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R12 :FA Close process

Posted on March 12th, 2009 by Sanjit Anand ||Email This Post Email This Post

If you are coming from 11i, there is slightly change in FA Period Closure process because of SLA.

Here are steps & procedures for performing period-end processing in Oracle Assets Release 12.

In FA, at period end, we require to run depreciation for depreciation books set up for the organization, and to Create accounting for Oracle General Ledger. Oracle Assets has only a single open depreciation period in each depreciation book.

FA Close Process

1.Complete All Transactions for the Period Being Closed

You need to ensure that all transactions have been entered for the period being closed. Once a depreciation period in Oracle Assets has been closed, it cannot be re-opened. Check that no-one is entering transactions as Oracle Assets prevents transaction data entry while the Depreciation Run Process is running. You need to complet all transactions for Oracle Assets:

  • Prepare and Post Mass Additions
  • Complete Manual Additions
  • Complete Adjustments
  • Complete Retirements
  • Complete Transfers
  • Complete Reinstatements

2.Then if you required, you need to assign distribution lines to all assets.

If an asset has not been assigned to a distribution line, the period end Depreciation Process will not complete, and will not close the period. Take the advantage of running “Assets Not Assigned to Any Cost Centers Listing ” report to determine which assets have not been assigned to a distribution line.

3.Run Calculate Gains and Losses

This is optional , the Calculate Gains and Losses program for retirements can be submitted prior to running depreciation. The Calculate Gains and Losses process is performed independently for each depreciation book.

4.Run the depreciation

In Release 11i when you ran depreciation you would automatically close the period whereas in Release 12 you can now run depreciation without closing the period.

5.Create accounting

Create Journal Entries (FAPOST) is replaced by Create Accounting – Assets process (FAACCPB)

6.RollBack Depreciation for adjustment

When you are trying to do adjustment on a particular asset, FA automatically rolls-back depreciation for that particular asset.This is one of the area where you will experience change if you are coming from other versions.

7.Once you are sure that all the balances are correct you need to run depreciation and close the period.

8.Create accounting

You need to run “create accounting” very similar as mention in step 5.

9.Post Asset Transaction in GL

You need to make sure the step 8 must be completed only if you done transfer and posting for the accounting entries to GL.

These steps are basically takes care of data movement , then next step for you to tie FA and GL.

For reconciliation of assets you need to take advantage of some of seeded and newly added report that will help business user to reconcile and closing the period.

10. Reconcile your Fixed Asset and GL

  • Reconcile Assets to the GL Using Reports
    • Journal Entry Reserve Ledger – reconcile with the Account Analysis with Payables Details Report.
    • Tax Reserve Ledger Report
    • Account Reconciliation Reserve Ledger Report
  • Balance Report
    • Cost Detail and Cost Summary Reports
    • CIP Detail and CIP Summary Reports
    • Reserve Detail and Reserve Summary Reports
    • Revaluation Reserve Detail and Revaluation Reserve Summary Reports
  • GL Report
    • Journal – posted/Unposted
    • Account analysis

Once these report can tally, there is no way that your P & L report is not going to tally.

tip Suggested Reading

Posted in Oracle Asset, R12 | 3 Comments »

Credit Check Functionality in Order Management

Posted on March 9th, 2009 by Sanjit Anand ||Email This Post Email This Post

Credit checking feature of Oracle OM provides the ability to check that the customer has sufficient credit available with the organization at the point of order booking ,picking, packing and shipping. Credit check rules, order transaction type, payment terms and credit profiles are the key setup entities that influence the credit check process.

Oracle OM credit checking includes:

  • Validating orders and lines against existing credit limits defined in the credit profile.
  • Placing credit holds at either the order or line level.
  • Sending credit hold notifications to order creator.
  • Automatically apply or release order or order line credit holds using credit check processor program.
  • Reporting and querying tools to effectively manage your credit processes and ensure credit holds are processed in a timely manner.

Main purpose of Credit checking process is to minimize the financial risk that the organization assumes as a result of day-to-day transactions.

In order to utilize this great feature these are mandatory setup you have to do:

  • Credit Check Failure Hold Setup (seeded)

Navigation would be

Order Management > Setup> Orders> Hold.

    • Name: Credit Check Failure
    • The seeded Credit Check Failure hold is a generic hold and not an activity specific hold.
    • Modifying the definition of the credit check failure hold can be prevented by setting the profile option OM:Modify Seeded Holds to NO.
  • Activating & Deactivating Credit Check
    • Activating Credit Checking Credit checking is performed based upon the criteria met of following 4 conditions:
      1. You need to enable credit profiles for customer in accounts receivables.
      2. You need to enable credit check flag on payment terms used on the order or Line.
      3. You need to define credit check rule.
      4. You need to assign credit check rule to the order type used.
    • Deactivating Credit Checking There are three ways to deactivate Credit Checking on an order:
      1. You can use an Order Type that does not have an assigned credit check rule.
      2. You can define the Customer Profile with ‘Credit Check’ checkbox unchecked.
      3. You can setup Payment Terms on Order /Line with ‘Credit Check’ checkbox unchecked.

Deactivating Credit Checking does not automatically release orders previously on credit check failure hold.

Four main setup is mandatory as per figure below:

Credit Check


Step 1: Credit Check Rules Setup
Order Management Super User
Setup>Credit>Define Credit Check Rules

Once Credit Check Rule set then this can be used at the following points in the Order Life Cycle.

The same credit check rule, or different credit check rules, can be defined for all four (4) of these phases:


  1. Ordering
  2. Picking/Purchase Release
  3. Packing
  4. Shipping


STEP 2: Customer Profiles Setup
On the Profile: Transaction Tab, ensure the credit check box is checked

In the Profile:Amounts Select the currency and change the Order Limit and Credit Limit to as needed

Step3: Payment Terms Setup
Setup>Orders>Payment Terms

Step4: Order Types Setup – Select at what stage of Ordering you would like to perform Credit Check

Setup> Transaction Types>Define

Step5: Run the “Initialize Credit Summaries Report”

Order Management Super User
Setup>Credit>Initialize Credit Summaries

Step6: Run the “Credit Exposure Report”
Reports, Requests>Run Reports

Step7: Now Test

Now Book the Order.

You should see the credit check hold being applied and a message indicating the same

One more concept you have to understand, if your company or client operating working in Global model.

dgreybarrow GO GLOBAL

Global exposure involves credit check using overall exposure calculated from ALL ORGANIZATIONS (this is the term associated with Global Exposure) or credit exposure calculations using SINGLE organizations.

There are two levels available for this type of credit checking:

  1. Customer level credit checking and the overall credit limit defined at this level will be used.
  2. Org Default level credit checking and the overall credit limit defined at this level will be used.
  3. Site level and Item category level are not applicable to global exposure because customer sites are specific to an organization only and currently the item category credit checking is limited only to the specific sale order being credit checked.
  4. Global Exposure usage:
    • Site Level: Not Available
    • Customer Level: Available
    • Item Category Level: Not Available
    • Customer Default Level: Available
  5. In order to enable Global Exposure, Navigate to Order Management Super User > Setup > Credit > Define Credit Usage Rules.
    Enable a checkbox option called: Global Exposure

If a rule has been assigned to a credit profile, then modification of the rule set is not allowed. If a rule is new or not assigned to a credit profile, then modification is allowed. Next lets expose more on credit usage Rule.


  • Usage rule set defines the set of currencies that are involved in a specific credit check process.
  • Credit usage rule ensures that all transactions for specified currencies go through the currency conversion process prior to the credit checking process.
  • Usage Rule Set can be assigned to a Customer Profile Class, Customer account, Customer site, Item category or Operating Unit Default.

Credit Usage Rules enables:

  1. Multi Currency Credit Checking
  2. Global Credit Checking

Multi Currency Credit Check


  • With Multi-currency credit checking, you need to define just credit profile with single currency (e.g in US dollars) and share it among the other currencies. With Single currency credit check you must define a credit limit profile in each currency since each currency is treated individually for credit check purposes.
  • If you do not assign a credit usage rule set to the credit profiles, then the credit checking is performed as Single currency credit check.
  • While assigning usage rule to a profile a currency for the profile needs to be specified. The limits and the currency defined for that particular profile will be picked as multi-currency and credit checking will be done based on these limits.
  • For using multi-Currency credit checking set the Profile option AR: Credit Limit Selection to MULTI.


Global Credit Checking

  • Global exposure involves credit check using overall exposure calculated for all Organizations.
  • Global credit checking can be enabled by selecting the ‘Global Exposure’ check box in Usage Rule Set.
  • Global Credit checking is not applicable to Site level and Item category level profiles because customer sites are specific to an organization only and item category credit checking is limited only to the specific sale order.


Question we have implemented AR module.Is it possible to implement Credit check for AR invoices.
We have created customers with credit limit, but on invoicin what if you donot have OM , can i use Credit check function with AR only?

answer Credit check is not directly available in AR. If you refer back to AR Implementation Guide it states :

Credit Check: If you select the Credit Check box, then Oracle Order Management will check the customer’s credit before creating a new order, provided that the Payment Term and Order Type associated with the order also require credit checking. Receivables does not check your customer’s credit when you create transactions in Receivables.

QuestionWe are using Credit Check and Credit Hold. In Profile Amount we gave profile amount for each currency. Now we want to see for each customer what is credit Balance available.

answerGo to Receivales Super User -> Reports -> Listings -> and then run the Credit Limit Usage Report.

Also you check the output of the program “Customer Credit Snapshot”

QuestionIs it possible to set up credit checking rules across BGs? This is to prevent order booking on customers who have outstanding with business entities across the globe.

answer Yes , if you are R12 , you can achieve, Credit Management utilizes the TCA Relationship Manager hierarchy, the data in a credit review can be consolidated and calculated for Party / Customer Account and Site levels

Hope this helps.

Posted in Oracle Order Management | No Comments »

Accounting fundamentals for Techies : Encumbrance – Part II

Posted on March 4th, 2009 by Sanjit Anand ||Email This Post Email This Post

This post is answer of reader’s query which was pending from long time.

To elaborate in details , lets take sample case with two items.

accural method4





Read the rest of this entry »

Posted in Basic Accounting, Oracle Purchasing | 2 Comments »

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