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Oracle Fixed Assets Process Overview

Posted on October 13th, 2007 by Sanjit Anand |Print This Post Print This Post |Email This Post Email This Post

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There are four main business Process in Oracle Assets Process Cycles:

  • Additions
  • Adjustments/Transfers
  • Depreciation
  • Retirements

redarrow-1Oracle Asset Addition Methods

Assets are created when entered into the Oracle Assets module. The three ways assets can be entered are via Manual Additions , Details addition and Mass Additions.

  • Quick Additions or Manual addition
    • It allows you to use the QuickAdditions process to quickly enter ordinary assets when you must enter them manually. You can enter minimal information in the QuickAdditions window, and the remaining asset information defaults from the asset category, book, and the date placed in service.The good is that quick addition requires only one screen to enter an asset.

Navigation Path

Assets -> Asset Workbench

quickaddition

 

 

 

 

 

In the Find Assets window, click the QuickAdditions button

  • Detail Additions

Detailed Additions provides three separate screens in order to input more complex assets that cannot accept defaults. Additional asset details could include lease and leasehold improvements, salvage value,multiple assignments, or changes to category defaults.

Detail Additions process to manually add complex assets which the QuickAdditions process does not handle:

  • Assets that have salvage value
  • Assets with more than one assignment
  • Assets with more than one source line
  • Assets to which category default depreciation rules do not apply
  • Subcomponent assets
  • Leased assets and leasehold improvements

Navigation

Assets -> Asset Workbench

quickadditionnews

 

 

 

 

 

 

In the Find Assets window, click the New button

  • Mass Additions

Mass Additions is the process of taking asset information from an external system or another module, such as Payables or Projects, and importing it into F/A via the FA_MASS_ADDITIONS table. Prepare the asset(s) by assigning an asset category, a date placed in service, and a depreciation expense account. The ‘Run Mass Additions’ process creates the asset(s) in the F/A module.

redarrow-1Assets Adjustments

  • Changing Asset Details - You can change descriptive information for an asset at any time. Changing asset descriptive information other than category and units has no financial impact on the asset.

  • Reclassifying Assets – Reclassify assets to update information, correct data entry errors, or when consolidating categories. You can update financial information for a single asset or a group of assets. When you reclassify an asset in a period after the period you entered it, Oracle Assets creates journal entries to transfer the cost and accumulated depreciation to the asset cost and accumulated depreciation accounts of the new asset category.
  • Adjusting Accounting Information - You can adjust financial, depreciation, distribution, and invoice information for a single asset or a group of assets. Before running depreciation in the period in which you added the asset you can change any field. After you have run depreciation in any period after the one you added the asset, you can change asset cost, salvage value, prorate convention, depreciation method, and life .You can choose whether to amortize or expense the adjustment
  • Assets Transfers
    • You can transfer assets between employees, depreciation expense accounts, and locations. When transferring assets, you should consider the following:
      • 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.
      • You cannot transfer an asset to a future period.
      • You can transfer a single asset or a group of assets.

redarrow-1Depreciation

Running depreciation to process all assets in a book for a period. If you have assets that have not depreciated successfully, these assets are listed in the log file created by Oracle Assets when you run depreciation.

When you run depreciation, Oracle gives you the option of closing the current period if you check the Close period check box on the Run Depreciation window. If all of your assets depreciate successfully, Oracle automatically closes the period and opens the next period for the book. If you do not check the Close Period check box when you run depreciation, Oracle Assets does not close the period.

Once depreciation has been processed for an asset in the current open period, you cannot perform any transactions on those assets unless depreciation is rolled back or the current period is closed.

redarrow-1Asset Retirements

Retire an asset when it is no longer in service. For example, retire an asset that was stolen, lost, or damaged, or that you sold or returned.

You can retire an entire asset or you can partially retire an asset. When you retire an asset by units, Oracle Assets automatically calculates the fraction of the cost retired. When you retire an asset by cost, the units remain unchanged and the cost retired is spread evenly among all remaining assignment lines.

You can retire a single asset or a group of assets.

Mass/Group Retirements can be achieved using any of the following criteria:

  • Expense Account
  • Location
  • Category
  • Range of Asset numbers
  • Date placed in service

You cannot retire an asset if you added it in the current period.

Although the depreciation program automatically processes retirements, you can run the Calculate Gains and Losses program several times during the period to reduce period end processing time.

When an asset is retired before it is fully depreciated, Oracle FA calculates the gain or loss on the asset retirement. The calculation is based on the following formula: Proceeds of Sale minus Cost of Removal minus NBV Retired plus Revaluation Reserved Retired equals Gain/Loss on Retirement.

Please take a note , Oracle calculates the gain/loss based upon

  • Proceeds: The sale price
  • Cost of Removal: How much did it cost to remove it?
  • Current Net Book Value: Original cost less accumulated depreciation.

With this information Oracle calculates the gain or loss as well as creates the appropriate journal entries to remove the asset cost and accumulated depreciation from the general ledger. It also uses clearing accounts to make a Receivables entry if you sold the asset and a Payables entry if you had to pay someone to remove it.

At asset retirement , the cost of removal and disposal proceeds is entered which aids in the computation of Gain/Loss on Disposal, however there is no direct link between the sub-ledgers (AP or AR)

Related Posts

Posted in Oracle Asset | 14 Comments »Email This Post Email This Post | Print This Post Print This Post

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14 Responses
  1. user Says:

    Can u add or email some stuff on fixed assets amortize.

  2. Sanjit Anand Says:

    http://www.oracleappshub.com/asset/depreciation-and-amortisation/

  3. Asif Husain Says:

    I have an issue regarding adjustment. We found out that after period closed in oracle assets that we missed one salvage value issue in a vehicle. So the system calculated it on 100% cost instead of the recoverable cost(less salvage value). Tell me how to adjust it in the coming month? Help would be appreciated.
    Asif Husain
    +92 321 3224705

  4. dd Says:

    simple and good one. I appreciate if you add more details about transactons ( complete flow with examples)

    thank you
    dd rao

  5. Stuart Dairiki Says:

    My question is in regards to physical inventory and fixed asset reconcilation. Physical inventory I have Serial # and purchase order as the unique identifier. In Accounts Payable I have purchase order # and invoice #. In FA I have an invoice #. When I need to retire a physical assets I have to request retirement of my assets by serial #. However, serial # is a manually enter attribute in Fixed Assets and not always accurate. Please advise if there is a better way to correlate my physical asset serial # and PO to a FA record?

  6. Asset Transfer Says:

    […] Oracle Fixed Assets Process Overview […]

  7. Fixed Asset :Retirement/Disposal Says:

    […] Oracle Fixed Assets Process Overview […]

  8. Jack Says:

    Is it possible to delete a fixed asset that was created in the current period but depreciation has not yet been closed or JE’s created/posted? I have an asset entry that I would just like to get rid of and start all over.

  9. Sanjit Anand Says:

    Hi Jack,

    Need a further clarification on a)depreciation has not yet been closed
    b)JE’s created/posted

    Meanwhile I what i understood here is my input.

    cASE 1
    If you asset is added in current period and if depreciation is not run, you can get delete the asset from system. while deleting , you get confirmation message with APP-OFA-48177.
    Is this same you mention.
    Under this case…
    Depreciation havn’t run, no Accounting entry created.

    CASE 2
    If asset is added in current period, depeciation run, that mean acounting entry have been made through GL Lines.
    The way its works can be best understood as:
    Assets creates journal entries for depreciation expense, asset cost, and other accounts.Oracle FA automatically creates transaction journal entries for your general ledger, if you have set up the journal entry category for that transaction type for that book. Oracle Assets creates journal entries that summarize the activity for each account for each transaction type.

    That mean if Depreciation has been executed , you cann’t delete, in that case you have only options you have is you need to Perform a prior period retirement for the asset.

    Asset Workbench > Find (button)> Retirements (button)
    Enter the prior period retirement date in the retirement date field

    Since you have mention, the asset is being created in current period, than I think, you need to retire the asset by putting salvage value.

    Oracle Assets also allows you to roll back journal entries in an open depreciation period, as long as those journals have not already been posted to General Ledger. After you make the necessary adjustments, you run the Create Journal Entries program once again and post the journals to General Ledger.

    Let me know,if this does not work with your senarios.

    Regards
    sanjit

  10. Manisha Says:

    Thanks!!!!

    Very good Explaination.

    Really very helpful artical.

  11. Vignesh Says:

    Once I perform the above mentioned process for retirement, does the concerned asset get removed from my Fixed Assets Register. If no, how can I have retired assets removed from my fixed assets register?

  12. Rajesh Says:

    Hi,

    We had a situation where we did several prior period retirements on an asset which was added in 2005.Approximate figures were

    Original Asset cost- Rs.4 Bn (Added in 2005,Life 20 years,Straight line depreciation,the prorate convention given at the addition was to calcualate the depreciation IN THE MONTH OF ADDITION)

    Pls note that the asset was taken into the Books of oracle in 2006.Therefore around 200 mn was calculated as the depreciation in the period od addition.

    However we did some prior period pariatial retirements for the asset giving the AUG/SEP/2008 dates.(Actual retired period was in MARCH 2009)

    However errorneously when performing the retirement the retirement convention was given as a different convention.(Which calculates no depreciation in the year of addition if its an addition and calculates full years depreciation if its a retirement)

    The issue we faced was in the period of retirement the system calculated depreciation was -Rs 213 million(negative)

    Please can someone explain why it gave such a negative depreciation figure???

  13. Srinivas Kondu Says:

    Hi,
    This article is really too good, gives a brief understanding about the FA in oracle apps

  14. RAVIRAJ Says:

    what entries will pass in fa in the month end?
    dep. entry, prov entry, fa entry?
    plz tell me the entry details lyk dr n cr.

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