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.

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.

Suggested Reading

• Fixed Asset Transfer to GL
• Fixed Asset & SLA
• Release 12: 6 New and Changed Feature in "Oracle Assets"

How Fixed Assets (FA) Passes Journals To General Ledger (GL)

Before 11.5.9 and Fixed Assets patchset M (11i.FA.M), Journals created by the Create Journals process in FA were entered directly to the journal tables. For some time it was possible to have different period names between the two ledgers and change them using the General Ledger Change Periods feature.

Financials Family pack G or higher all journals to be passed from FA through the gl_interface table using the standard import mechanism (GLLEZL). Initially the import had to be launched from GL separately.Check out old post for R12 SLA Changes.

How to generate FA journal entries and transfer to GL?

In FA module, the journals should be generated after asset addition, depreciation,revaluation, adjustment, transfer, and retirement. It is suggested that in end of each month, after run depreciation and close FA module, user should generate journal entries and transfer to GL module.

1. Login to system and switch to FA responsibility, select Other -> Request -> Run, select “Single Request”, click “OK” button.
2. In “Submit Request” form, input “Create Journal Entries” in name field.
3.Input or select the book and period that you want to generate journals entries

How and what FA Populates into GL

These are the columns which are used for capturing the information from FA to GL.

Convention :GL_INTERFACE table column (GL_LINES table COLUMN) :FA REFERENCE

• REFERENCE21(REFERENCE_1):TRANSACTION_HEADER_ID
• REFERENCE22(REFERENCE_2):ASSET_ID
• REFERENCE23(REFERENCE_3):DISTRIBUTION_ID
• REFERENCE24(REFERENCE_4):ADJUSTMENT_LINE_ID
• REFERENCE25(REFERENCE_5):BOOK_TYPE_CODE
• REFERENCE26(REFERENCE_6):PERIOD_COUNTER
• REFERENCE27(REFERENCE_7):FA_TRANSFER_TO_GL
• REFERENCE28(REFERENCE_8):ADJUSTMENT_TYPE / LOOKUP_CODE
• REFERENCE29(REFERENCE_9):CJE_ID

Journal categories used while FA to GL Transfer

These are the transaction type used for JE creation in GL.

• Addition
• Reinstatement
• Full Retirement
• Transfer
• Partial Retirement
• Adjustment
• Unit Adjustment
• Reclass
• Depreciation
• Revaluation

Query for Subledger Transfer to GL

If you want to get details of different journals transferred to GL, use this to get the result. You can also fine tune with period , currency or clearing company code or Journal Type.

Here is the query:

 
SELECT gjjlv.period_name period_name
, gjb.name batch_name
, gjjlv.header_name Journal_Entry
, gjjlv.je_source Source
, gjjlv.line_entered_dr Entered_Debit
, gjjlv.line_entered_cr Entered_credit
, gjjlv.line_accounted_dr Accounted_Debit
, gjjlv.line_accounted_cr Accounted_Credit
, gjjlv.currency_code Currency
, fasv.TRX_TYPE_NAME Trans_Type
, fasv.TRX_NUMBER_DISPLAYED Transaction_Number
, fasv.TRX_DATE Transaction_Date
, fasv.ASSET_NUMBER Reference
, glcc.CONCATENATED_SEGMENTS
,gjjlv.created_by
FROM apps.GL_JE_JOURNAL_LINES_V gjjlv
, gl_je_lines gje
, apps.fa_ael_gl_v fasv
, gl_je_headers gjh
, gl_je_batches gjb
, apps.gl_code_combinations_kfv glcc
WHERE gjh.period_name BETWEEN 'SEP-2008' AND 'OCT-2008'
AND glcc.code_combination_id = gje.code_combination_id
AND glcc.code_combination_id = fasv.code_combination_id
AND gjh.JE_BATCH_ID = gjb.JE_BATCH_ID
AND gjh.JE_HEADER_ID = gje.JE_HEADER_ID
AND gjh.period_name = gjb.default_period_name
AND gjh.period_name = gje.period_name
AND gjjlv.period_name = gjh.period_name
AND gjjlv.je_batch_id = gjh.je_batch_id
AND gjjlv.je_header_id = gjh.je_header_id
AND gjjlv.LINE_JE_LINE_NUM = gje.je_line_num
AND gjjlv.je_header_id = fasv.je_header_id
AND glcc.segment1='22'
 

Verification Report

You can use these Verification Report for your FA and GL monthly Reconcilation.

1. Cost Detail Report :Use the Cost Detail and Cost Summary reports to reconcile your asset cost accounts to your general ledger to reconcile with Oracle General Ledger, compare the Cost Summary report with the Account Analysis Report.
2. Asset Retirements Report :Use this report to review the assets you retired for the Book and accounting Period range you choose. The report is sorted by balancing segment, asset type, asset
   account, cost center, and asset number. It prints totals for each cost center, account,asset type, and balancing segment.
3. Asset Reclassification Reconciliation Report
4. Asset Transfer Reconciliation Report :Use this report to review asset transfers for the Book and Period you choose. For each transaction Oracle Assets lists the expense account, balancing segment, cost center,and location of the asset before and after the transfer. Oracle Assets sorts the report by
   asset number.
5. Journal Entry Reserve Ledger Report : This report can be used to review how much depreciation Oracle Assets charged to a depreciation reserve account in an accounting period. The report is sorted by, and prints totals for each balancing segment, asset account, reserve account, and cost center.
6. CIP Capitalization Report
7. CIP Assets Report
8. Unposted Mass Additions Report
9. CIP Detail Report (If using adding asset through Project)
10. Asset Addition Report
11. Cost Adjustment Report

Important FAQ - that user may ask

1. Are journal entries transferred to the GL in summary or detail format?

Journal entries are summarized to code combination ids within journal categories.

2. Why do I have journal entries for zero dollar amounts (i.e., debit 0, credit 0)?

The expense segment is part of a single distribution row, which also contains the assets owner and location. Changes to any one of these items will result in the creation of a new distribution. If a change is made in the location or owner, journal entries are posted to reflect the new distribution, even though there has been no accounting impact (thus the zero dollar accounting entries).

3. How often can I create journal entries?

You can run the Create Journal Entries program once per accounting period after you run the depreciation program.

4. What happens if I forget to create journal entries for an accounting period? For example, I created journal entries for AUG-08 and OCT-08, but forgot to create journal entries for SEP-08).

Oracle Assets lets you create journal entries for accounting periods in any order as long as you have ran depreciation for the period and the period is open in your general ledger.

5. How do I reconcile Oracle Assets with my general ledger?

Oracle Assets has a set of reports you use to reconcile asset cost, depreciation expense, and depreciation reserve accounts to your general ledger.

Similar Post

• Fixed Assets:Journal Entries
• Fixed Asset & SLA

As mention earlier, SLA played a key role in most of accounting event based application.Some of high points of SLA and Fixed asset are:

• Oracle Assets is fully integrated with SLA, which is a common accounting platform for Sub Ledgers
  • There is no need to explaining again , we already seen why this concept brought into Financial application . Fixed asset though one of Application, which heavily utilize the accounting information ,therefore its is obvious Choice.
• You can use the seeded Account Derivation definitions or modify them as required
  • ADD as discussed in earlier post , can be used for as it is or we can manage and configure the definition to accommodate own custom derivation rule.
• SLA does supports Account Generator functionality for existing Asset Books
  • For those who are coming from 11i background knows Oracle FA Module uses the Account Generator to generate accounting flexfield combinations for which to create journal entries into GL. The Account Generator normally allows to designate a specific source for each segment in the account for which Oracle Assets creates a journal entry. These flexibility options can be archived by anyone ..
    • Flexibility to create journal entries that mean you can specify to what detail to create journal entries
    • Flexibility of managing detail level for each book and account type.

Technically speaking Account Generator in Oracle Assets is Oracle Workflow driven component which can be viewed and customized with some skill in Oracle Workflow.

In Release 12 , by default, Subledger Accounting is used to generate accounts which is defined at ADD, still you have options to use the 11i workflow based account generator. The minimum you have to do is to keep "FA: Use Workflow Account Generation" profile option is set to Yes, that mean the account generation rules set up in Oracle Workflow will be used.

• And, last ..SLA in FA can heavily used for SLA Accounting report and online account inquiry purpose.

How SLA works in Fixed asset

Subledger Accounting Process consist of these three steps

1. It start with entering transactions in the application.
2. Then running the Create Accounting Program to process accounting.
3. Once step 2 completed successfully, you can use this for inquire . You can also drilldown information from SLA Pages

Lets take yet another granular look for SLA with FA..

• Accounting Events
• Oracle Assets creates accounting events for every asset transaction

These are major four event entries Accounting Events Classes you can get in Fixed asset.

• Oracle Assets groups all the accounting events classes into the following four event entities:
  Transactions: This event entity groups the following event classes: Additions, Adjustment, Capitalization, Category Reclass, CIP Additions, CIP Adjustments, CIP Category Reclass, CIP Retirements, CIP Revaluation, CIP Transfers, CIP Unit Adjustments, Depreciation Adjustments, Retirements, Retirement Adjustments, Revaluation, Terminal Gain and Loss, Transfers, Unit Adjustments, and Unplanned Depreciation.
• Depreciation: This event entity groups the following event classes: Depreciation and Rollback Depreciation.
• Inter Asset Transactions: This event entity groups the following event classes: Source Line Transfers, CIP Source Line Transfers, and Reserve Transfers.
• Deferred Depreciation: This event entity groups the following event classes: Deferred Depreciation.

Apart from this there few additional event class exist like Retirements .

The Accounting Flow

Journal entries get created that summarize the activity for each account for each transaction type.

• There is significant mean of period ,for which you want to create journal entries and the period must be open or future entry , as discussed in last post.
• The period name used in the depreciation calendar assigned to the asset book must be the same as the period name in the general ledger calendar for the ledger you want to send the journal entries to.
• When you run the Create Accounting program, Oracle Assets sends entries directly to the GL_JE_BATCHES, GL_JE_HEADERS, and GL_JE_LINES tables.
• Oracle Assets allows you to run the Create Accounting program multiple times before closing the depreciation period.
• You can post journal entries to Oracle General Ledger for all transactions that have occurred thus far in an open depreciation period.
• If additional transactions occur during the open depreciation period, you need to rerun Depreciation, then you can rerun the Create Accounting program.

Oracle Fixed Assets creates journal entries for your depreciation expense, asset cost, and other accounts. That means application automatically creates transaction journal entries for your general ledger, if you have defined and configure 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.

Another good things for FA is its allows you to run the Create Journal Entries program multiple times before closing the depreciation period. You can post journal entries to Oracle General Ledger for all transactions that have occurred thus far in an open depreciation period. If additional transactions occur during the open period, you need to rerun Depreciation, then you can rerun the Create Journal Entries program.

Not only it create the Journal entry but also allows you to roll back journal entries in an open depreciation period,and this should be as long as applies to those journals which havn't posted to General Ledger. After doing the necessary adjustments, you can run the Create Journal Entries program once again and post the journals to General Ledger.

You should also note , you cannot roll back individual journal entries. The reason .. when you run the Rollback Journal Entries program, all journals created thus far in the current open depreciation period will be rolled back. These journals will be reprocessed the next time you run the Create Journal Entries program.

In case of Rollback Journal Entries program failure, for example, if you have already posted some additional journals to General Ledger, you can still continue to process additional transactions. However, you will not be able to re-run journal entries for that period until you have fixed the error and run the Rollback Journal Entries program successfully.Sound good!!

Once you close the depreciation period, you can run the Create Journal Entries program only once more. When the depreciation period is closed, you cannot roll back Create Journal Entries, and therefore, cannot run the program again.Hope this makes clear.

Creating journal entries

Creation of Journal entries in Oracle Consist into two step process:

1. At the end of each accounting period, run the depreciation program for each of your books.
2. Run the Create Journal Entries program to create journal entries to your general ledger.

• Case 1 : Period is Closed
  • If the period is closed, you can run the Create Journal Entries program only once for each period in each book for which you allow posting to the general ledger.
• Case II : Period is Open
  • If the period is still open, you can run the Create Journal Entries program multiple times before closing the period.

Journal Entries :

Case 1 : When you are in 11i

The create journal entries process creates journal entries for the appropriate general ledger set of books.

Case 2 :When you are in R12

The Create Accounting process creates journal entries for the appropriate Ledger.

Asset Accounts for which Oracle Assets journal entries Created

These are asset account for which are used for JE Line creation. We will see a seperate post for accounting entry in some of the transaction events so that if you are coming from non -Oracle accounting system, you can see how its works here.

• Accumulated Depreciation
• Asset Clearing
• Asset Cost
• CIP Clearing
• CIP Cost
• Cost of Removal Gain,Loss, and Clearing
• Deferred Accumulated Depreciation
• Deferred Depreciation Expense
• Depreciation Adjustment
• Depreciation Expense
• Intercompany Payables
• Intercompany Receivables
• Net Book Value Retired Gain and Loss
• Proceeds of Sale Gain, Loss, and Clearing
• Revaluation Amortization
• Revaluation Reserve
• Revaluation Reserve Retired Gain and Loss

Will take a more granular details for JE and SLA in another post. Keep watching this space.

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.

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.

The 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.

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.

Oracle Processes & Navigation

(N) Assets > Asset Workbench (B) Retirements

Full 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.

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 »

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

Similar Post

• 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.

Similar Post

• Depreciation and Amortization
• Deep Drive : “Depreciation” in Oracle Fixed Asset
• Oracle Fixed Asset:Security by Book
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• Understanding Depreciation Books: It May Be More Simple Than You Think