Oracle Assets An Overview

Day 1

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Agenda

Overview of Assets flow

Fixed Asset Overview
Setups
Asset Additions process
Security by Book feature
Asset Maintenance
Depreciation
Accounting and Reporting

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Overview of Assets flow

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What is a Fixed Asset

Fixed Asset
A long-term, tangible asset held for business use and not expected to be converted to cash
in the current or upcoming fiscal year
From Accounting perspective, Fixed Assets are assets that depreciate with a constant on
the books

Examples of Fixed Assets:

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Fixed Asset Flow

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What is a Fixed Asset
Fixed Asset
A long-term, tangible asset held for business use and not expected to
be converted to cash in the current or upcoming fiscal year
From Accounting perspective, Fixed Assets are assets that
depreciate with a constant on the books

Examples of Fixed Assets:

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What is Oracle Fixed Asset? What does it do?

Oracle Assets is a software tool that enables for tracking a companys asset
from the point of acquisition through the point of disposal (retirement).

Oracle Assets serves as a producer of well over 100+ seeded reports

Oracle Assets is a depreciation calculation engine.

Oracle Assets produces General Ledger journal entries to record Fixed Asset
transactions in the companys central financial reporting repository.

Oracle Assets allows for using different depreciation methods for Corporate
vs. Tax Book reporting.

Summary: Oracle Assets is a comprehensive asset management solution,

ensures maintenance of accurate property and equipment inventory as well
as optimal accounting and tax strategies.

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 Oracle Assets Workflow
Fixed Asset Accounting - Summary

Accounts Payable AP
Interfaced

Invoices

Run Period
Controllers Dept. Determine Reconcile
Record Asset Maintain Depreciation/ Produce Fixed
Asset Fixed Asset
In System Assets Produce Asset Reports
Characteristics Accounts
Journal Entries

Analysts/ Communicate
Provide Asset Review
Cost Centers Movement/
Information Reports
Disposition

GL Dept. Post GL
Ledger Entries

Perform
Tax Dept. Export Maintain
Depreciation & File Tax
Transactions Assets in Tax
Produce Returns
to Tax System System
Reports

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Setups

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Asset Category Flexfield Functionality
Category Flexfield

Oracle Assets uses the category flexfield to group your assets by

financial information, e.g., Depreciation Rules.

You design your category flexfield to record the information you

want.

Group your assets by category and provide default information that

is usually the same for assets in that category.

If you need data for which Oracle has not provided fields, the
descriptive flexfield functionality is available for this field.

Warnings:

Plan your flexfield carefully. Once you have started entering assets
using the flexfield, you CANNOT change it.
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Asset Category Flexfield Structure
Objective - Configure a grouping mechanism to summarize your companys
assets by common financial elements, the most prevalent common
denominatorassets with the same Depreciation Rules.
Common Groupings:
Type of Asset grouping examples: IT Equipment, Office Equipment, Autos &
Trucks, Machinery & Equipment, Land & Improvements, etc.
Best Practice:
Assign a Natural Account to each Asset Category Combination for each
major classification.
Limit the number of segments to as few as needed. NOTE: Oracle
recommends 2 as the optimal number. You may have up to 6 segments. Size
is limited to 30 characters each. The only requirement is at least one Major
Category segment.
Sample Configurations:
Major Category ^ Minor Category
OFFICE EQUIP ^ COPIERS
OFFICE EQUIP ^ CONF ROOM
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Asset Category Form-page 1

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Asset Category Form-page 2

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Asset Location Flexfield
Objective:
Configure a mechanism to group client assets by a physical
(as opposed to financial/accounting) location. Typical use is for
taxation, i.e., Personal/Real Property. Also, useful for taking capital
asset inventories and assigning responsibility based on location for
custodianship.
Define the location flexfield to fit the way you track your asset
locations. Design your Location flexfield to record the locator
information you want. Then you can report on your assets by location,
regardless of accounting assignments.
Enables you to transfer assets that share location information as a
group (MassTransfer), such as when you move an office to a new
location.
Warnings:
Plan your flexfield carefully. Once you have started entering assets
using the flexfield, you cannot change it.

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Asset Location Flexfield
Common Configuration (US Locations; Multinational
Organization) :
SEGMENT1 ^ SEGMENT2 ^ SEGMENT3 ^ SEGMENT4
Country ^ State ^ County ^ City

Best Practice
Limit the number of segments to as few as needed.
NOTE: Oracle recommends 2 as the optimal number.
Size is limited to 30 characters each.
Where assets are in different countries, you will most likely
want to indicate the country where the asset is found.
If considering using bar-coding of assets in the future, you may
want to provide segments for building and room number as
Future segments.

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Asset Location Flexfield contd..
Set-up Considerations:
1. Define the Location flexfield to fit the way you track your asset locations.
2. Choose the number of segments and the length (in characters) for each
segment.
3. Define names for the Segments. Aside from the configuration example on
the previous page, some common segments used are SITE, FLOOR,
ROOM.
4. Determine the order of presentation for the concatenated Location flexfield.

Asset Location Functionality

Property Tax Reporting: You can run the Property Tax Report for your
states. The Property Tax Report sorts assets by the location segment with
the state qualifier set to Yes.

Mass Transferring Assets: You can transfer assets that share location
information as a group. Or you can use the location as a criterion to select
assets to transfer between employees or general ledger expense accounts.

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Asset Location Flexfield contd..

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Asset Key Flexfield
Objective: Configure a mechanism to group client assets by non-financial information. You
design the Asset Key Flexfield to record the information you want, then group assets by
the Asset Key to enable finding them without an Asset Number.
Common uses:
Enable selecting all of the assets that were constructed or acquired on a specified Project
or Work Order.
Enable retrieving all assets used for a particular process, e.g., Environmental Control
assets that would fall under various Asset Categories and be assigned to various
organizations.
Retrieve all assets of a particular brand within an Asset Category having a variety, e.g.,
retrieve all Chevrolets in a car fleet.
Group similar assets that have different uses, e.g., Salesmens vs. Executive automobiles.
Identify assets having a particular component. For example, enable retrieving all cars in
your fleet that have diesel engines.
NOTE: You will be able to retrieve assets on all Oracle Assets transaction forms using the
Asset Key Flexfield feature.

Warnings:
1. Plan your Asset Key flexfield carefully. Once you have started entering assets using the
flexfield, you cannot change it.
2. You do not have to use this feature, but it must be configured as part of Set-up.

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Asset Key Flexfield contd
Set-up Considerations:
1. Define the Asset Key flexfield, as needed by your Organization, to fit the
way you track your assets that are not provided for by other Oracle Assets
features such as Asset Categories and Asset Locations, Descriptive
Flexfields, etc .
2. Choose the number of segments and the length (in characters) for each
segment.
3. Define names for the Segments.
4. Determine the order of presentation for the concatenated flexfield
segments.
5. You must establish valid Asset Key Flexfield Combinations.
6. You may have up to 10 Asset Key Flexfield segments.
7. This feature is limited to 1 structure per Oracle Assets environment.
8. Once data is entered in an Asset Key Flexfield, it cannot be modified.
9. If you choose not to track assets using the asset key, you must define at
least one segment asset key flexfield without validation.

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Asset Key Flexfield Illustrated (single segment)

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Asset Books
Asset Book Properties:
Tied to just 1 Ledger.
Comes in 3 classes, Corporate, Tax, and Budget
Uses a specified Depreciation Calendar which can be Monthly, Fiscal, Quarterly, Annual, etc.
Allowing GL Posting means the Book will generate journal entries (only for a Corporate Asset
Book).
The Open/Closed status of Oracle Assets is by Asset Book. The periods open for each one
is independent of the other Asset Books. Best practice is to keep the books in sync when
possible.
Each Book has its own Prorate Calendar (covered later).
Each Book has its own Accounting Rules. These are:
Create Intercompany Balancing Entries (if you want Oracle Assets to create
intercompany journal entries when you Create Journal Entries.
Allow Amortized Changes check box to allow amortized changes in this book. The
default is to record the retroactive impact of adjustments in the current reporting
period.
Choose Allow Mass Changes to allow mass changes in this book.
Enter the minimum time you must hold an asset for Oracle Assets to report it as a
capital gain when you retire it.

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Asset Books contd..
Choose to Allow Revaluation
Group (asset) Depreciation related rules.
Allow Intercompany assignments for Group Assets

Natural Account Designations for a Book (used in periodic Journal Entries)

Retirement Accounts; Enter separate accounts for each component
(Gain/Loss), or a single account for all Net Gain/Loss entries generated.
Deferred Depreciation Reserve, or Deferred Depreciation Expense accounts.
Choose the offset account to use when you adjust depreciation reserves.
Enter the Account Generator default segment values for this book's journal
entries.

By default, Oracle Assets creates journal entries without cost center level detail
for all accounts except the depreciation expense account. Using the default
assignments, it creates journal entries using the balancing segment from the
expense account in the Assignments window and the account segment from
the asset category or book, depending on the account type. Oracle
Assets uses the other segments from the default segment values you
enter for the book in this field.

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Asset Books contd..
Entering Tax Rules for a Book (Tax Books, only)

1. Allow Reserve Adjustments if you want to allow changes to the accumulated

depreciation in your tax book.

2. Allow Cost/Expense Ceilings in a depreciation book; however, you cannot apply a

cost ceiling and an expense ceiling to the same asset in a depreciation book.

3. Check Allow CIP Assets if you want to be able to automatically add CIP assets to
your tax book when you add them to your corporate book. (NOTE: Many companies
do not copy CIP assets to the tax books until it is capitalized).

4. Allow Mass Copy into this tax book, choose whether to copy additions,
adjustments, retirements, and/or salvage value.

5. In the Group Asset Additions field, choose Copy if you wish to allow mass copy
of group assets into this tax book. The default value is Do Not Copy.

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Asset Books-Calendar Window

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Asset Books-Accounting Rules Window

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Asset Books-Natural Accounts Window

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Depreciation Methods
Type of Depreciation Methods
Oracle Assets comes seeded with many depreciation methods already configured. Each
method has numerous Asset Life choices expressed in a Year/Months combination. You
can also select to use Cost vs. NBV basis for some depreciation methods. Users may
also define their own custom Depreciation Methods by implementing the associated
depreciation tables and asset lives. The types of depreciation that comes with Oracle
include (examples in parenthesis):
1. Flat (any Flat/Fixed Rate method)
2. Formula (STY MACRS or Short Tax Year Methods)
3. Table (150DB/200 DB, ACRS, MACRS, AMT, SYD)
4. Production (Units of Production)

What Depreciation Methods do you need to use?

One default method can be used per Asset Category Combination.

How have the assets of acquired business units been treated?

How will you treat acquired business assets, depreciation rule-wise,

going forward?

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 REVISED DECK
Prorate Conventions
About Prorate and Retirement Conventions
Oracle Assets uses the prorate convention to determine how much depreciation to
take in the first and last year of an asset's life, based on when you place the asset in
service or retire it.

Assets can be acquired at any point in time in a given reporting period. The prorate
convention serves as a pointer to indicate the period in which depreciation will start,
or stop in the case of a retirement.

The calculated prorate convention is set based on the DPIS.

The prorate convention uses a Prorate Calendar to pinpoint the Prorate Date,
which applies a Prorate Method that relates to the DPIS. The Prorate Calendar must
begin with the calendar year of your Earliest Date of Service for your oldest asset.

The Prorate calendar can be the same as the Depreciation Calendar.

Every prorate convention must have a depreciation rate for every period in the
Prorate Calendar.

Prorate Convention is a required set-up. You cannot use Oracle Assets without it.

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Prorate Convention Examples
System Name Full Name Description

CUR-MON a.k.a. MONTH- CURRENT MONTH Take a full period of Deprn for the entire period added, no
TO-MONTH matter what day the DPIS is.
4-4-5 FOL MON 4-4-5 Following Month Use 4-4-5 Calendar. Take a full period of Deprn the
period following after DPIS.
4-4-5 HALF 4-4-5 Half Month Use 4-4-5 Calendar. Take a full month Deprn if added in
the first half of the period. Take a half month if added
after the mid point.
DAY Daily Prorate Start taking depreciation on the DPIS.
FOL-MONTH Following Month Start taking depreciation on the first day of the period
after the DPIS period.
HALF-YEAR Half-Year Take a full year of Deprn if added in first half of he year.
Take a half year of Deprn, if added in the second half of
the year.
MID-MO Mid-Month Take a full month of Deprn if added in first half of the
month. Take a half month of Deprn, if added in the
second half of the.

NOTE: You must have a rate for all periods in a Prorate Calendar. Oracle Assets does not come seeded with any
depreciation tables of less than a full period. You will need to manually set up these tables for every Deprn Method-Asset Life
combination used with the Prorate Conventions calling for taking a half-month of depreciation.

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Prorate Convention Set-up Illustrated

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Types of Assets
Types of Assets:

Capitalized Assets included on the company balance sheet. Capitalized assets

usually depreciate.

CIP Assets Unfinished assets being built, not yet in use and not yet depreciating.

Group Assets A group asset is a collection of member assets. You can add member
assets to a group asset, transfer assets out, or between groups assets. Group asset
cost is the sum of all the associated member assets costs.

Expensed Assets Items that do NOT depreciate; the entire cost is charged in a
single period to an expense account.

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Assets Addition

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Asset Additions
Manual Methods
Quick Additions -
Use the QuickAdditions process to quickly enter ordinary assets
when you must enter them manually. You can enter minimal
information in the QuickAdditions window, and the remaining
asset information defaults from the asset category, book, and
the date placed in service. Use this method if you can accept
most of the defaults.

Detail Additions
Use the Detail Additions process to manually add complex assets
which the QuickAdditions process does not handle:
Assets that have a salvage value
Assets with more than one assignment
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

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Asset Additions contd
Automated Interface Methods
Mass Additions

1. Use the Mass Additions process to add assets automatically from an

external source.

2. 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. You must prepare the mass additions to become assets
before you post them to Oracle Assets. Note: R12 has APIs available to
automate the preparation steps.

The mass additions process purpose is to let you add new assets, or cost
adjustments from other systems, to your system automatically without
reentering the data.

Note: The Mass Additions Table is the only in-bound Oracle Assets interface
for new assets. Any data entering into Oracle Assets must come through
this route whether from Accounts Payable, Oracle Projects, or ADI.
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Quick Addition Illustrated

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Detail Addition Illustrated

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Detail Additions Illustration contd

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Detail Additions Illustration Contd

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Mass Additions
This screen is actually a data record interfaced from Accounts Payable

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Mass Additions Contd
Screen used to assign the asset. The use enters any needed data not interfaced.

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Security by Book

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Security by Book
Security by Book
Using this functionality you can -
Secure access to each depreciation book
Create a flexible hierarchy of asset organizations
Associate one or more responsibility with one or more depreciation
books

Steps to define Security

Step 1 Define Organization
Step 2 Define Hierarchy
Step 3 Define Security Profile
Step 4 Run Security List Maintenance
Step 5 Set Profile Option

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Practice Session
1. Define:
Asset Calendar
Prorate Convention
Corporate Book
Asset Category
Depreciation Method
2. Create:
Capitalized Asset
CIP Asset
Group Asset
3. Capitalize a CIP Asset

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End of Day 1

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