depreciation Report or the Hypothetical WhatIf Report.

Depreciation Analysis-Projections

Depreciation projections are estimates of actual depreciation expense which can be projected for any depreciation book. One can run depreciation projection only for the current depreciation parameters set up in the system.

Enter the Projection Calendar to specify how to summarize the projection. Enter the No of Periods for which to project depreciation Enter the Starting Period for projection. Check Cost Center Detail to print a separate depreciation projection amount for each cost center. Check Asset Detail to print a separate depreciation amount for each asset. Enter the Book (s) that to include in projection. All of them must use the same Account structure. The fiscal year name for the Calendar and each Book must be the same.

Depreciation Analysis - What-if Analysis

Select the Relevant Tabbed region for FA assets or Hypothetical assets.

Enter the Corporate Book, Start Period and No of Periods for which Analysis is to be carried out.

Enter Asset Parameters for which the What-if is to be run.

Enter the Relevant Depreciation Scenario Parameters for running the What-if

Unplanned Depreciation

Intended mainly for Germany & Netherlands Also, can handle any other unplanned depreciation (Ex.temporary restrictions in special economic periods etc.,) Can perform the following:

Enter unplanned depreciation amounts by asset and book for any current period during the useful life of an asset. Enter unplanned depreciation for an asset in both the corporate and/or tax books. [Immediately updates the yeartodate and lifetodate depreciation,and the net book value of the asset.] Change the depreciation method after entering unplanned depreciation.

Depreciation Beyond Useful Life

Can depreciate an asset in the years following its useful life if the asset uses a straightline or flatrate depreciation method. For assets using a straightline 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, the asset will continue to depreciate at the same rate it depreciated during the last fiscal year of the assets normal useful life. Cant 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 PriorPeriod Retirements

Warranties

Enables tracking Vendor warranties on assets. Either Start and End Dates must be entered or both left blank. Currency can be selected. Asset to Warranty relationship is currency specific. Employee details can be optionally attached to the warranty. In the Asset Workbench for any specific asset, against Warranty Number any record previously defined can be attached. However, validated for Date Placed In Service to be within the Warranty Period. (only if warranty contains dates).

No Standard Report appear to be available for reporting on warranties.

Leased Assets

Permits testing of leased assets in accordance with GAAP whether to capitalize or not. 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, and to determine if any of the tests listed above are met. If the lease meets one of the four tests, application defaults the lease type to Capitalized, 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. Accommodates different lease payments like Purchase / Renewal / Balloon etc., Can also create amortization schedules. Oracle Assets tracks payments under operating leases, or leases which do not meet any of the criteria, for informational purposes.

Leased Assets

In the Asset Workbench the defined lease can be attached to an asset having category definition set up as Leased asset. The capitalized value is automatically defaulted as the Fair Value. Can be changed.

Only leases of the Type Capitalized are available for selection.

Lease Payments can be transferred to Oracle Payables .

The invoice number is designated as FA-<<Lease No.>>-<<Running Sr.No. of Invoice>> The exported invoice information would be available in AP_INVOICES_INTERFACE and AP_INVOICE_LINES_INTERFACE. 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.

Mass Transactions-Transfers
Select the Corporate Book, 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. Click on Preview to get an overview of the impact and details of transfer. Once finalized, use the Mass Transaction No to query (generated on preview) and Click on Run to launch the transfer process.

Mass TransactionChanges
Select the Corporate Book and Enter the Change Date. If Amortize Adjustments is not selected, the adjustments will be expensed in the current period.

Specify the asset numbers or dates placed in service or category for which the Mass Change applies.

Enter the Before and After details for the requisite changes to take place.

Preview: to get an overview of the impact and details of transfer. Run: Once finalized, use the Mass Transaction No to query (generated on preview) and Click on Run to launch the change process. Review: to get an overview of the changes taken place on running

Mass TransactionRevaluations
Enter the Corporate Book, Comments and Revaluation Date.

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. Life Extension Ceiling limits the amount of depreciation one can back out when fully reserved assets are revalued.

Enter the Asset Category and / or Asset No to be revalued. Enter a +ve or ve Revaluation % . Override revaluation rules if reqd.

Mass TransactionReclassifications
Enter the Corporate Book, Comments and Reclassification Date.

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. Inherit Depreciation Rules of New Category to have all rules inherited or no rules by ensuring the check box is not checked. Amortize Adjustments to amortize the resulting adjustments else adjustments will be expensed.

Mass TransactionRetirements
Enter the Corporate Book, Retirement Date, Retirement Type, 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. Whether to retire subcomponents attached to this parent asset and Comments.

Select the Asset Type to be retired. Enter one or more of the selection criteria for mass retirement. Choose whether to: Retire only fully reserved assets- Yes check box Retire only assets that are not fully reserved - No check box Retire all assets specified in the window - do not check the boxes

Click on Create to Create the Mass Transaction. Click on Retire to automatically run the Mass Retirements Report and the Mass Retirements Exception Report. Review the reports. One can also adjust a resulting individual retirement transaction in the Retirements window, or reinstate the mass retirement transaction in the Mass Retirements window. When one is ready to process the pending mass retirement transaction, run the Calculate Gains and Losses program. Click on Discard to reinstate the Assets wrongly retired. One can also Prepare and Post Mass Retirement from the Prepare and Post windows.

Journal Entries
Creating Journal Entries for the GL FA creates journal entries for depreciation expense, asset cost, and other accounts. FA automatically creates transaction journal entries for GL, if one has set up the journal entry category for that transaction type for that book. FA creates journal entries that summarize the activity for each account for each transaction type. Asset Accounting Creating journal entries is a two step process: 1. At the end of each accounting period, run the depreciation program for each book which closes the current period and opens the next period. 2. Run the Create Journal Entries program to create journal entries to GL. Journal Entries The create journal entries process creates journal entries for the appropriate GL SOB. One can review these journal entries in GL and post them. Prior Period Transactions FA creates adjusting journal entries to depreciation expense and accumulated depreciation accounts when prior period additions are entered, transfers, or retirements:

For a prior period addition, FA creates journal entries for the missed depreciation
For a prior period transfer, 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, 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. Any GL One can create journal entries for any GL. If Oracle GL is not used, one can copy the journal entry information from the GL tables.

FA Accounts
FA creates journal entries for the following GL accounts: Accumulated Depreciation, Asset Clearing Asset Cost, CIP Clearing, CIP Cost, Cost of Removal Gain, Loss, and Clearing, Deferred Accumulated Depreciation, Deferred Depreciation Expense, Depreciation Adjustment, Depreciation Expense, Intercompany Payables, Intercompany Receivables, Net Book Value Retired Gain and Loss, Proceeds of Sale Gain, Loss, and Clearing, Revaluation Amortization, Revaluation Reserve, Revaluation Reserve Retired Gain and Loss Reviewing Journal Entries After sending journal entries from FA to oner general ledger, one can review or modify journal entries in oner general ledger before posting them. If one integrate FA with Oracle GL, use the Enter Journals window in Oracle GL to review, change or correct oner entries. f one use a different general

ledger, one can review or change entries in that general ledger.

Journal Entries - Standard

Click to Launch the concurrent program.

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.

Tax Books
TAX BOOK MAINTENANCE: Copy assets and transactions from corporate book to tax books automatically using Mass Copy. One can create as many tax books as required, maintain asset information in corporate book, and then update tax books with assets and transactions from corporate book.

Initial Mass Copy: Use Initial Mass Copy to initially populate tax book by adding existing assets to a tax 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. The current fiscal year in tax book determines which assets Initial

Mass Copy copies into tax book. Initial Mass Copy does not copy assets retired before the end of that year.

When this initial period is closed, FA calculates the net book value of assets that have zero accumulated depreciation in the tax book, and opens the next period.

When the Initial Mass Copy program copies an asset into a tax book, the following basic financial information comes from the corporate book: Cost, Original Cost, Units, Date Placed in Service, Capacity and unit of measure for units of production assets, Salvage Value. The remaining depreciation information comes from the default category information for tax book according to the asset category and the date placed in service.

Since tax books share the category and assignments with their associated corporate book, one need not copy reclassifications or transfers from one book to another. Tax books also share Production amounts with their associated corporate books for assets depreciating under units of production. Initial Mass Copy does not copy any transactions on CIP assets or expensed items. Finally, it does not copy revaluations.

For subcomponent assets, copy the parent asset first. Then copy the subcomponent asset, defaulting the asset life according to the subcomponent life rule defined for the tax category and the parent asset life. Set up the depreciation method for the subcomponent asset life before the method and life can be used . Periodic Mass Copy: Use Periodic Mass Copy each period to keep tax book up to date with corporate book. 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.

One can run periodic mass copy on each tax book after each period in the corporate book is closed. The Periodic Mass Copy program copies addition, adjustment, retirement, and reinstatement transactions to tax book from the current period in the associated corporate book.

Periodic Mass Copy copies all qualifying transactions for an asset one at a time. It does not combine transactions, and only copies transactions from a closed accounting period in the associated corporate book.

Production

Use the Production Interface: Production information can be entered manually, or maintained in another system and uploaded using the production interface. Prepare and analyze the production information on any feeder system and then automatically transfer the production information into FA. FA uses that information to calculate depreciation for units of production assets. Import production information to FA: Use an import program or utility to export data from feeder system and populate the production interface table. Run the Upload Production program to move production information into FA. Run the Production History report to review the status of all imported items. Use the Periodic Production window to review or change the production information. 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, one must specify the following information in the SQL*Loader script: Asset Number, Production Amount, 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, or one can load it automatically from a feeder system using the Upload Periodic Production program. Enter production more than once a period if necessary.

Production - 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 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. - I.e. for the same category with a different account new budget can be entered. Can not post to a GL Set of Books. Budget always enterable only from the first period of the Current Fiscal Year set up in Book Controls. Partial budget entries not allowed. Should be entered for all the periods in a fiscal year. Also, budget can always be entered for one year at a time. [Max. 12 periods] Budget can only be entered for Categories which have been defined for the corresponding Corporate Book. Projections use the category rules. Can compare actual cost of assets acquired and budgeted by running Budget-toActual Report. 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.

Purge of Data

Purge program removes the depreciation expense and adjustment transaction records for the book specified. However, it does not remove the asset identification, financial, and assignment information for the assets, including assets retired or that are fully reserved during any fiscal year. Maintains an audit trail of which fiscal years have been archived, purged, and restored, and how many records were processed. As a measure of security Purge should be enabled in Book Controls window otherwise, not feasible.