Professional Documents
Culture Documents
Fixed Assets
Fixed Assets
Agenda
Introduction Mass Transactions
Asset Identifiers and Journal Entries
Flexfields Tax Books
Asset Addition Production
Capitalizing CIP Budget
Asset Workbench Physical Inventory
Depreciation Set Up
Retirement Analysis
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.
When an asset is acquired / built, the asset is assigned an initial book value, an
economic life and a calculation to determine the value of the asset at each period
during that economic life. An asset may have a residual value beyond which it will
not depreciate.
At the end of its economic life, the initial cost of the asset (less residual value if
any), will have been expensed. The depreciated book value appears on the
balance sheet as an asset. The asset is taken off the books when it is sold. The
diff between the sale price and the book value at the time of the sale is the
gain/loss on sale.
Introduction - FA Cycle
Purchasing
Assets
Payables
Projects
General Ledger
FA Process Flow
Create Invoices Transfer AP Transfer Asset
Enter Purchase
in AP accounting lines lines from
Order
to GL AP to FA
• Enter Purchase Orders • Enter the PO default invoices • After validation and • After the accounting lines
for the asset items in in Accounts Payable module. approval of the invoice in are transferred, run the
Purchasing Module. • Capture the PO number in the AP, run Payables Mass Additions Create
Invoice which defaults the PO Accounting Process to procedure for transferring
details in AP. transfer all the accounting all Asset lines from AP to
• In the Invoice Distributions lines from AP to GL. FA. View report for status.
enter the same code • The asset lines will be
combination as that has been transferred only if the
defined in FA. conditions in second
• Ensure that track as an asset process are met.
is flagged for expense items • Run the Mass Additions
in invoice distributions. Create Report to view the
• Ensure that the GL date is in details of lines transferred
an open period in FA to FA.
Run Transfer
Create Assets in Depreciation and Accounting lines
Manage Assets
FA Close from FA to GL
• Review the Mass Additions • Reclassify, retire, • Run the depreciation for an open • Transfer journal entries
• Prepare Mass Additions to enter all the transfer, change, period with the option to close from FA to GL after
details of the asset by changing the revalue assets the period. closing the period.
queue from new to hold to post.
individually or in Mass • Rollback depreciation if period • Rollback the entries in
• Split, merge, adjust Mass Additions or
form. was not closed. case of issues.
Add Mass Additions to existing assets.
• Run Post Mass Additions to create the • Purge asset information • Make the changes as required • Finalize and again
assets in FA which have been finalized. based on the org and once finalized, again run transfer the entries.
• Delete / purge unwanted Mass addition requirements depreciation closing the period.
Asset Identifiers
Tagging with Asset Identifiers:
There are four unique identifiers with each asset as enlisted below:
The Category Flexfield: An asset’s category determines its financial treatment in Oracle
Assets – determining factor for depreciating an asset. The depreciation is derived as under:
An Asset in Mass
Additions
The Location Flexfield: It is used for recording the physical location of assets and for
property tax reporting. Its segments usually comprises Country, State/ Province/ Department/
Land, county and city in which an asset is located. Here again upto seven segments can be
defined.
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 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
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 Click to enter
Click to find the
additions 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.
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 Asset No (if manual), Asset Description, Tag No, Asset Key,
Asset Serial No, No of units (defaulted), Asset Type (Capitalized,
Expensed or CIP), Parent Asset (to link sub-components to Main Click to Store the details
component), Manufacturer Name, Model No, Warranty No, Check / and to change the Queue
uncheck In Use and Physical Inventory, enter Property Type (Personal, Name to ‘On Hold’.
Office, etc), Property Class, Ownership (Owned, Leased), Buy details
(New, existing etc)
Mass Additions (Contd…)
The Queue Name
Should be “ On Hold”.
Enter the Relevant
Asset Details
Depreciation expense is calculated as follows: Depreciation Expense = (Current Cost – Recoverable Cost) * Basic Rate
Depreciation (Contd…)
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 book’s current period and opens the next on running the depreciation program.
Year–End Processing One can close the year independently in each depreciation book. The depreciation program automatically resets year–to–
date 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
Method Adjustments, Life Adjustments, Rate Adjustments, Capacity Adjustments
Credit Assets One can enter a credit asset as an asset with a negative cost, and FA credits depreciation expense and debits accumulated
depreciation each period for the life of the asset.
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 doesn’t 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.
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
Enter the Asset Category and / or Asset can revalue an asset as
No to be revalued. Enter a +ve or –ve fully reserved.
Revaluation % . Override revaluation rules
if reqd. Life Extension Ceiling
limits the amount of
depreciation one can
back out when fully
reserved assets are
revalued.
Mass Transaction–Reclassifications
Enter the Corporate Book,
Comments and
Reclassification Date.
Inherit Depreciation Rules of New Category to have all rules inherited or no rules by
ensuring the check box is not checked.
Click to Launch
the concurrent
program.
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.
This information can be used to project depreciation expense for capital budgets and compare actual and planned capital spending in FA.
After one creates a budget book and budget assets, one can run budget reports and project depreciation expense for amounts budgeted to each
category.
One can enter budget information and create budget assets for each category from the information. Then one projects depreciation for the budget
assets in the budget book using the category default depreciation rules from the associated corporate book.
Enter budget information either at the major category level, or for each full category flexfield combination and for each period.
One can create an asset in the budget book for each budget amount, category, and general ledger depreciation expense account one enter. The
budget asset is placed in service in the period for which one specified the budget amount. The budget book depreciation calendar must be the same
as the associated corporate book and can have up to twelve periods.
When one projects depreciation, FA projects depreciation for these budget assets, to the detail entered. It projects on a budget book based on the
budget amounts one enters for each period.
Capital Budgeting - Upload
Choose upload to upload the budget info from the budget interface
table.
Load physical inventory data into FA using the Physical Inventory Entries window, or use the Record Physical Inventory process in the Applications
Desktop Integrator (ADI), which allows to import data from an Excel spreadsheet. One can also use SQL*Loader to import physical inventory data
from a non–Oracle file system.
After entering physical inventory data into FA, run the Physical Inventory comparison program, which highlights the differences between the asset
information in FA and the actual assets in physical inventory. This program compares physical inventory data with FA data for all assets that have
the In Physical Inventory check box checked.
View the results of the comparison online in the Physical Inventory Comparison window, or run the Physical Inventory Comparison Report. The
comparison results highlight differences between the assets in production system and those in physical inventory.
Reconcile the differences between physical inventory and the information in database by updating each asset manually, or use the mass additions
process to add assets that are missing from the production system. On completing physical inventory, run the Missing Assets Report, which lists all
assets that have not been accounted for in the physical inventory process.
Physical Inventory (Contd…)
SETTING UP FA DATA TO BE INCLUDED IN PHYSICAL INVENTORY:
Assets listed in FA will be compared by the Physical Inventory Comparison program only if the In Physical Inventory check box is checked for those
assets. The In Physical Inventory check box allows one to determine which assets are included in the physical inventory process.
Mass Additions: One can designate a group of assets to be included in the physical inventory process by checking the In Physical Inventory check
box in the Mass Additions window.
Asset Categories: When one sets up asset categories in the Asset Categories window, the In Physical Inventory check box is checked by default. If
one does not want assets in a particular category to be included in physical inventory, uncheck the In Physical Inventory check box while setting up
the category.
Asset Details: One can use the Asset Details window to override the value of the In Physical Inventory check box.
Loading Physical Inventory Data: To use the Physical Inventory feature in FA, one must load physical inventory data that one has collected into
the inventory interface table in FA.
STATUS CODES:
After one has loaded the physical inventory data and runs the Physical Inventory comparison program, FA generates a status code based on the
information it has stored about an asset and the information provided during the physical inventory process.
UNIT RECONCILIATION METHODS:
When one runs the Physical Inventory Comparison program, FA updates the unit field in the FA Inventory Interface table with certain codes which
indicate whether the asset needs an adjustment in the number of units stored in FA, and if so, the type of unit adjustment needed.
METHODS FOR LOADING PHYSICAL INVENTORY DATA: One can load physical inventory data into FA using several different methods as
under:
Import data from an Excel spreadsheet using ADI:
Use ADI to load the physical inventory data into an Excel spreadsheet and import the data into FA.
Enter data using Physical Inventory Entries window
One can enter data for each asset directly into FA using the Physical Inventory Entries window.
Import data from a non–Oracle system using SQL*Loader:
Define the interim table in the Oracle database.
Load the interim table using SQL*Loader.
Convert the physical inventory information into text form.
Create the SQL*Loader control file.
Run SQL*Loader to import the physical inventory data.
Compare record counts and check the SQL*Loader files.
Spot check the interim table.
Physical Inventory (Contd…)
VIEWING COMPARISON RESULTS
There are two ways to view the results of the Physical Inventory Comparison:-
Physical Inventory Comparison Window
One can view the results of the comparison online on the Physical Inventory Comparison window. The Physical Inventory
Comparison window displays the asset number, location, and number of units for each asset in the FA production system,
and the corresponding asset number in physical inventory, along with its location and number of units. If the location or
number of units differs, the comparison highlights the differences in the comparison results. It also indicates when it cannot
find a corresponding asset number in the production system, and when it finds duplicate assets.
Physical Inventory Comparison Report
This report displays information on each asset in the production system, along with the corresponding asset number in
physical inventory. This report displays all assets, including those with a status of New and Not Unique. This report is a
standard variable format report, which one must run from the Application Desktop Integrator (ADI) Request Center.
RECONCILIATION
After running physical inventory and generating reports, one needs to reconcile physical inventory data with FA data.
To reconcile physical inventory with stored asset information:
Analyze the reports to determine the assets that need to be reconciled.
Obtain proper approval to change assets that need to be reconciled.
Change the asset information by using the Asset Workbench or the Mass Change window.
MISSING ASSETS
When one has finished reconciling physical inventory, one can run the Physical Inventory Missing Assets Report to
determine if there are any assets in production system that could not be found during the physical inventory process. This
report is a standard variable format report, which one must run from the ADI Request Center.
PURGING PHYSICAL INVENTORY DATA
After closing physical inventory, one can purge the physical inventory data by entering an end date in the Physical Inventory
window.
Physical Inventory-Enter
Enter the Physical Inventory name and
the start date. Entering an end date
indicates that the physical inventory is
complete. Save the changes
Set of Books Defining the set of books to be used for the org (defined in GL).
Asset Key Flexfield For grouping assets to be used in reports for analysis etc.
Asset Category Flexfield Defined as Independent and dependent segments (ex Major and Minor
category).
Location Flexfield Defined as Independent and dependent segments (ex Country, State, Location,
Building).
Quick Codes Default codes used in various forms
Fiscal Year For defining the Fiscal year of an org used for financial reporting
Calendars For defining Fiscal Calendar and Prorate Calendar
Prorate / Retirement Convention To define Prorate/Retirement convention with DPIS, from-to date and Prorate
Date.
Depreciation Methods Used for defaulting in Asset Categories.
Asset Categories Where the account codes, depreciation method, rate, prorate convention are
attached to the asset category
Book Controls For defining global level parameters for each corporate book – Calendar,
Accounting Rules, Natural Accounts and Journal Categories
System Controls Used for defaulting flexfields and asset numbering for an org.
Financial System Options Used for defaulting AP and HRMS parameters
FA Set Up – Fiscal Year
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.
By Days to divide it
proportionally based on the no of
days in each period
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.
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 Enter the date Placed in Service range for which these
Months. For flat-rate method, enter default values for the Basic Rate and Adjusted Rate that to be used to category defaults are effective. When you add an asset, the
depreciate assets For a units of production method, enter UOM and production Capacity to be used to depreciation rules default according to the date placed in
depreciate assets service of the asset, the category, and the book.
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