Oracle Internal & Oracle AcademyUse Only

R12 Asset Management Fundamentals Ed. 1 Student Guide - Volume 2

D49290GC10

Edition 1.0

June 2007

D50605

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Copyright © 2007, Oracle. All rights reserved. This document contains proprietary information and is protected by copyright and other intellectual property laws. You may copy and print this document solely for your own use in an Oracle training course. The document may not be modified or altered in any way. Except where your use constitutes "fair use" under copyright law, you may not use, share, download, upload, copy, print, display, perform, reproduce, publish, license, post, transmit, or distribute this document in whole or in part without the express authorization of Oracle. The information contained in this document is subject to change without notice. If you find any problems in the document, please report them in writing to: Oracle University, 500 Oracle Parkway, Redwood Shores, California 94065 USA. This document is not warranted to be error-free. If this documentation is delivered to the United States Government or anyone using the documentation on behalf of the United States Government, the following notice is applicable: U.S. GOVERNMENT RIGHTS The U.S. Government’s rights to use, modify, reproduce, release, perform, display, or disclose these training materials are restricted by the terms of the applicable Oracle license agreement and/or the applicable U.S. Government contract. Oracle, JD Edwards, PeopleSoft, and Siebel are registered trademarks of Oracle Corporation and/or its affiliates. Other names may be trademarks of their respective owners.

Authors

Gail D’Aloisio, Brent A. Bosin, and Paul Scott

Technical Contributors and Reviewers

Kathy Wohnoutka, Ruth Kukla, Jan Quist, JongSung Ahn, Chris Rudd, Som Viswapathy, and Bruce Isner

This book was published using: oracletutor

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Copyright © Oracle Corporation, 2007. All rights reserved.

R12 Asset Management Fundamentals Ed. 1 Table of Contents i

Table of Contents

Overview of Oracle Asset Management.........................................................................................................1-1 Overview of Oracle Asset Management........................................................................................................1-3 Objectives ......................................................................................................................................................1-4 Agenda...........................................................................................................................................................1-5 Overview of Oracle Assets ............................................................................................................................1-6 E-Business Suite Integration..........................................................................................................................1-7 Implementation Considerations for Oracle Financials...................................................................................1-8 The Best Project Team for the Job ................................................................................................................1-9 Critical Implementation Issues ......................................................................................................................1-10 Oracle Assets Setup Steps .............................................................................................................................1-12 Oracle Assets Key Flexfields.........................................................................................................................1-13 Implementing Oracle Assets..........................................................................................................................1-14 Asset Books Positioning................................................................................................................................1-15 Asset Categories Positioning .........................................................................................................................1-17 Asset Life Cycle ............................................................................................................................................1-18 Adding Assets Manually ...............................................................................................................................1-19 Mass Asset Additions Process .......................................................................................................................1-21 Adding and Capitalizing a CIP Asset ............................................................................................................1-23 Acquire and Build CIP Assets .......................................................................................................................1-24 Asset Adjustments .........................................................................................................................................1-25 Asset Adjustment Overview..........................................................................................................................1-26 Performing Physical Inventory ......................................................................................................................1-27 Elements of Depreciation ..............................................................................................................................1-29 Basic Depreciation Calculation .....................................................................................................................1-31 Tracking Asset Retirements...........................................................................................................................1-33 Assets Journal Entries Flow...........................................................................................................................1-34 Default Account Generator Process for Oracle Assets ..................................................................................1-36 Reconciling Data in Oracle Assets ................................................................................................................1-37 Viewing Asset Information Online................................................................................................................1-38 Oracle Assets Reporting ................................................................................................................................1-39 Assets Reports Groupings..............................................................................................................................1-40 Creating a Tax Book......................................................................................................................................1-41 Entering Information in Tax Books...............................................................................................................1-42 Transaction APIs ...........................................................................................................................................1-44 Business Events .............................................................................................................................................1-46 Asset Business Event Triggers ......................................................................................................................1-47 Summary........................................................................................................................................................1-48

Asset Controls Setup .......................................................................................................................................2-1 Asset Controls Setup .....................................................................................................................................2-3 Objectives ......................................................................................................................................................2-4 Agenda...........................................................................................................................................................2-6 Oracle Assets Setup Steps .............................................................................................................................2-7 Setup Steps Flow ...........................................................................................................................................2-8 Oracle Assets Key Flexfields.........................................................................................................................2-15 Setting Up Key Flexfields .............................................................................................................................2-16 Asset Category Key Flexfield........................................................................................................................2-17 Location Key Flexfield..................................................................................................................................2-18 Asset Key Key Flexfield................................................................................................................................2-19

Guided Demonstration - Oracle Assets Key Flexfield Setup.....................................................................2-20 Creating Key Flexfield Combinations ...........................................................................................................2-22

Guided Demonstration - Create a Location Flexfield Combination ..........................................................2-23 Practice - Create a Location Key Flexfield Combination ..........................................................................2-24

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Solution – Create a Location Key Flexfield Combination.........................................................................2-25 Specifying System Controls ..........................................................................................................................2-26

Guided Demonstration - System Controls Form .......................................................................................2-28 QuickCodes ...................................................................................................................................................2-29

Guided Demonstration - QuickCodes........................................................................................................2-31 Practice - Add QuickCode Values .............................................................................................................2-32 Solution – Add QuickCode Values............................................................................................................2-33

Defining Fiscal Years and Calendars.............................................................................................................2-34 Setting Up Fiscal Years .................................................................................................................................2-35 Setting Up Asset Calendars ...........................................................................................................................2-36

Guided Demonstration - Fiscal Years & Calendars...................................................................................2-37 Practice - Create an Oracle Assets Calendar..............................................................................................2-39 Solution – Create an Oracle Assets Calendar ............................................................................................2-40

Sharing Calendars..........................................................................................................................................2-42 Defining Price Indexes ..................................................................................................................................2-43 Profile Options...............................................................................................................................................2-45

Guided Demonstration - Oracle Assets Profile Options ............................................................................2-51 Asset Insurance..............................................................................................................................................2-52 Entering Asset Insurance Information ...........................................................................................................2-54

Guided Demonstration - Entering Asset Insurance Information................................................................2-55 Implementing Oracle Assets..........................................................................................................................2-57 Planning Implementation...............................................................................................................................2-58 Key Flexfields Planning Considerations........................................................................................................2-60 The Key Flexfields Planning Phase ...............................................................................................................2-62 Implementing Oracle Assets..........................................................................................................................2-64 Convert Existing Asset Information ..............................................................................................................2-66 Using the FA_MASS_ADDITIONS Table for Conversion ..........................................................................2-68 Implementing Oracle Assets..........................................................................................................................2-70 Post Conversion Reconciliation.....................................................................................................................2-71 Other Conversion Issues................................................................................................................................2-72 Maintaining an Audit Trail ............................................................................................................................2-73 Maintaining Audit Trails ...............................................................................................................................2-74 Defining Asset Warranties.............................................................................................................................2-76

Guided Demonstration - Define an Asset Warranty ..................................................................................2-77 Creating Leases .............................................................................................................................................2-78

Guided Demonstration - Define a Lease....................................................................................................2-79 Summary........................................................................................................................................................2-81

Asset Books.......................................................................................................................................................3-1 Asset Books ...................................................................................................................................................3-3 Objectives ......................................................................................................................................................3-4 Agenda...........................................................................................................................................................3-5 Asset Books Positioning................................................................................................................................3-6 Asset Books Regions .....................................................................................................................................3-8 Calendar Region ............................................................................................................................................3-10 Accounting Rules Region..............................................................................................................................3-12 Natural Accounts Region...............................................................................................................................3-14

Guided Demonstration - Define an Asset Book.........................................................................................3-16 Group Depreciation .......................................................................................................................................3-18 Group Depreciation in the Global Market .....................................................................................................3-20 Group and Member Asset Rules....................................................................................................................3-21 Set Up Group Assets......................................................................................................................................3-23 Assigning Member Assets to Group Assets ..................................................................................................3-25 Group Asset Reserve Transfer.......................................................................................................................3-27

Practice - Set Up Group Assets..................................................................................................................3-28 Solution – Set Up Group Assets ................................................................................................................3-30

Energy Assets ................................................................................................................................................3-32

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Security by Book ...........................................................................................................................................3-34 Organizations and Security by Book .............................................................................................................3-35 How Security by Book Is Used within Process Flow ....................................................................................3-36 Security by Book Setup Steps........................................................................................................................3-37

Guided Demonstration - Security by Book Setup (Optional) ....................................................................3-41 Practice - Review Security by Book Setup ................................................................................................3-44 Solution – Review Security by Book Setup...............................................................................................3-46

Troubleshooting Security by Book................................................................................................................3-48 Implementation Considerations for Security by Book...................................................................................3-50 Summary........................................................................................................................................................3-51

Asset Categories...............................................................................................................................................4-1 Asset Categories ............................................................................................................................................4-3 Objectives ......................................................................................................................................................4-4 Agenda...........................................................................................................................................................4-5 Asset Categories Positioning .........................................................................................................................4-6 Asset Categories Regions ..............................................................................................................................4-7 Asset Categories Setup ..................................................................................................................................4-8

Guided Demonstration - Define Asset Category Flexfield Values ............................................................4-10 Practice - Add Asset Category Key Flexfield Values................................................................................4-11 Solution – Add Asset Category Key Flexfield Values ..............................................................................4-12 Guided Demonstration - Define an Asset Category...................................................................................4-21 Practice - Define Asset Categories ............................................................................................................4-23 Solution – Define Asset Categories ...........................................................................................................4-24

Summary........................................................................................................................................................4-29 Manual Asset Additions ..................................................................................................................................5-1

Manual Asset Additions ................................................................................................................................5-3 Objectives ......................................................................................................................................................5-4 Agenda...........................................................................................................................................................5-6 Asset Life Cycle ............................................................................................................................................5-7 Adding Assets Manually ...............................................................................................................................5-8 Asset Additions Required Data .....................................................................................................................5-10 QuickAdditions..............................................................................................................................................5-11

Guided Demonstration - Add Assets Using QuickAdditions (Optional) ...................................................5-14 Practice - Add an Asset Using QuickAdditions.........................................................................................5-16 Solution – Add an Asset Using QuickAdditions .......................................................................................5-17

Detail Asset Additions...................................................................................................................................5-20 Detail Additions - Asset Details Window......................................................................................................5-22 Detail Additions - Books Window.................................................................................................................5-24 Asset Cost Terminology ................................................................................................................................5-26 Accumulated Depreciation Considerations....................................................................................................5-27 Depreciate Checkbox Actions .......................................................................................................................5-29 Detail Additions - Assignments Window ......................................................................................................5-30 Detail Additions - Source Lines Window......................................................................................................5-31

Guided Demonstration - Add an Asset Using Detail Additions (Optional)...............................................5-32 Practice - Add an Asset Using Detail Additions........................................................................................5-33

Manual Asset Additions Journal Entries .......................................................................................................5-37 Summary........................................................................................................................................................5-38

Mass Asset Additions.......................................................................................................................................6-1 Mass Asset Additions ....................................................................................................................................6-3 Objectives ......................................................................................................................................................6-4 Agenda...........................................................................................................................................................6-6 Mass Asset Additions Process .......................................................................................................................6-7 Using the Mass Additions Interface Table ....................................................................................................6-9 Adding Assets from Invoice Distribution Lines ............................................................................................6-10 The Mass Additions Process..........................................................................................................................6-11

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Step 1 Mass Additions Create........................................................................................................................6-13 Requirements to Create Mass Addition Lines ...............................................................................................6-15 Tracking Expensed Items in Oracle Assets ...................................................................................................6-17

Guided Demonstration - Create Mass Addition Lines...............................................................................6-18 Practice - Create Mass Addition Lines ......................................................................................................6-21 Solution – Create Mass Additions .............................................................................................................6-23

Other Mass Additions Considerations ...........................................................................................................6-27 Step 2 Prepare Mass Additions......................................................................................................................6-29 Required Fields and Mass Additions .............................................................................................................6-30 Automatic Preparation of Mass Additions.....................................................................................................6-31 Automatic Preparation of Mass Additions Process .......................................................................................6-32

Guided Demonstration - Automatic Preparation of Mass Addition Lines.................................................6-34 Mass Addition Queues...................................................................................................................................6-43

Mass Addition Queue Names ....................................................................................................................6-44 Changing Asset Information..........................................................................................................................6-45

Changing Asset Information......................................................................................................................6-46 Merging Mass Addition Lines .......................................................................................................................6-47 Splitting Mass Addition Lines .......................................................................................................................6-48 Merging Then Splitting Functionality ...........................................................................................................6-49 Adding a Mass Addition Line to an Existing Asset.......................................................................................6-50

Guided Demonstration - Prepare Mass Addition Lines .............................................................................6-51 Practice - Prepare Mass Addition Lines.....................................................................................................6-53 Solution – Prepare Mass Addition Lines ...................................................................................................6-55

Accounting for Cost Adjustments Example ..................................................................................................6-61 Step 3 Post Mass Additions ...........................................................................................................................6-62 Effect of Post Mass Additions on Queue Names...........................................................................................6-63

Guided Demonstration - Post Mass Additions...........................................................................................6-64 Practice - Post Mass Additions ..................................................................................................................6-65 Solution – Post Mass Additions.................................................................................................................6-66

Step 4 Delete Mass Additions........................................................................................................................6-68 Purge Mass Additions....................................................................................................................................6-69 Future Transactions .......................................................................................................................................6-70 View Pending Transactions ...........................................................................................................................6-73

Guided Demonstration - Add a Future Dated Asset ..................................................................................6-74 Creating Assets Using Web ADI...................................................................................................................6-76 Web ADI Upload to Oracle Assets................................................................................................................6-78

Guided Demonstration - Add Assets Using Web ADI ..............................................................................6-80 Practice - Add Assets Using Web ADI......................................................................................................6-83 Solution – Add Assets Using Web ADI ....................................................................................................6-86

Summary........................................................................................................................................................6-89 CIP Asset Additions.........................................................................................................................................7-1

CIP Asset Additions ......................................................................................................................................7-3 Objectives ......................................................................................................................................................7-4 Agenda...........................................................................................................................................................7-5 Adding and Capitalizing a CIP Asset ............................................................................................................7-6 Acquire and Build CIP Assets .......................................................................................................................7-7 Automatically Adding CIP Assets to Tax Books .........................................................................................7-8 Modifying the Cost of CIP Assets .................................................................................................................7-10

Guided Demonstration - Create a CIP Asset and Build Costs ...................................................................7-12 Guided Demonstration - Transfer Invoice Lines .......................................................................................7-14 Practice - Create a CIP Asset and Add Costs ............................................................................................7-16 Solution – Create a CIP Asset and Add Costs ...........................................................................................7-18 Practice - Transfer Invoice Lines...............................................................................................................7-21 Solution – Transfer Invoice Lines .............................................................................................................7-23

Recording a CIP Asset Addition....................................................................................................................7-27 Capitalizing a CIP Asset................................................................................................................................7-28

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Reversing a Capitalized Asset .......................................................................................................................7-29 Guided Demonstration - Capitalizing a CIP Asset ....................................................................................7-30 Practice - Capitalize a CIP Asset ...............................................................................................................7-31 Solution – Capitalize a CIP Asset..............................................................................................................7-32

Updating Asset Fields When Capitalizing CIP Assets ..................................................................................7-34 Updating Transaction Types When Capitalizing CIP Assets ........................................................................7-35 Recording a Capitalization - Adding and Capitalizing in the Same Period ...................................................7-36 Recording a Capitalization - Adding and Capitalizing in Different Periods..................................................7-37 CIP Assets and Oracle Projects .....................................................................................................................7-39 Tracking Capital Projects in Oracle Projects .................................................................................................7-40 Capital Projects Flow Integration ..................................................................................................................7-41 Creating Mass Additions from Oracle Projects .............................................................................................7-42 Integrating Oracle Projects with Oracle Assets .............................................................................................7-44 Summary........................................................................................................................................................7-46

Asset Adjustments and Maintenance.............................................................................................................8-1 Asset Adjustments and Maintenance.............................................................................................................8-3 Objectives ......................................................................................................................................................8-4 Agenda...........................................................................................................................................................8-6 Asset Adjustments .........................................................................................................................................8-7 Asset Adjustment Overview..........................................................................................................................8-8 Single Asset Reclassification.........................................................................................................................8-9 Mass Reclassification ....................................................................................................................................8-10 Inheriting Depreciation Rules........................................................................................................................8-11 Copying Category Descriptive Flexfield Information ..................................................................................8-13 Mass Transactions Process ............................................................................................................................8-14 Recording a Reclassification .........................................................................................................................8-15 Adjusting Units..............................................................................................................................................8-16 Adjusting Financial Information....................................................................................................................8-17 Choosing to Expense or Amortize Depreciation Adjustments ......................................................................8-18 Amortizing Adjustments Using a Retroactive Start Date ..............................................................................8-20 Using Mass Changes .....................................................................................................................................8-21 Single Asset Transfers ...................................................................................................................................8-22 Mass Asset Transfers.....................................................................................................................................8-24

Guided Demonstration - Perform Single Asset Adjustments ....................................................................8-26 Guided Demonstration - Perform Mass Transactions................................................................................8-28 Practice - Perform Single Asset Adjustments ............................................................................................8-31 Solution – Perform Single Asset Adjustments...........................................................................................8-33

Asset Revaluation ..........................................................................................................................................8-39 Scheduling Asset Maintenance......................................................................................................................8-41

Guided Demonstration - Schedule Asset Maintenance..............................................................................8-42 Performing Physical Inventory ......................................................................................................................8-43 Entering Physical Inventory ..........................................................................................................................8-45 Physical Inventory Comparison.....................................................................................................................8-46 Physical Inventory Reconciliation.................................................................................................................8-48

Guided Demonstration - Review a Physical Inventory..............................................................................8-49 Integrating Web ADI with Physical Inventory ..............................................................................................8-50

Guided Demonstration - Create a Physical Inventory in Web ADI...........................................................8-52 Summary........................................................................................................................................................8-54

Depreciation .....................................................................................................................................................9-1 Depreciation ..................................................................................................................................................9-3 Objectives ......................................................................................................................................................9-4 Agenda...........................................................................................................................................................9-5 Elements of Depreciation ..............................................................................................................................9-6 Depreciation Setup Areas ..............................................................................................................................9-8 Basic Depreciation Calculation .....................................................................................................................9-9 Depreciation Methods....................................................................................................................................9-11

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Using the Life-Based Method........................................................................................................................9-12 Life-Based Method Terms.............................................................................................................................9-13 Life-Based Method Example.........................................................................................................................9-14 Using the Flat-Rate Method...........................................................................................................................9-15 Flat-Rate Method Example............................................................................................................................9-17

Guided Demonstration - Create a New Depreciation Method ...................................................................9-18 Practice - Create a New Depreciation Method...........................................................................................9-19 Solution – Create a New Depreciation Method .........................................................................................9-20

Using the Units-of-Production Method .........................................................................................................9-22 Units-of-Production Method Example...........................................................................................................9-23 Entering Production Information...................................................................................................................9-24

Guided Demonstration - Enter Production ................................................................................................9-26 Units-of-Production Method Production Amount Restrictions .....................................................................9-27 Units-of-Production Method Restrictions......................................................................................................9-28 Units-of-Production Capacity Restrictions ....................................................................................................9-29 Prorate Conventions ......................................................................................................................................9-30

Guided Demonstration - Create a Prorate Convention ..............................................................................9-31 Practice - Create a Prorate Convention......................................................................................................9-32 Solution – Create a Prorate Convention.....................................................................................................9-33

Run Depreciation Process..............................................................................................................................9-35 Depreciation Program Processes ...................................................................................................................9-37 Rollback Depreciation ...................................................................................................................................9-38 Projecting Depreciation for an Asset ............................................................................................................9-40 Defining a Projection.....................................................................................................................................9-41

Guided Demonstration - Perform a Depreciation Projection.....................................................................9-42 Practice - Run a Depreciation Projection...................................................................................................9-43 Solution – Run a Depreciation Projection .................................................................................................9-44

Depreciation Forecasts ..................................................................................................................................9-46 Guided Demonstration - Perform a What-if Depreciation Analysis ..........................................................9-47 Practice - Perform a What-If Depreciation Analysis .................................................................................9-48 Solution – Perform a What-If Depreciation Analysis ................................................................................9-49

Using Depreciation Override.........................................................................................................................9-51 Useful Depreciation Reports..........................................................................................................................9-53 Summary........................................................................................................................................................9-55

Asset Retirements ............................................................................................................................................10-1 Asset Retirements ..........................................................................................................................................10-3 Objectives ......................................................................................................................................................10-4 Agenda...........................................................................................................................................................10-5 Tracking Asset Retirements...........................................................................................................................10-6 Overview of Retiring an Asset ......................................................................................................................10-7 Restrictions on Retirements and Reinstatements...........................................................................................10-8 Fully Retiring Assets .....................................................................................................................................10-10

Guided Demonstration -Perform a Full Retirement and Undo Retirement................................................10-11 Partially Retiring Assets ................................................................................................................................10-12

Guided Demonstration - Process a Partial Retirement and Reinstate ........................................................10-14 Mass Asset Retirements.................................................................................................................................10-16

Guided Demonstration - Perform a Mass Retirement................................................................................10-18 External Retirements .....................................................................................................................................10-19 Reinstating Retired Assets.............................................................................................................................10-21 Calculate Gains and Losses Program.............................................................................................................10-22

Practice - Perform a Retirement and Reinstatement ..................................................................................10-23 Solution – Perform a Retirement and Reinstatement.................................................................................10-24

Retirement Processing Flow..........................................................................................................................10-27 Processing a Pending Retirement and Reinstatement ....................................................................................10-28 Calculating Depreciation for the Period Retired............................................................................................10-29 Recording Retirements and Reinstatements ..................................................................................................10-30

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Recording Retirements ..................................................................................................................................10-31 Recording a Retirement on Multiple Accounts ............................................................................................10-33 Retirement Journal Entries Example .............................................................................................................10-34 Recording Prior Period Reinstatement Entries ..............................................................................................10-35 Retirement Reports ........................................................................................................................................10-36 Summary........................................................................................................................................................10-39

Asset Accounting..............................................................................................................................................11-1 Asset Accounting...........................................................................................................................................11-3 Objectives ......................................................................................................................................................11-4 Agenda...........................................................................................................................................................11-5 Setting Up Asset Accounting.........................................................................................................................11-6 Assets Journal Entries Flow...........................................................................................................................11-8 Oracle Subledger Accounting........................................................................................................................11-10 Accounting Event Entities and Classes .........................................................................................................11-11 Create Accounting – Assets Program ............................................................................................................11-13

Guided Demonstration - Run Create Accounting ......................................................................................11-14 Journal Entries Created..................................................................................................................................11-15 Reconciling Data in Oracle Assets ................................................................................................................11-17 Generating Reports to Reconcile to the General Ledger ...............................................................................11-18 Reconciling an Asset Cost Account...............................................................................................................11-19 Reconciling Asset Cost Accounts..................................................................................................................11-20 Reconciling a CIP Cost Account ...................................................................................................................11-21 Reconciling a Reserve Account.....................................................................................................................11-22 Reconciling Depreciation Expense................................................................................................................11-24 Reconciling Mass Additions..........................................................................................................................11-25 Summary........................................................................................................................................................11-27

Asset Inquiry & Reporting .............................................................................................................................12-1 Asset Inquiry & Reporting.............................................................................................................................12-3 Objectives ......................................................................................................................................................12-4 Agenda...........................................................................................................................................................12-5 Viewing Asset Information Online................................................................................................................12-6 Types of Asset Inquiries ................................................................................................................................12-7 Asset Inquiry Options....................................................................................................................................12-8 iAssets Search for Assets...............................................................................................................................12-9 Viewing Financial Information......................................................................................................................12-11 Viewing Transaction History.........................................................................................................................12-13 Viewing Transaction Accounting ..................................................................................................................12-14 Viewing Subledger Accounting Transactions ...............................................................................................12-15

Guided Demonstration -Perform Asset Inquiries.......................................................................................12-16 Practice - Perform Asset Inquiries .............................................................................................................12-19 Solution – Perform Asset Inquiries............................................................................................................12-21

iAssets ...........................................................................................................................................................12-27 iAssets Setup Steps........................................................................................................................................12-28 iAssets Setup Steps—Rules...........................................................................................................................12-30

Guided Demonstration - iAssets Setup-Rules............................................................................................12-31 iAssets Setup Steps—Profile Options............................................................................................................12-34 iAssets Setup Steps—User Responsibilities ..................................................................................................12-35 Oracle Assets Reporting ................................................................................................................................12-36 Assets Reports Groupings..............................................................................................................................12-38 Variable Format Reports ...............................................................................................................................12-39 Assets Reports Using XML Publisher ...........................................................................................................12-40 Summary........................................................................................................................................................12-41

Tax Accounting................................................................................................................................................13-1 Tax Accounting .............................................................................................................................................13-3 Objectives ......................................................................................................................................................13-4

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Agenda...........................................................................................................................................................13-6 Creating a Tax Book......................................................................................................................................13-7 Asset Books Regions .....................................................................................................................................13-8

Guided Demonstration - Create a Tax Asset Book....................................................................................13-10 Practice - Define a Tax Asset Book...........................................................................................................13-12 Solution – Define a Tax Asset Book .........................................................................................................13-15

Prerequisites for Setting Up Tax Book Asset Categories ..............................................................................13-18 Guided Demonstration - Add Asset Categories to Tax Book ....................................................................13-19 Practice - Add Asset Categories to a Tax Book.........................................................................................13-21 Solution – Add Asset Categories to a Tax Book .......................................................................................13-23

Entering Information in Tax Books...............................................................................................................13-26 Populating the Tax Book by Initial Mass Copy.............................................................................................13-28 Populating the Tax Book ...............................................................................................................................13-30

Guided Demonstration - Perform an Initial Mass Copy ............................................................................13-31 Practice - Perform an Initial Mass Copy....................................................................................................13-32 Solution – Perform an Initial Mass Copy ..................................................................................................13-33

Populating the Tax Book by Periodic Mass Copy ........................................................................................13-35 Updating a Tax Book Manually ....................................................................................................................13-37

Guided Demonstration - Manually Add an Asset to a Tax Book ..............................................................13-38 Practice - Manually Add an Asset to a Tax Book......................................................................................13-39 Solution – Manually Add an Asset to a Tax Book ....................................................................................13-41

Tax Book Upload Interface ...........................................................................................................................13-44 Discussing Tax Rules ....................................................................................................................................13-46 Deferred Depreciation ...................................................................................................................................13-48 Calculating Deferred Depreciation ................................................................................................................13-49 Adjusting Accumulated Depreciation............................................................................................................13-50 Adjusting Depreciation Reserve for a Single Asset.......................................................................................13-51

Guided Demonstration -Adjust Depreciation Reserve...............................................................................13-53 Adjusting Depreciation Reserve for All Assets .............................................................................................13-54 Controlling Mass Depreciation Adjustment ..................................................................................................13-55 Calculating Mass Depreciation Adjustment ..................................................................................................13-56 Automatically Adding CIP Assets to Tax Books .........................................................................................13-57 General Tax Reports......................................................................................................................................13-59 Special Tax Reports.......................................................................................................................................13-60 Depreciation Adjustment Reports..................................................................................................................13-61 Summary........................................................................................................................................................13-62

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Preface

Profile

Before You Begin This Course

• Basic knowledge of business accounting concepts

• Familiarity with data processing concepts and techniques

Prerequisites

• R12 Navigate Oracle Applications

• R12 eBusiness Suite Essentials for Implementers

How This Course Is Organized

This is an instructor-led course featuring lecture and hands-on exercises. Online demonstrations and written practice sessions reinforce the concepts and skills introduced.

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Related Publications

Oracle Publications Title Part Number

Oracle Assets User Guide B31177

Oracle iAssets User Guide B31179

Additional Publications

• System release bulletins

• Installation and user’s guides

• Read-me files

• International Oracle User’s Group (IOUG) articles

• Oracle Magazine

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Typographic Conventions

Typographic Conventions in Text Convention Element Example Bold italic Glossary term (if

there is a glossary) The algorithm inserts the new key.

Caps and lowercase

Buttons, check boxes, triggers, windows

Click the Executable button. Select the Can’t Delete Card check box. Assign a When-Validate-Item trigger to the ORD block. Open the Master Schedule window.

Courier new, case sensitive (default is lowercase)

Code output, directory names, filenames, passwords, pathnames, URLs, user input, usernames

Code output: debug.set (‘I”, 300); Directory: bin (DOS), $FMHOME (UNIX) Filename: Locate the init.ora file. Password: User tiger as your password. Pathname: Open c:\my_docs\projects URL: Go to http://www.oracle.com User input: Enter 300 Username: Log on as scott

Initial cap Graphics labels (unless the term is a proper noun)

Customer address (but Oracle Payables)

Italic Emphasized words and phrases, titles of books and courses, variables

Do not save changes to the database. For further information, see Oracle7 Server SQL Language Reference Manual. Enter [email protected], where user_id is the name of the user.

Quotation marks

Interface elements with long names that have only initial caps; lesson and chapter titles in cross-references

Select “Include a reusable module component” and click Finish. This subject is covered in Unit II, Lesson 3, “Working with Objects.”

Uppercase SQL column names, commands, functions, schemas, table names

Use the SELECT command to view information stored in the LAST_NAME column of the EMP table.

Arrow Menu paths Select File > Save. Brackets Key names Press [Enter]. Commas Key sequences Press and release keys one at a time:

[Alternate], [F], [D] Plus signs Key combinations Press and hold these keys simultaneously: [Ctrl]+[Alt]+[Del]

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R12 Asset Management Fundamentals Ed. 1 Table of Contents xii

Typographic Conventions in Code Convention Element Example Caps and lowercase

Oracle Forms triggers

When-Validate-Item

Lowercase Column names, table names

SELECT last_name FROM s_emp;

Passwords DROP USER scott IDENTIFIED BY tiger;

PL/SQL objects OG_ACTIVATE_LAYER (OG_GET_LAYER (‘prod_pie_layer’))

Lowercase italic

Syntax variables CREATE ROLE role

Uppercase SQL commands and functions

SELECT userid FROM emp;

Typographic Conventions in Oracle Application Navigation Paths

This course uses simplified navigation paths, such as the following example, to direct you through Oracle Applications.

(N) Invoice > Entry > Invoice Batches Summary (M) Query > Find (B) Approve

This simplified path translates to the following:

1. (N) From the Navigator window, select Invoice then Entry then Invoice Batches Summary.

2. (M) From the menu, select Query then Find.

3. (B) Click the Approve button.

Notations:

(N) = Navigator

(M) = Menu

(T) = Tab

(B) = Button

(I) = Icon

(H) = Hyperlink

(ST) = Sub Tab

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R12 Asset Management Fundamentals Ed. 1 Table of Contents xiii

Typographical Conventions in Oracle Application Help System Paths

This course uses a “navigation path” convention to represent actions you perform to find pertinent information in the Oracle Applications Help System.

The following help navigation path, for example—

(Help) General Ledger > Journals > Enter Journals

—represents the following sequence of actions:

1. In the navigation frame of the help system window, expand the General Ledger entry.

2. Under the General Ledger entry, expand Journals.

3. Under Journals, select Enter Journals.

4. Review the Enter Journals topic that appears in the document frame of the help system window.

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R12 Asset Management Fundamentals Ed. 1 Table of Contents xiv

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Depreciation Chapter 9 - Page 1

Depreciation Chapter 9

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Depreciation

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Objectives

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Agenda

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Elements of Depreciation

Elements of Depreciation

Defining Books • Define corporate, tax, and budget asset books. Define the corporate book first to associate

it with multiple tax and budget books. The setup of Asset Books is discussed in the Asset Books module of Release 12 Oracle Asset Management Fundamentals. Defining Depreciation Rules

• Oracle Assets provides many standard depreciation methods. Set up additional methods if required.

• Prorate and retirement conventions determine how much depreciation expense to take in the first and last year of life, based on when you place the asset in service.

• Set up the depreciation expense and cost ceilings, as well as the investment tax credit rates and ceilings, if needed.

• Because prorate conventions depend on the calendar, Oracle Assets does not predefine any conventions. Define prorate conventions from the oldest date placed in service to the current fiscal year.

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• Define price indexes, if necessary, to report gains and losses for your retired assets by using the revalued asset cost.

• If not previously done when implementing other Oracle application products, create units of measure for use with assets depreciating under a units-of-production depreciation method.

Defining formula based depreciation methods, cost ceilings, price indexes and investment tax credits are discussed in modules of the Release 12 Asset Management Advanced learning path.

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Depreciation Setup Areas

Depreciation Setup Areas

Asset Books Setup discussed in detail in module Asset Books of the Release 12 Oracle Asset Management Fundamentals path. Calendars Setup discussed in detail in module Asset Controls Setup of the Release 12 Oracle Asset Management Fundamentals. Depreciation Methods Setup discussed in more detail later in this module. Prorate Convention Setup discussed in more detail later in this module. Optional Elements Units of Measure, Depreciation Ceilings, Investment Tax Credit and Price Indexes are discussed in the Asset Controls Setup of the Release 12 Oracle Asset Management Fundamentals.

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Basic Depreciation Calculation

Basic Depreciation Calculation

Prorate Date • Oracle Assets prorates the depreciation taken for an asset in its first fiscal year of life

according to the prorate date. • Oracle Assets calculates the prorate date when you initially enter an asset. The prorate

date is based on the date placed in service and the asset prorate convention. For example, if you create a following month prorate convention, the prorate date would be the beginning of the month following the month placed in service.

Depreciation Rate • Oracle Assets calculates depreciation using either the recoverable cost or the recoverable

net book value as a basis. • Oracle Assets uses the prorate date to choose a prorate period from the prorate calendar. • For table–based methods, the prorate period and asset age then determine which rate

Oracle Assets selects from the rate table. The depreciation program calculates asset age from the date placed in service as the number of fiscal years that you have held the asset.

• Flat–rate methods use a fixed rate and do not use a rate table.

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• For table–based depreciation methods, Oracle Assets uses the depreciation method and life to determine which rate table to use. Then, it uses the prorate period and year of life to determine which of the rates in the table to use.

• Flat–rate depreciation methods determine the depreciation rate using fixed rates, including the basic rate, adjusting rate, and bonus rate.

Calculate Annual Depreciation • Calculated and table–based methods calculate annual depreciation by multiplying the

depreciation rate by the recoverable cost or net book value as of the beginning of the fiscal year.

• Flat–rate methods calculate annual depreciation as the depreciation rate multiplied by the recoverable cost or net book value, multiplied by the fraction of year the asset was held.

Allocate Annual Depreciation Across Periods • After calculating the annual depreciation amount, Oracle Assets uses your depreciation

calendar, the divide depreciation flag, and the depreciate when placed in service flag to determine how much of the fiscal year depreciation to allocate to the period for which you ran depreciation.

Spreading Depreciation Across Expense Accounts • Finally, Oracle Assets allocates the periodic depreciation to the assignments you made

for the asset. Oracle Assets does this according to the fraction of the asset units that is assigned to each depreciation expense account in the Assignments window.

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Depreciation Methods

Depreciation Methods

(N) Setup > Depreciation > Methods You depreciate assets by using several types of depreciation methods that Oracle Assets supports. You also create periodic journal entries for each book to the general ledger. As an asset depreciates, its net book value approaches the salvage value. Oracle Assets is delivered with many seeded depreciation methods. Life-Based

• Depreciates the asset cost using an annual depreciation rate. • For straight-line depreciation, the annual rate is calculated by dividing the life (in years)

into one. • For other life-based methods, Oracle Assets takes the annual depreciation rate from a rate

table. Flat-Rate

• Depreciates the asset cost or net book value over time using a fixed rate. Units-of-Production

• Depreciates the asset cost by actual use or production for each period.

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Using the Life-Based Method

Using the Life-Based Method

Use a life–based method to depreciate the asset over a fixed time using specified rates. There are two types of life–based methods:

• Table: Oracle Assets gets the annual depreciation rate from a rate table. • Calculated: For straight–line depreciation, the depreciation program calculates the annual

depreciation rate by dividing the life (in years) into one. Calculated methods spread the asset value evenly over the life.

You can accommodate new depreciation methods using rate tables instead of formulas. Add the appropriate rates to create a new method at any time. Oracle Assets uses asset recoverable cost or net book value, salvage value, date placed in service, prorate convention, depreciation method, and life to calculate depreciation for life–based methods. Oracle Assets, using rates from a table or calculated rates, depreciates assets with life–based depreciation methods to be fully reserved at the end of a fixed lifetime.

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Life-Based Method Terms

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Life-Based Method Example

Life-Based Method Example

Finding the Annual Depreciation Rate • The prorate date is the first day of the following month, 01-APR-YYYY. • The prorate date falls into prorate period four, in the period APR-YY. • Using the rate table, since this is the asset’s first year, the rate is 0.300.

Calculating Depreciation Annual depreciation amount = Depreciation rate × Recoverable cost Year 1 Depreciation = 0.300 x 50,000 = $15,000 Depreciation per period = Annual depreciation/Number of periods from Prorate Period to End of Fiscal Year APR-YY Depreciation = 15,000/9 = $1,666.67

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Using the Flat-Rate Method

Using the Flat-Rate Method

Flat-rate depreciation methods allocate the cost or net book value of an asset over time by using a fixed rate. The flat-rate methods that use the net book value as the depreciable basis are also called diminishing-value methods. Using these methods does not fully reserve an asset, but it decreases the annual depreciation expense over time. Calculating Annual Depreciation

• Determine the fraction of the year the asset was held by dividing the number of periods after the prorate period, by the number of prorate periods per year. Make this fraction proportional by the number of days in each prorate period if dividing depreciation by days.

• Annual depreciation = Depreciation rate × [Asset cost or Net book value (less salvage value)] × the fraction of the year the asset was held.

• Use the Depreciate When Placed in Service flag to determine the manner in which depreciation expense is spread across depreciation periods in the depreciation calendar.

Adjusting Rate In some countries, the flat–rate consists of a basic rate and an adjusting rate, or loading factor. These rates vary according to your reporting authority’s depreciation regulations.

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When you add an asset, you can select a basic rate and an adjusting rate. Oracle Assets increases the basic rate by the adjusting rate to give you the adjusted rate. This is your flat–rate for the fiscal year. Depreciation Rate = Basic Rate x (1 + Adjusting Rate) + Bonus Rate Bonus Depreciation For reporting authorities that allow additional depreciation in the early fiscal years of an asset life, you can assign an additional bonus rate on top of the flat–rate. Oracle Assets adds the bonus rate to the adjusted rate to give you the flat–rate for the fiscal year.

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Flat-Rate Method Example

Flat-Rate Method Example

Finding the Annual Depreciation Rate • The prorate date is the first day of the following month, 01-MAY-YYYY. • The prorate date falls into prorate period five, in the period MAY-YY. • The fraction of year held is 8/12. (May through December) • Since the truck has been depreciated when placed in service, the number of periods to

spread depreciation over is 9. (April through December) Calculating Depreciation Depreciation rate = Basic rate × (1 + Adjusting rate) + Bonus rate Depreciation rate = 0.10 × (1 + 0.10) + .05 = 0.16 Annual depreciation = Depreciation rate × Net book value* × Fraction of year held Year 1 Depreciation = 0.16 × 6,000 × (8/12) = $640.00 Depreciation per period = Annual depreciation/Number of periods MAY-YY Depreciation = 640/9 = $71.11 *Net book value = Recoverable cost – Accumulated depreciation

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Guided Demonstration - Create a New Depreciation Method

Responsibility: Assets, Vision Operations (USA)

(N) Setup > Depreciation > Methods

1. Perform the following queries in the Depreciation Methods form to demonstrate some of the seeded methods. Select the (B) Rates where applicable to demonstrate the Depreciation Rates form.

• Query 1 > Method = 150DB

• Query 2 > Method = NL FLAT RATE

• Query 3 > Method = UOP-HOURS

2. (I) New

3. Enter the following data: Field Name Value

Method XX_METHOD

Description Demo for Class

Life Years 3

Prorate Periods Per Year 2

4. Accept the default values for the other fields.

5. (B) Rates

6. Enter the following data: Year Period Annual

Rate

1 1 .5

2 1 .2

3 1 .2

4 1 .1

1 2 .5

2 2 .3

3 2 .2

4 2 0

7. (I) Save

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Practice - Create a New Depreciation Method

Overview

In this Practice, you will create a new Depreciation Method.

Assumptions

• If you are not attending training at an Oracle University or Authorized Partner Education Center, you must have access to an Oracle Application Vision demonstration database or comparable training test instance on which to complete this Practice.

• Use the Oracle Assets seeded Responsibility > Assets, Vision Operations (USA)

• Replace XX in the Practice with a unique identifier such as your initials or a number (for Instructor Led Training classes, this number will be assigned to you). This is necessary in order to create unique records within the database when performing the Practice.

Tasks

Create a New Depreciation Method

Your Company wants to use a custom, three-year accelerated depreciation method for some of its assets. The name of the method should be XXDEP with the description 3-YEAR ACCELERATED VACRS. This depreciation method is a straight-line method with 3 Life Years and 12 Prorate Periods Per Year. The custom rates for this method are:

Year 1: Periods 1-4, 40%; periods 5-8, 30%; periods 9-12, 20%

Year 2: All periods 30%

Year 3: All periods 30%

Year 4: Periods 1-4, 0%; periods 5-8, 10%; periods 9-12, 20%

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Solution – Create a New Depreciation Method

Create a New Depreciation Method

Responsibility = Assets, Vision Operations (USA)

1. Navigate to the Depreciation Methods form.

• (N) Setup > Depreciation > Methods

2. Enter the following data:

Field Name Value

Method XXDEP

Description 3-YEAR ACCELERATED VACRS

Straight Line Method Check box

Life Years 3

Prorate Periods Per Year 12

3. Select (B) Rates.

4. Enter the rate data:

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Year Per 1

Per 2

Per 3

Per 4

Per 5

Per 6

Per 7

Per 8

Per 9

Per 10

Per 11

Per 12

1 .4 .4 .4 .4 .3 .3 .3 .3 .2 .2 .2 .2

2 .3 .3 .3 .3 .3 .3 .3 .3 .3 .3 .3 .3

3 .3 .3 .3 .3 .3 .3 .3 .3 .3 .3 .3 .3

4 0 0 0 0 .1 .1 .1 .1 .2 .2 .2 .2

5. Save your work by select (I) Save or CTRL + S key combination.

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Using the Units-of-Production Method

Using the Units-of-Production Method

Units-of-production depreciation methods allocate the cost of an asset by the quantity of resource extracted or used each period. This method differs from other methods because it disregards the passage of time and bases depreciation on how much you use the asset. Calculating Depreciation Rate Depreciation rate = Production this period/Capacity Calculating Depreciation Expense per Period Depreciation expense for the period = Depreciation rate × Depreciable basis of an asset

• Notice that this is the depreciation expense for a period and not for the fiscal year, because depreciation is based on the production amount for a period.

You cannot enter production amounts for an asset in the corporate book before its prorate date or for a period in which you have run depreciation.

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Units-of-Production Method Example

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Entering Production Information

Entering Production Information

Manually (N) Production > Enter Upload Program (N) Production > Upload

• Enter production information online, or load it automatically from a feeder system by using the Upload Periodic Production program.

• Enter periodic production amounts more than once, if necessary, because depreciation is based on actual production.

Using Upload Production You use the Upload Production program, which is run from the standard request submission, to automatically upload production from a feeder system each period. Before performing the upload process, use a tool such as SQL*Loader to load the production information into the production interface table called FA_PRODUCTION_INTERFACE.

• If you have not yet run depreciation for a period, update or reload production amounts for the same date ranges. Oracle Assets overwrites the production amounts with the new production if you reload.

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• The capacity does not change when you partially retire a production asset or change the unit of measure. Manually adjust the capacity in the Books window.

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Guided Demonstration - Enter Production


(N) Production > Enter

1. In the Find Production form, enter the following data:

Field Name Value

Book OPS CORP

Periods Leave blank

Asset Number 100447

2. Select (B) Find.

3. In the Periodic Production form, select (I) New to add a new record.


Field Name Value

Asset Number 100447

From Date First day of the current open period in the OPS CORP Book

To Date Last day of the current open period in the OPS CORP Book

Production 100

5. Save your work.

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Units-of-Production Method Production Amount Restrictions

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Units-of-Production Method Restrictions

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Units-of-Production Capacity Restrictions

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Prorate Conventions

Prorate Conventions

(N) Setup > Asset System > Prorate Conventions Prorate and retirement conventions determine how much depreciation expense to take in the first and last year of life, based on when you place the asset in service. You set up as many prorate and retirement conventions as you need. Prorate Conventions

- The prorate convention determines the annual depreciation for the first fiscal year. - The prorate date and the prorate calendar determine the prorate period. - Enter the prorate date for each date-placed-in-service range. - Specify whether to spread annual depreciation from the date placed in service or

from the prorate date. • Retirement Conventions

- If you use a different prorate convention for retirements than for additions, set up retirement conventions to determine how much depreciation to take in the last year of life, based on the retirement date.

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Guided Demonstration - Create a Prorate Convention


(N) Setup > Asset System > Prorate Conventions

1. In the Prorate Conventions form, enter the following data:

Field Name Value

Convention XX_DEMO

Description DEMO FOR CLASS

Fiscal Year Name ACCOUNTING (LOV)

From Date To Date Prorate Date

01-JAN-1993 (automatically fills in as it’s the first day of the defined Fiscal Year)

31-MAR-1993 01-JAN-1993

2. Tab through the next fields and notice that Oracle Assets completes the data automatically.

3. After 01-OCT-1993 to 31-DEC-1993 is displayed, save your work.

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Practice - Create a Prorate Convention

Overview

In this Practice, you will create a new prorate convention.

Assumptions




Tasks

Create a New Prorate Convention

You need to create a new prorate convention named XX_PRORATE where assets added on any date in a month have a prorate date of the first day of the month. Your prorate convention should use the fiscal year named ACCOUNTING and be setup through December 1994.

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Solution – Create a Prorate Convention

Create a New Prorate Convention


1. Navigate to the Prorate Conventions form.

• (N) Setup > Asset System > Prorate Conventions

2. In the Prorate Conventions form, enter the following data:

Field Name Value

Convention XX_PRORATE

Description SAME MONTH PRORATE (any description is OK)

Fiscal Year Name ACCOUNTING (LOV)

From Date To Date Prorate Date

01-JAN-1993 (automatically fills in as it’s the first day of the defined Fiscal Year)

31-JAN-1993 01-JAN-1993

3. Continuing tabbing through the fields until 01-DEC-1994 to 31-DEC-1994 is displayed.

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4. Save your work.

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Run Depreciation Process

Run Depreciation Process

(N) Depreciation > Run Depreciation Run depreciation to process all assets in a book for a period. Each asset book must have depreciation run individually. 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. Suggested Prerequisites Run the Assets Not Assigned to Any Cost Centers Listing and the Assets Not Assigned to Any Books Listing to ensure that all assets are assigned to expense accounts and books. Closing a Depreciation Period

• When you run depreciation, Oracle Assets 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 Assets 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.

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• 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.

• Note: Ensure that you have entered all transactions for the period before you run depreciation. Once the program closes the period, you cannot reopen it.

Reporting Currencies • If you are using Reporting Currencies, you must first run depreciation for each Reporting

Currencies reporting responsibility associated with an asset depreciation book, before running depreciation for your standard Fixed Assets responsibility.

• When you run depreciation in a Reporting Currencies reporting responsibility, the Calculate Gains and Losses program does not run automatically, since you cannot run the Calculate Gains and Losses program in a Reporting Currencies reporting responsibility.

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Depreciation Program Processes

Depreciation Program Processes

Generate Accounts • Builds accounting combinations using Oracle Workflow. Discussed in more detail in

Release 12 Oracle Asset Management Fundamentals module Asset Accounting. Calculate Gains and Losses

• Calculate gains and losses resulting from retirements. Discussed in more detail in Release 12 Oracle Asset Management Fundamentals module Asset Retirements.

Depreciation Run • Calculates depreciation expense.

Reserve Ledger Reports • Runs either the Journal Entry Reserve Ledger Report or Tax Reserve Ledger Report

depending on the type of asset book.

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Rollback Depreciation

Rollback Depreciation

(N) Depreciation > Rollback Depreciation If you have run depreciation for a particular period, you can use the Rollback Depreciation feature to restore assets to their state prior to running depreciation. For example, you may have outstanding adjustments or transactions that you need to process for a period; however, you have already run depreciation for that period. If the Close Period check box was not checked when you ran depreciation, you can roll back depreciation to include these outstanding transactions. You must run depreciation with the Close Period check box checked to open the next period. Handling Depreciation Processing Exceptions

• When you run depreciation, Oracle Assets flags all exceptions and they appear in the Run Depreciation log file.

• You can review the log and make adjustments for all assets that did not depreciate successfully.

• You can close the period when all exceptions have been processed successfully. Rolling Back Depreciation

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• After running depreciation, you can roll back depreciation to restore assets to their state at the beginning of the period before running depreciation.

• You can continue to add assets, perform transactions, and make corrections and adjustments.

• You can roll back depreciation: - For the current open period - If you ran depreciation for the period and did not select the Close Period check box

• You can roll back depreciation only for the current open period.

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Projecting Depreciation for an Asset

Projecting Depreciation for an Asset

(N) Depreciation > Projections • You project depreciation for any asset in corporate, tax, and budget books to plan

spending based on expected depreciation expense. • Include depreciation expense for the budget amounts in the projection for the budget

book. - You add the projection amounts for depreciation projections and for existing assets

to determine total future depreciation. • When entering budget information, you:

- Project depreciation and report on the major category level, or with full category flexfield combination.

- Project depreciation expense for amounts budgeted for each category each period, using the category default depreciation rules from the associated corporate book.

• You can project a maximum of four books at one time and all of them must use the same Account structure. The fiscal year name for the Calendar and each Book must be the same.

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Defining a Projection

Defining a Projection

Not all transactions are included in a depreciation projection. Transactions Included:

• The depreciation projection is based on the financial information for your existing assets at the start of the current period.

• It includes additions, transfers, and reclassification transactions you perform in the current period.

Transactions Excluded: • It ignores other asset transactions you make in the current period, such as the depreciation

adjustment for retroactive additions and transfers you enter in the current period. It also ignores fully reserved and fully retired assets.

• If you do not start your projection beyond the current period, the projection does not include your most recent transactions (e.g. if the current period in your corporate book is JUL–92, and you request an annual projection starting with JAN–92, Oracle Assets projects depreciation expense based on the financial information for your existing assets as of the start of January 1992.

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Guided Demonstration - Perform a Depreciation Projection


(N) > Depreciation > Projections

1. In the Depreciation Projections form, enter the following data: Field Name Value

Projection Calendar Monthly

Number of Periods 12

Starting Period Jan-YY

Books OPS FEDERAL

Report Detail checkbox Check Cost Center

2. (B) Run

3. Navigate to the View Requests form.

4. Select the FA Projections Report line.

5. (B) View Output

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Practice - Run a Depreciation Projection

Overview

In this Practice, you will run a depreciation projection for a budget asset book.

Assumptions




• Replace any year references of YYYY and YY with the calendar year of your choice or as directed by the Instructor (e.g. 2002 or Jan-02). Keep in mind that some transactions require calendar dates and calendar periods be defined and enabled before hand in order to be processed.

Tasks

Run a Depreciation Projection

You have been asked to project depreciation for the OPS BUDGET asset book on a quarterly basis for 1 year starting with Qtr-1-YY. The projection should present results by cost center detail.

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Solution – Run a Depreciation Projection

Run a Depreciation Projection


1. Navigate to the Depreciation Projections form.

• (N) Depreciation > Projections

2. In the Depreciation Projections form, enter the following data:

Field Name Value

Projection Calendar Quarterly

Number of Periods 4

Starting Period Qtr-1-YY

Books OPS BUDGET

Report Detail checkbox Check Cost Center

3. Select (B) Run.

4. Navigate to the Requests form to review the report.

• (M) View > Requests

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5. Select the FA Projections Report line and click (B) View Output

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Depreciation Forecasts

Depreciation Forecasts

(N) Depreciation > What-If Analysis Using What-If Depreciation Analysis on Existing Assets Without changing Oracle Assets data, What-If Depreciation Analysis:

• Forecasts depreciation for multiple scenarios using different depreciation criteria. • Allows you to select assets using various selection criteria, and analyze the effects of

expensing or amortizing changes to depreciation information. • Projects depreciation on existing assets before changing the depreciation rules. • Helps select the best depreciation strategy for assets not yet added in the system. • If you are satisfied with the results of your analysis, you can enter the new parameters in

the Mass Changes window to update your assets according to the parameters you specified in the what–if analysis.

What-If Depreciation Analysis for Future Assets • Forecast different depreciation scenarios for assets not yet defined in Oracle Assets. • Compare results of what-if depreciation profiles for a new asset. • Select optimal depreciation strategy prior to adding the asset.

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Guided Demonstration - Perform a What-if Depreciation Analysis


(N) > Depreciation > What-If Analysis

1. In the What-If Analysis form, enter the following data: Field Name Value

Book OPS CORP

Start Period Jul-YY (must be a period after the current open period and all projection periods must be defined)

Number of Periods 6

Asset Number 100111

Method STL

Life Years 15

Months 0

2. (B) Run


4. Select the RX-only: What-If Depreciation Analysis report line.

5. (B) View Output

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Practice - Perform a What-If Depreciation Analysis

Overview

In this Practice, you will perform a What-If depreciation analysis.

Assumptions





Tasks

Perform a What-If Depreciation Analysis

You have been asked what the depreciation effect would be if the depreciation method for all assets in the COMPUTER-PC category in the OPS CORP asset book was changed to 150DB with a 3 year life. The request asked for depreciation for 12 periods starting with period Jul-YY.

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Solution – Perform a What-If Depreciation Analysis

Perform a What-If Depreciation Analysis


1. Navigate to the What-If Analysis form.

• (N) Depreciation > What-If Analysis


Field Name Value

Book OPS CORP

Start Period Jul-YY (must be a period after the current open period and all projection periods must be defined).

Number of Periods 12

Category COMPUTER-PC

Method 150DB

Life Years 3

3. Select (B) Run.

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5. Select the What-If Depreciation Report line and click (B) View Output.

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Using Depreciation Override

Using Depreciation Override

Depreciation Override allows you to optionally override the depreciation amounts calculated by Oracle Assets. Using this feature, you can manually override the calculated default depreciation amounts for standalone and group assets. Before running depreciation or performing adjustments, you must provide the necessary information in the Depreciation Override window or the FA_DEPRN_OVERRIDE table, and indicate whether the override data is for depreciation or adjustments. When running depreciation, the system will upload and use the depreciation amounts provided in the interface table. If you do not use the Depreciation Override window to input the override amounts, you must first populate the FA_DEPRN_OVERRIDE table with the necessary depreciation data. Next, the feature uploads and overrides the system calculated depreciation amounts with the amounts you provided in the override interface table. Prerequisite Set the profile option FA: Enable Depreciation Override to Yes.

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Note: For Reporting Currencies–enabled books, you do not need to provide the override amounts for the reporting currency books. The system will derive the reporting book values based on the ratio of asset cost in the reporting book to asset cost in the primary book. Depreciation Override Process To override the system calculated depreciation amounts using the Depreciation Override window: (N) Depreciation > Override

1. Open the Depreciation Override window. 2. You can use the Find Assets window to find assets for which you want to change

depreciation. 3. If you did not use the Find Assets window, or query, to find the assets records you wish

to modify, enter the asset number, book, and period of the asset in the rows of Depreciation Override window.

4. In the Depreciation field, you can enter the override depreciation amount. 5. In the Bonus Depreciation field you can enter the override bonus depreciation amount.

To override the system calculated depreciation amounts using the FA_DEPRN_OVERRIDE table:

1. Define the override data in the FA_DEPRN_OVERRIDE table. In the FA_DEPRN_OVERRIDE table, enter all basic override depreciation information: BOOK_TYPE_CODE, ASSET_ID, PERIOD_NAME, DEPRN_AMOUNT, BONUS_DEPRN_AMOUNT and USED_BY. You can provide depreciation amounts for depreciation expense and bonus expense separately using the columns: DEPRN_AMOUNT and BONUS_DEPRN_AMOUNT. Define either DEPRECIATION or ADJUSTMENT in the USED_BY column depending on your requirement.

Note: You can assign multiple override data for each asset as long as PERIOD_NAME and USED_BY do not overlap for records with a non–posted status.

2. Optionally run What–If Analysis or Projection to review the estimated depreciation amounts for that period.

3. Run Depreciation or perform adjustments (single asset adjustment and mass change) to incorporate the override data.

4. If the override fails, the system will roll back the depreciation for the asset. You first need to correct the override information in the interface table, then rerun depreciation. For example, if any assets became over–reserved during the overriding process, the override will fail and the system will return an error.

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Useful Depreciation Reports

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Summary

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Asset Retirements Chapter 10 - Page 1

Asset Retirements Chapter 10

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Asset Retirements

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Objectives

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Agenda

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Tracking Asset Retirements

Tracking Asset Retirements

• You retire an asset fully or partially when it is lost, stolen, damaged, sold, returned, or for any other reason that causes you to stop using it.

• You retire assets by units or cost. • You perform a mass retirement by retiring a group of assets. • You can synchronize asset disposal information between Oracle Assets and external

systems via the Mass External Retirements interface. • You can reinstate retired assets within certain limits. • 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.

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Overview of Retiring an Asset

Overview of Retiring an Asset

(N) Assets > Asset Workbench (B) Retirements You can retire all or part of an asset when it is no longer in service. Oracle Assets continues to track a fully reserved asset until you retire it. A fully reserved asset is a fully depreciated asset. Full Retirement

• Retiring an entire asset including all of its units and cost. Partial Retirement

• Retiring part of an asset by cost or specified units. The cost retired is distributed proportionately across the specified distribution lines.

Undo or Reinstate Retirements • Within certain restrictions, you can undo or reinstate an asset retirement, and Oracle

Assets will continue to track the asset and depreciate it if appropriate. Retiring Separately Across Depreciation Books Retire an asset from any depreciation book without affecting other books. To retire an asset from all books, retire the asset from each book separately or set up Mass Copy to copy the retirements to the other books in the Book Controls form.

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Restrictions on Retirements and Reinstatements

Restrictions on Retirements and Reinstatements

Retiring Assets Restrictions • You cannot retire an asset that you added in the current period.

- Instead, enter it as a prior period retirement after you close the current period. - Optionally, select Edit–>Delete Record from the menu in the Asset Details window

to delete the asset anytime in the period you added it. - If an asset was erroneously added in a prior period, adjust the cost to zero and retire

it. • The retirement date must be within the current fiscal year.

Reinstating Assets Restrictions • You can only reinstate assets retired in the current fiscal year. • You can reinstate a partially retired asset only if you have not performed any transactions

on the asset since the partial retirement. - Depreciation is not considered a transaction that affects the ability to reinstate a

partial retirement.

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• You can reinstate only the most recent partial retirement if you have performed several partial retirements on the asset.

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Fully Retiring Assets

Fully Retiring Assets

(N) Assets > Asset Workbench (B) Retirements You fully retire an asset by 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. If you reinstate the asset, Oracle Assets catches up depreciation expense through the end of the current period.

• You can enter proceeds of sale and cost of removal amounts when you perform a retirement.

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Guided Demonstration -Perform a Full Retirement and Undo Retirement


(N) Assets > Asset Workbench

1. In the Assets form, find asset number 100111.

2. (B) Retirements

3. Enter the following data in the Retirements form: Field Name Value

Book OPS CORP

Retire Date Accept default date

Units Retired 1

Retirement Type Sale (LOV)

Proceeds of Sale 10,000,000

4. (B) Done

5. Back in the Assets form, find asset # 100111 again.

6. (B) Retirements

7. Query the retirement performed above by either going into query mode based on Reference Number or performing a query all (CTRL + F11).

8. (B) Undo Retirement. Confirm the Undo transaction.

9. (B) Cancel

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Partially Retiring Assets

Partially Retiring Assets

(N) Assets > Asset Workbench (B) Retirements You can retire part of an asset by cost or by units 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.

By Cost • Enter the cost to retire. • The cost change will not affect the unit amount. Oracle Assets distributes the cost retired

proportionally across all distribution lines. By Units

• Enter whole numbers for the number of units you want to retire.

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• Oracle Assets calculates the cost retired as the fraction of total cost for the units retired relative to the total number of units.

By Source Line • Select Source Lines to navigate to the Source Lines window. • Choose the source line or enter the amount you want to retire. • Select Retire to navigate to the Source Line Retirement window. • Modify the necessary fields.

Note: You cannot modify units retired or cost retired. You must cancel out of the retirement window before changing the units or cost information. You can change this information in the Source Lines window. Source Line window changes are propagated to the Retire window when you navigate to it.

• Select Done to save your work.

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Guided Demonstration - Process a Partial Retirement and Reinstate




2. Select (B) Retirements.


Book OPS CORP


Units Retired 2

Retirement Type THEFT (LOV)

4. (B) Continue

5. In the Assignments form, enter –2 in the Units Change field.

6. (B) Done

7. Return to the Navigator.

(N) Depreciation > Calculate Gains and Losses

8. In the Parameters window, enter OPS CORP book and accept the default period.

9. (B) OK

10. (B) Submit

11. After the Calculate Gains and Losses program completes, navigate to:

(N) Asset > Asset Workbench

12. In the Assets form, find asset # 100077 again.

13. (B) Retirements

14. Query the retirement performed above by either going into query mode based on Reference Number or performing a query all (CTRL + F11).

15. Use the down arrow to scroll down to the previous retirement.

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16. Note the Gain/Loss field is now populated.

17. (B) Reinstate

18. (B) Cancel

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Mass Asset Retirements

Mass Asset Retirements

(N) Mass Transactions > Retirements Use the Mass Retirements window to retire a group of assets at one time. You specify selection criteria, including asset category, asset key, location, depreciation expense account segments, employee, asset number range, and date placed in service range, to select the assets you want to retire. You can also elect to automatically retire subcomponents along with the parent asset. When you define a mass retirement, you can choose to immediately submit the concurrent request to retire the selected assets, or you can save the mass retirement definition for future submission. You can change the details of any mass retirement before you submit the concurrent request. When you submit a mass retirement, Oracle Assets automatically runs the Mass Retirements Report and the Mass Retirements Exception Report. You can review these reports, perform a mass reinstatement, or adjust an individual retirement transaction if necessary. If you wish to simultaneously run this program in more than one process to reduce processing time, Oracle Assets can be set up to run this program in parallel. Exceptions

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Oracle Assets does not retire the following types of assets, even if they are selected as part of a mass retirements transaction:

• Assets added in the current period • Assets with transactions dated after the retirement date you enter • Assets that are

multiply distributed and one or more values do not meet the mass retirement selection criteria

• For reinstatements, assets retired during a prior fiscal year

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Guided Demonstration - Perform a Mass Retirement


(N) Mass Transactions > Retirements > Create and Reinstate

1. In the Mass Retirements form, enter the following data: Field Name Value

Book OPS CORP

Retire Date Accept Default

Retirement Type Sale

Proceeds of Sale 5,000,000

Cost of Removal 50,000

Location USA-CA-SAN FRANCISCO-OFFICE1

2. (B) Create


4. Select the Mass Retirements Report line.

5. (B) View Output

6. Close the View Output window and then close the Requests form.

7. Reopen the Mass Retirements form.

8. Query the mass retirement you just created.

9. (B) Retire

10. Select the Mass Retirements Report line.

11. (B) View Output

12. Back in the Mass Retirements form, query the mass retirement you just performed.

13. (B) Undo

14. (B) OK

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External Retirements

External Retirements

Mass External Retirements (N) Mass Transactions > External Retirements Oracle Assets allows you to perform mass retirements on a set of assets by populating an external interface table with these assets and processing them in a batch. Why Use Mass External Retirements The Mass Retirements Oracle Assets form does not allow partial unit retirements. Partial unit retirements can be done in mass for assets by using the Mass External Retirement feature. Oracle Asset forms do allow for partial cost retirements. Mass External Retirements Processing

• First populate the FA_MASS_EXT_RETIREMENTS interface table with valid data. • The "Post Mass External Retirements" concurrent program that starts the retirement

processes for each asset is started from the Submit Requests form. • After the concurrent program has completed, view the output file from the request and

verify that no errors have been reported.

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- If any errors are reported, correct them and reset status from "Error" to "Post" for those assets in the Mass External Retirements form.

• After the Post Mass External Retirements concurrent program has finished, the gain/loss program should be run.

Retirements and Reinstatements Application Program Interface (API) Perform asset retirements, reinstatements, and their related undo transactions without going thru the Asset Workbench. Use the Retirements API to submit your transactions using PL/SQL.

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Reinstating Retired Assets

Reinstating Retired Assets

The effect of your reinstatement depends on the status of the retirement. Reinstating with a PENDING Status:

• Choose Undo Retirement to delete the retirement transaction. • No journal entries are created, and there is no audit trail.

Reinstating with a PROCESSED Status: • Choose Reinstate to create the reinstatement transaction. • When you run the Calculate Gains and Losses program, Oracle Assets creates journal

entries to reverse the effects of the retirement. Reversing a Reinstatement:

• If you decide to reinstate a retired asset, you can query the reinstatement by using the original retirement number.

- Choose Undo Reinstatement

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Calculate Gains and Losses Program

Calculate Gains and Losses Program

(N) Depreciation > Calculate Gains and Losses 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. Reporting Currencies Considerations

• If you are using Reporting Currencies, you can run the Calculate Gains and Losses program only from your standard Oracle Assets responsibility. You cannot calculate gains and losses from a Reporting Currencies reporting responsibility.

- There is a standard program request called MRC: Calculate Gain Loss in All Sets of Books that can be run from the primary responsibility whereby Gain/Loss will be calculated in all reporting books associated with the primary asset book.

• When you run depreciation from an Reporting Currencies reporting responsibility, the Calculate Gains and Losses program does not run automatically, as it does when you run depreciation from your standard Oracle Assets responsibility.

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Practice - Perform a Retirement and Reinstatement

Overview

In this Practice, you will perform a partial asset retirement, run the Calculate Gains and Losses program and then reinstate the retirement.

Assumptions





Tasks

Perform a Partial Asset Retirement

Part of the asset with the tag number XXBLDG has been destroyed. You need to retire half of the asset.

Process Asset Retirements

Run the appropriate program that will calculate gains and losses for the asset you retired.

Reinstate the Retirement

The XXBLDG asset has been rebuilt and the retirement needs to be cancelled.

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Solution – Perform a Retirement and Reinstatement

Perform a Partial Asset Retirement


1. Navigate to the Asset Workbench:

• (N) Assets > Asset Workbench

2. Click (I) Find.

3. In the Tag Number field, enter XXBLDG.

4. In the Book field, enter OPS CORP

5. Click (B) Find.

6. Select (B) Retirements.


Book OPS CORP


Cost Retired 2,500,000.00

Retirement Type DESTROYED

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8. Select (B) Done.

9. Close the Assets window to return to the Navigator.

Process Asset Retirements

10. Navigate to the Calculate Gains and Losses program submission form.

• (N) Depreciation > Calculate Gains and Losses

11. In the Parameters window, enter OPS CORP.

12. Select (B) OK then (B) Submit.

13. View your request to ensure it completes normally:

• (N) Other > Concurrent

14. Click (B) Find.

Reinstate the Retirement

15. Navigate to the Asset Workbench and find the asset on which you performed the partial retirement above.

• (N) Assets > Asset Workbench (I) Find

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16. When the asset is displayed, select (B) Retirements.

17. Query the retirement you processed by entering CTRL + F11 in the Retirements form.

18. Note the Gain/Loss field has data. Select (B) Reinstate.

19. Confirm the reinstatement then select (B) Cancel.

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Retirement Processing Flow

Retirement Processing Flow

Each retirement transaction has a status. • A new retirement receives the status of PENDING. • The depreciation program automatically processes retirements. • After you run the depreciation or Calculate Gains and Losses program, the status changes

to PROCESSED. • When you reinstate a retired asset with a status of PROCESSED, Oracle Assets changes

the status to REINSTATE. - After calculating gains and losses, the status becomes DELETED.

For books with a large volume of assets, run the Calculate Gains and Losses program several times during the period to reduce the time the depreciation program takes to run at the end of the period.

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Processing a Pending Retirement and Reinstatement

Processing a Pending Retirement and Reinstatement

Processing Retirements with Status PENDING • Oracle Assets calculates the gain or loss for a retirement and removes the asset cost and

accumulated depreciation from the appropriate accounts. • It takes depreciation during the period of retirement according to the retirement

convention, and it takes any necessary ITC recapture. • It updates the status of the retirement to PROCESSED.

Processing Reinstatements with Status REINSTATE • Oracle Assets reinstates the cost and depreciation reserve to the appropriate accounts. • It determines depreciation adjustment for missed depreciation. • It updates the status of the retirement to DELETED.

Running this process separately reduces the end-of-period processing time, because some processing is done in advance. Partial unit retirements terminate the existing distribution and create a new distribution. Partial unit reinstatements terminate the new distribution and recreate the old distribution.

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Calculating Depreciation for the Period Retired

Calculating Depreciation for the Period Retired

Calculating Depreciation for Current and Prior Period Retirements Oracle Assets calculates any depreciation for a current period retirement and automatically backs out any excess depreciation resulting from a prior period retirement. Specify whether to take depreciation in the year that you retire the asset for the depreciation method (depreciate-in-year-retired flag). Discussing Prorate Convention and Retirement Convention

• Oracle Assets uses the prorate convention to determine how much depreciation to take in the first and last years of an asset’s life based on the asset’s date placed in service.

• Oracle Assets uses the retirement convention to determine how much depreciation to take in the year retired based on the retirement date.

• In the United States, the conventions are usually the same.

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Recording Retirements and Reinstatements

Recording Retirements and Reinstatements

Oracle Assets creates different journal entries for each asset type. For Capitalized Assets:

• Charges or reverses depreciation for the year retired. • Removes the asset cost and accumulated depreciation from the corresponding accounts. • Clears the proceeds of sale and the cost of removal. • Recognizes gain or loss from the retirement.

For Construction-in-Process (CIP) Assets: • Removes the asset cost from the CIP cost account. • Clears the proceeds of sale and the cost of removal. • Recognizes gain or loss from the retirement.

For Expensed Items: • There are no journal entries for retirement

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Recording Retirements

Recording Retirements

Full Retirement with Multiple Retirement Accounts Dr Cr Accumulated Depreciation 2,750 Proceeds of Sale Clearing 2,000 *Cost of Removal Gain 500 *Net Book Value Retired Gain 1,000 *Revaluation Reserve Retired Gain 250 Asset Cost 4,000 *Proceeds of Sale Gain 2,000 Cost of Removal Clearing 500 Full Retirement with a Single Gain or Loss Account Accumulated Depreciation 2,750 Proceeds of Sale Clearing 2,000 Asset Cost 4,000 Cost of Removal Clearing 500

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*Gain or Loss 250 * Note the different components of the gain or loss amount.

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Recording a Retirement on Multiple Accounts

Recording a Retirement on Multiple Accounts

You can create journal entries to multiple accounts defined for the book. Identifying Separate Accounts for Each Component of Gain or Loss:

• Proceeds of sale • Cost of removal • Net book value retired • Revaluation reserve retired

Separate Account Sets for Gains and Losses • If the retirement results in a gain, Oracle Assets creates journal entries to the gain

accounts. • If the retirement results in a loss, Oracle Assets creates journal entries to the loss

accounts. • To use a single gain or loss account, enter the same account for each of the gain and loss

accounts. - The net effect is a single gain or loss journal entry.

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Retirement Journal Entries Example

Retirement Journal Entries Example

Journal Entries Created by Oracle Assets Dr Cr Depreciation Expense 250 Accumulated Depreciation 2,500 Proceeds of Sale (clearing account) 2,000 Removal Cost (clearing account) 500 Gain or Loss 250 Asset Cost 4,000 Journal Entries Created by Oracle Receivables Accounts Receivable 2,000 Proceeds of Sale (clearing account) 2,000 Journal Entries Created by Oracle Payables Removal Cost (clearing account) 500 Accounts Payable 500 Note: A single gain or loss account was used in this example.

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Recording Prior Period Reinstatement Entries

Recording Prior Period Reinstatement Entries

Period Qtr Asset

Cost Accum Depr

YTD Depreciation

Depreciation Expense

Year 1 Q1 $4,000 $ 250 $ 250 $ 250

Q2 $4,000 $ 500 $ 500 $ 250

Q3 $4,000 $ 750 $ 750 $ 250

Q4 $4,000 $1,000 $1,000 $ 250

Year 2 Q1 $ 0 $ 0 $ 250 $ 250

Q2 $ 0 $ 0 $ 0 $ 0

Q3 $4,000 $1,750 $ 750 $ 500

Q4 $4,000 $2,000 $1,000 $ 250

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Retirement Reports

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Summary

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Asset Accounting Chapter 11 - Page 1

Asset Accounting Chapter 11

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Asset Accounting

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Objectives

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Agenda

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Setting Up Asset Accounting

Setting Up Asset Accounting

Define Your Ledger In Oracle General Ledger: (N) Setup > Financials > Accounting Setup Manager > Accounting Setups In Oracle Assets: (N) Setup > Financials > General Ledger > Accounting Setup Manager > Accounting Setups You need to define at least one ledger before you can implement and use Oracle Assets. A ledger includes an accounting calendar, a functional currency, and an account structure. If the ledger has not been defined during Oracle General Ledger setup, complete as follows:

• Define the chart of accounts using the accounting key flexfield. Oracle Assets requires the cost center qualifier to be designated in the accounting flexfield. The accounting key flexfield is shared by all Oracle Applications.

• Define the general ledger accounting calendars and the accounting period types. • Enable the functional currency that you want to use with the ledger. • Define, enable, and allow posting of values. • Define a ledger.

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• Assign the ledger to a responsibility. You can use Oracle Assets with multiple ledgers within a single installation. Define Additional Journal Entry Sources In Oracle General Ledger: (N) Setup > Journal > Sources In Oracle Assets: (N) Setup > Financials > General Ledger > Journal Sources If you do not install Oracle General Ledger, use the Journal Entry Sources window in Oracle Assets to define additional journal entry sources. Journal entry sources are used to identify the origin of your journal entry transactions. If you previously defined your journal entry sources while setting up Oracle General Ledger, Oracle Assets will use those values as defaults. Define Additional Journal Entry Categories In Oracle General Ledger: (N) Setup > Journal > Categories In Oracle Assets: (N) Setup > Financials > General Ledger > Journal Categories If you do not install Oracle General Ledger, use the Journal Entry Categories window in Oracle Assets to define additional journal entry categories. Journal entry categories describe the purpose or type of your journal entries. If you previously defined your journal entry categories while setting up Oracle General Ledger, Oracle Assets will use those values as defaults.

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Assets Journal Entries Flow

Assets Journal Entries Flow

(N) Create Accounting Oracle Assets creates journal entries for depreciation expense, asset cost, and other accounts. Oracle Assets automatically creates transaction journal entries for your general ledger when you run the Create Accounting program if you check the Create Journal Entries check box. Otherwise, Oracle Assets will not create journal entries and you can run the Transfer Journal Entries to GL – Assets concurrent program at a later time. Oracle Assets creates journal entries that summarize the activity for each account for each transaction type.

• The general ledger period for which you want to create journal entries must be open or future entry.

• 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.

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• 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.

See the 12 Asset Management Fundamentals lesson Asset Books for more detailed information on Asset Books setup requirements.

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Oracle Subledger Accounting

Oracle Subledger Accounting

Oracle Assets is fully integrated with Oracle Subledger Accounting for: •Creating accounting entries •Transaction drilldown •Reporting By default, Subledger Accounting is used to generate accounts. •If the FA: Use Workflow Account Generation profile option is set to Yes, the account generation rules set up in Oracle Workflow will be used.

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Accounting Event Entities and Classes

Accounting Events Oracle Assets creates accounting events for every asset transaction that has accounting impact. The Create Accounting process creates subledger accounting entries for these accounting events. Note: You do not need to run depreciation to process accounting for additions. 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.

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Some event classes are divided into event types. For example, the Retirements event class is divided into the Retirements and Reinstatements event types. Event classes are associated with process categories using the Event Class options. Process categories allow you to run Create Accounting for a specific process. For example, if you want to run accounting for the Revaluation transaction then you can specify the Revaluation process category while running Create Accounting program.

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Create Accounting – Assets Program

Create Accounting – Assets Program

The Create Accounting – Assets concurrent program: • Creates journal entries for Oracle Assets transactions. • Journal entries can be transferred to and posted to General Ledger. • You can re-run the Transfer Journal Entries to GL – Assets concurrent program to post

journal entries at a later time. • Submit the process from the Create Accounting Menu.

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Guided Demonstration - Run Create Accounting

1. Open the Submit Requests window.

• (N) Create Accounting

2. In the Parameters window, enter the following: Field Value

Book Type Code OPS CORP

End Date Leave as the system date

Accounting Mode Draft

Errors Only No

Report Summary

Include User Transaction Identifiers No

Note: The Transfer to General Ledger and Post in General Ledger fields are disabled when you run the process in the Draft accounting mode.

3. (B) Okay.

4. (B) Submit.

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Journal Entries Created

Journal Entries Created

The Create Accounting process creates journal entries for the appropriate general ledger set of books. You can review these journal entries in the general ledger and then post them.

• You can create journal entries for any general ledger. If you do not use Oracle General Ledger, you can copy the journal entry information from the GL tables.

Adjusting Journal Entries Oracle Assets creates adjusting journal entries to depreciation expense and accumulated depreciation accounts when you enter prior period additions, transfers, or retirements:

• For a prior period addition, Oracle Assets creates journal entries for the missed depreciation.

• For a prior period transfer, Oracle Assets reverses a portion of the depreciation expense posted to the “from” depreciation expense account and posts it to the “to” depreciation expense account.

• For prior period retirements, Oracle Assets creates journal entries that reverse the depreciation taken for periods after the retirement prorate date.

Depreciation Adjustments

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Oracle Assets creates separate journal entries for adjustments to depreciation expense and current period depreciation. You can review the effect of your adjustment transaction and your current period depreciation expense separately in the general ledger.

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Reconciling Data in Oracle Assets

Reconciling Assets Data

• To confirm data in reports, reconcile Oracle Assets to Oracle Payables and Oracle Projects, and to non-Oracle feeder systems.

• You use reports to reconcile journal entries that are sent to Oracle General Ledger.

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Generating Reports to Reconcile to the General Ledger

Generating Reports to Reconcile to the General Ledger

When you run depreciation in Oracle Assets and then run Create Accounting, journal entries can be automatically transferred to the general ledger You can also choose to have journal entries automatically posted to the general ledger when you run Create Accounting. At the end of each period, use the Account Analysis Report in Oracle Subledger Accounting (SLA) to reconcile journal entries with Oracle General Ledger’s Journals - General Report as follows:

• Use the Journals - General Report (parameter set to Unposted Journals status) to review unposted journal batches and associated journals.

- Use this information to trace transactions back to the original source. • Use the Account Analysis report to list all journal entry lines and detailed information on

the asset transactions.

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Reconciling an Asset Cost Account

Reconciling an Asset Cost Account

• Use the Detail Trial Balance Report in Oracle General Ledger to reconcile asset additions imported into General Ledger from Oracle Payables.

• Use the General Ledger Report in Oracle General Ledger to list beginning and ending account balances and all journal entry lines affecting each account balance in the functional and foreign currencies.Use this report to review journal information and to trace each transaction back to its original source.

• Match the ending balance of the Cost Summary Report with the Cost Detail Report. • Match the ending balance of the CIP Summary Report with CIP Detail Report. • Match the ending balance of the Reserve Summary Report with the Reserve Detail

Report.

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Reconciling Asset Cost Accounts

Reconciling Asset Cost Accounts

Reconcile the following reports’ information to the Oracle Assets Cost Detail Report: • Asset Additions Report > Match the cost with match the additions column on the Cost

Detail Report. • Cost Adjustments Report > Match the net change column with the adjustments column

on the Cost Detail Report. • Asset Retirements Report > Match the cost retired column with the retirements column

on the Cost Detail Report. • Asset Reclassification Reconciliation Report > Match the cost column (reflecting

transferred costs) with the reclass column on the Cost Detail Report. This report lists the reclassification of assets reflected in adjusting journal entries that were created when you ran the Create Journal Entries program.

• Asset Transfer Reconciliation Report > Match the cost column with the transfers column on the Cost Detail Report.

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Reconciling a CIP Cost Account

Reconciling a CIP Cost Account

Reconcile the following reports with the CIP Detail Report: • Asset Additions Report > Match the cost column with the additions column on the CIP

Detail Report for CIP assets. • Cost Adjustments Report > Match the net change column with the adjustments column

on the CIP Detail Report. • Asset Retirements Report > Match the cost retired column with the retirements column

on the CIP Detail Report. • CIP Capitalization Report > Match the cost column with the capitalized column on the

CIP Detail Report. • Asset Reclassification Reconciliation Report > Match the cost column (reflecting

transferred costs) to the reclass column on the CIP Detail Report. • Asset Transfer Reconciliation Report > Match the assigned cost column with the transfers

column on the CIP Detail Report. • CIP Assets Report > Match the cost column with the ending balance column on the CIP

Detail Report.

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Reconciling a Reserve Account

Reconciling a Reserve Account

Reconcile the following reports to the columns in the Reserve Detail Report: Match the following columns >

Report Name and Column Name Reserve Detail Report Column Asset Additions Report -Accumulated depreciation column

Additions column

Reserve Adjustments Report -Reserve adjustments column

Adjustments column

Asset Retirements Report -Difference between Cost retired and Net book value retired column

Retirements column

Asset Reclassification Reconciliation Report -Accumulated depreciation column

Reclasses column

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Report Name and Column Name Reserve Detail Report Column Asset Reconciliation Reserve Ledger Report -Depreciation amount column

Depreciation column

Asset Transfers Report -Accumulated depreciation column

Transfers column

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Reconciling Depreciation Expense

Reconciling Depreciation Expense

• Use the Journal Entry Reserve Ledger Report to find out how much depreciation expense Oracle Assets charged to a depreciation expense account for any accounting period.

• Reconcile depreciation expense with the General Ledger Report or the SLA Account Analysis Report.

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Reconciling Mass Additions

Reconciling Mass Additions

Use the following reports to track mass additions from the time you import them from the accounts payable system to the time you post them in Oracle Assets:

1. The Mass Additions Create Report provides a complete audit trail of the mass additions created by Oracle Payables. The report shows all invoice line items that were split, merged, deleted, placed on hold, and prepared for posting.

2. The Mass Additions Posting Report shows an audit trail of assets that were created from mass additions when you ran the Post Mass Additions to Oracle Assets program. Oracle Assets posts mass additions with a POST status.

3. The Cost Clearing Reconciliation Report shows all assets created or adjusted during an accounting period for which Oracle Assets creates journal entries to asset clearing accounts. Use this report to reconcile clearing accounts between the general ledger and Oracle Assets.

4. The Additions by Source Report shows posted mass additions and manual mass additions, and should be reconciled with the Asset Additions Report and the Mass Additions Posting Report. Its current cost column should match with the cost column on the Mass Additions Posting Report.

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5. Oracle Assets creates journal entries for the general ledger. 6. Use the Mass Additions Status Report to review source lines by queue name in the Mass

Additions interface.

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Summary

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Asset Inquiry & Reporting Chapter 12 - Page 1

Asset Inquiry & Reporting Chapter 12

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Asset Inquiry & Reporting

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Objectives

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Agenda

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Viewing Asset Information Online

Viewing Asset Information Online

You can view and query assets online to verify or research asset information: • Perform online inquiries to view the financial information about an asset • Query all assets assigned to a general ledger account by asset detail, assignment, source

lines, and lease • Query all assets assigned to a depreciation account • View the transaction, depreciation, and cost history of an asset • View transactions for any depreciation book and accounting period • View accounting lines for transactions

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Types of Asset Inquiries

Types of Asset Inquires

• To find an asset by detail, enter asset descriptive information, such as asset number, description, or category, as the search criteria.

• To find an asset by assignment, enter assignment information as the search criteria. If you want to search using the expense account, enter a book first.

• To find an asset by source line, enter invoice information, such as supplier or invoice number, or project information, such as project number or task number, as the search criteria.

• To find an asset by lease, enter lease information, such as the lessor, lease number, or lease description, as the search criteria.

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Asset Inquiry Options

Asset Inquiry Options

(N) Inquiry > Financial Information Use the Financial Information windows to view descriptive and financial information for an asset. You can review the transactions, depreciation, and cost history of the asset you select. (N) Inquiry > Transaction History Use the Transaction History windows to review all the transactions for any book, accounting period, transaction type, or range of assets. You cannot update information from the asset inquiry forms.

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iAssets Search for Assets

iAssets Search for Assets

Oracle iAssets includes a powerful search tool you can use to find any assets that are available in the Oracle Assets system. Oracle iAssets includes two types of search mechanisms:

• Simple Search: The Simple Search page allows you to search by asset number, description, serial number, tag number, employee name, and location.

• Advanced Search: If you want to search using additional criteria, you can use the Advanced Search. The Advanced Search page enables you to search for specific assets or for many assets containing the same criteria. By default, the Advanced Search page allows you to search by asset number, description, tag number, and serial number. You can add additional search criteria from a list of values.

Note: The assets you can query are determined by your security options setup. When you find assets, you have the option to add them to an asset list. You can search for more assets, save the asset list for later use, or use the asset list to create transfer requests. Simple Search Use the Simple Search page to search for assets. You must enter at least one of the search criteria listed on the simple search page, but can enter as many as you like. The more information you enter, the more precise your search results will be.

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Advanced Search The Advanced Search page enables you to enter more specific information about assets than does the Simple Search page. You can search on any of the fields listed on the page, as well as add additional fields on which to conduct your search by choosing additional fields from the Add Another list. You can also narrow your search for each field. For example, if you search by asset number, you can search for a specific asset number, or an asset number that contains, starts with, or ends with a particular set of numbers.

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Viewing Financial Information

Viewing Financial Information

(N) Inquiry > Financial Information (B) Assignments • Displays the current assignment information for the asset.

(N) Inquiry > Financial Information (B) Source Lines • If the asset was created from capital asset lines in Oracle Projects, Oracle Assets displays

the Project Number and Task Number of the asset. - Choose the Project Details button to view detail project information about the asset.

The Asset Line Details window includes the following project information for your asset: expenditure type, item date, employee, supplier, quantity, CIP cost, expenditure organization, non–labor resource, and non–labor organization.

(N) Inquiry > Financial Information (B) Books • The View Depreciation window shows each period’s depreciation amounts that are

updated each time you run depreciation. - Any unplanned depreciation amounts are included in the depreciation expense per

period for each asset and book.

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• If you change any information such as the asset cost in the period that you added the asset, Oracle Assets updates the original ADDITION transaction to ADDITION/VOID transaction in the Cost History.

- Any unplanned depreciation amounts appear as ADJUSTMENT transactions.

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Viewing Transaction History

Viewing Transaction History

(N) Inquiry > Transaction History To perform a transaction history inquiry:

1. In the Find Transactions window, enter search criteria for your inquiry. You must enter a Book and Reference Number or Asset Numbers to query a transaction history. You can optionally enter other search criteria, including Periods, Transaction Type, and Category.

2. (B) Find. You can see a summary of the transactions for the asset. 3. To view details, check an asset and then choose the Details button.

Note: You can view the detail accounting lines for the transaction in the form of a balanced accounting entry (i.e., debits equal credits). You can also choose to view the detail accounting as t–accounts.

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Viewing Transaction Accounting

Viewing Transaction Accounting

In Oracle Assets, you can view detailed accounting information for asset transactions in the following formats:

• Accounting Lines - displays balanced accounting information in the form of debits and credits.

• T Accounts - displays underlying accounting information in graphical t-account format. • Activity Summary - displays net activity for transaction and account balances.

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Viewing Subledger Accounting Transactions

Viewing Subledger Accounting Transactions

In Oracle Assets, you can view the following transactions in Oracle Subledger Accounting: •Accounting Events •Journal Entries •Journal Entry Lines

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Guided Demonstration -Perform Asset Inquiries


(N) Inquiry > Financial Information

1. In the Find Assets window, enter 100111 in the Asset Number field and OPS CORP in the Book field, and select (B) Find.

2. When the Find is complete, select (B) Assignments to view the assignment information for the asset.

3. Return to the Assets form and select (B) Source Lines. Review the Source Line information for the asset.

4. Return to the Assets form and select (B) Books. Review the Financial information for the asset.

5. Select (B) Transactions and click on the ADDITION transaction type line.

6. Select (B) Details to review the detail information for the ADDITION.

7. Close windows until you return to the View Financial Information form. Select (T) Depreciation and view depreciation history for the asset.

8. Return to the View Financial Information form and select (T) Cost History. Review the information.

9. Go back to (T) Depreciation and select (M) Tools > View Accounting. Click (B) View Journal Entry. Select (B) T Accounts.

10. In the Options form, select (B) T Accounts and note the T Account presentation. Select (B) Activity Summary and review the information.

11. Return to the Navigator.

(N) Inquiry > Transaction History

12. In the Find Transactions form, enter the following data: Field Name Value

Book OPS CORP

Asset Numbers 101125 - 101125

13. Select (B) Find.

14. In the Transaction History form, select (M) Tools > View Accounting. Note the accounting data also is available in this type of inquiry.

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15. Close all windows and return to the navigator.

(N) Inquiry > Subledger Accounting > Accounting Events

16. On the Accounting Events page, enter: Field Name Value

From Transaction Date 01-Nov-2006

To Transaction Date 30-Apr-2007

Ledger Vision Operations (USA)

17. (B) Go.

18. Click Show on any transaction in the list of accounting events.

19. (B) View Transaction. The Transaction History window in Oracle Assets opens, displaying information about the accounting event.

20. Close the Transaction History window.

21. Go back to the Accounting Events window (you may need to click (I) Back) and click (B) View Journal Entries to view journal entries for this accounting event.

22. Click (B) View T-Account.

23. In Oracle Assets on the Options window, click (B) T Accounts.

24. Close all pages and forms.

(N) Inquiry > Subledger Accounting > Journal Entries

25. On the Subledger Journal Entries page, enter: Field Name Value

Ledger (is) Vision Operations (USA)

From GL Date (after) 31-Dec-2006

26. (B) Go.

27. Click the Select check box next to the first two journal entries.

28. (B) Compare.

29. Close the Subledger Journal Entries page.

(N) Inquiry > Subledger Accounting > Journal Entry Lines

30. On the Journal Entry Lines page, enter:

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Field Name Value


Balancing Segment (is) 01

31. (B) Go.

32. Select one of the transactions.

33. Click (B) View Transaction.

34. Click (B) View Journal Entry.

35. Close the Subledger Journal Entry Lines window.

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Practice - Perform Asset Inquiries

Overview

In this Practice, you will perform inquiries to obtain asset information.

Assumptions




• The segment separator for the accounting flexfield may not be a dash “-“. Substitute the applicable segment separator if necessary.

Tasks

Perform a Financial Information Inquiry

You have been asked to provide the following information for OPS CORP book asset # 100081:

• Where was its last known location?

• What were the accounts used to record the original addition?

• How much depreciation expense was recorded for the asset in the period JUL-96?

Investigate an Asset Transaction

You have been asked to find out information for an asset transaction and have only been given the Reference Number. You’ve been informed the asset is in the OPS CORP book and the Reference Number is 108.

• What is the Asset Number and Description?

• Where is the asset located?

Perform Inquiries in Oracle Subledger Accounting

From Oracle Assets, perform the following Oracle Subledger Accounting inquiries:

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• Accounting Events – Find accounting events with a From Transaction Date of November 1, 2006, a To Transaction Date of April 30, 2007, and the Ledger Vision Operations (USA). View the transaction history and T-accounts for one of these accounting events.

• Journal Entries – Find journal entries in the ledger Vision Operations (USA) The From GL Date should be after December 31, 2006. Compare two journal entries from the list of journal entries.

• Journal Entry Lines – Find journal entry lines in the Vision Operation (USA) ledger with a balancing segment of 01. Select one of the journal entry lines and view the transaction history and journal entry.

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Solution – Perform Asset Inquiries

Perform a Financial Information Inquiry


1. Navigate to the Financial Information inquiry form:

• (N) Inquiry > Financial Information

2. In the Find Assets window, enter 100081 in the Asset Number field and OPS CORP in the Book field and select (B) Find.

3. Select (B) Assignments and click in the Location field. Select (I) Edit Field. Note the Location which is USA-CA-SAN FRANCISCO-NONE. Close the Assignments form.

4. Select the (B) Books from the Assets form.

5. In the View Financial Information form, select (B) Transactions.

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6. Select (M) Tools > View Accounting and note the accounts used to record the original addition:

• DR 01-740-1530-0000-000 30,000.00

• CR 01-000-1570-0000-000 30,000.00

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7. Close windows until you return to the View Financial Information form. Select (B) Depreciation.

8. In the Depreciation tabbed region, scroll down until you see the period JUL-96. Note that the depreciation expense for this period was 250.00.

9. Close all windows and return to the navigator.

Investigate an Asset Transaction


10. Navigate to the Transaction History inquiry form:

• (N) Inquiry > Transaction History

11. In the Find Transactions form, enter the Book OPS CORP and the Reference Number 108. Select (B) Find.

12. Note that the asset number is 100071 and the description is LAND.

13. To find the Location, select (I) Find.

14. In the Find Transactions form, clear the Reference Number field and enter 100071 in the Asset Numbers range field. Select (B) Find.

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15. In the Transaction History window, click on the TRANSFER IN line and select (B) Details.

16. Click on the Location field in the Transaction Details form. Select (I) Edit Field and note the Location is USA-CA-SAN FRANCISCO-NONE. Close all windows and return to the Navigator.

Perform Inquiries in Oracle Subledger Accounting

(N) Inquiry > Subledger Accounting > Accounting Events

17. On the Accounting Events page, enter: Field Name Value

From Transaction Date 01-Nov-2006

To Transaction Date 30-Apr-2007

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Ledger Vision Operations (USA)

18. Click (B) Go.

19. Click Show on the first transaction in the list of accounting events.

20. (B) View Transaction. The Transaction History window in Oracle Assets opens, displaying information about the accounting event.

21. Close the Transaction History window.

22. Go back to the Accounting Events window (you may need to click (I) Back) and click (B) View Journal Entries to view journal entries for this accounting event.

23. Click (B) View T-Account.

24. In Oracle Assets on the Options window, click (B) T Accounts.

25. Close all pages and forms.

(N) Inquiry > Subledger Accounting > Journal Entries

26. On the Subledger Journal Entries page, enter: Field Name Value


From GL Date (after) 31-Dec-2006

27. (B) Go.

28. Click the Select check box next to the first two journal entries.

29. (B) Compare.

30. Close the Subledger Journal Entries page.

(N) Inquiry > Subledger Accounting > Journal Entry Lines

31. On the Journal Entry Lines page, enter: Field Name Value


Balancing Segment (is) 01

32. Click (B) Go.

33. Select one of the transactions.

34. (B) View Transaction.

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35. (B) View Journal Entry.

36. Close the Subledger Journal Entry Lines window.

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iAssets

iAssets

• Oracle iAssets is a web portal designed to help employees manage and access information about a company's capital assets, such as equipment and machinery.

• Oracle iAssets supports self-service transfer of assets, enabling employees to keep track of equipment location and ownership.

- This enables companies to maintain an accurate account of their capital spending necessary to support capital budgeting.

- Tracking movements of assets is also crucial for planning maintenance services and reducing resources for physical inventory.

• This self-service product automates approval and enforcement of business rules. Oracle iAssets offers real-time inquiries of information pertaining to your fixed assets.

• You can access financial and other supporting data about your assets for analysis and decision support.

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iAssets Setup Steps

iAssets Setup Steps

Before you set up Oracle iAssets, set up Oracle Applications responsibilities and users for the implementation. Oracle iAssets provides Oracle iAssets responsibilities. Set Up Underlying Oracle Applications Technology

• You need to set up underlying Oracle Applications technology, which includes the following steps:

- Perform system–wide setup tasks such as configuring concurrent managers and printers

- Manage data security, which includes setting up responsibilities to allow access to a specific set of business data and complete a specific set of transactions, and assigning individual users to one or more of these responsibilities.

- Set up Oracle Workflow Oracle Assets Setup Steps

• Before implementing Oracle iAssets, you must implement Oracle Assets. Oracle Human Resources Setup Steps

• Before implementing Oracle iAssets, you must implement Oracle Human Resources.

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Oracle iAssets Setup Steps 1. Set up Rules 2. Set up Profile Options 3. Assign Rule Names to User Responsibilities

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iAssets Setup Steps—Rules

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Guided Demonstration - iAssets Setup-Rules

Responsibility: iAssets Setup Administrator

Set up Rules

To define self service asset transfer rules:

1. Open the Create Rule page.

Setup > Rules (B) Create New Rule

2. Enter XX_Demo in the Rule Name field.

3. Enter a description of the rule.

4. In the Corporate Book field, enter OPS CORP.

5. Determine whether users will be able to use self service transfer functionality.

6. The Enable Self–Service Transfer Functionality check box must be checked to enable users to create transfer requests.

If you do not check this check box, users will only be able to search and view assets.

7. Determine whether users will be able to enter a transfer effective date while requesting a transfer.

If you check the Allow user–enterable transaction date check box, users will be able to enter the current date or any date within the current fiscal year. Users will not be able to enter future dates.

If you do not check this check box, the transfer date is set to the date the transfer is approved.

Approval Options

8. Determine whether fixed asset manager (iAssets manager) approval is required before applying any self service transfers.

9. If you check the Require iAssets Manager approval before applying any self–service transfers check box, then Oracle iAssets will require approval from the fixed asset manager. The fixed asset manager can review the transfer lines from the iAssets Manager Responsibility and change the request status.

If you do not check the check box, after management approval, all transfer lines will be transferred to Oracle Assets with a status of Post.

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10. Determine the approval type that will be required for each transfer request.

Both Releasing and Destination approvals required: If you choose this option, an Approver field appears for each asset selected for transfer on both the releasing and destination information pages. Both of these fields are required. This option is the default approval type.

No approvals required: If you choose this option, all transfer requests will be automatically approved.

Only Destination approvals required: If you choose this option, no Approver field will be displayed on the releasing information page. The Approver field will appear on the destination information page.

Only Releasing approvals required: If you choose this option, the Releasing Approver field is required. No Approver field will be displayed on the destination information page.

11. Determine the approval method that will be required for each transfer request.

Cost Center–based approvals: If you choose this option, the default approver will be the cost center manager.

Management hierarchy–based approvals: If you choose this option, the default approver will be based on the employee hierarchy relationship. The employee is the person for whom the transfer is requested. The approver defaults to the user who logs in. This option is the default approval method.

Security Options:

12. Choose the accounting segments that will be displayed throughout Oracle iAssets.

13. Check the Enforce Security by Cost Center check box to allow users to view and perform transactions only on assets in their cost center.

If you do not check this check box, users will be able to view and perform transactions on assets in all cost centers.

Search Options:

14. Determine whether users will be restricted to search only their own requests.

If you choose the Restrict users to only search for their saved requests check box, users will be able to search only their saved requests. If this check box is not checked, users will be able to query all requests on the system.

Custom Options:

15. Determine whether you want to add any company–specific instructions that users need to follow before submitting a transfer. To add these instructions, you need to check the Enable custom text input check box, and enter the company–specific information in the Custom

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Text box. This text is visible in the content container on the Create Transfer Request: Request Details page.

16. (B) Finish

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iAssets Setup Steps—Profile Options

iAssets Setup Steps—Profile Options

Each rule must have a rule name defined in the IA: iAssets Rule Name profile option. Once the rule name is assigned to a responsibility, the responsibility is governed by the controls and options set up in that rule. This profile option must be set at the responsibility level. Note: The IA: Assets Rule ID profile option is automatically populated based on the value you enter for the IA: iAssets Rule Name profile option. You cannot update the IA: Assets Rule ID profile option.

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iAssets Setup Steps—User Responsibilities

iAssets Setup Steps—User Responsibilities

After defining rule names in the IA: iAssets Rule Name profile option, you must assign each rule name to a user responsibility. Every Oracle iAssets user responsibility and Oracle iAssets approver responsibility must be assigned a rule name. Otherwise, when users log into an Oracle iAssets responsibility, they will receive an error message and will be unable to proceed.

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Oracle Assets Reporting

Oracle Assets Reporting

• Use Oracle Assets standard reports and listings to keep track of your assets, and to reconcile Oracle Assets to your general ledger.

• Oracle Assets standard reports and listings include both standard fixed format reports and standard variable format reports. You run standard reports and listings from Oracle Assets or from the Oracle Report Manager.

Note: When you run reports for assets using bonus rules, the bonus depreciation is included in the depreciation expense column and the bonus reserve is included in the accumulated depreciation column. To run a standard report, listing, or request set:

1. Open the Submit Requests window. 2. Decide whether to run a request or request set, then select the request or request set you

want to run. 3. Enter the request parameters. 4. (B) Submit 5. Note the Request ID.

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6. Review the status of your request.

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Assets Reports Groupings

Assets Reports Groupings

See the Oracle Assets User Guide Release 12 for detail information on all available reports.

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Variable Format Reports

Variable Format Reports

Many of the Oracle Assets reports are available as variable format reports, which means you can view and manipulate the report data in the desktop application of your choice. For example, you can download the information into Microsoft Excel and sort, analyze, and manipulate the report data using familiar spreadsheet features. You can also format the report as an HTML file and place it on your Web server or directly into the database for general access. To create a variable format report, an attribute set that contains formatting instructions is applied to Oracle Assets report data. You also have a variety of options to publish your report. In Oracle Applications, attribute sets are defined using the RXi Report Administration Tool.

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Assets Reports Using XML Publisher

Assets Reports Using XML Publisher

• XML (eXtensible Markup Language). • You can generate major asset transaction reports with XML Publisher. • You can design and control how the report outputs are presented in separate template

files. • XML Publisher merges your designed template files with the report data to create

published documents in PDF • Reports support color, images, font styles, headers and footers, and other formatting. • Create new report templates or modify existing templates to view your report output.

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Summary

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Tax Accounting Chapter 13 - Page 1

Tax Accounting Chapter 13

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Tax Accounting

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Objectives

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Agenda

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Creating a Tax Book

Creating a Tax Book

• You create tax books before you add and depreciate assets. • You set up a new tax books to comply to tax laws and to take advantage of optimal tax

strategies. • You set up multiple tax books that are associated for each corporate book. • You define independent tax depreciation books for each reporting authority. • You create a separate federal tax book and state tax book. • You copy assets into each book and depreciate these according to each book’s

depreciation rules. - Several authorities may be able to use the same book. For example, some states use

information from the United States Federal tax book instead of requiring a separate book.

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Asset Books Regions

Asset Books Regions

(N) Setup > Asset System > Book Controls Before you can define an tax asset book, you must first setup the corporate asset book that the tax book will be associated with. See the Release 12 Oracle Asset Management Fundamentals module Asset Books for detailed information on setting up asset books. You must complete each region for every tax book you define regardless of whether the information will be used or not. For example, in defining a tax book, you must complete the natural accounts and journal categories regions even if you do not intend to generate journal entries for the book. Special considerations when setting up a tax asset book are as follows: Calendar Region

• Choose the Tax book class. You must associate a Tax book with a previously setup Corporate book.

• Your tax book must have the same account structure, general ledger calendar, and functional currency as the associated corporate book. If you want to create journal entries from your tax book, you must enter a different G/L set of books for your tax book then the associated corporate book. You can then Allow G/L Posting.

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• Use the prorate calendar with the smallest period size or resolution you need for determining your depreciation rate. For example, you may want to use a monthly prorate calendar in a tax book that uses a quarterly depreciation calendar to allow finer control of the annual depreciation amount for some monthly prorate/method combinations.

Accounting Rules Region • Check Allow Reserve Adjustments if you want to allow changes to the accumulated

depreciation in your tax book. • You can Allow Cost/Expense Ceilings in a depreciation book; however, you cannot apply

a cost ceiling and an expense ceiling to the same asset in a depreciation book. • Check Allow CIP Assets if you want to be able to automatically add CIP assets to your

tax book when you add them to your corporate book. • If you choose to Allow Mass Copy into this tax book, choose whether to copy additions,

adjustments, retirements, and/or salvage value. - Corporate book periods must map exactly into tax periods for Mass Copy. For

example, three corporate months must fit into each tax quarter.

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Guided Demonstration - Create a Tax Asset Book


(N) Setup > Asset System > Book Controls

1. Enter Book Name of DEMO TAX BOOK.

2. Change the Class to Tax.

3. Description should also be DEMO TAX BOOK.

4. Associated Corporate Book is OPS CORP.

5. For GL Set of Books, accept Vision Operations.

6. For both the Depreciation and Prorate Calendar choose Monthly from the LOV.

7. Current Period should be DEC-YY (use you own preferred year but it should be a closed year in the OPS CORP Book in order to later perform an Initial Mass Copy).

8. Leave the Divide Depreciation field as is and let the Last Run Date for depreciation be the default of today's date.

9. Tab through the remaining fields in the Calendar region or click on the Accounting Rules tab.

10. Click the Allow Amortized Changes and Allow Mass Changes checkbox. Note that the default for these checkboxes is unchecked.

11. Accept the defaults for the Allow Revaluations section.

12. In the Tax Rules section, check the Allow Reserve Adjustments and the Allow Expense Ceilings checkboxes.

13. Check the Allow Mass Copy checkbox and accept the default values displayed.

14. Tab through the remaining fields of the Accounting Rules region or click on the Natural Accounts tab.

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15. Enter the following Natural Account values: Gain Loss Clearing

Proceeds of Sale 7850 7851 1247

Cost of Removal 7852 7853 2240

Net Book Value Retired

7854 7855

Reval Reserve Retired 7854 7855

Intercompany Receivables 1810

Intercompany Payables 2370

Deferred Depreciation Reserve 2540

Deferred Depreciation Expense 7860

Depreciation Adjustment 1690

Account Generator Defaults 01-000-9999-0000-000

16. Tab to the Journal Categories region.

17. Select from the LOV or enter Assets as the Journal Source.

18. For the Journal Categories fields, choose from the LOV or enter the following values: Field Name Value Field Name Value

Additions Addition CIP Additions CIP Addition

Adjustments Adjustment CIP Adjustments CIP Adjustment

Retirements Retirement CIP Retirements CIP Retirement

Reclass Reclass CIP Reclass CIP Reclassification

Transfers Transfer CIP Transfers CIP Transfer

Revaluation Revaluation

Depreciation Depreciation

Deferred Depreciation Deferred Depreciation

Depreciation Adjustment Depreciation Adjustment

19. (I) Save

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Practice - Define a Tax Asset Book

Overview

In this Practice you will define a tax asset book.

Assumptions

• If you are not attending training at an Oracle University or Authorized Partner Education Center, you must have access to an Oracle Application Vision database or comparable training test instance on which to complete this Practice.

• Use the Oracle Assets seeded Responsibility > Assets, Vision Operations (USA).

• Replace XX in the Practice with a unique identifier such as your initials or a number. (For Instructor Led Training classes, this number will be assigned to you). This is necessary in order to create unique records within the database when performing the Practice.

• Replace the year references of YYYY and YY with the calendar year of your choice or as directed by the Instructor (e.g. 2002 or Jan-02). Keep in mind though, that some transactions require calendar dates and calendar periods be defined and enabled in order to be processed.


Tasks

Enter Book Header and Calendar Regions Information

Go to the Book Controls form and enter the following Asset Book header and Calendar region data:

Field Name Value

Name XX_TAX BOOK

Class Tax

Description XX_TAX BOOK

Associated Corporate Book OPS CORP

Ledger Vision Operations

Allow GL Posting No (unchecked)

Depreciation Calendar Monthly

Prorate Calendar Monthly

Current Period Dec-YY (Instructor will

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Field Name Value provide or use your own preferred year)

Divide Depreciation (accept default)

Depreciate if Retired in First Year (accept default)

Last Depreciation Run (accept default)

Enter Accounting Rules Region Information

Enter the following data in the Accounting Rules region: Field Name Value

Allow Amortized Changes Yes (check)

Allow Mass Changes Yes (check)

Create Intercompany Balancing Entries

Yes (check)

Allow Revaluations (accept default)

Enter Natural Accounts Region Information

Enter the following data in the Natural Accounts region: Gain Loss Clearing

Proceeds of Sale 7850 7851 1247

Cost of Removal 7852 7853 2240

Net Book Value Retired 7854 7855

Reval Reserve Retired 7854 7855

Deferred Depreciation Reserve 2540

Deferred Depreciation Expense 7860

Depreciation Adjustment 1690

Account Generator Defaults 01-000-9999-0000-000

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Enter Tax Rules Region Information

Enter the following data in the Tax Rules region: Field Name Value

Allow Reserve Adjustments Yes (check)

Allow Mass Copy Yes (check)

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Solution – Define a Tax Asset Book

Enter Book Header and Calendar Regions Information

1. Navigate to the Book Controls form.

(N) Setup > Asset System > Book Controls

2. Enter the Book Controls Header and Calendar Region data per Task instruction.

Enter Accounting Rules Region Information

3. Tab through all the fields of the Calendar region or click on the Accounting Rules tab.

4. Enter the Accounting Rules region data per Task instruction.

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Enter Natural Accounts Region Information

5. Tab through all the fields of the Accounting Rules region or click on the Natural Accounts tab.

6. Enter the Natural Accounts region data per Task instruction.

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Enter Tax Rules Region Information

10. Enter the Tax Rules region data per Task instruction.

11. (I) Save

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Prerequisites for Setting Up Tax Book Asset Categories

Prerequisites for Setting Up Tax Book Asset Categories

(N) Setup > Asset System > Asset Categories Before you can add assets to a newly defined tax asset book, you must assign already existing asset categories to the tax book. See the Release 12 Oracle Asset Management Fundamentals module Asset Categories for detailed information on setting up asset categories. Specific considerations when setting up asset categories for tax asset books are:

• You can optionally enter either a depreciation expense or cost ceiling. • Check Straight Line for Retirements if you are setting up an asset category with a 1250

property class in a tax book. Oracle Assets uses a straight–line depreciation method in determining the gain or loss resulting from the retirement of 1250 (real) property.

- If you check Straight Line For Retirements, enter the straight–line depreciation Method and Life you want to use for the Gain From Disposition of 1250 Property Report. This is the default method for your asset in the Retirements window and in the tax book if you use mass copy.

• Indicate whether assets in this category are eligible for Investment Tax Credit (ITC), and whether assets in this category Use ITC Ceilings.

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Guided Demonstration - Add Asset Categories to Tax Book


(N) Setup > Asset System > Asset Categories

1. In the Asset Categories form, go into query the existing BUILDING-OFFICE asset category.

2. After the record is retrieved, click in the Book field.

3. (I) New

4. From the LOV, select DEMO TAX BOOK for the Book field.

5. Enter the following GL Accounts data: Asset Cost 01-000-1520-0000-000

Asset Clearing 01-000-1570-0000-000

Depreciation Expense Segment 7320

Accumulated Depreciation 01-000-1620-0000-000

Bonus Expense 7320

Bonus Reserve 01-000-1620-0000-000

6. (B) Default Rules

7. Enter the following Default Depreciation Rules: Method STL

Life Years 30

Life Months 0

Prorate Convention MONTH

Retirement Convention MONTH

8. (I) Save

9. Close the Default Depreciation Rules form.

10. Back in the Asset Categories form, click in the Category field, enter query mode , and retrieve the VEHICLE-OWNED STANDARD category.

11. After the record is retrieved, click in the Book field.

12. (I) New

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13. From the LOV, select DEMO TAX BOOK for the Book field.

14. Enter the following GL Accounts data: Asset Cost 01-000-1550-0000-000

Asset Clearing 01-000-1570-0000-000

Depreciation Expense Segment 7350

Accumulated Depreciation 01-000-1650-0000-000

Bonus Expense 7350

Bonus Reserve 01-000-1650-0000-000

15. (B) Default Rules

16. Enter the following Default Depreciation Rules: Method STL

Life Years 5

Life Months 0

Prorate Convention FOL-MONTH

Retirement Convention FOL-MONTH

17. (I) Save

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Practice - Add Asset Categories to a Tax Book

Overview

In this practice you will add 3 asset categories to the XX_TAX BOOK you defined in the previous practice.

Assumptions






Tasks

Assign Asset Categories to the XX_TAX BOOK

In order to later perform a mass copy from the OPS CORP asset book to the XX_TAX BOOK, you need to add the following existing asset categories to the XX_TAX BOOK. The asset categories and their applicable data are as follows:

Field Name Asset Category 1 Asset Category 2 Asset Category 3

Category Name COMPUTER-PC VEHICLE-OWNED HEAVY

BUILDING-OFFICE

Asset Cost 01-000-1560-0000-000 01-000-1550-0000-000 01-000-1520-0000-000

Asset Clearing 01-000-1570-0000-000 01-000-1570-0000-000 01-000-1570-0000-000

Depreciation Expense Segment

01-000-7360-0000-000 01-000-7350-0000-000 01-000-7320-0000-000

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Accumulated Depreciation

01-000-1660-0000-000 01-000-1650-0000-000 01-000-1620-0000-000

Bonus Expense 01-000-7360-0000-000 01-000-7350-0000-000 01-000-7320-0000-000

Bonus Reserve 01-000-1660-0000-000 01-000-1650-0000-000 01-000-1620-0000-000

Method MACRS HY MACRS HY MACRS STL HY

Life Years 5 10 40

Life Months 0 0 0

Prorate Convention HALF-YEAR HALF-YEAR HALF-YEAR

Retirement Convention

HALF-YEAR HALF-YEAR HALF-YEAR

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Solution – Add Asset Categories to a Tax Book

Assign Asset Categories to the XX_TAX BOOK


1. Navigate to the Asset Categories form:

• (N) Setup > Asset System > Asset Categories

2. In the Asset Categories form, start query mode (F11) and enter COMPUTER-PC in the Category field. Execute the query (CTRL+F11).

3. Place the cursor in the Book field and select (B) New from the Toolbar.

4. From the List of Values for the Book field, choose XX_TAX BOOK.

5. Enter the GL Accounts data as requested.

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6. Select (B) Default Rules.

7. Enter the default depreciation rules as requested.

8. Save your work and close out of the Default Depreciation Rules form.

9. Back in the Asset Categories form, click in the Category field, enter query mode (F11) , and retrieve the VEHICLE-OWNED HEAVY category.

10. After the record is retrieved, click in the Book field and select (B) New.

11. From the List of Values, choose XX_TAX BOOK for the Book field.

12. Enter the GL Account and Default Rules information as requested.

13. When finished, save your work and close out of the Default Depreciation Rules form.

14. Back in the Asset Categories form, click in the Category field, enter query mode (F11) , and retrieve the BUILDING-OFFICE category.

15. After the record is retrieved, click in the Book field and select (B) New.

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16. From the List of Values, choose XX_TAX BOOK for the Book field.

17. Enter the GL Account and Default Rules information as requested.

18. When finished, save your work and close out of the Default Depreciation Rules form.

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Entering Information in Tax Books

Entering Information in Tax Books

You can copy your assets and transactions from your corporate book to your tax books automatically using Mass Copy.

• You can create as many tax books as you need, maintain your asset information in your corporate book, and then update your tax books with assets and transactions from your corporate book.

• You must allow Mass Copy and choose whether to copy additions, cost adjustments, retirements, and salvage value for your tax book in the Book Controls window before you can run mass copy.

• You also specify which corporate book mass copy uses as the source. • You cannot copy assets from one corporate book into another 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.

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• Use Initial Mass Copy to initially populate your tax book by adding existing assets to a tax book.

• Use Periodic Mass Copy each period to keep your tax book up to date with your corporate book.

You can also enter assets and transactions into the tax book manually.

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Populating the Tax Book by Initial Mass Copy

Populating the Tax Book by Initial Mass Copy

(N) Tax > Initial Mass Copy • Use Initial Mass Copy to initially populate your tax book by adding existing assets to a

tax book. • Initial Mass Copy copies all the assets added to your corporate book before the end of the

current tax fiscal year into the open accounting period in your tax book. • When using Initial Mass Copy for the first time in your tax book, you can run it as many

times as necessary for the first period to copy all existing assets. When you rerun the process, Initial Mass Copy only looks at assets which it did not copy into the tax book during previous attempts, so no data is duplicated.

• The current fiscal year in your tax book determines which assets Initial Mass Copy copies into your tax book.

- Example: If the current fiscal year of your tax book is 2001, Initial Mass Copy copies all assets into your tax book as they appeared at the end of 2001 in your corporate book, even if 2002 is the current fiscal year of your corporate book.

- The fiscal year must be closed in the corporate book.

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- Only run Initial Mass Copy for the first period of your tax book. For following periods in your tax book, run Periodic Mass Copy.

• Initial Mass Copy does not copy assets retired before the end of that year or assets added after the end of that year.

• You do not need to copy any adjustments or partial retirements you performed before the end of the fiscal year.

• When you close this initial period, Oracle Assets calculates the net book value of your assets that have zero accumulated depreciation in the tax book, and opens the next period.

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Populating the Tax Book

Populating the Tax Book

• Depreciation information comes from the default category information for the tax book according to the asset category and the date placed in service. You must set up your asset categories with default information for your tax book before you run Initial Mass Copy.

• Override default depreciation rules in the Depreciation Books form if necessary. • Since tax books share the category and assignments with their associated corporate book,

you do not need to copy reclassifications or transfers from one book to another. • Tax books also share production amounts with their associated corporate books for assets

depreciating under units of production. • For subcomponent assets, copy the parent asset first. Then copy the subcomponent asset,

defaulting the asset life according to the subcomponent life rule you defined for the tax category and the parent asset life. You must set up the depreciation method for the subcomponent asset life before you can use the method and life.

- If your subcomponent asset uses straight–line depreciation, Oracle Assets sets up the depreciation method for the calculated life for you. If the depreciation method is not straight–line, and not already set up for the subcomponent life rule default, Oracle Assets uses the asset category default life.

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Guided Demonstration - Perform an Initial Mass Copy


(N) Tax > Initial Mass Copy

1. In the Submit Request form, enter DEMO TAX BOOK as the lone parameter.

2. (B) Submit

3. Navigate to the View Requests form and select (B) View Output.

4. Review the results of the Initial Mass Copy.

Notice that there are assets that have the message "This asset's category is not set up for this tax book" on the report. This is because we only assigned a few asset categories to the DEMO TAX BOOK. There are other categories in the OPS CORP book that we did not set up for the DEMO TAX BOOK. They will not copy, causing this message to display.

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Practice - Perform an Initial Mass Copy

Overview

In this Practice, you will perform an Initial Mass Copy of assets from the OPS CORP Book to the XX_TAX Book you previously defined.

Assumptions





• The segment separator for the accounting flexfield may not be a dash "-". Substitute the applicable segment separator if necessary.

Tasks

Perform an Initial Mass Copy for the XX_TAX Book

You need to copy assets from the OPS CORP book to the XX_TAX Book for the categories you assigned to this tax book in a previous Practice.

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Solution – Perform an Initial Mass Copy

Perform an Initial Mass Copy for the XX_TAX Book


1. Navigate to the Initial Mass Copy submission form:

• (N) Tax > Initial Mass Copy

2. Enter XX_TAX BOOK as the parameter for the request. Select (B) Submit.

3. Navigate to the View Requests form:


4. For the Initial Mass Copy request line, select (B) View Output.

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5. View the results of the Initial Mass Copy. Note that there are assets that have the message "This asset's category is not set up for this tax book" on the report. This is due to you only assigning a few asset categories to the XX_TAX BOOK and the assets in the OPS CORP book in categories other than what we set up for the XX_TAX BOOK will not be copied and therefore display this message.

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Populating the Tax Book by Periodic Mass Copy

Populating the Tax Book by Periodic Mass Copy

(N) Tax > Periodic Mass Copy • Use Periodic Mass Copy each period to keep your tax book up to date with your

corporate book. • Oracle Assets copies new assets and transactions you made in your corporate book during

one accounting period in the current fiscal year into the open period of your tax book. • You can run periodic mass copy on each tax book after you close each period in the

corporate book. • The Periodic Mass Copy program copies addition, adjustment, retirement, and

reinstatement transactions to your tax book from the current period in the associated corporate book.

- Note: You can use Periodic Mass Copy to populate a new tax book if you added all your assets to your corporate book in the period for which you are running Mass Copy.

• Periodic Mass Copy copies all qualifying transactions for an asset one at a time. It does not combine transactions, and only copies transactions from a closed accounting period in the associated corporate book.

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• Because tax books share category and distribution information with the corporate book, Periodic Mass Copy does not copy reclassifications or transfers.

- If two transactions in separate corporate periods fall into the same tax period, Oracle Assets may copy them differently. For example, if you adjust an asset in the period after you added it to the corporate book but the adjustment falls in the same tax period as the addition, the tax addition becomes an Addition/Void, and the tax adjustment is a new Addition transaction.

- If the second transaction is not allowed in the same period, such as a retirement in the period of the addition, it is not copied.

• Oracle Assets prints all skipped transactions in the Periodic Mass Copy log file. • In using Periodic Mass Copy, specify whether to copy retirements, adjustments, and

salvage value for the tax book in the Book Controls window. • If a retirement is skipped, consider adjusting the cost to zero in the open period and

performing a prior-period retirement in the next period.

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Updating a Tax Book Manually

Updating a Tax Book Manually

(N) Asset > Asset Workbench (B) Books You may enter assets and transactions directly into the tax book. This is done by navigating to the Books window for the asset and selecting the appropriate tax book. The financial information can be changed as necessary. If you manually adjust the cost in the tax book, Mass Copy will copy future transactions from the corporate book if you set the FA: Copy All Cost Adjustments profile option to a Yes value. This will allow cost adjustments to be copied as an absolute value, not a proportion of basis.

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Guided Demonstration - Manually Add an Asset to a Tax Book



1. From the Assets form, find asset number 100111.

2. (B) Books

3. In the Book field, select OPS FEDERAL from the LOV.

4. Tab to or click in the Current Cost field.

5. Change the Depreciation Life to 7 years 0 months.

6. (B) Done

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Practice - Manually Add an Asset to a Tax Book

Overview

In this Practice, you will add a new asset using QuickAdditions and then manually add that asset to the OPS FEDERAL tax asset book.

Assumptions






Tasks

Add an Asset Using QuickAdditions

You need to add a new asset using QuickAdditions to the OPS CORP book with the following data:

Field Name Value

Description Brand New BMW

Tag Number XX_BMW

Category VEHICLE-OWNED LUXURY

Book OPS CORP

Cost 32,000

Expense Account 01-120-7350-0000-000

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Location USA-NY-NEW YORK-NONE

Manually Add the BMW to a Tax Book

You need to manually add the Brand New BMW to the OPS FEDERAL book and change the depreciation method to MACRS HY with a 5 year life.

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Solution – Manually Add an Asset to a Tax Book

Add an Asset Using QuickAdditions


1. Navigate to the Asset Workbench:

• (N) Assets > Asset Workbench (B) QuickAdditions

2. Enter a new asset using the following data:

Field Name Value

Description Brand New BMW

Tag Number XX_BMW

Category VEHICLE-OWNED LUXURY

Book OPS CORP

Cost 32,000

Expense Account 01-120-7350-0000-000

Location USA-NY-NEW YORK-NONE

3. Select (B) Done.

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Manually Add the BMW to a Tax Book

4. From the Assets form, select (I) Find.

5. In the Find Assets form, enter either the asset number or tag number (XX_BMW).

6. Enter OPS CORP in the Book field and select (B) Find.

7. Back in the Assets form with the BMW now displayed, select (B) Books.

8. Choose OPS FEDERAL from the list of values for the Book field.

9. Tab to or click in the Current Cost field. The asset information should now be displayed.

10. Change the depreciation method to MACRS HY with a life of 5 Years 0 Months.

11. Select (B) Done.

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Tax Book Upload Interface

Tax Book Upload Interface

• The Tax Book Upload interface table enables you to enter tax information via SQL. Once the assets have been added into your tax books, you can change basic financial information, such as year–to–date depreciation, accumulated reserve, cost, and salvage value, for an unlimited number of assets in the tax books. You can use the Tax Book Upload interface table to enter tax information only in the period you added the assets to your tax book. You can also use the Tax Book Upload interface table to upload short tax year information.

• You can use the FA: Copy All Cost Adjustments profile option to allow the Mass Copy program to copy all cost adjustments, even when the unrevalued cost is different in the corporate book and the associated tax books.

Tax Book Upload Example The following example shows how you can use the Tax Book Upload feature and the FA: Copy All Cost Adjustments profile option to copy cost adjustments when the unrevalued cost in the corporate book is different from the unrevalued cost in the tax book:

1. You add an asset in the corporate book with an original cost of $100.

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2. After running mass copy, the asset now appears in your tax book with an original cost of $100.

3. You want to change the original cost amount in the tax book to $80, so you execute the following SQL script:

- insert into fa_tax_interface - (asset_number, book_type_code, cost, posting_status) - values (’12345’,’ABCTAX’,80, ’POST’);

4. You run the Upload Tax Book Interface program so that the asset in the tax book now has an original cost of $80.

5. Next, you adjust the asset cost in the corporate book from $100 to $200. 6. You run the Mass Copy program to the tax book with the profile option FA: Copy All

Cost Adjustments set to Yes. 7. This adjustment is reflected in the tax book with a new cost of $180.

Note: If you have two different cost values for your corporate and tax books, and you want the Periodic Mass Copy program to copy all cost adjustments to your tax books, you must set the FA: Copy All Cost Adjustments profile option to Yes. If you do not set the FA: Copy All Cost Adjustments profile option to Yes, you will not be able to take advantage of the Periodic Mass Copy functionality that allows subsequent cost adjustments to be copied to the tax books.

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Discussing Tax Rules


You can set up and review your Investment Tax Credit (ITC) rates and recapture rates. Oracle Assets displays the rates in ascending order by year and life. Oracle Assets automatically recaptures a portion of the investment tax credit for assets with ITC that you retire before they are fully reserved. Once you set up your rates, you can claim ITC for an asset. Note: In the United States for federal income tax purposes, the investment tax credit applied to assets placed into service prior to 1987. Setup Investment Tax Credit: (N) Setup > Depreciation > ITC Rates (N) Setup > Depreciation > ITC Recapture Rates Apply ITC to an Asset: (N) Tax > Tax Workbench (B) Investment Tax Credits

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Depreciation Ceiling • The depreciation expense ceiling limits the annual depreciation expense amount. It is

applied to luxury automobiles in the United States. • The depreciation cost ceiling limits the recoverable cost of an asset. It is commonly used

in countries outside the United States. Capital Gain Threshold Capital gain threshold is the minimum time an asset is held before qualifying for capital gains treatment upon retirement.

• You specify a default capital gain threshold for a book, and override the default threshold for a particular category.

• If you hold an asset for at least as long as this threshold, Oracle Assets reports it as a capital gain on retirement.

Adjusted Current Earnings (ACE) Adjusted current earnings depreciation rules are for United States tax purposes. An ACE book is another type of tax book that you create and update according to ACE rules.

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Deferred Depreciation

Deferred Depreciation

Defining Deferred Depreciation Deferred depreciation is the temporary difference in depreciation expense between the corporate book and the tax book. FAS 109 determines how to account this difference between the corporate and tax books in the United States. Estimating Deferred Depreciation Tax Liability Project depreciation expense for the corporate and tax book. Determine permanent differences, such as salvage value in the corporate book or an investment tax credit, by running the Recoverable Cost Report. Adjust depreciation expense for permanent differences. Adjusted tax depreciation expense = Tax depreciation expense × (Corporate recoverable cost/Tax recoverable cost)

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Calculating Deferred Depreciation

Calculating Deferred Depreciation

(N) Journal Entries > Deferred Creating Deferred Depreciation Journal Entries After closing the corporate and tax periods, create journal entries for the general ledger for the actual deferred depreciation. Oracle Assets calculates deferred depreciation by comparing the tax and corporate books, which must use the same depreciation calendar. The general ledger period for which you want to create journal entries must be open or future entry. Creating Journal Entries from Tax Books Create a corporate tax book and associate it with a set of tax books. Create journal entries for the tax book from the set of tax books. Compare the corporate book with the set of tax books in the general ledger.

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Adjusting Accumulated Depreciation

Adjusting Accumulated Depreciation

• You adjust the depreciation taken for a previous fiscal year in a tax book if an auditor specifies a different depreciation amount or you need to adjust depreciation between the minimum and maximum amounts.

• You adjust the depreciation taken for all assets in a tax book using the Mass Depreciation Adjustment feature.

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Adjusting Depreciation Reserve for a Single Asset

Adjusting Depreciation Reserve for a Single Asset

(N) Tax > Tax Workbench (B) Reserve Adjustments Adjusting Depreciation Reserve in a Tax Book Adjust an asset reserve for a year only if you have not performed an amortized change since that year.

• Allow Reserve Adjustments for the tax book. • Add assets to the tax book by using Mass Copy. • Close the fiscal year you want to adjust.

- You cannot adjust the depreciation taken in a previous fiscal year for assets using a units-of-production method.

- You cannot adjust depreciation for assets on which you have performed an amortized cost adjustment since the end of the fiscal year you are adjusting.

Adjust a reserve in tax books only, because once depreciation is reported to shareholders, it cannot be changed. Updating Subsequent Years

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Oracle Assets automatically adjusts the life-to-date depreciation for all subsequent years to reflect the adjustment.

• Updating a reserve in tax books does not change the depreciation expense taken. • It creates journal entries to the accumulated depreciation and depreciation adjustment

accounts. • Use this feature only when a reporting authority specifies a different accumulated

depreciation.

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Guided Demonstration -Adjust Depreciation Reserve


(N) Tax > Tax Workbench


2. (B) Reserve Adjustments

3. In the Tax Reserve Adjustment form, enter the following data: Field Name Value

Book OPS FEDERAL

Comments Audit Results

Fiscal Year 2000

New Fiscal Year Depreciation 2,000,000

4. (B) Done

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Adjusting Depreciation Reserve for All Assets

Adjusting Depreciation Reserve for All Assets

(N) Tax > Mass Depreciation Adjustments Oracle Assets can adjust depreciation for each asset between minimum and maximum amounts by a factor that you enter. It determines the minimum and maximum amounts by comparing the accumulated depreciation in the tax book, a control book, and the associated corporate book. Preparing for the adjustment:

• Define the three books. The adjusted and control tax book must have the same associated corporate book.

• Close the fiscal year in all three books. • Ensure that you have run depreciation to close the previous fiscal year for the tax book

you want to adjust, its associated corporate book, and the control tax book. • The current open period in the adjusted tax book must be the first period of the following

fiscal year with no transactions entered.

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Controlling Mass Depreciation Adjustment

Controlling Mass Depreciation Adjustment

• Use the Status field to see the current status of the adjustment. • Select Preview, Run, or Review to specify the action that you want Oracle Assets to do.

Preview runs the Mass Depreciation Adjustment Preview Report.

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Calculating Mass Depreciation Adjustment

Calculating Mass Depreciation Adjustment

Oracle Assets calculates the adjusted depreciation for the fiscal year for each asset in the tax book by the following formulas:

• Adjusted depreciation expense = Minimum depreciation + [Adjustment factor (Maximum - Minimum depreciation)]

• Minimum depreciation = Minimum accumulated depreciation - Opening accumulated depreciation in adjusted book

• Maximum depreciation = Maximum accumulated depreciation - Opening accumulated depreciation in adjusted book

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Automatically Adding CIP Assets to Tax Books

Automatically Adding CIP Assets to Tax Books

• After you set up Oracle Assets to automatically add CIP assets to your tax book, all CIP assets you add to your corporate book will automatically be added to your tax book at the same time.

• When you capitalize these CIP assets in your corporate book, the same assets will automatically be capitalized in your tax book, even if the corporate and tax books are in different periods.

• If you checked Allow CIP Assets and later you uncheck it, you may have CIP assets that were automatically added to the tax book while Allow CIP Assets was checked. Although Allow CIP Assets is no longer checked, those CIP assets in the tax book will be automatically capitalized when the same assets are capitalized in the corporate book.

• You cannot perform any transactions directly to CIP assets in tax books. You can only perform transactions on CIP assets in your corporate book, and these transactions will automatically be replicated to the tax book.

- Adjustments, retirements, reinstatements, and capitalizations must be performed on CIP assets in the corporate book.

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- These transactions are copied automatically to the related tax book. Cost adjustments are copied as actual adjustment amounts, not as a percentage of the cost.

- Example: The cost of Asset A in the corporate book is $1000. In the tax book, the cost of Asset A is $1500 due to inflationary revaluation. If the cost of Asset A in the corporate book changes by 30% to $1300, the actual adjustment is $300. In the tax book, the cost adjustment amount of $300 will be copied, not the rate of the adjustment (30% of $1500). The adjusted cost for Asset A in the tax book will be $1800, not $1950.

• You cannot view CIP assets in tax books from the Asset Workbench. You can view this information in the View Financial Information window.

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General Tax Reports

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Special Tax Reports

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Depreciation Adjustment Reports

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Summary

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Oracle Internal & Oracle AcademyUse Only

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Transcript of Oracle Internal & Oracle AcademyUse Only