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Know 15 important things before you can do Auto lockbox setting

Posted on June 29th, 2008 by Sanjit Anand |Print This Post Print This Post |Email This Post Email This Post

Auto lockbox Implementation been never been an easy task. Though it requires own set up to handle this functionality. Therefore Its is very important to understand some key points before implementing LockBox in Oracle.

  1. How are you identifying the customer against which you apply the receipts? Are you using Auto associate, Customer Number or MICR number?
  2. What do you have for the Match Receipts "By option" in Lockbox? Is this by Customer Bill-to-Site, Customer or Lockbox?
  3. What do you have for Allow Payment of Unrelated Transactions when you submit lockbox and at the system level?
  4. Do you Require Billing Location?
  5. What do you have for Auto cash Rules?
  6. What do you have for Remaining Remittance Amount? Do you want this as unapplied or Onaccount ?
  7. Do you Apply Partial Receipts?
  8. What do you have for Remainder Rule Set? How the setup is done ? Is it at customer site or customer profile level?
  9. What do you have for Allow Payment of Unrelated Transactions?
  10. Do you use Autoassociate?
  11. What do you have for Invalid Transaction Number Handling? This mean how post partial amount as unapplied or you want reject entire receipt?
  12. Are you expecting Miscellaneous Receipt through AutoLockbox?
  13. Is customer expecting some Refunds with negative amount for returns to handled through Lockbox?
  14. Is customer expecting any adjustment through Lockbox?
  15. Are you using Lockbox standard format or have a different format? If not using standard format do you have details for transmission line details?

If you have already some more items need to be added, do share your experiences.:)

dgreybarrowSimilar Post

Posted in Oracle Receivable | 4 Comments »

Lockbox – Functional Prospective

Posted on June 28th, 2008 by Sanjit Anand |Print This Post Print This Post |Email This Post Email This Post

Is this a one of the Business scenarios:

  • Your company receiving payment from customers through mail.
  • These mails containing cheque that come from customers who dispersed across a region or the country or out of country.
  • Once Check received by AR department they normally submit all cheque with deposite slip
  • Many time because of what ever reason, AR department hold checks over a day or two or longer.
  • The totol number of customer payment per month would be 1000+.

If this is case and and your business is growing without AR work force, than get use of Lockbox services offered by Different Bank. You need to check with your banking partner, are they offering any such kind of service or not in your region.

dgreybarrow-2LockBox - An Automated Banking Solution

In Financial term normally used by bank is called Lockbox, in which bank will improve your cash flow that enhancing company's working Capital.This is technology driven technique in which you have your customers' payments delivered directly to a special post office box instead of your business address and then bank will take care of all your remittance activity.

dgreybarrow-2 Its via ..PO Box

You might have one quick question at this stage, Is this same PO Box, that National Postal Department using?

The answer is no, as the key difference between the Lockbox post office box number and a regular post office box is that only your customers' payments are delivered to the box. Instead of you picking up the payments, bank's couriers have a key to the post office box, and they remove its contents and deliver your customers' payments to your bank. Your bank opens the payments and then processes the payments for deposit directly into your bank account.

dgreybarrow-2 The Flow

The entire business Flow can be best understood as :

Lockbox

>> What additional things bank handle when you are using Lockbox

These are the some of the services, now a days most of bank offering in LockBox Feature. This Includes

  • Automated capture of receivables and customer information as mention above
  • Consolidation of paper-based and electronic payment streams, regardless of whether the lockbox provider was the original recipient of the electronic payment.
  • Integration with accounting applications for automated receivables matching.
  • Remote check capture for accelerating the processing and/or electronic conversion of payments received outside of a lockbox or the normal receivables process.
  • In some of the case Bank provide customized business rules for handling industry-specific receivables
  • Deposit reconcilement for tracking deposits from multiple departments.
  • Manage electronic bill presentment and payment (e-bills).
  • Collections.

dgreybarrow-2Which Kind of business does Requires Lockbox

Lockbox is best used by the companies which have numerous customers base such as:

  • Public Utilities company
  • Mobile or Telecom for receiving customer Payment
  • Professional Membership/Club
  • health care

dgreybarrow-2Benefits of using LockBox

The LockBox Utilizes two primary benefits :

  1. Fund Collection
  2. Remittance Information Delivery

On top of that major benfits are that company is able to recognize the funds more quickly and customer's check is cashed bit faster.

dgreybarrow-2AutolockBox setup:

  1. Explore
    1. Explore your banking partner how they offer Lockbox and understand the cost.
    2. Explore the integration aspect of accounting system and lockbox integration, the next is to follow these steps:
  2. Steps Involved
    1. Letting customer Know, about the channel of payment. The First you have to instruct customer to deliver there cheque and remittance advice to any any of the bank Lockbox PO Boxes. Most of bank will provide you a list of all there PO boxes.
    2. On receipt of cheque on the business day, the banking courier Partner collect items from each PO boxed and deliver to nearest Lockbox processing center.
    3. Once Cheuqe or remittance advice collected at processing center, data is captured from the cheque and remitted advice. End of day depends upon how bank provide the details you can get the data transmitted to your AR department. Most of bank now a days provide there Portal , you can download the data directly from the Portal.
  3. Oracle Configuring :These are the basic Steps in Configuring the Autolockbox in Oracle
    • Maintain Control Parameters : How Autolockbox ...This should be based out of these 15 points that was mention in this post.
    • Create Lockbox Addresses for Bank
      • Bank Details
      • Bank Data file Trasmision Format

These steps should be prerequisite as per this post.

dgreybarrow-2The Importance of receivables Information

Thats true , the importance of receivable information can not be neglected.

Most of the bank passes these information,

  1. Cheque/Payment Information
    • Amount and Currency
    • Cheque/Payment Number
    • issue date and value date
  2. Remittance/invoice Information
    • Reference/invoice
    • Remitte's Name

Once bank processed, a electronic File is transmitted and transferred to company which owns the lockbox.This files can be in one of two standard banking industry formats: BAI or BAI2 which is defined by Bank Administration Institute (BAI). In some cases and some countries if not following the standard , you can can also get use the transmitted via EDI using the ANSI X.12 823 for lockbox remittances.

dgreybarrow-2Supported Format in Oracle AR

Oracle does provide some seeded file format that you can configure based out of your need.These are the list of Files:

  • Example : The control file located under $AR_TOP/bin with name arxmpl.ctl. This format that contains an example of lockbox header information, several receipt records, and overflow receipt records.
  • Default : A standard BAI (Bank Administration Institute) format used by most banks. Underline control file would be ardeft.ctl
  • Convert :A standard format used for transferring payment information from other systems.Underline control file would be arconv.ctl
  • Cross Currency :A default format used for importing cross currency receipts. Underline control file Format would be arxcurr.ctl
  • Zengin : This is used to import bank files in the Japanese Zengin format.Underline control file Format would be arzeng.ctl

dgreybarrow-2

Global Bank & LockBox

Most of global(ABN, Bank of America, CitiBank, Deutsche, HSBC, JP Morgan and Standard Chartered) as well Local bank are offering Lockbox servics , therefore if you are planning to take an adavantage for lockbox services to boost customers' bottom line, then Choice is Obvious.

Let me know, in case if you need some more input , I will share some more implemenation senarios.

dgreybarrow-2Similar Post

Posted in Oracle Receivable | 4 Comments »

Fixed Asset : Oracle Vs Others

Posted on June 26th, 2008 by Sanjit Anand |Print This Post Print This Post |Email This Post Email This Post

If you are customer/client is coming from other system like SUN or SAP, you can notice some good features and some missing feature Oracle Fixed Asset while comparing.

  1. Assets purchased through AP coded to an asset clearing account are dynamically transferred into the asset register; there is no need for them to be re-input. This is what called asset Tracking in Oracle.
  2. GL codes, depreciation method and useful lives default from asset category and do not need to be input, therefore reducing error. This is yet another good feature.
  3. Ability to run and rollback depreciation many times to review results and correct errors in Oracle.
  4. Ability to make mass changes (additions, adjustments, transfers, disposals) e.g. cost centre transfers,location, employee and to a group of assets therefore process will get faster.
  5. Retirement and Disposal does not have any distinction in Oracle.
  6. Capital budgeting requirements at category level as nicely controlled in Oracle, as compare to SAP.
  7. In SAP, there is some good automation of feature like "Asset Shutdown" where SAP users like.Asset Shutdown can be consider in case if you have an asset which you do not want not be used for production purposes for next six months as the company is being closed for whatever reason.
  8. See how you can transfer assets from one cost centre to another and across entities?
    • [Oracle ] As mention earlier also, assets can be owned by one entity and have depreciation charge going to another. Asset transfers would be typically be treated as a disposal and purchase by the new entity if across completely different legal entities- this can either be gone as a GL journal or via the AR/AP modules - the process will depend upon and varies business process and the local legislative requirements
    • [SAP] The SAP system provides transactions to transfer assets from one cost centre to another and from one company to another where-in the asset values and accumulated gets transferred automatically.
  9. Asset register Usage and Maintance
    • [SAP] The asset register is a standard report available in the asset management module of SAP. This reports does shows all acquisitions, transfers, retirements, depreciations, revaluations.In asset management you create an asset first and then use the asset number created for capitalising the asset.
    • [Oracle] Assets (ideally) are created from Payables as invoices which goes to a Fixed Assets additions screen from where the Asset Manager/user can review which items to incorporate to the asset register.Assets can also be created in the Fixed Assets modules. CIP based assets can directly integrated with Project and PO modules.
      • Assets integrates with the general ledger which can process the journals automatically - this is typically done at month end so the depreciation can be run and rerun many times if required
  10. Oracle does have iAsset , a purly web based application designed to cater to manage employees and access information about a company's capital assets, such as equipment and machinery.

Disclaimer : SAP Functionality which is discussed is based out of Personal observation and discussion with SAP user, which they are using bit older version.Any Conflicts with SAP functionlity must be validated. Oracle Version which is used for reference is 11.5.10.2/R12.

Posted in Oracle Asset | 1 Comment »

Fixed Asset :Retirement & Disposal

Posted on June 23rd, 2008 by Sanjit Anand |Print This Post Print This Post |Email This Post Email This Post

Oracle Asset does not draw a distinction between the retirement and the disposal of an asset. Since there may be a significant time elapse between the retirement of an asset (it is no longer being used) and the physical disposal of the asset.

The generic retirement Procedure normally consist of these sub-procedures from place to place.

  1. Identification of assets to be retired.
  2. Collection of details and supporting documentation including proper authorization.
  3. Data entry of disposal information.
  4. Data entry of retirement information.

dgreybarrowThe Oracle Asset Retirement Process

You can retire all or part of an asset when it is no longer in service. For example, you can retire an asset that was lost, stolen, damaged, sold, returned, or any other reason that caused you to stop using it. If necessary, you can undo the retirement. Oracle Assets will continue to track a fully reserved asset until you retire it.

The other feature and functionality that Oracle handles are:

  • Retiring assets by units or cost.
  • Performing a mass retirement by retiring a group of assets if using.
  • You can synchronize asset disposal information between Oracle Assets and external systems , this can be achieved by Mass External Retirements interface, which is discussed at the end.
  • You can create journal entries to separate accounts for each component of the gain or loss.

dgreybarrow Retirement Limitation

These Limitation you should be familiar:

  • You can only retire assets that were added in previous periods and are effective in the current fiscal year.
  • You cannot retire an asset that you added in the current period. Therefore it is advisable that you must enter your retirement as a prior period retirement after you run depreciation. [[This is 11i Functionality]

You perform current and prior period retirements and reinstatements within the same fiscal year.

You create journal entries to separate accounts for each component of the gain or loss.

dgreybarrowOracle Processes & Navigation

(N) Assets > Asset Workbench (B) Retirements

1Full Retirement

This mean retiring an entire asset including all of its units and cost.

When entering the date of the retirement, it must be in the current fiscal year, and cannot be before any other transaction on the asset.

Oracle Assets lets you use a different prorate convention when you retire an asset than when you added it. The retirement convention in the Retirements window and the Mass Retirements window defaults from the retirement convention you set up in the Asset Categories window.
If you perform a prior period retirement, Oracle Assets backs out the depreciation expense through the date of retirement.

2 Partially Retiring an Asset

You can retire part of an asset by cost or by units or by By Source Line in your corporate book. You cannot perform partial unit retirements in your tax books; you can only perform cost retirements (partial and full) in your tax books. The procedure to partially retire an asset is identical to the procedure for fully retiring the asset. The only difference occurs when you specify the cost or units to retire.

If you perform multiple partial retirements on an asset within a period, you must run the Calculate Gains and Losses program between transactions.

Read the rest of this entry »

Posted in Oracle Asset | 1 Comment »

The Asset Life Cycle – eAM Context

Posted on June 21st, 2008 by Sanjit Anand |Print This Post Print This Post |Email This Post Email This Post

In the lifecycle of Assets these are different stages:

AssetLifeCycle

  1. Business Modeling that is based on actual operating and performance data allows companies to continuously monitor and modify the model under changing conditions. Oracle BI is product typically used to perform this function.
  2. Capital Planning is the starting point for asset-related business execution. Timetables and budgets originate in capital plans; companies can monitor and measure performance against these plans. This is a critical and dynamic part of the business cycle. Oracle Projects is product typically used to perform this function
  3. Operational and capital Budgets generated as part of planning processes are the foundation of business-performance monitoring. Budgets are important for operational as well as financial management. Oracle Financials is product typically used to perform this function
  4. Procurement of assets is where detailed information about assets starts to be collected.Performance specifications are part of any request-for-quotation process, and should flow through to purchase contracts, and on to receiving and inspection documents. Quantity and cost information should flow to payables and fixed-asset records to ensure proper accounting and ongoing depreciation calculation. Oracle PO and IPROC is product typically used to perform this function.
  5. Installation of assets requires tools for physical installation, as well as management of the people and materials required to execute the work. Often, installation is fully or partially executed by the people who are tasked with ongoing maintenance. Capture of as-built configuration information and other details is necessary to support future operation and maintenance. Linkage of the actual
    work required back to the capital-budgeting system is necessary for project management and control. Oracle EAM is product typically used for this function.
  6. Operation of assets requires tools for planning and scheduling the productive use of an asset. In a manufacturing environment, this means tools that consider product demand, production capacity, production cost, and maintenance requirements. The relationships of these factors are nonlinear and dynamic. Planning tools must allow for repetitive, real-time reevaluation and adjustment of schedules. Oracle SCM is product typically used for this function.
  7. Maintenance of assets requires tools for labour, and material planning to support work execution.Scheduling tools must consider resource availability, material availability, and operational requirements of an asset. Performance and operational characteristics should drive dynamic
    adjustments to the preventive and predictive tasks associated with asset maintenance. Oracle EAM is product typically used for this function.
  8. Performance Management and reporting is critical for asset managers who must make decisions about the operation and maintenance of an asset. Access to daily business-intelligence information is a necessity. This type of timely information is available only with an integrated enterprise asset management system. Oracle BI is product typically used for this function..
  9. Capital Improvement is commonly part of an asset’s life cycle. Extending the life of an asset or improving its operating characteristics is often more cost-effective than replacing the asset.Access to historical performance, cost, and financial information is required for optimal decisions regarding capital improvements. Capital-improvement decisions feed back to the planning process, and, for many assets, result in multiple loops through the asset life cycle.
  10. Decommissioning of an asset means its physical removal from operation and its removal from systems for planning maintenance and operation. Oracle EAM is product typically used for this function.
  11. Disposal of an asset involves physical disposal, as well as accounting disposal, to remove it from further involvement in operational and financial reporting.Oracle Financials is product typically used for this function.

An integrated system that includes asset management provides unique benefits in each stage of the asset life cycle.

Posted in Oracle eAM | No Comments »

Asset Transfer

Posted on June 21st, 2008 by Sanjit Anand |Print This Post Print This Post |Email This Post Email This Post

Asset transfer is a complex process and should not be entered into lightly, if your customer business is bit complex in nature. The complexity varies from companies to companies along with industry type.This post will briefly tells about Asset Transfer functionality of Oracle.

You may have three main business scenario's within Asset Transfer.

  1. Location Transfer without ownership change
  2. Location Transfer with ownership change
  3. Ownership Transfer without location change

In reality 1,2 is sort of intra Transfer of asset where as #3 is consider as Inter Transfer. Lets take a detail understanding what is meant and see key difference:

dgreybarrow Transfer Intra Entity

Assets are sometimes transferred between locations within the same entity. These are referred to as INTRA Entity transfers as opposed to INTER Entity transfers where the asset transfers between two entities.

Companies have requirement , when an asset is transferred Intra Entity the location of the asset changes. It is therefore necessary that those changes are identified and recorded in the Fixed Assets module for controlling the physical location of the asset.

dgreybarrowOracle Navigation

Navigation -> Assets -> Asset workbench -> Assignments

You can use Find Assets form to make a transfer of a particular asset.

dgreybarrow Asset Transfers -Process

(N) Assets > Asset Workbench (B) Assignments

To get use of Intra Entity transfer which might be location change , you can transfer assets between employees, depreciation expense accounts, and locations. These are some of key things which you need to have a clarity:

  • You can change the transfer date to a date in a prior period for a particular transfer, but the transfer must occur within the current fiscal year
  • You can change the transfer date of an asset to a prior period only once per asset.
  • Oracle does not allow you to transfer an asset to a future period.
  • Oracle does not transfer an asset after its normal life is completed.
  • In the Unit Change field of the Assignments window, enter a negative number for the assignment line from which you want to transfer the asset. Enter a positive number if you want to add units to existing assignments or create new assignments. Only one negative line is allowed per transaction.
  • A journal entry is created as soon as an asset is transferred from one Depreciation Expense Account to another.

dgreybarrow Transfers - Inter Entity

In reality , Oracle Asset does not have a facility to transfer assets from one corporate book to another. For the purpose of understanding you can consider corporate book to be synonymous with legal entity. In order to transfer assets from one legal entity to another it is necessary to retire the asset in one corporate book and add it to the other corporate book.

In EBS, there is no standard functionality/process in FA for transfer assets Inter Entity.

The work around for handling such scenarios consist of 2 simple steps.

1) In Entity book(s)1 you need to adjust Current Cost = 0, retire the assets.
This will reverse all accumulated depreciation and have no gain/loss on the retirements passed to GL.

2) Add the assets to the new book(s)(entity 2) via FA_MASS_ADDITIONS or the Addition API.

Here you probably do not want to add with DEPRN_RESERVE values - just let FA re-establish the balances when you run depreciation and create JEs > GL.

dgreybarrowHow Transfer works

A tranfer is recorded as such in the FA_TRANSACTION_HEADERS table. The old and the new line is shown in the FA_DISTRIBUTION_HISTORY table and the journal lines are shown in FA_ADJUSTMENTS after depreciation is run. In FA_DEPRN_DETAIL you see a row with the old distribution_id and the new distribution_id in the period_counter of the transfer.

dgreybarrow Asset Transfer API

You can get use the Oracle Transfer API's to add assets directly by writing a PL/SQL based driven program . The Transfer API FA_TRANSFER_PUB.DO_TRANSFER can be used .

dgreybarrow Scenarios in Intra entity Transfer - Asset Accounting

accounting

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Posted in Oracle Asset | 9 Comments »

Oracle eAM Integration and information flow

Posted on June 20th, 2008 by Sanjit Anand |Print This Post Print This Post |Email This Post Email This Post

Oracle Enterprise Asset Management is part of the Oracle E-Business suite, and directly integrates with Oracle Manufacturing, Oracle Purchasing, Oracle Property Management,Oracle Quality, Oracle Inventory, Oracle Human Resources, Oracle Financials, Oracle Fixed Assets, and Oracle Projects.

A well-planned maintenance environment depends on the ability of key personnel to view available inventory items, equipment, and skilled personnel. Because eAM is an enterprise solution, you can view the resource availability for assets that are used by operations and
coordinate maintenance work to minimize operation disruption. You can refer to fig 1 for information flow .

For Best usage of EAM , these products must be required & installed:

  • Oracle Inventory
  • Oracle Bills of Material
  • Oracle Human Resources
  • Oracle Cost Management
  • Oracle Manufacturing Scheduling
  • Oracle Quality
  • Oracle Work In Process

Where as these are optional Products, which are not required;however, they are useful in the overall robust eAM solution:

  • Oracle Master Scheduling/MRP
  • Oracle Property Management
  • Oracle Financials
  • Oracle Fixed Assets
  • Oracle iProcurement
  • Oracle Projects
  • Oracle Project Manufacturing
  • Oracle Purchasing
  • Oracle Order Management
  • Oracle Time and Labor

dgreybarrow E-Business Suite Integration and Information Flow

Oracle eAM brings the functionality, look and feel of traditional best-of-breed CMMS systems to ERP.

Oracle eAM seamlessly integrates with other Oracle Supply Chain and Financial applications such as: Inventory, Bills of Materials, Work in Progress, Quality, Cost Management, Project Manufacturing, Fixed Assets, Property Management, Manufacturing Scheduling, MPS/MRP, and core Human Resources (as shared install) for employee definition and skill search. This unique integration to extensive enterprise applications improves overall organization efficiency and enables comprehensive work management capabilities. Fig 1 will gives EAM Integration options and Information flow. details are follow herewith:

EAM

  1. Fixed Assets For reference, Oracle eAM allows you to associate an asset to a fixed asset defined in Oracle Assets. Using Work Order Cost Capitalization, selected work order charges can be sent to Oracle Assets for additional capitalization.
  2. iSupplier Portal Integration with Oracle iSupplier Portal provides the capability for Web-based collaboration with suppliers / subcontractors. The accuracy and timing of suppliers' reporting is greatly improved. Through iSupplier, a supplier can report work completion and any required collection data and meter readings.
  3. iProcurement Oracle eAM integrates with Oracle iProcurement to provide an intuitive, Web-shopping interface to order direct items for maintenance work orders. A powerful search engine and multi-supplier self-guiding catalog capabilities are the trademarks of Oracle iProcurement for item selection.
  4. Projects -Oracle eAM is integrated with Oracle Projects to provide a complete, seamlessly integrated business solution for maintenance project management. You can specify a project and task for your maintenance work order. Transaction costs are collected and passed to Oracle Projects for subsequent project cost analysis and management.
  5. Property Manager Oracle eAM integrates with Oracle Property Manager to provide a comprehensive real estate management solution that automates and enhances property definition, space utilization management, and lease administration. Users can link an eAM asset directly to a Property Management location name and code.
  6. Human Resources (HR) :It depends on how much of HR is being used. Just employees and jobs being used requires shared. EAM comes with a "shared" install of HR. This is a requirement so that the user can select an individual's name (defined in HR) to assign to a work order. However, for training and certification tracking for selecting resources will require full installations
  7. Service Integration to Oracle Service allows you to log a maintenance service request. This provides the maintenance planner or supervisor with visibility into service requests logged against his / her department’s asset, and can assign work appropriately to them.
  8. Time and Labor With Oracle Time and Labor (OTL), employees can enter the hours they have worked by work order on a self-service timecard. Once the timecard is submitted, Oracle eAM will charge the time to the work order resource and assigned employee.
  9. Process Manufacturing Oracle eAM integrates with Oracle Process Manufacturing (OPM) Scheduling to improve the coordination between production scheduling and maintenance scheduling. Scheduled maintenance downtime updates resource availability in the OPM Resource Calendar
  10. Discrete Manufacturing and Advanced Supply Chain Planning -Oracle eAM streamlines the coordination between production scheduling and maintenance scheduling. The load production downtime process generates equipment resource downtime caused by scheduled maintenance. The downtime is included by production scheduling as a constraint on its scheduling. When a production plan is generated by Oracle Master Scheduling / MRP or Oracle Advanced Supply Chain Planning, equipment resource downtime can also be included as a capacity constraint. In this release, Oracle Shop Floor Management leverages Oracle eAM's operation log data to identify production equipment down time for its production planning and scheduling.
  11. Installe Base : if you came from 11i background, you might aware there was no integration between EAM and IB in release 11, where in R12 there is a functionality introduced to allow EAM Assets to be trackable.The need for R12 add-on function was to maintain the transactional history of the EAM Asset linked with install base .Therefore integration only done to support
    • EAM Asset Tracking
    • Meters
    • Locations
  12. Grants:Unfortunately, there is no direct integration between EAM and Grants.Typical workaround is to create a Costing Extension .

Hope this helps.

Posted in Integration, Oracle eAM | No Comments »

Changes in to “Mass Additions Create” in R12

Posted on June 19th, 2008 by Sanjit Anand |Print This Post Print This Post |Email This Post Email This Post

1) R12, the Mass Additions Create program inserts the records into the FA_MASS_ADDITIONS_GT table, a global temporary table whereas in 11i, it is inserted the records directly into the FA_MASS_ADDITIONS table.

2) The Mass Additions Create process calls the fixed assets code, FA_MASSADD_CREATE_PKG , which determines whether the selected data meets the criteria to be set moved to the FA_MASS_ADDITIONS table based on the asset book controls and the configured asset and CIP clearing accounts.

3) In R12 profile option "FA: Include Nonrecoverable Tax in Mass Addition" is obsolete.

4)The asset book and asset category can be defined in Payables on the invoice line. If these are defined in Payables, they will appear in the Mass Additions Prepare screen when the asset is reviewed.

Reference

  1. Note:464780.1 :R12 Non Recoverable Tax Lines Not Interfacing to Mass Additions
  2. Note:559980.1 :How To Include Nonrecoverable Tax In Mass Addition In R12

Posted in Oracle Asset | 1 Comment »

FA : Capital Budgeting & Depreciation Forecast

Posted on June 17th, 2008 by Sanjit Anand |Print This Post Print This Post |Email This Post Email This Post

If your client/customers's company want to use the capital budgeting function of Oracle Asset , then you will able to create, upload and amend a budget by asset category, cost centre within a legal entity.

What minimum you have to do is to do setup a budget book, which is basically subsidiary to a Corporate book and is used to hold capital budget information. Please note no actual assets are held in a Budget book. You can also manage multiple Budget books and can be linked to one Corporate book. For details for budget books refer this .

dgreybarrowCapital Budgeting

Client Requirement : To establish if Capital Budgeting within FA will be required

Oracle Assets budget allows you to enter budget information manually, or you can maintain your budget information in another system and upload the information via the budget interface.

Budgeting is done at either the major category level or at the full category flex field combination per period. Update of budget can be restricted to authorized user by function and menu exclusion.Therefore, you need to be very careful while designing and providing the menu to user community.

In Oracle you can get use of budget entry report is available within the standard report set.

The Budget to Actual Standard Report list the actual and budgeted amounts for each major category and cost centre and the percent variance between the budget and actual regardless of the budget information detail whilst the Capital Spending Report compares the budgeted and actual amounts for all major categories, for which there exists a budget and it sums them up by major category. It also sums up the actual expenditures for non-budgeted categories by major category.

Sometime it has requirement to be able to project/forecast depreciation over future periods using all fields within fixed assets,if customer wants.

dgreybarrowDepreciation Forecast

Depreciation Forecast is achieved within Oracle standard functionality via What if Analysis or Depreciation Projections.

What-if Depreciation Analysis is use to forecast depreciation for groups of assets in different scenarios without making changes to your Oracle Assets data. You can run what-if depreciation analysis on assets defined in your Oracle Assets system or on hypothetical assets that are not defined in Oracle Assets.

What-if depreciation analysis differs from depreciation projections in that what-if depreciation analysis allows you to forecast depreciation for many different scenarios without changing your Oracle Assets data. Depreciation projection allows projection only for the parameters set up in Oracle Assets.

The important fields that can be used for What If analysis are;

  1. Asset Book , Start Period and number of period , these are mandatory parameter.
  2. Range of asset numbers
  3. Range of Date in Service
  4. Asset Category
  5. Indicate the depreciation method, years you wish to simulate. For example the impact of changing the depreciation method from straight Line to Sum of Digits.

Use the what-if depreciation analysis to forecast depreciation for groups of assets in different scenarios without making changes to your
Oracle Assets data.

dgreybarrowSteps to use Forecast Depreciation using WHAT-IF DEPRECIATION Analysis:

  1. First you need to navigate to the What-If Depreciation Analysis window .
  2. Next you need to enter the book containing the assets for which you want to run what-if analysis.
  3. Now , in the Assets to Analyze tabbed region, enter the parameters you want to use to identify the set of assets for which you want to run
    what-if depreciation analysis or you can use other options like ..In the Hypothetical Assets tabbed region, enter the parameters to identify the hypothetical asset for which you want to run what-if depreciation analysis.
  4. Next you need to enter the Depreciation Scenario parameters to identify the depreciation rules to be used in the analysis.
  5. Run what-if depreciation analysis.
  6. Review the results of the What-If Depreciation Report or the Hypothetical What-If Report by navigating to the View My Requests window.
  7. Update your assets according to the specified parameters in the Mass Changes window or repeat this with other parameters.

dgreybarrowAsset budgeting : EBS Out of box possiblity

  • Possibility to create a budget by asset category (type of asset) within a legal entity.
  • Possibility to create a budget by cost centre within a legal entity
  • Possibility to modify a budget
  • Possibility to upload a budget by assets category (type of assets) within a legal entity.
  • Possibility to upload a budget by cost centre within a legal entity.
  • Ability to forecast current asset depreciation for future periods and what if analysis

dgreybarrowSome Quick Question Answer

Q: What is the use of Budget Book?
A: Capital Budgeting

Q: How will you Create Asset in Budget Book?
A: Via the application or Budget Upload interface table.

Q: Is there any process where in assets can be transfered from Corporate book to Budget Book?
A: NO

Q:Link between FA Budget and GL Budgets
A:To establish the link between FA budget and GL Budget , you need to do customization on Account Generator.

Q:What is Budget Open Interface ?
A:As mention this is Capital Budgeting Process in which you can maintain your budget information in a spreadsheet, and then upload it to Oracle Assets using the budget interface. You can transfer budget data from any software package that prints to an ASCII file, and then use SQL*Loader to load the FA_BUDGET_INTERFACE table.

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Understanding Depreciation Books: Back to Basic

Posted on June 15th, 2008 by Sanjit Anand |Print This Post Print This Post |Email This Post Email This Post

Fixed Asset is one of the easiest application in Financial side but whenever its comes to discussion for depreciation, people roll their eyes and shudder. I received lot many emails and offline request for understanding asset tax book and deprecation. This is back to basic subject, an attempt to draw a line in the sand.

In EBS , there are three types of Depreciation Books you can manage:

1 Corporate Book :This is the main asset book type used to hold the Fixed Asset Register in accordance with your corporate policy. The Corporate Book is linked to the appropriate GL Set of Books for journal postings.

The Corporate Book into which the invoice lines from Oracle Payables or Oracle Projects flow. It is the main depreciation book from which journal entries are created for General Ledger.

2 Tax Book : This book type is subsidiary to the your corporate book and is used to hold the same assets as in the Corporate book but depreciate them differently for tax or legal / fiscal purposes.

From the corporate book the transactions can be copied into the Tax Book. It is called tax book because it is generally used to keep the tax depreciation. One can maintain different depreciation methods and life from the corporate book for the same assets. The accumulated depreciation of previous fiscal years can only be adjusted for tax books.

3 Budget Book :This book type is also subsidiary to a Corporate book and is used to hold capital budget information. No actual assets are held in a Budget book. Multiple Budget books can be linked to one Corporate book.

Once you created Budget Book and budget assets, you can run budget reports and project depreciation expense for amounts budgeted to each category. Planning to have another post on Asset Budgeting.

dgreybarrowImplementation Consideration :Steps/process

When setting up the depreciation books, one defines which set of books and therefore which Accounting Flex field/Calendar/Currency will be the basis and for which set of books journal entries will be created. The depreciation and prorate calendar need to be chosen. The current open period needs to be chosen and the method for dividing the annual depreciation amount over the periods in the fiscal year.

The accounting rules have to be chosen and the profit/loss accounts that the account generator will use to create the account combinations. The journal categories for the journal entries in General Ledger have to be chosen.

Asset Calendars are assigned to asset books for purposes of calculating and allocating depreciation expense.

Asset Categories are assigned for use with asset books. All assets are assigned to an asset category which designates accounting information and default depreciation rules for the assets. Depreciation methods are assigned to asset categories.tax book

dgreybarrowCreating a Tax Book

  • Tax books can be created before you add and depreciate assets.
  • Driving factors for deciding tax books is to comply with tax laws .
  • You Can manage multiple tax books that are associated for each corporate book.
  • You can also define independent tax depreciation books for each reporting authority.
  • You can copy assets into each book and depreciate these according to each book's depreciation rules.

dgreybarrow Entering Information in Tax Books

  • Mass Copy can be used moving corporate book to your tax books automatically .
  • As mention above , you can manage multiple tax book but you need to maintain your asset information in your corporate book, and then update your tax books with assets and transactions from your corporate book.
  • If you choose to copy adjustments, Oracle Assets copies cost adjustments from the associated corporate book if the unrevalued cost in the corporate book before the adjustment matches the unrevalued cost in the tax book. It copies both adjustments that are ADJUSTMENT type in the tax book and adjustment transactions that create a new ADDITION type and update the ADDITION/VOID in the tax book.
  • You should note that initial mass copy is used to initially populate your tax book by adding existing assets to a tax book.
  • Assets and transactions into the tax book can be entered manually.
  • Periodic Mass Copy each period can be used to keep your tax book updated with your corporate book.
  • You cannot copy assets from one corporate book into another corporate book.

dgreybarrow What is the difference between book depreciation and tax depreciation?

Corporate book depreciation is the amount recorded on the “books” and reported on the financial statements. This depreciation is based on the matching principle of accounting.

Whereas , the tax depreciation is recorded on the company’s income tax returns and will be based on the Local Internal Revenue Service’s rules.The IRS might specify that the machine is a 7-year machine regardless of a company’s situation. The IRS rules also allow a company to accelerate the depreciation expense. Accelerated depreciation means taking more depreciation in the first few years and less depreciation in the later years of the machine’s life. This saves income tax payments in the first few years of the asset’s life but will result in more taxes in the later years. Companies that are profitable will find the accelerated depreciation to be attractive.[Apoted]

dgreybarrow Some FAQ

Q. Which Book allows mass copies checked in order for the mass copy to copy.
A. Only the tax book needs to have the allow mass copy checked

Q. How do I disable a Book?
A. You can disable the book is to end date it.The end date The end date is as of today or later and cannot be post-dated.

Q. Can be manage multiple FA Books pointing to a GL book?
A. Yes, you may have multiple FA books tied to the same GL Set of Books.
Create Journal Entries, which is where the interface from FA to GL occurs, is run by individual book in FA.

Q. Can it be possible to push the same payables item into 2 different fixed asset books to get depreciated with 2 different methods?
A. Yes, you can ..If you would create a corporate book and attach a tax book with different depreciation rules. Then you can send the invoice from AP to the corporate book and later mass copy it to the tax book.

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