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:

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.

Oracle Navigation

Navigation -> Assets -> Asset workbench -> Assignments

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

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.

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.

How 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.

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 .

Scenarios in Intra entity Transfer - Asset Accounting

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• Oracle Fixed Assets Process Overview

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

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 .

Capital 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.

Depreciation 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.

Steps 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.

Asset 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

Some 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.

Similar Post

• Depreciation and Amortization
• Deep Drive : “Depreciation” in Oracle Fixed Asset
• Oracle Fixed Asset:Security by Book
• Know the “Security by Book” in Fixed Asset
• Understanding Depreciation Books
• FA : Capital Budgeting & Depreciation Forecast

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:

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.

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.

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.

Implementation 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.

Creating 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.

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.

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]

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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• Depreciation and Amortization
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• Oracle Fixed Asset:Security by Book
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You can manage your Asset Book Security, as mention in one of last post.This Functionality you can

• Secure access to each depreciation book
• Create a flexible hierarchy of asset organizations
• Associate a responsibility with one or more depreciation books

Asset Book Security allows multiple asset books/registers to be manage/administered independently.

Read the rest of this entry »

Oracle Approvals Management (AME) is a self-service Web application that enables users to define business rules governing the process for approving transactions in Oracle Applications .This enables development of custom rules to manage transaction approvals that is integrated with multiple Oracle EBS applications such as HR, PO, AP and UMX.

If you want to migrate the AME setup like rules,conditions,approval groups etc. from one instance to another instance, you can use some of them by mean of FNDLOAD utility. The process is similar to what we are regularly using for other AOL Objects.

FNDLOAD will have such ldt file through which you can use.

You should read the lct first before using any FNDLOAD Command. In the lct, there is an Entity section, where the Entity details are mentioned.Newcomer in OracleApps if you are not familiar with lcts, i would suggest you to go through the DOWNLOAD section and find the bind variables, which are mandatory.

Here are the details steps for each setup's availability till date.

Read the rest of this entry »

As it is well known fact that XMLPublisher stores the metadata and physical files for templates and data definitions in BLOB columns in its schema. During Development you need to download information from a development instance to a test instance before porting over to production environment.These steps you normally follow:

• Use the FNDLOAD utility to upload and download the data definition information and the template metadata stored in the Template Manager.
• Use the XDOLoader utility to upload and download the physical files (RTF, PDF, XSL-FO, XML, and XSD).

Using FNDLOAD to Manage Metadata

As per user guide,both templates and data definitions are stored in the database, therefore we can use the FNDLOAD loader to download the metadata for these objects and then to upload this metadata to another instance. The FNDLOAD program requires a control file (lct) as discussed earlier that XML Publisher provides for use with its objects. The file which is used called xdotmpl.lct and it is located under your APPL_TOP directory as follows:

XDO_TOP/patch/115/import/xdotmpl.lct

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What two program responsible for creating events in R12 CM

They are

• bank account transfers
• bank statement cash flows

Once events created and the accounting program is run, the journal entry setup and the accounting configurations are referenced to produce journal entries. The journal entries are then transferred to GL which had visibility upto source transactions. This way CM user can drill down from the transaction level to the journal entry details.

How it is differ from R11i

In 11i release Cash Management produced journal entries for bank statement activity based on simple rules and sent them to the GL interface

A bit on Bank account transfers

For those who are new to R12, should note The bank account transfer functionality of R12 is one in which you can take action on the projected closing balances calculated by the system. This is integrated with the Payments application that allows you to send payment instructions to the bank in a variety of payment formats.

We already aware for changes for new Bank Account Model feature of R12.

Lets investigate how bank model drive some changes in Bank statement Reconciliation.

1....R12, Bank Transaction Codes is linked to multiple sources.

In 11i each bank transaction code had to be linked to a single source, such as Accounts Payable. This could create an issue if the bank was using the same transaction code to report back a payment that was initiated from an application other than Accounts Payable. With this enhanced changes link with bank transaction code to sources can easily manage and this way you can assign a priority number which can be used in the auto reconciliation for sequencing.

2..Another feature is Reconciliation tolerances.This R12 feature is moved from the system level to the bank account level. This moves simply means that each bank account can manage unique set or reconciliation tolerances. The options for setting tolerance is still distinct for at both manual and auto reconciliation. You should also note auto reconciliation tolerances is unique with sources, that mean each source like AP,.AR,CM, and Open Interface can have there own level.

3... Most important,now it is possible to use the same bank account, created in the centralized model, in multiple organizations, the bank statement reconciliation can also done across Operating Units.

Underline Setup

Most of setup is now attached at Bank level which includes your Transaction codes. There is provision to manage and assign transaction code to multiple transaction sources.

Another changes you can see in R12 accounts Control in which you can easily manage reconciliation control parameters.

Post of your Intrest

• XML based statement for Cash Management
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• R12 : Bank & Trading Community Architecture(TCA)
• R12 : EBS Banking Model in demanding and Changing World
• R12 :Bank Statement Reconciliation

This is not Oracle acquisition news, rather yet another Big news this morning locally in Singapore for partnership with global bank Citibank Japan and Oracle for enhancing the Oracle Global Cash Management System,that provide a integrated solution for managing Cash Management for global manufacturing operations, retail, transportation, financial services sector of Japanese clients.

"Oracle Global Cash Management System" is SOA based product of Oracle Japan used for managing group corporate finance, fund management and financial risk management, financial transaction management function.

Some of the important Fund management features that product offers are : centralized group of companies in the financial management of pooling funds, payments to suppliers to pay a centralized agency, balances between group companies to make the difference between the settlement and netting capabilities.

"Oracle Global Cash Management System" available for local clients since October 1, 2007 with price tag 15 million yen for 4-user license,supported with most of available platforms(AIX, Solaris, HP-UX, RedHat Linux, Windows).

read this entire story

As need for banking Integration is greatly felt in corporate world, and Lets hope, this might bring some more banking functionality in next releases of Oracle EBS ..what you say...