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Oracle Applications 11i

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.

Asset management encompasses three primary activities:


Physical Upkeep: Comprises asset location, asset condition and assignment
Asset Tracking: Covers the whole gamut from controlling leased, loaned and
consigned items from acquisition to asset maintenance.
Financial: Involves asset value, depreciation and taxation.
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.
Introduction (Contd…)
Depreciation Overview:
Capital Assets such as building and machinery typically lose their value over time.
The loss of value during any given period is called depreciation and it is charged
as an expense in that period. The value of the asset at any point in time – usually
cost minus accumulated depreciation– is called the net book value.

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:

Identifier Optional? Use Source Purpose


Asset Number No External; forms User-assigned or Identifies the asset
and Reports. generated; may be in FA forms and
imported. Same as reports.
Asset ID if
generated.
Tag Number Yes External; bar User-assigned; Provides bar code
codes. usually imported. tracking of assets.
Asset ID No Internal Generated Links asset
records with
depreciation and
other transactions.
Serial Number Yes External User-Assigned Provides an
additional asset
identifier; usually
assigned by the
manufacturer.
Asset Flexfields
There are three very important Asset Flexfields that drive FA.
The Asset Key Flexfield: This supplements the asset number with descriptive information
that can used to meet the company’s needs. Asset Key Flexfield groups assets by non-
financial identifiers (Co, A/c No, Dept. etc). Upto ten segments can be defined. This is used
for custom reporting

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

must be assigned to Asset Category


an
Asset life and
which dictates the Depreciation
method
Depreciation per
used to compute the period
Asset Flexfields (Contd…)
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. Asset Category specifies a default depreciation method to be used with an asset.
Upto seven segments can be used for the Category Flexfield. Ex
Major Category (Segment1): Computers | Minor Category (Segment 2): Laptop.
The advantage of multiple segments is that each segment can be validated independently as
new categories are created.

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.

Enter Employee Name,


Depreciation Expense A/c
and the Asset Location.

Enter the Asset


Book, Asset Cost
and DPIS

Click to create the


Asset No reflected in
the Message Box.
New Additions
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

Click to enter the


Source Line details Click to Continue
(purchasing info) entering additional
details if Source Lines
info is not required
New Additions (Contd…)

Enter the Supplier No,


Enter the Invoice No,
PO no and Project
Line no and Invoice
Details if applicable.
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), Click to Continue
Bonus Rule (if applicable), Check on Short Fiscal Year entering additional
(if applicable) details.
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


Each mass addition belongs to a queue that describes its status, and the queue name changes according
to the transactions one performs on the mass addition.
Mass Additions (Contd…)
 Review Mass Additions
Review newly created mass addition lines for entering additional mass addition source, descriptive, and depreciation information, assign the mass addition
to one or more distributions, or change existing distributions. Once the mass addition is ready to become an asset, change the queue to POST. On Posting
Mass to FA this mass addition becomes an asset. The Mass Additions post program defaults depreciation rules from the asset category, book,
and date placed in service which can be overridden
 Add to Existing Asset
One can add a mass addition line to an existing asset as a cost adjustment. Choose whether to change the category and description of the existing asset
to those of the mass addition and whether to amortize or expense the cost adjustment. When one changes the queue name to POST for a mass addition
line which is being added to an existing asset, the queue name is changed to COST ADJUSTMENT. This makes it easy to differentiate between adding a
new asset or adjusting an existing asset.
 Merge Mass Additions
One can merge separate mass addition lines into a single mass addition line with a single cost. The mass addition line becomes a single asset when one
Posts Mass Additions. One can only merge mass additions in the NEW, ON HOLD, or user–defined hold queues. Choose whether to sum the number of
units. When one posts the merged line, the asset cost is the total merged cost.
 Split Mass Additions
One can split a mass addition line with multiple units into several single unit lines. The original line is put in the SPLIT queue as an audit trail of the split.
The resulting split mass additions appear with one unit each, and with the same existing information from the source system. Each split child is now in the
ON HOLD queue which can be reviewed to become a separate asset.
 Post Mass Additions to FA
Use the Post Mass Additions to FA program to create assets from mass addition lines in the POST queue using the data entered in the Mass
Additions window. It also adds mass additions in the COST ADJUSTMENT queue to existing assets.
 Clean Up Mass Additions
The Delete Mass Additions program removes mass addition lines in the following queues:
• Mass additions in the SPLIT queue for which child mass addition lines created by the split has already been posted.
• Mass additions in the POSTED queue that have already become assets
• Mass additions in the DELETE queue.
 Create Mass Additions from Invoice Distributions in Payables
Mass Additions adds assets and cost adjustments directly into FA from invoice information in Payables. The Create Mass Additions for Oracle
Assets process sends valid invoice line distributions and associated discounts from Payables to an interface table in FA. One reviews them in
and determines whether to create assets from the lines.
Mass Additions (Contd…)
 Register the Accounts
Account Type Must Be Asset: Register the clearing accounts to be used as Asset accounts. The create mass additions process selects Payables invoice
line distributions charged to clearing accounts with the type of Asset.
Define Valid Clearing Accounts in FA: For each asset category in FA for which invoice line distributions are to be imported from
Payables, define valid asset clearing and construction–in–process clearing accounts. These accounts must be of type Asset. The create mass additions
process only imports lines charged to accounts that are already set up in asset categories.
 Define Items with Asset Categories
One can define a default asset category for an item in Purchasing or Inventory. Then when one purchases and pays for one of these items using
Purchasing and Payables, the mass additions process defaults this asset category. If mass addition lines for an item are to appear in FA with
an asset category, one must:
• Define a default asset category for an item in the Item window in Purchasing or Inventory
• Create a purchase order for that item
• Receive the item in either Purchasing or Inventory
• Enter an invoice in Payables and match it to the outstanding purchase order
• Approve the invoice and Post the invoice to GL
After one runs create mass additions, the mass addition line appears with the asset category specified for the item.
 Enter Invoices in Payables
While entering a new invoice in AP, charge the distribution to a clearing account that is already assigned to an asset category. The line amount can be
either positive or negative.
 Units
If one enters a PO with multiple units and match it completely to an invoice in Payables, the Create Mass Additions process uses the number of units
specified by the original PO for the mass addition line. Mass addition lines created from invoices entered directly into AP without matching to a PO default
to one unit. After one approves and posts the invoice in AP, run the Create Mass Additions process to send valid invoice line distributions to FA.
 Handle Returns: One can easily process and track returns using mass additions.
 Conditions For Asset / Expensed Invoice Line Distributions To Be Imported
For the mass additions create process to import an invoice line distribution to FA, these specific conditions must be met:
• The line is charged to an account set up as an Asset account. (Expense in case of expense asset)
• The account is set up for an existing asset category as either the asset clearing account or the CIP clearing account
• The Track As Asset check box is checked. (It is automatically checked if the account is an Asset account)
• The invoice is approved and The invoice line distribution is posted to Oracle GL from AP
• The GL date on the invoice line distribution is on or before the date specified for the create program
• AP must be tied to the same GL SOB as the corporate book for which one want to create mass additions
 Running the Create Mass Additions For FA Program in Payables: One can run Create Mass Additions for FA as many times as during a period.
Each time it sends potential asset invoice line distributions to FA. AP ensures that it does not bring over the same line twice.
Mass Additions (Contd…)
Click to select the
Queue Name

Select the Queue Name from the List.


Select New for starting with Mass
Additions
Mass Additions (Contd…)
Select the
Invoice Number

Click to Split the Line or


Add to an existing
Asset or Merge the
Lines or Open to enter
the Asset Details
Mass Additions (Contd…)
Enter the Corporate Depreciation Book, Asset Category, Employee
Name, Depreciation Expense A/c, Asset Location, DPIS,
Check/uncheck Depreciate Flag, Enter any comments if required.
Mass Additions (Contd…)

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

Change the Queue


Name to “ Post”.

Click to store the Queue


Click to view / change
name as Post.
the Assignments.
Mass Additions (Contd…)

Enter the Employee


Name,
Depreciation
Expense Account Click to Change the
and the Asset status of Mass
Location Details. 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.
Capitalizing CIP

Select the Asset No to Reverse the


Capitalization or Capitalize the CIP.

Enter the Book No, Asset Type (CIP to


capitalize or Capitalize to Reverse), Asset
No etc for initiating Capitalize or Reversal.
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.
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 (Contd…)
 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 authority’s
depreciation regulations determine the amount of depreciation to take in the asset’s 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 life–based 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. Flat–rate depreciation methods determine the depreciation rate using
fixed rates, including the basic rate, adjusting rate, and bonus rate.
 Calculate Annual Depreciation
Calculated and table–based 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. Flat–rate 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 year–to–date 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 (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

 Prior Period Transactions


 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 asset’s life so that the asset becomes fully reserved. If the asset’s 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 one–time 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.

 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.

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.
Asset Retirements
Retire an asset when it is no longer in service.
 Full and Partial Retirements by Units or Cost One can retire an entire asset or can partially retire an asset.
• When one retires an asset by units, FA automatically calculates the fraction of the cost retired
• When an asset is retired by cost, the units remain unchanged and the cost retired is spread evenly among all assignment lines
 Restrictions One cannot retire assets by units in tax books or perform full retirements on CIP assets. If one partially retires a units of production
asset, one must manually adjust the capacity to reflect the portion retired.
 Gain/Loss = Proceeds of Sale – Cost of Removal – Net Book Value Retired + Revaluation Reserve Retired
 Independence Across Depreciation Books One can retire an asset or a group of assets from any depreciation book without affecting other books.
To retire an asset from all books, retire it from each book separately, or set up Mass Copy to copy retirements to the other books in the Book
Controls window.
 Retirement and Reinstatement Statuses Each retirement transaction has a status.
 ITC Recapture If one retires an Asset for which an investment tax credit (ITC) has been taken and ITC recapture applies, FA automatically
calculates it.
 Correct Retirement Errors One can undo asset retirement transactions in the same Fiscal year, and FA creates all the necessary journal entries for
GL to catch up any missed depreciation expense. One can reinstate an individual or mass retirement transaction. For multiple partial retirements,
one can reinstate only the most recent partial retirement.
 Retirement Conventions FA allows a different prorate convention when one retires an asset than when it was added. The retirement convention
defaults from the retirement convention set up in the Asset Categories. One can change the retirement convention for an individual asset before
running the Calculate Gains and Losses program.
 Per Diem Retirements If one has set up a book to divide depreciation by days and to use both a daily prorate convention and a daily prorate
calendar, and if one retires an asset in that book in the current period, FA takes depreciation expense for the number of days up to, but not
including, the date of retirement. If a prior period retirement is performed, FA backs out the depreciation expense through the date of retirement. If
the asset is reinstated, FA catches up depreciation expense through the end of the current period.
 Retirement Transactions
• For assets added in the current accounting period: One cannot retire an asset if it was added in the current period. Instead, enter
retirement as a prior period retirement after depreciation has been run. Or if no journal entries are to be created, use Edit, Delete Record
from the menu in the Asset Details window to delete the asset any time in the current period.
• For prior–period retirement dates: One can retire retroactively only in the current fiscal year, and only after the most recent transaction
date. One cannot perform prior period retirements to assets having unplanned depreciation amounts.
 Proceeds of Sale and Cost of Removal One can enter proceeds of sale and cost of removal amounts while performing a retirement or mass
retirement. FA uses the following formula to prorate the proceeds of sale amount across the assets selected:
Proceeds of Sale (per asset) = Current cost of asset/Total current cost of all selected assets X Proceeds of Sale
FA uses the following formula to prorate the cost of removal amount across the assets one select:
Cost of removal (per asset) = Current cost of asset/Total current cost of all selected assets X Cost of Removal
 Calculating Gains and Losses for Retirements
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 necessary
Asset Retirements ( Contd…)
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, To reinstate an


choose Subcomponents to view the asset wrongly
subcomponents asset (s) affected by retired.
the retirement transaction. One can
separately retire these
subcomponents if necessary.
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 Transaction–Changes
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 Transaction–Revaluations 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
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.

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 Transaction–Retirements
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 Backx

Select the Corporate


Book and the period
for which Journal
Entries are to be
rolled back.
Journal Entries (Contd...)
Accounting Event Account Head Debit Credit

Entry in AP Asset Clearing A/c 100$


Supplier Liability A/c 100$

Additions in FA Fixed Asset A/c 100$


(Mass/Quick/New)
Asset Clearing A/c 100$

Depreciation Depreciation Expense A/c 10$


Accumulated Depreciation A/c 10$

Construction-in-Process CIP Cost A/c 150$


Addition (CIP) in FA
(The Entry in AP is same CIP Clearing A/c 150$
except for Asset Clearing)

On Capitalizing CIP Fixed Asset A/c 150$

CIP Cost A/c 150$


Journal Entries (Contd...)
Accounting Event Account Head Debit Credit

Asset type Adjustments – CIP Clearing A/c 100$


Changing Asset type from
Capitalize to CIP
Asset Clearing A/c 100$

Retirement Cash / Bank A/c 95$


1. Entry in GL for monies received
Sale Clearing A/c 95$

2. Entry in FA on retirement (one Accumulated Depreciation 10$


needs to enter the sales proceeds (Assumed that the asset is sold immediately
and the cost of removal if any in after last depreciation and there is no cost of
the Retirement Screen) removal)
Sale Clearing A/c 95$

Fixed Asset A/c 100$

Gain on Sale of Asset 5$


Journal Entries (Contd...)
Accounting Event Account Head Debit Credit

Cost Adjustment to Assets (any


method)–Original Cost 1000$ in Q1
Year 1; dep rate 20% SLM;
incremental cost 500$ in Q4 Year1
Entry in AP Asset Clearing A/c 500$
Supplier Liability A/c 500$

Entry in FA Fixed Asset A/c 500$

Asset Clearing A/c 500$

Expensed Depreciation Expense A/c 75$

Depreciation Expense A/c (adjustment – 500$ * 20% 75$


*3/4)
Accumulated Depreciation A/c 150$

Amortized Depreciation Expense A/c 75$

Accumulated Depreciation A/c 75$


Journal Entries (Contd...)
Accounting Event Account Head Debit Credit

Depreciation Method Adjustments –


Original Cost 1000$ in Q1 Year 1; dep
rate 20% WDV; Method changed to
SLM in Q1 Year 3
Expensed Depreciation Expense A/c 40.00$
Accumulated Depreciation A/c 40.00$

Amortized Depreciation Expense A/c 200.00$

Accumulated Depreciation A/c 200.00$

Rate Adjustment-any method (In Depreciation Expense A/c 62.50$


above case rate changed to 25% SLM
from Q3 Year 4)
Depreciation Expense A/c (adjustment) 175.00$

Accumulated Depreciation A/c 237.50$

Amortized Depreciation Expense A/c 62.50$

Accumulated Depreciation A/c 62.50$


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.
Capital Budgeting
CAPITAL BUDGETING:
 Budget information can be maintained manually, or in another system and uploaded using the budget interface. One can prepare and analyze budget
information on any feeder system and then automatically transfer it into FA.

 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.

 Depreciation expense can be projected on any of the budget books.

 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.

Compare Actual to Budgeted Spending to Plan Purchases:


 One can compare the cost of the assets one actually acquired in a period to the cost one budgeted for that period using the Budget–to–Actual
Report. This report lists the actual and budgeted amounts for each category, and the percent variance between the two amounts. It also shows how
much was spent for each category for which a budget amount was not entered.

 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

Enter / Select the New Budget book name.

Choose Delete to delete an existing Budget Book.

Choose upload to upload the budget info from the budget interface
table.

Choose Create Budget Assets to create a budget asset for each


category, expense account, and budget amount entered for each
period in the Capital Budgets window.
Capital Budgeting - Enter

Select the budget Book, Asset Category, and


GL Expense A/c.

Enter/ update the budget amounts for this


period. The budget amount is the amount one
plans to spend on new assets in this category
in this period for this expense account.

Save and exit


Physical Inventory
PHYSICAL INVENTORY:
Physical inventory is the process of ensuring that the assets a company has listed in its production system match the assets it actually has in inventory. A
company takes physical inventory by manually looking at all assets to ensure they exist as recorded, are in the appropriate locations, and consist of the
recorded number of units.
A person taking physical inventory can collect physical inventory data in a number of ways, such as by writing down information about the asset manually,
or by using a barcode scanner to automatically scan asset information into a file such as an Excel spreadsheet. After this information is collected, any
discrepancies need to be reconciled.

About Physical Inventory:


 The Physical Inventory feature in FA assists one in comparing and reconciling physical inventory data. To use the Physical Inventory feature, one
must first take physical inventory of the assets and include the following information about assets:
 A unique identifier, which can be either the asset number, tag number, or serial number
 The location
 The number of units
One can include other information that may make it easier for one to keep track of the assets one are comparing, such as a description of each asset, but
only the information listed above is required.

 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

Enter/ Load the following details in


Physical Inventory: Asset Tag No, Asset
Description, Serial No, Location
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.
FA Set Up
SETUP FLOWCHART:
FA Set Up – (Contd…)
The various steps required for setting up FA are as under:

Set up Step Description

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

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


Enter the Period Name. the current period.

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.

Initially set up all prorate


conventions from the convention
period corresponding to the oldest
Enter date ranges and
date placed in service through the
corresponding prorate dates for
end of the current fiscal year. At the
assets where the date placed in
end of each fiscal year, FA
service is between the From Date
automatically sets up prorate
and the To Date.
conventions for the next fiscal year.
FA Set Up–Depreciation Methods (Contd…)
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
One can define corporate, tax, and retired in their first year of life.
budget depreciation books which
must be set up before one can add Enter the date on which
assets to them. One can set up depreciation was last calculated
multiple corporate books that create for this book. FA updates this
journal entries for different GL SOB date each time on depreciation
or to the same set of books. For run.
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.
To Allow Revaluation, specify
revaluation rules:
Allow Cost or Expense Ceilings to
an asset
Revalue Accumulated
Depreciation else FA transfers the
Allow CIP Assets to be able to
accumulated depreciation to the
automatically add CIP assets to tax
revaluation reserve account.
book when adding them to corporate
Revalue YTD Depreciation Retire
book.
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
Category information is common for
a group of assets. FA defaults these Enter a Category name and
depreciation rules when adding an Description
asset, to help add assets quickly.
One can override many of the Check Capitalize to charge
defaults for an individual asset in items in this category to an asset
the Asset Details or Books account and to depreciate items
windows. Set up default values for in this category.
each category in each book. The
default depreciation rules set up for Check In Physical Inventory to
a category also depend upon the include assets under this
date placed in service ranges category in physical inventory
specified. comparisons.

Choose Lease, Leasehold


Improvement, or Non-Lease
from the Category Type

Choose Owned or Leased from


Ownership.
Click to enter the
default
Enter the Property Type and
depreciation
Class to which the assets in this
rules.
category usually belong.

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 Prorate Convention


Enter a default and Retirement Convention
subcomponent life Rule to to assign to assets.
determine the default life of
the subcomponent asset Enter a Default Salvage
based on the life of the Value % for this category,
parent asset 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
Use Depreciation Limit book.
to depreciate an asset
beyond the recoverable
cost in the years following If this category is for a tax book,
the useful life of the indicate whether assets in this
asset. category are eligible for
Investment Tax Credit (ITC), and
whether assets in this category
Use ITC Ceilings.
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 Enter the Corporate Book,


region for FA assets or Start Period and No of
Hypothetical assets. Periods for which Analysis
is to be carried out.

Enter Asset Parameters


for which the What-if is
to be run.
Use what-if depreciation analysis to
forecast depreciation for groups of
assets in different scenarios without
making changes to FA data. Run
what-if depreciation analysis on
assets defined in FA system or on
hypothetical assets that are not
defined in FA

Enter the Relevant


Depreciation Scenario
Parameters for running the
What-if
Q&A

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