Oracle 12.0.5 Implementation Project BP.080-Future Process Model- Fixed Assets

AIM
BP.080 - FUTURE PROCESS MODEL

Aditya Brila Retail Limited
Future Process Fixed Assets Version: Oracle Application 12.0.4
Author Creation Date Last Updated Document Ref Version
: Ram Ganesh : 26 Sep 2008 : 29-Sep-2008 : ABRL-BP080-FA : 1.0
Approvals:
Name and Designation Signature
Swarup Ghosal Chaudhary, Project Manager Wipro Saurabh Chakravarthy Bala S.K
Confidential for Internal use only
Oracle 11.5.10.2 Implementation Project BP.080-Future Process Model- Fixed Assets
FA_BP080_NLL 5 May 2008
Document Control
Change Record
Date
Author
Version
Change Reference
Reviewers
Name
Position
Shalini Pal
Lead Consultant, Wipro Infotech
Distribution
Copy No. 1
Name
Location
Note to Holders: If you receive an electronic copy of this document and you print this out, you should write your name on the front cover (for document control purposes). If you receive a hard copy of this document, please write your name on the front cover (for document control purposes)
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Company Confidential - For internal use only
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Oracle 11.5.10.2 Implementation Project BP.080-Future Process Model- Fixed Assets
FA_BP080_NLL 5 May 2008
Contents
Document Control........................................................................................ii Introduction ................................................................................................4 About Company.....................................................................................4 Document Scope and Assumptions........................................................4 ABRL HO Finance...................................................................................4 Key Issues Highlighted /Observed..........................................................5 Key Business Process Improvement.......................................................5 Legend......................................................................................................... 6 Fixed Assets Process....................................................................................8 Event Catalog for Fixed Assets ...................................................................9 Process Descriptions for Fixed Assets........................................................10 Fixed Assets Future Process Flow in Application........................................11 ABRL Future Business Process Flow ....................................................12 FA-P001: Prepare Mass Additions ........................................................12 FA-P002: Post Mass Additions..............................................................14 FA-P003: Manual Additions...................................................................17 FA-P004: Enter CIP Asset......................................................................19 FA-P005: Asset Maintenance................................................................21 FA-P006: Adjustments - Financial and Other Asset Information...........23 FA-P007: Asset Retirement..................................................................25 FA-P008: Asset Transfer.......................................................................27 FA-P009: Manage Construction in Progress Assets...............................29 FA-P010: Depreciate Assets.................................................................31 FA-P011: Period Close Process.............................................................32 FA-P012: Create Accounting ................................................................35 Open and Closed Issues.............................................................................37 Open Issues......................................................................................... 37 Closed Issues.......................................................................................37
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Oracle 12.0.5 Implementation Project BP.080-Future Process Model- Fixed Assets
FA_BP080_ABRL 08 Sep 2008
Introduction
About Company
ABRL Profile
Aditya Biral Retail Limited belongs to the USD 28 Billion Corporation that is in the league of fortune 500. ABRL made its foray into retail market in 2006 by acquiring Trinethra, a retail chain of super markets in south India and with over 170 Outlets. Spread across the four southern states of Tamilnadu, Karnataka, Andhra Pradesh and Kerala respectively. In May 2007 ABRL launched its own Brand of retail stores More. More Spread its wings in Super Markets and Hyper markets ranging from an area of 10000 Sq.Feet to 75000 Sq.feet, more. has till date around 100 Super Markets in locations across Pune, Vizag, Delhi, Bangalore & Vijayawada.
Document Scope and Assumptions

This document is the result of discussions with key personnel from Aditya Birla Retail Limited (ABRL). This document outlines the future process model proposed for the Fixed Assets function of ABRL. The scope of the module includes Addition , Maintenance , Depreciation Calculation, Retirement of assets and Integration with General Ledger. This high level process model has been developed based the discussions with the key users of from the Accounts Department of ABRL. The document describes each of the business functions identified within ABRL during the discussion and the proposed business solution using the Fixed Assets module. It will also identify the individual processes that it performs within business functions and explain the process and limitations (if any) compared to current practice. Each business function contains the following sections: Descriptive overview
Process descriptions
The proposed solution uses the standard Oracle Application Release 12.0.5 with India Localization which is an integrated Module of Supply Chain, Oracle Financials. Oracle Assets module provides the basis for creation, tracking and maintenance of fixed assets. Those business functions identified as not being sufficiently catered for by the standard system will be addressed during detailed analysis in Phase - II of the implementation cycle. We may propose to change the business practices or will propose workarounds that can be fulfilled using standard Oracle applications. In the event of these options are not able to meet ABRL requirements, we may look at the possibility of customizing the functionality and features of the standard modules. This will be a last resort as our intention will be to keep the system as standard as possible. If customization is unavoidable, we will try to make the processes external to Oracle Assets module. Our objective is to avoid modifications to the core logic and procedures of the Oracle Assets system. Upon acceptance of this document, we will carry out the business mapping for the Assets system and a gap list will be produced addressing the business areas that are not supported by the standard Oracle Assets module. We will also suggest the workarounds (if any) in the same document. It is important that all key users and the IT key users go through this document and identify any areas that we may not have addressed or are not to be implemented due to operational reasons. Such items need to be addressed at this stage to ensure smooth deployment of the system.
ABRL HO Finance
The HO Accounts in ABRL is responsible for maintaining the Financial and Management accounts in the company. The Fixed assets processing activities of ABRL are currently performed using FAMS/Navision system. In ABRL all Fixed Assets reports are performed manually using FAMS, an offline System The Accounts Department matches Supplier Invoices with Receipts and then they manually record the items as fixed assets in the System.
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The objective of this document is to recommend the High level Process model for the Fixed Assets functions in ABRL. Future process model will be used as the basis for the Oracle Product mapping. ABRL Proposes to maintain a single Corporate Book that will be associated with HO Ledger.
Key Issues Highlighted /Observed

1. 1. 2. 3. 4. 5. 6. 7. 8. Integration is the key issue as many processes are performed manually (i.e. no integration with other modules). Matching of PO/GRN against Invoice and Fixed Asset is performed manually. In ABRL Fixed Assets Spreadsheet. schedule is prepared manually using MS-Excel
In ABRL, journal entries relating to Fixed Assets are passed in the General Ledger manually. In ABRL, Depreciation under Income Tax are calculated separately in Excel Sheet. ABRL Follows a Straight line Method of Depreciating Assets based on the rates for the relevant assets/category of assets. In ABRL, Store opening date is the cutoff date for capitalizing the assets for that Location ABRL Capex procurement, Invoicing, payment and capitalization process is centralized Transfer of Asset related financial information namely Asset cost and depreciation expense to the Concerned State ledger is not possible as a single FA book can be attached to a single ledger only.
Key Business Process Improvement

Following are the key areas where the process improvements have been proposed: 1. 2. 3. 4. 5. 6. Integration of the Fixed Assets process with the Purchase Order, Accounts Payable, General Ledger processes. Invoice details will be transferred electronically from the Accounts Payable module to the Fixed Assets module. Actual depreciation will be automatically calculated by the system monthly. All journal entries related to the fixed assets will be automatically generated and passed to Oracle General Ledger. Depreciation expense can be assigned to relevant cost centers. Capex Purchase orders, GRN, Invoicing and capitalization will be carried out in ABRL HO Ledger and ABRL HO will be responsible for the maintenance of the FA Book.
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Legend
Fixed Assets Fixed Assets Flow Flow
Other Modules Flow
Future Business Model

The Fixed Assets Module takes care of the Asset Management and Reporting requirements of the entire enterprise. The module allows users to create assets either manually or through Mass Additions, perform Asset transfers, Adjustments, Retirements and Depreciation. ABRL Proposes to follow a centrally Managed Asset Management System. Requisitions for asset Purchases are proposed to be raised by the Project team and subsequent process of raising POs and Making Payments for the procurement being handled from HO. The Proposed Process in ABRL is diagrammatically Presented in the following Process Flow Diagram.
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The Asset Register is referred to as an Asset Book i.e. Corporate Book in the Oracle Assets. The journal of all the financial transactions of an Asset Book is done in the GL. Hence every asset book should be associated with a GL. Fixed Assets has three flex fields that assist in codification and classification of assets.
Asset Category Flex field

ABRL Plans to have its Assets categorized in to Major and Minor Categories. For this Purpose Asset Category Flex fields would be configured to meet the requirements of ABRL for grouping their assets based on Depreciation Method, Rate etc.
The Asset Location Flex field

This structure is to be used for recording asset locations and use this as the basis of recording physical asset transfers. It can support up to seven segments. This is a mandatory flex field. ABRL Proposes to track its assets based on the Asset Locations and for the purpose the Flexfield would be configured accordingly to cater to their requirements.
The Asset Key Flex field

ABRL can group assets as per it own requirements apart from the grouping to be done using the Asset Category Flex field. The Asset key Flex field can be used for this. This structure is to be used for recording user required groupings. This flex field can support up to ten segments. This flex field is optional.
Depreciation Calendar
Depreciation calendar is the calendar, which the entire fixed assets use for the purpose of calculating depreciation and subsequent accounting in the General Ledger module. It is a general practice to maintain the same calendar for both the GL and the FA.
Depreciation Methods
Oracle Assets supports almost any depreciation method. The depreciation methods that can be used are Flat rate, Table based, Calculated, Production based and Formula depreciation. Different depreciation methods can be used for different categories based on ABRL requirements.
Prorate Convention/Retirement Convention.

ABRL requires a Prorate convention so as to enable it to have the assets depreciated as on the date asset placed in service regardless of the date Depreciation is run for the asset. Prorate Convention is used to capture prorate date. Prorate date is the date which overwrites the date placed in service for depreciation calculation during the first year of the assets life. In prorate convention, we specify what should be the prorate date from which the system should calculate depreciation for the first year, for a given date placed in service. The system in turn identifies the period to which the prorate date belongs to and calculates depreciation for that period.
Physical Verification of Assets

In the Assets module, Physical Inventory is the process of comparing the location and number of units of fixed assets as per the information maintained by Oracle assets with the actual location and no. of units. Its helps to identify the missing assets. To use Physical Inventory feature, it should be enabled for each Asset category at the time of setup.
Transfer of Assets Each asset can be assigned to a location and / or to an employee. Assets can be transferred between locations or from one employee to another. Running Depreciation
Depreciation can be run only at the book level and for a period at a time. Running depreciation for a period automatically closes the current period and opens the next period for transactions. Fixed Assets can have only one period open at any point in time.
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Fixed Assets Process
FA-E01 FA-E01 Create Fixed Create Fixed Assets Assets
FA-E02 FA-E02 Maintain Fixed Maintain Assets Fixed Assets FA-P005 Maintain Assets FA-P006 Adjustment to Financial Information. FA-P007 Asset Retirement FA-P008 Asset Transfer
FA-E03 FA-E03 Depreciate Depreciate Fixed Assets Fixed Assets
FA-E04 FA-E04 Period Close Period Close Process Process
FA-E05 FA-E05 Book Book Control Control
FA-P001 Prepare Mass Additions
FA-P010 Depreciate Assets
FA-P011 FA-P011 Period Close Period Close Process Process FA-P012 Create Journal Entries
FA-P013 Book Control
FA-P002 Post Mass Additions FA-P003 Manually Add Assets
FA-P004 Enter CIP Assets
FA-P009 Manage CIP Assets
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Event Catalog for Fixed Assets

Event Id FA-E01 FA-E02 FA-E03 FA-E04 FA-E05 FA-E06 Name Creation of Fixed Assets Maintain Fixed Assets Depreciate Fixed Assets Period Close Process Define Book Control Defining Flex Fields Type Internal Internal Internal Internal Internal Internal Description Create fixed assets in the Assets module. Maintain fixed assets information in the Assets module. This includes adjusting asset value, retiring assets, transferring assets and maintaining CIP assets. Run depreciation process to calculate the depreciation amount of all assets. Period Close Process and Create journal entries relating to fixed assets e.g. depreciation journals, disposals etc. Creation of Corporate Book Creation of Asset Flex fields Frequency As Required As Required Monthly Monthly Once at the time of setup Once at the time of setup
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Process Descriptions for Fixed Assets

Event FA-P001 FA-E01 Process Title Prepare Mass Additions Description of Process Invoices are matched against Purchase Orders, Goods Receipt Note. The invoice details are then transferred from Oracle Payables to Oracle Assets. The transferred invoice details (mass additions) are reviewed in Oracle Assets. Fixed Assets will be created based on the invoice details transferred from Oracle Payables. There may be a requirement for some assets to be created directly in the Oracle Assets module (i.e. not via the transfer of invoices from the Oracle Payables module). For such cases, the assets are manually created as Fixed Assets. Construction In Progress (CIP) assets have zero cost. They are not tracked as Fixed Assets until construction is completed and they are placed in service. CIP assets can be created in the system either from Mass Addition lines from Oracle Payables or Manual entry in Oracle Assets. Existing Assets are maintained in the Asset system in this process. The maintenance performed includes adjustments to asset information, adjustment to depreciation, adjustment to financial information, asset retirement, transfer of assets to different locations and capitalizing CIP assets. This process describes adjustments to financial information of assets.
FA-P002
FA-E01
Post Mass Additions
FA-P003
FA-E01
Manual Additions
FA-P004
FA-E01
Enter CIP Asset
FA-P005
FA-E02
Maintain Assets
FA-P006
FA-E02
Perform Asset Adjustments Financial Information Asset Retirement
FA-P007
FA-E02
An asset that is no longer in service will be retired. For example assets that are lost, damaged beyond repair, sold or returned will be retired by this process. This process describes the transfer of existing assets between employees, depreciation expense accounts and locations. After CIP assets are first captured in Oracle Assets, they are built up over a period of time. This process describes the maintenance of CIP assets. This includes adding, deleting or changing invoice lines to the existing CIP asset, transferring invoice lines between existing CIP assets, capitalizing CIP assets. Run the depreciation process to calculate depreciation amounts for all assets within a book for a period. After the depreciation process is run, Oracle Assets automatically closes the current period and opens the next period. Period Close process in Oracle Fixed Assets Oracle Assets creates journal entries for depreciation expense, asset cost and other accounts. These journal entries are automatically created and transferred to the Oracle General Ledger module.
FA-P008
FA-E02
Asset Transfer
FA-P009
FA-E02
Manage CIP Asset
FA-P010
FA-E03
Depreciate Assets
FA-P011 FA-P012
FA-E04 FA-E05
Period Close Process Create Accounting
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Fixed Assets Future Process Flow in Application
Fixed Asset Context Diagram
Payables
Generate Invoice For Asset Item
Post Invoice to General Ledger
Create Mass Additions
Pay Invoice
Fixed Assets
Manually Add Manually Add Assets Assets
Prepare and Post Prepare and Post Mass Additions Mass Additions
Maintain Assets Maintain Assets
Depreciate Assets Depreciate Assets
Create J ournal Create J ournal Entries Entries
General Ledger
Post J ournals
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ABRL Future Business Process Flow

Requisitions are raised by the Project Team members to the HO. Upon the approval of the Requisition the Purchase order is raised by ABRL HO, in Mumbai. Invoices are generated upon matching the same to Receipt at the HO. POs for other Locations are proposed to be processed from HO only. Fixed Assets Future Business Process Flow explains the proposed Flow in ABRL.
FA-P001: Prepare Mass Additions

The mass additions process allows for the addition of new assets or cost adjustments from other systems to Oracle Assets automatically without re-entering the data. For example, new assets can be created from invoice lines brought over to Oracle Assets from Oracle Payables. ABRL suppliers invoices can be matched to the goods receipt electronically within the Oracle Payables module. There is no requirement to perform the matching using physical copies of the Purchase Order or Goods Receipt Note, After the relevant invoices have been approved, the Mass Addition process will be run which will transfer invoice information from Oracle Payables to Oracle Assets. Once the invoice information is transferred to Oracle Assets, further processing on the asset is performed. The process flow diagram describes this process. ABRL Proposes to have assets added in bulk through Mass Addition and split the same in to individual Assets at the time of capitalising the assets.
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FA-P001 Prepare Mass Additions
Supplier
Supplier Invoice
Purchasing
Purchase Order
Inventory
GRN & Installation Report
Payables
Match Supplier Invoice, GRN,PO & Installation Report
Create Invoice in Payables Module
Run Mass Addition
Run Mass Addition Process to Transfer AP invoice details to The FA Module.
Fixed Assets
Process Mass Process Mass Addition Addition
FA-P002
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Oracle 12.0.5 Implementation Project FA_BP080_ABRL BP.080-Future Process Model- Fixed Assets 08 Sep 2008
FA-P002: Post Mass Additions

Once the mass additions lines (i.e. invoice details) have been transferred from Oracle Payables to Oracle Assets, they can be reviewed from within the module before posting them to Oracle Assets (i.e. before creating assets). The review is done to confirm how each mass addition line (i.e. invoice line) will be processed. Several options are available: Each mass addition line will be created as an asset. Each mass addition line will be combined with other mass addition lines to form one asset (i.e. several invoice lines will be grouped together to form one asset). One mass addition line can be split to create several assets. This may occur when several purchased items are recorded under one invoice line (e.g. 5 x PCs) but each item has to be recorded as an individual asset in the system. Mass addition lines which were created in error (i.e. those not meant to be created as assets can be deleted from the system.
During this process, additional information such as mass addition source, descriptive, and depreciation information can be inputted into the Assets module. Once the user has verified that the mass addition is ready to become an asset, the user changes the mass addition queue to POST. Post Mass Additions function is then run and this mass addition line will become an asset. The Mass Additions post program defaults depreciation rules from the asset category, book, and date placed in service. The user if necessary can override this information manually.
Asset Categories
Oracle Assets uses the category Flex Field to group your assets by financial information. By standardizing category names, it is easier to track the assets. By defaulting financial and depreciation information from the asset book and asset category, the creation of assets can be speeded up as less information needs to be manually entered during asset creation. Further Asset Category Flex fields determines the account to which depreciation expense will get generated. Oracle Assets allows having a maximum Segments for Asset Category Flexfield. For ABRL the Category will be created as Major Category Minor Category I Minor Category - II number of 7
Asset Key
ABRL has a requirement to track assets by ---- (i.e. assets purchased in the particular financial year). In ABRL the Asset Category will have only one Segment as Asset Key This Flex field can be used to group assets without impacting the financial reports as required by ABRL.
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Asset Locations
ABRL will track the locations of all assets. ABRL Will have a Asset Location Flex field structured on the pattern of Location Segments designed in the Accounting Flex field as follows. Location Segment Values.
Asset Number
ABRL will practice automatic numbering of assets.
Tagging
ABRL will tag its assets i.e. Tag labels containing the asset number and other necessary information will be attached onto the assets. These Tag Labels will facilitate users in identifying assets during stock taking exercises. Tag Numbers has to be manually entered by the person who is creating the asset.
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FA-P002 Post Mass Additions
Review Mass Addition Summary
Combine Mass Addition Lines? No
Yes
Merge Mass Addition
Merge several mass addition lines together, and create a single asset with this function.
Split Mass Addition Lines? Yes
Start mass additions posting program with this form, Submits concurrent request set. No
Post Mass Addition to Oracle Assets
Split Mass Addition
Mass Additions Posting Report Mass Additions Posting
Use this function: - To enter additional information for a mass addition item and create an asset. - To merge multiple mass additions lines into a single asset. - To add mass addition to an existing asset as a cost adjustment. - To split a multi-unit mass addition.
Unposted Mass Additions Report
A A
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FA-P003: Manual Additions

There are occasions in ABRL where certain assets are to be created directly in the Oracle Assets module (i.e. not via the transfer of invoices from the Oracle Payables module). For such cases, the assets are manually created as Fixed Assets. For example, Furniture and Fittings acquired to decorate the model homes and common areas of properties held for sales are considered as marketing and promotion expenditure. Such assets must be tagged and maintained under a separate register. There are 2 ways assets can be added directly into the Oracle Assets module. The quickest way is to use the Quick Additions function. This function allows for the addition of an asset by accepting default information. Details entered into the system include: Description of the asset Asset Category Current cost Date Placed in Service Employee the asset is assigned to Depreciation Expense Account Location
Using Quick Additions, only a limited number of fields are captured for each asset. Most of the information is also defaulted from the parameters assigned to the Asset Book and the Asset Category. For example, the depreciation methods are defaulted from the Asset Category. The Detail Addition function is used to enter complex assets that the Quick Addition process does not handle. This function allows more information to be captured about the asset. Default information can also be changed. The information includes:

Asset Description Asset Category Number of units making up the asset Details of asset sub-components Manufacturer and Model Serial number Property type and class (i.e. Owned/Leased and New/Used) Purchasing information (e.g. Supplier name, PO number, Invoice Number of Supplier) Current cost, Accumulated Depreciation etc Salvage value Date placed in service Indicate whether the asset will be depreciated (Oracle Assets can track items that do not need to be depreciated e.g. expensed items) Override and change the depreciation and prorate methods which were defaulted from the category.
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FA-P003 Manually Add Asset
Complex Asset?
No
Quick Asset? Enter descreptive Information, number Of units, and category.
CIP Asset
FA-P004 Enter Construction In-Process Asset
Enter Asset Details Yes
Quick Asset
Enter Assets descreptive, Financial and Distribution details
Enter Source lines
Assign invoice and Supplier references During set up. Quick Additions Use Quick Additions for ordinary assets to make use of Category default depreciation rules, Add an asset using Quick Additions to minimize Data entry.
Enter Book Info.
Enter financial Information, Depreciation, Cost.
Enter Assignments
Enter distribution Information, location, allocate units. Asset Type = Expensed? Yes Charge Asset To Expense account
Use Asset Category flexfield to tie the asset to its Corresponding asset account, asset clearing account, and Depreciation method & Life.
No Return
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FA-P004: Enter CIP Asset

ABRL will create an asset which is to be constructed over a period of time through CIP Asset creation function. A construction-in-process (CIP) asset is an asset constructed over a period of time. CIP assets will be maintained in the Oracle Assets module and can be tracked for material and labor resources to build the asset. Initially, the CIP asset is not in use, it does not depreciate. When the CIP asset is complete (i.e. when capitalised) ABRL will place the asset in service and begin depreciating it. CIP assets can be created in the Oracle Assets module in 2 ways i.e. using the mass additions or manual additions function. The 2 methods of adding the CIP assets are similar to the methods previously described for the addition of normal assets. Oracle Assets identifies invoices with distributions to CIP Clearing Accounts in Oracle Payables, and creates mass additions from them. You can create new CIP assets from your mass additions (i.e. invoice lines), or add them to existing assets.
ABRL Proposes to capitalize all its CIP Assets as on the date on which a store is opened in a location Capitalize Assets in the Asset work bench facilitates the capitalization of assets based on the client need on a asset to asset basis.
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FA-P004 Enter Construction In Process Assets
CIP Asset Details
CIP Assets are only added to Corporate books, Initially a CIP asset has a zero cost. It is a shell for the cost that make up the asset. Subsequently, add invoice distribution lines to the New CIP asset to increase the cost.
Add Manually?
No
Mass Additions Summary
Additions
Yes
Quick Additions
Return
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FA-P005: Asset Maintenance

ABRL Head Office, Finance department will centrally handle the Fixed Asset Procurement. ABRL proposes to continue the same process as far as Asset maintenance also. It may include any of the following activities Revaluation of assets Adjustment to prior year depreciation Adjustment to the assets financial information (e.g. asset cost, depreciation method, prorate convention etc) Asset retirement Asset Transfer (to different locations, cost center etc) Capitalize CIP assets that are completely constructed etc. Change the Asset Category of Assets For More information refer to Adjustments - Financial and Other Asset Information
The process flows gives an overview of the various types of maintenance processes. Each type of process will be elaborated in greater detail in subsequent flows.
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FA-P005
Maintain Assets
Adjust Asset Value?
No
Retire Assets?
No
Transfer assets?
No
Manage CIP Assets?
Yes
Yes
Yes
Yes
FA P006 Adjustments
FA-P 007 Asset Retirement
FA-P 008 Asset Transfer
FA-P 009 Manage CIP Assets
Return
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FA-P006: Adjustments - Financial and Other Asset Information

This process describes changes to the financial and other asset information of ABRL Corporate Book. Financial and Depreciation Information After an asset has been created in the Oracle Asset module, updates can be made to the financial and depreciation information for a single asset or a group of assets. Before running depreciation (in the period in which you added the asset), any fields can be changed. However, after depreciation has been run, only the following financial and depreciation information can be changed: Asset cost Salvage value Prorate convention Depreciation method Life of the Asset if SLM Capacity and unit of measure Rate
If the asset is fully reserved, adjustments can be made to the same fields as for an asset for which depreciation has been run. If the asset is fully retired, none of the fields can be changed. The user can choose whether to amortize or expense the adjustment made and Oracle Assets passes the necessary journal entries for the same. Further these adjustments can be identified after the current open period is closed. Other Asset Information Other asset information that can be changed includes: Asset Description Asset Category Tag Number Sub-components Parent asset Number of units Other Asset details pertaining to manufacturer, warranty, model etc.
As and when ABRL will change the Category of Assets, the applicable depreciation rates for the category will automatically apply.
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FA-P006
Adjustments Revaluation/Prior Year Depreciation.
Revalue Assets?
No
Adjust Prior Year Deprn?
No
FA-P008
Yes
Yes
Mass Revaluation Preview Report
Reserve Adjustments
Mass Depreciation Adjustments
Mass Revaluation
Revalue all the assets in a category, or Individual assets, Enter the revaluation rates and rules.
Select the book to adjust and enter the adjustment factor, Preview the effects of the adjustment before performing it.
Mass Revaluation Review Report
Return
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FA-P007: Asset Retirement

When an asset is no longer in service, ABRL HO Finance department will retire an Asset in the Oracle Assets module. Assets can be fully or partially retired. Assets can be retired by units or by cost. When assets are retired by units Oracle Assets automatically calculates the fraction of the cost retired. When assets are retired by cost, the units remain unchanged and the cost retired is spread evenly among all assignment lines. Assets can be selected individually for retirement. Alternatively, the Mass Retirements function can be used to retire a group of assets at a time. The user can specify the selection criteria for the assets to be mass retired. These election criteria include: Asset category Asset key Location Employee Asset number range Date placed in service range
For assets with sub-components, the user can also elect to automatically retire the subcomponents along with the parent asset. When performing a mass retirement, Oracle Assets automatically runs the Mass Retirements Report and the Mass Retirements Exception Report. The user can review these reports, perform a mass reinstatement, or adjust an individual retirement transaction if necessary. For individual retirements, the details of Proceeds of Sale and Cost of Removal (of the asset) can be entered into the system. When Mass Retirements is used, the total proceeds of sale and/or the total cost of removal amounts will be entered into the system. Oracle Assets then prorates the total amounts over the assets being retired according to each asset's current cost. ABRL has a requirement to capture the capital gain on Disposal of Assets.
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FA-P007 Retire an Asset
Retire part of an asset by cost or by units. Fully Retire? Partially Retirements
Fully
Change other Information
Calculate Gains & Loss
Process Retirements
Return 1.5
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FA-P008: Asset Transfer

Several types of transfers can occur to existing assets in ABRL such as transfer to various locations etc. Transfers can take place between locations, depreciation expense accounts or employees. A transfer form is used to start the transfer process. The requester completes the transfer form and obtains the necessary approval. The signed approval form is submitted to the Fixed Assets Manager that processes the request. Transfers can be performed for individual assets or a group of assets. Where mass transfers are executed, the Fixed Asset user can run the Mass Transfers Preview report to preview the expected effects of the Mass Transfer before it is actually executed. If necessary, the Fixed Asset user can update the parameters and run the preview report again before actually affecting the transfer.
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FA-P008 Asset Transfer
Receive Asset Transfer Relocation form
Transfer Single Asset?
No
Mass transfers Preview report
yes Use the mass transfer function to transfer a group of assets between general ledger depreciation expense accounts, locations, or employees with a corporate book.
Assignments
Transfer units from a single asset between general ledger depreciation expense accounts, location, or employees within a corporate book.
Mass transfers
Return
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FA-P009: Manage Construction in Progress Assets

ABRL HO will maintain CIP Assets. After CIP assets are entered in Oracle Assets, they are built up over a period of time. As payments are made for the CIP asset, supplier invoices will be received and processed in Oracle Payables. These invoice details will be transferred to Oracle Assets electronically via the Mass Addition process. In Oracle Assets, these mass addition lines (i.e. invoice lines) can be added to the existing CIP assets to reflect the building up of the CIP assets cost. Similarly, invoice lines that have already been assigned to a CIP asset can be deleted or modified. These invoice lines can also be transferred to another CIP asset if necessary. Once the CIP asset is completely constructed, it will be capitalized and placed in service as an asset. From this point on, the asset will start depreciating and continue to be tracked as a normal asset. ABRL will have the store opening date as the date for capitalizing its CIP Assets
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FA-P009 Manage Construction in Process
CIP Asset Details
Add invoice line to Existing Asset
Mass Additions Summary
Add a mass addition line to an Existing Asset as a cost adjustment.
Change or delete an Invoice line
CIP Asset Adjustments
Change the cost of an invoice line or delete the invoice line from a CIP Asset.
Transfer Invoice lines Between Assets
Assignments
Transfer all or part of an invoice line between assets. Transfer lines between CIP and Capitalized assets.
Finish building CIP Asset and ready to use.
Capitalize CIP Assets
Capitalize a CIP asset when it is ready to be placed into service and depreciated. Capitalize one or more assets in a single Transaction. Capitalize an asset in the period you added it, or in a later period.
Return
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FA-P010: Depreciate Assets

ABRL HO, Finance department Propose to maintain two Books, Corporate book to calculate depreciation as per Companies Act 1956, and to calculate depreciation amounts for all assets within a book for a period as per Income Tax Act. As Already noted in the earlier part of the document, Depreciation Amounts will reflect the Depreciation policy of ABRL namely Flat rates based depreciation. At month end, the Fixed Asset user will ensure that all necessary asset maintenance transactions for that month have been completed (i.e. asset adjustments, transfers, retirements/ disposals, capitalization of CIP assets etc). The user will also ensure that all new asset creations by mass additions or manual additions have been completed. If necessary, run the Depreciation Projection report to review projected depreciation expense for assets in each book. When the review is completed and all data is correct, run the Depreciation function to process all assets in a book for a period. It is important to note that Oracle Assets automatically closes opens the next for the book after calculating depreciation. Once the current period is closed, all further changes or adjustments to General Ledger in the next period. It is not possible to reopen an Fixed Assets module. the current period and depreciation is run, and the assets will affect the accounting period in the
The Prorate date basis would be Daily for all the asset categories. Retirement Convention will be the same as prorate convention. Hence depreciation would be calculated from the date the asset is put in to service. Run Depreciation for the period. Depreciation can be run any number of times. However no activities can be done in Fixed Assets for the period once depreciation is run and period is closed. Navigation is The Following Accounting entries are generated in FA for Depreciation Accounting Event Depreciation Account Head Debit Credit 10 10
Depreciation A/C
To Accumulated Depreciation A/C
For Income Tax purpose, Depreciation on asset is calculated on the Written down Value for the Block of Asset. 100% of depreciation is calculated if the asset is purchased between 1st April and 30th September and 50% of eligible depreciation if asset is purchased between 1st October and 31st March. For the above purposes date placed in Service is the date on which the assets are capitalized and the Depreciation Calculations are done accordingly. For calculating depreciation as per Income Tax Act, users need to manually run the program Income Tax Act Fixed Asset Schedule Please note that India-Income Tax Depreciation is only a report and no accounting entries are passed in the system. ABRL HO requires adjusting the cenvat recovery on Capital Goods at the applicable rates for the assets.
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FA-P010 Depreciate Asset
Perform Necessary asset Maintenance functions
Run Depreciation Reports
Run Depreciation
Reserve Ledger Reports
Return
Depreciation Projection Report
Calculate Gain & Losses
Depreciation
Journal entry Reserve Ledger Report
Close Period
FA-P011: Period Close Process

ABRL Plans to follow a Period close Process for its fixed assets on a monthly basis Once all the activities of assets are confirmed for the Accounting period and depreciation amount has been reviewed and found correct then that period can be closed and accounting entries can be transferred into the general ledger. Accounting period can be closed by clicking the Close Period Box in Depreciation form. Please note that you cannot open the next period without closing the current period Navigation: Oracle Fixed Assets> Depreciation> Run Depreciation Run the Create Accounting program to generate the journal entries and for transferring the same to General Ledger. Please refer to the Close Accounting Period Process Flow Diagram ABRL Proposes to Use April to March as their Fiscal Year.
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Close Accounting Period
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Key Reporting Requirements of ABRL

Asset Listing by Period: To track assets for a specified period for internal management purposes. Assets Register Report: To get a snapshot of any asset. Asset by Category Report: To find and review the entire asset in an asset category. Expensed Property Report: To find all expensed assets Fully Reserved Assets Report: TO find the assets that became fully depreciated in a range of accounting periods Asset Addition Report: To find the detail of asset added in that period Asset Schedule VI in accordance with Companies Act, 1956 Asset Retirement Report: To Find the retired asset for that period Asset Transfer Report: To find the list of assets transferred from one location, Employee to another.
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FA-P012: Create Accounting

After the depreciation run is completed, ABRL Finance department need to create journal entries to reflect the depreciation expense, asset cost, transfers and other accounts. When the Create Accounting Concurrent Program is run, the Oracle Assets module will automatically create transaction journal entries and then transfer them to the Oracle General Ledger. Oracle Assets Facilitates Online Creation of Accounting for FA Transactions without the period being closed.
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Open and Closed Issues

Open Issues
ID Issue Resolution Responsibility Target Date Impact Date
Closed Issues
ID Issue Resolution Responsibility Target Date Impact Date
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Oracle 12.0.5 Implementation Project BP.080-Future Process Model- Fixed Assets

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Oracle 12.0.5 Implementation Project BP.080-Future Process Model- Fixed Assets

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BP.080 - FUTURE PROCESS MODEL

Author Creation Date Last Updated Document Ref Version

: Ram Ganesh : 26 Sep 2008 : 29-Sep-2008 : ABRL-BP080-FA : 1.0

Confidential for Internal use only

Oracle 11.5.10.2 Implementation Project BP.080-Future Process Model- Fixed Assets

FA_BP080_NLL 5 May 2008

Lead Consultant, Wipro Infotech

Company Confidential - For internal use only

Oracle 11.5.10.2 Implementation Project BP.080-Future Process Model- Fixed Assets

FA_BP080_NLL 5 May 2008

Company Confidential - For internal use only