R12.x Oracle Asset Management Fundamentals: D59987GC10 Edition 1.0 March 2010 D64878

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R12.x Oracle Asset
Management Fundamentals
Volume 2 - Instructor Guide
D59987GC10
Edition 1.0
March 2010
D64878
Copyright © 2008, 2010, Oracle and /or its affiliates All rights reserved.
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Author
Gail D’Aloisio, Brent A. Bosin, Paul Scott, Assad Akhavan
Technical Contributors and Reviewers
Kathy Wohnoutka, Ruth Kukla, Jan Quist, JongSung Ahn, Chris Rudd, Som Viswapathy, Bruce
Isner, Ivy Farren, Bruce Ingram
This book was published using: oracletutor

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
Quiz ...............................................................................................................................................................1-23
Adding and Capitalizing a CIP Asset ............................................................................................................1-24
Acquire and Build CIP Assets .......................................................................................................................1-25
Asset Adjustments .........................................................................................................................................1-26
Asset Adjustment Overview ..........................................................................................................................1-27
Performing Physical Inventory ......................................................................................................................1-28
Elements of Depreciation ..............................................................................................................................1-30
Basic Depreciation Calculation .....................................................................................................................1-32
Tracking Asset Retirements...........................................................................................................................1-34
Assets Journal Entries Flow...........................................................................................................................1-35
Default Account Generator Process for Oracle Assets ..................................................................................1-37
Reconciling Data in Oracle Assets ................................................................................................................1-38
Viewing Asset Information Online................................................................................................................1-39
Oracle Assets Reporting ................................................................................................................................1-40
Assets Reports Groupings..............................................................................................................................1-41
Creating a Tax Book......................................................................................................................................1-42
Entering Information in Tax Books ...............................................................................................................1-43
Transaction APIs ...........................................................................................................................................1-45
Business Events .............................................................................................................................................1-47
Asset Business Event Triggers ......................................................................................................................1-48
Quiz ...............................................................................................................................................................1-49
Summary........................................................................................................................................................1-50
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
Quiz ...............................................................................................................................................................2-11
Setup Steps Flow ...........................................................................................................................................2-12
Oracle Assets Key Flexfields.........................................................................................................................2-16
Setting Up Key Flexfields .............................................................................................................................2-17
Asset Category Key Flexfield........................................................................................................................2-18
Location Key Flexfield..................................................................................................................................2-19
Asset Key Key Flexfield................................................................................................................................2-20
Copyright © Oracle, 2010. All rights reserved.
R12.x Oracle Asset Management Fundamentals Table of Contents

i
Creating Key Flexfield Combinations ...........................................................................................................2-21
Specifying System Controls ..........................................................................................................................2-22
QuickCodes ...................................................................................................................................................2-24
Available QuickCodes...................................................................................................................................2-27
Defining Fiscal Years and Calendars.............................................................................................................2-35
Setting Up Fiscal Years .................................................................................................................................2-36
Setting Up Asset Calendars ...........................................................................................................................2-37
Sharing Calendars..........................................................................................................................................2-38
Defining Price Indexes ..................................................................................................................................2-39
Profile Options...............................................................................................................................................2-41
Asset Insurance..............................................................................................................................................2-47
Entering Asset Insurance Information ...........................................................................................................2-49

Planning Implementation...............................................................................................................................2-51
Key Flexfields Planning Considerations........................................................................................................2-53
The Key Flexfields Planning Phase ...............................................................................................................2-55
Convert Existing Asset Information ..............................................................................................................2-59
Using the FA_MASS_ADDITIONS Table for Conversion ..........................................................................2-61

Post Conversion Reconciliation.....................................................................................................................2-64
Other Conversion Issues................................................................................................................................2-65
Maintaining an Audit Trail ............................................................................................................................2-66
Maintaining Audit Trails ...............................................................................................................................2-67
Defining Asset Warranties.............................................................................................................................2-69
Creating Leases .............................................................................................................................................2-70
Quiz ...............................................................................................................................................................2-71
Summary........................................................................................................................................................2-72
Asset Books.......................................................................................................................................................3-1
Asset Books ...................................................................................................................................................3-3
Objectives ......................................................................................................................................................3-4
Agenda...........................................................................................................................................................3-5
Asset Books Positioning................................................................................................................................3-6
Quiz ...............................................................................................................................................................3-8
Asset Books Regions .....................................................................................................................................3-9
Calendar Region ............................................................................................................................................3-11
Accounting Rules Region ..............................................................................................................................3-13
Natural Accounts Region...............................................................................................................................3-15
Security by Book ...........................................................................................................................................3-17
Organizations and Security by Book .............................................................................................................3-18
How Security by Book Is Used within Process Flow ....................................................................................3-19
Security by Book Setup Steps........................................................................................................................3-20
Quiz ...............................................................................................................................................................3-24
Troubleshooting Security by Book ................................................................................................................3-25
Implementation Considerations for Security by Book...................................................................................3-27
Summary........................................................................................................................................................3-28
Asset Categories...............................................................................................................................................4-1
Asset Categories ............................................................................................................................................4-3
Objectives ......................................................................................................................................................4-4
Agenda...........................................................................................................................................................4-5
Asset Categories Positioning .........................................................................................................................4-6
Quiz ...............................................................................................................................................................4-7
Asset Categories Regions ..............................................................................................................................4-8
Asset Categories Setup ..................................................................................................................................4-9
Summary........................................................................................................................................................4-17

ii
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
Quiz ...............................................................................................................................................................5-10
Asset Additions Required Data .....................................................................................................................5-11
QuickAdditions..............................................................................................................................................5-12
Quiz ...............................................................................................................................................................5-15
Detail Asset Additions...................................................................................................................................5-16
Detail Additions - Asset Details Window......................................................................................................5-18
Quiz ...............................................................................................................................................................5-20

Detail Additions - Books Window.................................................................................................................5-21
Asset Cost Terminology ................................................................................................................................5-23
Accumulated Depreciation Considerations....................................................................................................5-24
Depreciate Checkbox Actions .......................................................................................................................5-26
Detail Additions - Assignments Window ......................................................................................................5-27
Detail Additions - Source Lines Window......................................................................................................5-28
Manual Asset Additions Journal Entries .......................................................................................................5-29

Group Depreciation .......................................................................................................................................5-30
Group Depreciation in the Global Market .....................................................................................................5-32
Group and Member Asset Rules....................................................................................................................5-33
Set Up Group Assets......................................................................................................................................5-35
Assigning Member Assets to Group Assets ..................................................................................................5-37
Group Asset Reserve Transfer.......................................................................................................................5-39
Quiz ...............................................................................................................................................................5-40
Energy Assets ................................................................................................................................................5-41
Summary........................................................................................................................................................5-43
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
Quiz ...............................................................................................................................................................6-11
The Mass Additions Process..........................................................................................................................6-12
Step 1 Mass Additions Create........................................................................................................................6-14
Requirements to Create Mass Addition Lines ...............................................................................................6-16
Tracking Expensed Items in Oracle Assets ...................................................................................................6-18
Other Mass Additions Considerations ...........................................................................................................6-20
Quiz ...............................................................................................................................................................6-22
Step 2 Prepare Mass Additions......................................................................................................................6-23
Required Fields and Mass Additions .............................................................................................................6-24
Automatic Preparation of Mass Additions.....................................................................................................6-25
Automatic Preparation of Mass Additions Process .......................................................................................6-26
Mass Addition Queues...................................................................................................................................6-28
Changing Asset Information..........................................................................................................................6-29
Merging Mass Addition Lines .......................................................................................................................6-30
Splitting Mass Addition Lines .......................................................................................................................6-31
Merging Then Splitting Functionality ...........................................................................................................6-32
Adding a Mass Addition Line to an Existing Asset.......................................................................................6-33
Accounting for Cost Adjustments Example ..................................................................................................6-34
Step 3 Post Mass Additions ...........................................................................................................................6-35
Effect of Post Mass Additions on Queue Names...........................................................................................6-36

iii
Step 4 Delete Mass Additions........................................................................................................................6-37
Purge Mass Additions....................................................................................................................................6-38
Future Transactions .......................................................................................................................................6-39
Quiz ...............................................................................................................................................................6-42
View Pending Transactions ...........................................................................................................................6-43
Quiz ...............................................................................................................................................................6-44
Creating Assets Using Web ADI...................................................................................................................6-45
Web ADI Upload to Oracle Assets................................................................................................................6-47
Summary........................................................................................................................................................6-49
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
Quiz ...............................................................................................................................................................7-10
Modifying the Cost of CIP Assets .................................................................................................................7-11
Recording a CIP Asset Addition....................................................................................................................7-13

Capitalizing a CIP Asset................................................................................................................................7-14
Quiz ...............................................................................................................................................................7-15
Reversing a Capitalized Asset .......................................................................................................................7-16
Updating Asset Fields When Capitalizing CIP Assets ..................................................................................7-17
Updating Transaction Types When Capitalizing CIP Assets ........................................................................7-18
Recording a Capitalization - Adding and Capitalizing in the Same Period ...................................................7-19
Recording a Capitalization - Adding and Capitalizing in Different Periods..................................................7-20
CIP Assets and Oracle Projects .....................................................................................................................7-22
Tracking Capital Projects in Oracle Projects .................................................................................................7-23
Capital Projects Flow Integration ..................................................................................................................7-24
Creating Mass Additions from Oracle Projects .............................................................................................7-25
Integrating Oracle Projects with Oracle Assets .............................................................................................7-27
Summary........................................................................................................................................................7-29
Asset Adjustments and Maintenance.............................................................................................................8-1
Asset Adjustments and Maintenance.............................................................................................................8-3
Objectives ......................................................................................................................................................8-4
Agenda...........................................................................................................................................................8-6
Asset Adjustments .........................................................................................................................................8-7
Quiz ...............................................................................................................................................................8-8
Asset Adjustment Overview ..........................................................................................................................8-9
Single Asset Reclassification.........................................................................................................................8-10
Mass Reclassification ....................................................................................................................................8-11
Quiz ...............................................................................................................................................................8-12
Inheriting Depreciation Rules........................................................................................................................8-13
Copying Category Descriptive Flexfield Information ..................................................................................8-15
Mass Transactions Process ............................................................................................................................8-16
Recording a Reclassification .........................................................................................................................8-17
Adjusting Units..............................................................................................................................................8-18
Adjusting Financial Information....................................................................................................................8-19
Choosing to Expense or Amortize Depreciation Adjustments ......................................................................8-20
Amortizing Adjustments Using a Retroactive Start Date ..............................................................................8-22
Using Mass Changes .....................................................................................................................................8-23
Single Asset Transfers ...................................................................................................................................8-24
Mass Asset Transfers.....................................................................................................................................8-26
Asset Revaluation ..........................................................................................................................................8-28
Quiz ...............................................................................................................................................................8-30
Scheduling Asset Maintenance......................................................................................................................8-31

iv
Performing Physical Inventory ......................................................................................................................8-32
Entering Physical Inventory ..........................................................................................................................8-34
Physical Inventory Comparison.....................................................................................................................8-35
Physical Inventory Reconciliation .................................................................................................................8-37
Integrating Web ADI with Physical Inventory ..............................................................................................8-38
Summary........................................................................................................................................................8-40
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
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

Using the Units-of-Production Method .........................................................................................................9-19
Quiz ...............................................................................................................................................................9-20
Units-of-Production Method Example...........................................................................................................9-21
Entering Production Information...................................................................................................................9-22
Units-of-Production Method Production Amount Restrictions .....................................................................9-24
Units-of-Production Method Restrictions......................................................................................................9-25
Units-of-Production Capacity Restrictions ....................................................................................................9-26
Prorate Conventions ......................................................................................................................................9-27
Run Depreciation Process..............................................................................................................................9-28
Quiz ...............................................................................................................................................................9-30
Depreciation Program Processes ...................................................................................................................9-31
Projecting Depreciation for an Asset ............................................................................................................9-32
Defining a Projection.....................................................................................................................................9-33
Quiz ...............................................................................................................................................................9-34
Depreciation Forecasts ..................................................................................................................................9-35
Using Depreciation Override.........................................................................................................................9-36
Useful Depreciation Reports..........................................................................................................................9-38
Summary........................................................................................................................................................9-40
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
Quiz ...............................................................................................................................................................10-10
Fully Retiring Assets .....................................................................................................................................10-11
Partially Retiring Assets ................................................................................................................................10-12
Mass Asset Retirements.................................................................................................................................10-14
Quiz ...............................................................................................................................................................10-16
External Retirements .....................................................................................................................................10-17
Reinstating Retired Assets.............................................................................................................................10-19
Calculate Gains and Losses Program.............................................................................................................10-20
Retirement Processing Flow ..........................................................................................................................10-21
Processing a Pending Retirement and Reinstatement ....................................................................................10-22
Calculating Depreciation for the Period Retired............................................................................................10-23
Recording Retirements and Reinstatements ..................................................................................................10-24

v
Recording Retirements ..................................................................................................................................10-25
Recording a Retirement on Multiple Accounts ............................................................................................10-27
Retirement Journal Entries Example .............................................................................................................10-28
Recording Prior Period Reinstatement Entries ..............................................................................................10-29
Retirement Reports ........................................................................................................................................10-30
Summary........................................................................................................................................................10-33
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
Journal Entries Created..................................................................................................................................11-14
Quiz ...............................................................................................................................................................11-16
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
Quiz ...............................................................................................................................................................11-27
Summary........................................................................................................................................................11-28
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
Quiz ...............................................................................................................................................................12-15
Viewing Subledger Accounting Transactions ...............................................................................................12-16
iAssets ...........................................................................................................................................................12-17
iAssets Setup Steps........................................................................................................................................12-19
Oracle Assets Reporting ................................................................................................................................12-21
Assets Reports Groupings..............................................................................................................................12-23
Variable Format Reports ...............................................................................................................................12-24
Assets Reports Using XML Publisher ...........................................................................................................12-25
Summary........................................................................................................................................................12-26
Tax Accounting ................................................................................................................................................13-1
Tax Accounting .............................................................................................................................................13-3
Objectives ......................................................................................................................................................13-4
Agenda...........................................................................................................................................................13-6
Creating a Tax Book......................................................................................................................................13-7
Asset Books Regions .....................................................................................................................................13-8
Prerequisites for Setting Up Tax Book Asset Categories ..............................................................................13-10
Quiz ...............................................................................................................................................................13-11

vi
Entering Information in Tax Books ...............................................................................................................13-12
Quiz ...............................................................................................................................................................13-14
Populating the Tax Book by Initial Mass Copy.............................................................................................13-15
Populating the Tax Book ...............................................................................................................................13-17
Populating the Tax Book by Periodic Mass Copy ........................................................................................13-18
Updating a Tax Book Manually ....................................................................................................................13-20
Quiz ...............................................................................................................................................................13-21
Tax Book Upload Interface ...........................................................................................................................13-22
Discussing Tax Rules ....................................................................................................................................13-24
Deferred Depreciation ...................................................................................................................................13-26
Calculating Deferred Depreciation ................................................................................................................13-27
Adjusting Accumulated Depreciation............................................................................................................13-28
Adjusting Depreciation Reserve for a Single Asset.......................................................................................13-29

Adjusting Depreciation Reserve for All Assets .............................................................................................13-31
Controlling Mass Depreciation Adjustment ..................................................................................................13-32
Calculating Mass Depreciation Adjustment ..................................................................................................13-33
Automatically Adding CIP Assets to Tax Books .........................................................................................13-34
General Tax Reports......................................................................................................................................13-36
Special Tax Reports.......................................................................................................................................13-37
Depreciation Adjustment Reports..................................................................................................................13-38

Summary........................................................................................................................................................13-39

vii
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.

ix
Related Publications
Oracle Publications
Title Part Number
Oracle Assets User Guide E13586-03
Oracle iAssets User Guide E13435-02
Additional Publications

• System release bulletins
• Installation and user’s guides
• Read-me files

• International Oracle User’s Group (IOUG) articles
• Oracle Magazine

x
Typographic Conventions
Typographic Conventions in Text
Convention Element Example
Bold italic Glossary term (if The algorithm inserts the new key.
there is a glossary)
Caps and Buttons, Click the Executable button.
lowercase check boxes, Select the Can’t Delete Card check box.
triggers, Assign a When-Validate-Item trigger to the ORD block.

windows Open the Master Schedule window.
Courier new, Code output, Code output: debug.set (‘I”, 300);
case sensitive directory names, Directory: bin (DOS), $FMHOME (UNIX)
(default is filenames, Filename: Locate the init.ora file.
lowercase) passwords, Password: User tiger as your password.
pathnames, Pathname: Open c:\my_docs\projects

URLs, URL: Go to http://www.oracle.com
user input,
User input: Enter 300
usernames
Username: Log on as scott
Initial cap Graphics labels Customer address (but Oracle Payables)
(unless the term is a
proper noun)
Italic Emphasized words Do not save changes to the database.
and phrases, For further information, see Oracle7 Server SQL Language
titles of books and Reference Manual.
courses, Enter user_id@us.oracle.com, where user_id is the
variables name of the user.
Quotation Interface elements Select “Include a reusable module component” and click Finish.
marks with long names
that have only This subject is covered in Unit II, Lesson 3, “Working with
initial caps; Objects.”
lesson and chapter
titles in cross-
references
Uppercase SQL column Use the SELECT command to view information stored in the
names, commands, LAST_NAME
functions, schemas, column of the EMP table.
table names
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]

xi
Typographic Conventions in Code
Convention Element Example
Caps and Oracle Forms When-Validate-Item
lowercase triggers
Lowercase Column names, SELECT last_name
table names FROM s_emp;
Passwords DROP USER scott

IDENTIFIED BY tiger;
PL/SQL objects OG_ACTIVATE_LAYER

(OG_GET_LAYER (‘prod_pie_layer’))
Lowercase Syntax variables CREATE ROLE role

italic
Uppercase SQL commands and SELECT userid
functions 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

xii
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.

xiii

xiv
CIP Asset Additions
Chapter 7
CIP Asset Additions

Chapter 7 - Page 1
CIP Asset Additions

Chapter 7 - Page 2
CIP Asset Additions

CIP Asset Additions

Chapter 7 - Page 3
Objectives

CIP Asset Additions

Chapter 7 - Page 4
Agenda

CIP Asset Additions

Chapter 7 - Page 5
Adding and Capitalizing a CIP Asset

Adding and Capitalizing a CIP Asset
A construction–in–process (CIP) asset is an asset you construct over a period of time. You
create and maintain your CIP assets as you spend money for raw materials and labor to
construct them. Since a CIP asset is not yet in use, it does not depreciate. When you finish
building the CIP asset, you can place it in service and begin depreciating it.
You can track CIP assets in Oracle Assets, or you can track detailed information about your
CIP assets in Oracle Projects. If you use Oracle Projects to track CIP assets, you do not need to
track them prior to capitalization in Oracle Assets.
CIP Asset Additions

Chapter 7 - Page 6
Acquire and Build CIP Assets

Acquire and Build CIP Assets
Create CIP assets using mass additions or manual additions. Oracle Assets identifies invoices
with distributions to CIP clearing accounts in Oracle Payables, and creates mass additions from
them. You can create new CIP assets from your mass additions, or add them to existing assets.
You can also add non–invoiced expenses, such as labor cost, to your CIP assets. You can
perform transfers or adjustments on your CIP assets if necessary.
• Initially, CIP assets have zero costs. They act as shells for the costs that make up the
assets.
• Adding source lines to the new CIP assets will increase the costs.
• Since CIP assets are not ready for use, they are non-depreciable assets.
• For costs that originate in Oracle Payables, you can send CIP costs to Oracle Projects,
and then send capitalized costs to Oracle Assets.
• Consider using the asset key flexfield to group CIP assets from the same project if you
are not using Oracle Projects.
• You cannot add production amounts to a CIP asset.
CIP Asset Additions

Chapter 7 - Page 7
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.
CIP Asset Additions

Chapter 7 - Page 8
- 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.
CIP Asset Additions

Chapter 7 - Page 9
Quiz

Answer: 1
CIP Asset Additions

Chapter 7 - Page 10
Modifying the Cost of CIP Assets

Modifying the Cost of CIP Assets
(N) Assets > Asset Workbench (B) Source Lines
You can modify and track the costs incurred as you build an asset by:
Adding Invoice Lines
• Add an invoice distribution line to an existing asset by using Mass Additions.
- Merge and split invoice lines before they are posted in Mass Additions.
Changing Invoice Lines
• You can manually change the cost of an invoice line from the Asset Workbench after the
CIP asset has been added.
- You can cost adjust or delete invoice lines.
- You can add non-invoiced costs.
Transferring Invoice Lines
• Transfer an invoice line or partial invoice cost between CIP assets, between capitalized
assets, or between CIP assets and capitalized assets to maintain accurate asset inventory.
CIP Asset Additions

Chapter 7 - Page 11
• You can transfer invoice lines between assets that were BOTH added in the current
period or BOTH added in any prior period. You cannot transfer lines between assets
added in the current period and assets added in any prior period.

CIP Asset Additions

Chapter 7 - Page 12
Recording a CIP Asset Addition

Recording a CIP Asset Addition
The slide shows the journal entries for the following scenario:
• You add a CIP asset with zero cost
• You add a $5,000 invoice line for Labor to the CIP asset
CIP Asset Additions

Chapter 7 - Page 13
Capitalizing a CIP Asset

Capitalizing a CIP Asset
(N) Assets > Capitalize CIP Assets
Capitalization
• You capitalize CIP assets when you are ready to place them in service. You can capitalize
or reverse capitalize a single asset or a group of assets.
• When you capitalize an asset, Oracle Assets changes the asset type from CIP to
Capitalized, changes the date placed in service to the date you enter, sets the cost to the
sum of all source lines for the asset, and re–defaults the depreciation rules from the asset
category.
• Oracle Assets creates an Addition transaction for an asset you added in a prior period or
changes the CIP Addition transaction to an Addition for an asset you added in the current
period.
CIP Asset Additions

Chapter 7 - Page 14
Quiz

Answer: 4
CIP Asset Additions

Chapter 7 - Page 15
Reversing a Capitalized Asset

Reversing a Capitalized Asset
(N) Assets > Capitalize CIP Assets (B) Reverse
Reverse Capitalization
• You can reverse a capitalization:
- Only in the period the asset was capitalized.
- If no transactions were performed on the asset.
- Before you close the period. Note: you can run depreciation and choose not to close
the period. If you do not close the period when running depreciation, you can
reverse an asset capitalization.
• When you reverse a capitalization, Oracle Assets changes the asset type from Capitalized
back to CIP and leaves the date placed in service unchanged.
Note: You can reverse capitalize an asset only in the period you capitalized it, and only if you
did not perform any transactions on it.
CIP Asset Additions

Chapter 7 - Page 16
Updating Asset Fields When Capitalizing CIP Assets

CIP Asset Additions

Chapter 7 - Page 17
Updating Transaction Types When Capitalizing CIP Assets

CIP Asset Additions

Chapter 7 - Page 18
Recording a Capitalization - Adding and Capitalizing in the Same
Period

Recording a Capitalization - Adding and Capitalizing in the Same Period
Oracle Assets creates journal entries to the asset cost and CIP clearing account for an asset
capitalized in the period you added it.
Scenario
• Add a CIP computer system in APR-2002.
• Add invoice lines for $10,000 to the computer system.
• Capitalize the system in APR-2002.
The journal entries that result are:
Create by Oracle Payables: DR CR
CIP Clearing 10,000
Accounts Payable 10,000
Created by Oracle Assets:
Asset Cost 10,000
CIP Clearing 10,000
CIP Asset Additions

Chapter 7 - Page 19
Recording a Capitalization - Adding and Capitalizing in Different
Periods

Recording a Capitalization - Adding and Capitalizing in Different Periods
Oracle Assets creates journal entries to the Asset Cost and CIP Cost account for an asset
capitalized after the period you added it due to the clearing account being already cleared.
Scenario:
• Add a CIP computer system in APR-2002.
• Add invoice lines for $10,000 in APR-2002 to the computer system.
• Capitalize the system in JUN-2002.
For APR-2002:
Create by Oracle Payables: DR CR
CIP Clearing 10,000
Accounts Payable 10,000
CIP Cost 10,000
CIP Clearing 10,000
CIP Asset Additions

Chapter 7 - Page 20
For JUN-2002:
Asset Cost 10,000
CIP Cost 10,000

CIP Asset Additions

Chapter 7 - Page 21
CIP Assets and Oracle Projects

CIP Assets and Oracle Projects
You can collect CIP costs for capital assets you are building in Oracle Projects. When you
finish building your CIP asset, you can capitalize the associated costs as asset lines in Oracle
Projects and send them to Oracle Assets as mass addition lines. When you run the Interface
Assets process, Oracle Projects sends valid capital asset lines to the Mass Additions interface
table in Oracle Assets. You can then review these mass addition lines in Oracle Assets and then
create assets from them by running the Post Mass Additions program.
You define and build capital assets in Oracle Projects using information specified in the project
definition. You can determine which costs will be capitalized to the project and which are
expensed. You define and assign the grouping method and levels for CIP costs to summarize
them for capitalization. You can review and adjust the summarized CIP costs if necessary. You
also can adjust capital project costs before and after capitalization.
The following material is intended as a high level review of the process.
CIP Asset Additions

Chapter 7 - Page 22
Tracking Capital Projects in Oracle Projects

Tracking CIP Assets in Oracle Projects
• Collect CIP costs for a project asset in Oracle Projects by assigning the asset to a project
or tasks.
• Define key asset information such as date placed in service, location, employee
assignment, and corporate asset book for each project asset in Oracle Projects.
• Differentiate between capital and expense transactions.
• Capitalize assets prior to completion of the project.
• Define the grouping methods by which CIP costs are summarized for capitalization.
• Review summarized CIP costs, and make adjustments.
• Allocate costs collected under common tasks to multiple project assets.
• Send capitalized asset lines to the FA_MASS_ADDITIONS table with a queue of POST
for the parent line and MERGED for all supporting lines.
• Oracle Assets will then create assets when the Post Mass Additions program is run.
• Adjust asset costs after capitalization when additional costs are incurred.
• Drill down from Oracle Assets to Oracle Projects detail transactions.
CIP Asset Additions

Chapter 7 - Page 23
Capital Projects Flow Integration

Capital Projects Flow Integration
Oracle Purchasing
• When you create a purchase order for a capital project in Oracle Purchasing, you enter a
project, task number, and expenditure type for each project-related distribution line.
Oracle Payables
• In Oracle Payables, you match the purchase order to an invoice and collect additional
invoiced costs against the capital project even after the asset is capitalized. These costs
are sent to Oracle Projects and then to Oracle Assets as cost adjustments.
• You cannot send capital project-related distribution lines to Oracle Assets directly from
Oracle Payables. You can, however, send non-CIP distribution lines to Oracle Assets by
using mass additions.
• Note: Any CIP distribution lines sent directly from Oracle Payables to Oracle Assets will
not be tracked in Oracle Projects.
CIP Asset Additions

Chapter 7 - Page 24
Creating Mass Additions from Oracle Projects

Creating Mass Additions from Oracle Projects
If you use Oracle Projects to build CIP assets, you do not need to create CIP assets in Oracle
Assets. For costs that originate in Oracle Payables, you should send CIP costs to Oracle
Projects, and capitalized costs to Oracle Assets.
Build Capital Assets in Oracle Projects
You define and build capital assets in Oracle Projects using information specified in the project
work breakdown structure (WBS). You define and assign the grouping method and levels for
CIP costs to summarize them for capitalization. You can review and adjust the summarized
CIP costs if necessary. You also can adjust capital project costs before and after capitalization.
When your CIP asset is built and ready to be placed in service, you can capitalize and send the
associated costs as asset lines to Oracle Assets. Oracle Assets places these imported mass
addition lines in a holding area, where the capitalized lines can be posted which converts them
into assets. Now you can begin using and depreciating your assets. You can review detail
project transactions associated with the asset lines in both Oracle Projects and Oracle Assets.
Conditions for Project Information to Be Imported
For Oracle Projects to send asset lines to Oracle Assets, the asset line must meet these specific
conditions:
CIP Asset Additions

Chapter 7 - Page 25
• The actual date in service must fall in the current or a prior Oracle Assets accounting
period
• The CIP costs for summarized asset lines must be interfaced to Oracle General Ledger
• The CIP costs for supplier invoice adjustments must be interfaced to Oracle Payables
• A CIP asset must be associated with the asset line

CIP Asset Additions

Chapter 7 - Page 26
Integrating Oracle Projects with Oracle Assets

Integrating Oracle Projects with Oracle Assets
Interface Assets
• You run the Interface Assets process in Oracle Projects to send asset lines to Oracle
Assets. This process creates a mass addition line for each asset line in Oracle Projects. It
then merges all mass additions for one asset into a single parent mass addition line. All of
the mass additions appear in the Prepare Mass Additions window. The merged children
have a status of MERGED.
• Oracle Assets places the parent mass addition in the POST queue if you completely
defined the asset in Oracle Projects, and it is ready for posting. Oracle Assets places the
parent mass addition in the NEW queue if the asset definition is not complete; you must
enter additional information for the mass addition in the Prepare Mass Additions window,
and then update the queue status to POST. You do not need to change the queue status for
lines with a status of MERGED.
Query Information
• Oracle Assets places the parent mass addition in the POST queue if you completely
defined the asset in Oracle Projects, and it is ready for posting.
CIP Asset Additions

Chapter 7 - Page 27
• Oracle Assets places the parent mass addition in the NEW queue if the asset definition is
not complete; you must enter additional information for the mass addition in the Prepare
Mass Additions window, and then update the queue status to POST.
• You do not need to change the queue status for lines with a status of MERGED.

CIP Asset Additions

Chapter 7 - Page 28
Summary

CIP Asset Additions

Chapter 7 - Page 29
CIP Asset Additions

Chapter 7 - Page 30
Asset Adjustments and
Maintenance
Chapter 8
Asset Adjustments and Maintenance

Chapter 8 - Page 1

Chapter 8 - Page 2


Chapter 8 - Page 3
Objectives


Chapter 8 - Page 4
Objectives


Chapter 8 - Page 5
Agenda


Chapter 8 - Page 6
Asset Adjustments

Asset Adjustments
You adjust an asset by reclassifying, changing the number of units, adjusting the financial
information, or performing a mass change. These adjustments are automatically reflected in the
reporting currencies asset books. All cost adjustments use the daily exchange rate based on the
transaction date entered during adjustment. Oracle Assets calculates new weighted average rate
for the asset.
You can also submit transactions directly thru PL/SQL using convenient Transaction API's
(Application Program Interface) . Instead of navigating thru the regular application, you can
bypass the forms to directly submit various financial transactions against your assets.

Chapter 8 - Page 7
Quiz

Answer: 4

Chapter 8 - Page 8
Asset Adjustment Overview

Asset Adjustment Overview
Reclassifying an Asset
You assign an asset to a new category in the Asset Details window to update information,
correct data entry errors, and consolidate categories.
Adjusting Asset Units
You change the number of units for an asset in the Asset Details window which will then take
you to the Assignments widow to update the distribution and assignment information.
Adjusting Financial Information
You adjust the financial information in the Books window to correct an error, update the
financial and depreciation data, and expense or amortize the adjustment following the period in
which you added the asset.
Transferring an Asset
You transfer an asset when there are changes in asset assignments (Employee, Depreciation
Expense Account, and Location) to help you maintain accurate asset inventory. You use the
Assignments window in the Asset Workbench to transfer assets from one assignment to
another within a corporate book.

Chapter 8 - Page 9
Single Asset Reclassification

Single Asset Reclassification
(N) Assets > Asset Workbench (B) Open
Reclassify assets to update information, correct data entry errors, or when consolidating
categories.
• When you reclassify an asset in a period after the period you entered it, Oracle Assets
creates journal entries to transfer the cost and accumulated depreciation to the asset cost
and accumulated depreciation accounts of the new asset category. This occurs when you
create journal entries for your general ledger.
• Reclassification does not redefault the depreciation rules to the default rules from the new
category. Manually change the depreciation rules in the Books or Mass Change windows
if necessary.

Chapter 8 - Page 10
Mass Reclassification

Mass Reclassification
(N) Mass Transactions > Reclassifications
You can reclassify a group of assets using the Mass Reclassifications window. In addition to
reclassifying assets to a new category, when you run the Mass Reclassification process, you
have the option to have assets inherit the depreciation rules of the new category. If you choose
to have the reclassified assets inherit depreciation rules, you can also choose to either amortize
or expense the resulting depreciation adjustments.
Restrictions
• Reclassification is done at the asset level. If an asset cannot be reclassified in one book,
the asset will not be reclassified in any of the books to which it belongs.
• You cannot reclassify an asset in a prior period.

Chapter 8 - Page 11
Quiz

Answer: 1

Chapter 8 - Page 12
Inheriting Depreciation Rules

Inheriting Depreciation Rules
• Inheriting depreciation rules is performed at the book level, meaning that if assets do not
inherit depreciation rules in one book to which the assets belong, it will not prevent assets
from successfully inheriting depreciation rules in other books to which they belong.
• When you choose to have assets inherit depreciation rules of the new category, you can
also choose to amortize the resulting adjustments by checking the Amortize Adjustments
check box on the Mass Reclassifications window. If you do not check the Amortize
Adjustments check box, adjustments will be expensed.
- Note that if you choose to expense adjustments on the Mass Reclassifications
window (the Amortize Adjustments check box is not checked), reclassification will
fail for any assets for which you have previously amortized an adjustment.
• Depreciation rules are inherited in both the corporate and tax books. The rules set up for
the category in the corporate book are inherited in the corporate book and the rules set up
for the category in the tax book are inherited in the tax book.
- Depreciation rules are not copied from the corporate book to the tax book.
- You do not need to check the Allow Mass Copy – Copy Adjustments check box in
the Accounting Rules tabbed region of the Books Controls window.

Chapter 8 - Page 13
• If the Depreciate check box in the Books window is not checked for an asset before the
asset is reclassified, that asset will inherit the depreciation rules of the new category, but
the Depreciate check box will remain unchecked.
• If the Allow Mass Changes check box in the Accounting Rules region of the Book
Controls window for the asset book is not checked, reclassified assets will not inherit
depreciation rules, even though you checked the Inherit Depreciation Rules of New
Category check box on the Mass Reclassifications window.


Chapter 8 - Page 14
Copying Category Descriptive Flexfield Information

Copying Category Descriptive Flexfield Information
• You can choose to copy descriptive flexfield information to the new category by
checking the Copy Category Descriptive Flexfield to New Category check box on the
Mass Reclassifications window.
• If a segment in the old category and a corresponding segment in the new category have
different formats (for example, segment 1 in the old category is alphanumeric and
segment 1 in the new category is in date format), the information will be copied, but you
will need to correct the descriptive information in that segment.

Chapter 8 - Page 15
Mass Transactions Process

Mass Transactions Process
Using the Processing Status Field to Control Mass Transactions
• Use the processing Status field to view the current status of the Mass Transactions and
determine what action to perform next.
• Click Preview, Run, or Review to specify what Oracle Assets does next. Note: Mass
Retirements transactions do not use this same process.
• Relevant reports include the applicable mass transaction preview reports and mass
transaction review reports.

Chapter 8 - Page 16
Recording a Reclassification


Chapter 8 - Page 17
Adjusting Units

Adjusting Units
(N) Assets > Asset Workbench (B) Open
Adjusting Asset Units
• You change the number of units for the asset in the Asset Details window.
• You update assignment information when you change the number of units.
• You are not retiring these units; you are adjusting the number of units to reflect the
correct amount.
• When you save your work, Oracle Assets navigates to the Assignments window so you
can update distribution information.
Assigning Units
• You update the distribution lines for the asset to reflect the new units.
• The Units to Assign field displays the number of units to be distributed.
• The Units to Assign field must be zero before you save your work.
• If all units remain in the original cost center, Oracle Assets does not create any journal
entries.

Chapter 8 - Page 18

(N) Assets > Asset Workbench (B) Books
Correct an error or update financial and depreciation information for a single asset or a group
of assets. You can also override depreciation information for an asset while adding it using the
Detail Additions process.
• Before running depreciation (in the period in which you added the asset), you can change
any field.
• After you have run depreciation (in any period after the one in which you added the
asset), you can change asset cost, salvage value, prorate convention, depreciation method,
life, capacity and unit of measure (in the corporate book), rate, bonus rule, depreciation
ceiling, and revaluation ceiling.
• If the asset is fully reserved, you can adjust the same fields as for an asset for which you
have run depreciation. If the asset is fully retired, you cannot change any fields.
• You can choose whether to amortize or expense the adjustment.
Note: If you run depreciation and do not close the period, choose to Rollback Depreciation,
and then you will again be able to change any field.

Chapter 8 - Page 19
Choosing to Expense or Amortize Depreciation Adjustments

Choosing to Expense or Amortize Depreciation Adjustments
You must choose whether to expense or amortize the adjustment following the period in which
you added the asset. You cannot expense adjustments after amortizing an adjustment for
that asset. You must amortize all future adjustments.
Amortizing the adjustment spreads the amount over the remaining life of the asset. Not
amortizing causes Oracle Assets to expense the amount in the current period.
Note: In order to amortize adjustments, you must enable the Allow Amortized Changes
checkbox in the Accounting Rules region of the Book Controls form for the asset book you are
working in.
Adjustments to Expense or Amortize
• Recoverable cost
• Depreciation methods
• Asset life
• Asset capacity

Chapter 8 - Page 20
Changing financial information does not adjust depreciation in the period in which you add an
asset, because no depreciation has been taken. In later periods, choose to amortize the
adjustment to depreciation.
Method Adjustments
For amortized method changes, Oracle Assets does not recalculate accumulated depreciation,
but uses the new information for the remaining time the asset is in service.
• Oracle Assets depreciates the recoverable net book value over the remaining life of the
asset as determined by the calculation basis.
• If your depreciation method multiplies the flat–rate by the cost, Oracle Assets begins
using the new information to calculate depreciation.

• In the Depreciation Methods form, use the checkbox Strict Calculation to determine what
Net Book Value to use after an adjustment. If the checkbox is enabled, the system uses
the NBV as of the beginning of the fiscal year, otherwise, it will use the NBV as of the
current period. The Strict Calculation option only applies to flat rate NBV methods.

Chapter 8 - Page 21
Amortizing Adjustments Using a Retroactive Start Date

Amortizing Adjustments Using a Retroactive Start Date
(N) Assets > Asset Workbench (B) Books
To amortize adjustments using a retroactive start date, you change the default amortization
start date (usually the system date) to a date in a previous period. Any adjustment not taken
since the amortization start date is taken in the current period.
Use the Amortization Start Date field to enter the retroactive date.
Scenario Depicted Above
Asset is added in OCT-01 at a cost of $24,000 and uses the STL method over 48 periods. In
APR-02, a cost adjustment is made for $7,200 pertaining to an invoice dated January 1, 2002.
The Oracle Assets user wants to amortize the depreciation adjustment retroactive to JAN-02.
Prior Period Amortized Adjustments
If you back date an amortized adjustment, Oracle Assets automatically calculates depreciation
from the retroactive amortization start date, and adds the retroactive depreciation to the current
period. You can perform multiple prior period amortized adjustments to an asset.

Chapter 8 - Page 22
Using Mass Changes

Using Mass Changes
(N) Mass Transactions > Changes
Sometimes a change applies to more than one asset. This can be a change in the prorate
convention, the depreciation method, or the life, rates, capacity, and unit of measure for the
method. For example, tax laws for a group of assets may change. If you enable Mass Change
for the specified book, you can make expensed adjustments to financial information for a group
of assets.

Chapter 8 - Page 23
Single Asset Transfers

Single Asset Transfers
(N) Assets > Asset Workbench (B) Assignments
You can transfer assets between employees, depreciation expense accounts, and locations.
When transferring assets, you should consider the following:
• You can change the transfer date to a date in a prior period for a particular transfer, but
the transfer must occur within the current fiscal year
• You can change the transfer date of an asset to a prior period only once per asset.
• You cannot transfer an asset to a future period.
• You cannot transfer an asset after its normal life is completed.
• In the Unit Change field of the Assignments window, enter a negative number for the
assignment line from which you want to transfer the asset. Enter a positive number if you
want to add units to existing assignments or create new assignments. Only one negative
line is allowed per transaction.
• If an asset is transferred from one Depreciation Expense Account to another, a journal
entry may be created.
Scenario:

Chapter 8 - Page 24
Transfer an asset between companies ABC Marketing and XYZ Advertising in Year 3, Quarter
4. Cost is $4,000, depreciation method is straight-line, and life is four years.
Oracle Assets creates the following journal entries for the transfer and for the current period
depreciation expense:
ABC Marketing Dr Cr
Accumulated Depreciation 2,750
Intercompany Receivables 1,250
Asset Cost 4,000

XYZ Advertising
Asset Cost 4,000
Depreciation Expense 250
Intercompany Payables 1,250

Chapter 8 - Page 25
Mass Asset Transfers

Mass Asset Transfers
(N) Mass Transactions > Transfers
Oracle Assets allows you to transfer multiple assets in one transaction. You use the Transfer
From and Transfer To fields to identify the assets to be transferred.
You can transfer between expense accounts, locations, and employees and employee numbers.
By selecting any combination of these criteria, you can further restrict the range of assets to be
transferred.
Transferring Between Expense Accounts
For the From account, you can enter a single expense account or a range of expense accounts.
When entering a single account number, you need to enter the account number in both the low
and high fields for the From account. You can enter the entire account combination or only a
partial combination.
For the To account, you can enter the entire account combination or only a partial combination.
Note that when specifying partial combinations for both From and To accounts, you do not
need to specify the same segment in both. For example, you can specify the first segment for
the From account, and the second segment for the To account.
For example:

Chapter 8 - Page 26
Transfer From Transfer To
Expense Accounts: 001 – 100 Expense Account: 100
Location: New York Location: Dallas
Employee Name: Robert Smith Employee Name: Janet Jones
The above transfer affects all assets that are assigned to Robert Smith in New York with an
expense account in the range of 001 through 100. An asset must satisfy all three criteria to be
transferred to Janet Jones in Dallas with an expense account of 100.
To transfer multiple assets between employees, expense accounts, and locations:
(N) Mass Transactions > Transfers

1. Select the corporate depreciation Book for the assets you want to transfer.
2. Optionally select a Category to use as a selection criterion for the mass transfer.
3. Optionally update the Transfer Date. You can change the transfer date to a a prior period
date. You cannot change the date to a future period date.
4. Enter one or more selection criteria for the mass transfer in the Transfer From and

Transfer To fields.
5. Select Preview to run the Mass Transfers Preview report. Use this report to preview the
expected effects of the Mass Transfer before you perform it. If necessary, update the
definition and run the preview report again.
6. To perform the Mass Transfer, query the mass transfer and select Run. Oracle Assets
submits a concurrent process to perform the transfer.
Note: 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.
7. Review the log file after the request completes.
Prior Period Transfers
If you back date an asset transfer, Oracle Assets automatically reallocates depreciation expense
by reversing some of the depreciation charged to the "from" account, and redistributing it
proportionally to the "to" accounts. Retroactive transfers do not impact the total depreciation.
You cannot backdate a transfer to a prior fiscal year.

Chapter 8 - Page 27
Asset Revaluation

Asset Revaluation
You can revalue all categories in a book, all assets in a category, or individual assets. You can
revalue all assets using the Mass Revaluation process. The Mass Revaluation process does not
use price indexes to revalue assets.
The Mass Revaluation process includes the following steps:
• Create Mass Revaluation Definition
• Preview Revaluation
• Run Revaluation
• Optionally Review Revaluation
To revalue all assets in a category:
(N) Mass Transactions > Revaluations
1. Open the Mass Revaluation window.
2. Enter the Book for which you want to revalue assets.
3. Enter a Description of the revaluation definition.
4. Specify revaluation rules.

Chapter 8 - Page 28
5. Enter the category you want to revalue.
6. Enter the revaluation percentage rate to revalue your assets. Enter either a positive or
negative number.
7. Override revaluation rules if necessary.
8. Select Preview. Oracle Assets runs the Mass Revaluation Preview Report so you can
preview what effect this revaluation will have when you perform it. If necessary, update
the definition and run the preview report again.
9. Find the revaluation definition using the Mass Transaction Number.
10. (B) Run

11. Review the log file after the request completes.
Note: You cannot run Mass Revaluation more than once per period. Once you run Mass
Revaluation, values are changed in the Oracle Assets system. If you re–run Mass Revaluation
in the same period, the Mass Revaluation calculation will be based on the previous Mass
Revaluation calculation. You can run the Mass Revaluation Preview report as many times as
you like, without affecting actual values in the system.

Oracle Assets runs the Mass Revaluation Preview Report so you can preview what effect this
revaluation will have when you perform it. If necessary, update the definition and run the
preview report again.
To revalue an individual asset:
Enter the asset number you want to revalue instead of a category. If you revalue a single asset
in a category which is also being revalued, the rate you enter for the asset overrides the
category rate.

Chapter 8 - Page 29
Quiz

Answer: 4

Chapter 8 - Page 30
Scheduling Asset Maintenance


Chapter 8 - Page 31
Performing Physical Inventory

Performing Physical Inventory
Physical inventory is the process of ensuring that the assets a company has listed in its
production system match the assets it actually has in inventory. The Physical Inventory feature
in Oracle Assets assists you in comparing and reconciling your physical inventory data. To use
the Physical Inventory feature, you must first take physical inventory of your assets. You need
to include the following information about your assets:
• A unique identifier, which can be either the asset number, tag number, or serial number
• The location
• The number of units
You can include other information that may make it easier for you to keep track of the assets
you are comparing, such as a description of each asset, but only the information listed above is
required.
You load your physical inventory data into Oracle Assets using the Physical Inventory Entries
window, or you can use the Physical Inventory Integrator in the Oracle Web Applications
Desktop Integrator (Web ADI), which allows you to import data from an Excel spreadsheet.
You can also use SQL*Loader to import physical inventory data from a non–Oracle file
system.

Chapter 8 - Page 32
When you finish entering physical inventory data into Oracle Assets, you run the Physical
Inventory comparison program, which highlights the differences between the asset information
in Oracle Assets and the actual assets in physical inventory. This program compares your
physical inventory data with your Oracle Assets data for all assets that have the In Physical
Inventory check box checked. You can view the results of the comparison online in the
Physical Inventory Comparison window, or by running the Physical Inventory Comparison
Report. The comparison results highlight differences between the assets in your production
system and those in physical inventory. You can reconcile the differences between physical
inventory and the information in your database by updating each asset manually, or you can
use the mass additions process to add assets that are missing from the production system.
When you have completed your physical inventory, you can run the Missing Assets Report,

which lists all assets that have not been accounted for in the physical inventory process.

Chapter 8 - Page 33
Entering Physical Inventory

Entering Physical Inventory
(N) Physical Inventory > Enter (B) Open
Enter data using the Physical Inventory Entries window
You can enter data for each asset directly into Oracle Assets using the Physical Inventory
Entries window. Keep in mind that you can only enter data for one asset at a time when using
this method.
Import data from an Excel spreadsheet using Web ADI
You can use Web ADI to load your physical inventory data into an Excel spreadsheet and
import the data into Oracle Assets.
Import data from a non–Oracle system using SQL*Loader
You can use SQL*Loader to import physical inventory data by completing the following steps:
• Define your interim table in the Oracle database.
• Load your interim table using SQL*Loader.
• Compare record counts and check the SQL*Loader files.
• Spot check the interim table.

Chapter 8 - Page 34
Physical Inventory Comparison

Physical Inventory Comparison
(N) Physical Inventory > Comparison > Run Comparison (B) Run
This program matches each asset in the physical inventory data to an asset in the production
system. It only compares entries with NEW status. It searches for matching unique identifiers,
such as asset number, tag number, or serial number.
• The program first determines whether the inventory data includes an asset number, and
then matches it to an asset number in the production system. Then it determines whether
the location and number of units match. If these do not match, the program updates the
asset status to DIFFERENCE.
• If no asset number has been recorded, the program next determines if the data includes a
tag or a serial number, and searches its match in the production system. In all cases, if the
program does not find a matching identifier in the Oracle Assets system, it terminates the
comparison for that asset and compares the next asset.
• If none of the unique identifiers exist for that asset, the program matches the asset using
other criteria, such as description and asset key. If these criteria are not unique, the
program may not uniquely identify an asset.

Chapter 8 - Page 35
• After completing the comparison, the program updates the FA_INV_INTERFACE table,
indicating the assets in the inventory that are irreconcilable with those in Oracle Assets
and the adjustment type to be made.
• If no difference exists, and the asset meets the other requirements for inclusion in the
inventory process, the asset automatically has a RECONCILED status. Otherwise, a
status code is assigned to the asset.
• You can use the Physical Inventory Comparison window or run the Physical Inventory
Comparison Report through the ReQuest Center to view the comparison.


Chapter 8 - Page 36
Physical Inventory Reconciliation

Physical Inventory Reconciliation
After you finish running physical inventory and generating reports, you need to reconcile your
physical inventory data with your Oracle Assets data.
To reconcile your physical inventory with stored asset information:
• Analyze your reports to determine the assets that need to be reconciled.
• Obtain proper approval to change assets that need to be reconciled.
• Change the asset information by using the Asset Workbench or the Mass Change
window.

Chapter 8 - Page 37
Integrating Web ADI with Physical Inventory

Integrating Web ADI with Physical Inventory
Oracle Assets integrates with Web ADI to enable you to create physical inventory through the
Physical Inventory Integrator. The Physical Inventory Integrator provides a spreadsheet-based
interface to simplify the physical inventory process. Use the Physical Inventory Integrator to
automatically build personalized inventory spreadsheets based on the information required by
your organization's specific implementation of Oracle Assets. You can enter your inventory
data manually, use the list of values, and take advantage of Excel's data entry shortcuts. You
can also map files created from scanned barcode data into the inventory worksheet. When you
are satisfied with the worksheet, the Physical Inventory Integrator automatically uploads the
data into Oracle Assets.
With the Physical Inventory Integrator, you can:
• Customize physical inventory worksheets.
• Use the powerful spreadsheet features of Excel.
• Generate comparison reports to determine if assets are missing or in the wrong location
In the Integrator page, you need to select an inventory. In the Layout page, you need to select
one of the following layouts:
• Physical Inventory – Default

Chapter 8 - Page 38
• Physical Inventory – Line Entry
• Physical Inventory – Single Category
• Physical Inventory – Single Location
• Physical Inventory – Tag number entry


Chapter 8 - Page 39
Summary


Chapter 8 - Page 40
Depreciation
Chapter 9
Depreciation
Chapter 9 - Page 1
Depreciation
Chapter 9 - Page 2
Depreciation

Depreciation
Chapter 9 - Page 3
Objectives

Depreciation
Chapter 9 - Page 4
Agenda

Depreciation
Chapter 9 - Page 5
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.x 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.
Depreciation
Chapter 9 - Page 6
• 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.x Asset Management Advanced learning
path.

Depreciation
Chapter 9 - Page 7
Depreciation Setup Areas

Depreciation Setup Areas
Asset Books
Setup discussed in detail in module Asset Books of the Release 12.x Oracle Asset Management
Fundamentals path.
Calendars
Setup discussed in detail in module Asset Controls Setup of the Release 12.x 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.x Oracle Asset Management
Fundamentals.
Depreciation
Chapter 9 - Page 8
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.
Depreciation
Chapter 9 - Page 9
• 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.
Depreciation
Chapter 9 - Page 10

(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.
Depreciation
Chapter 9 - Page 11
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.
Depreciation
Chapter 9 - Page 12
Life-Based Method Terms

Depreciation
Chapter 9 - Page 13
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
Depreciation
Chapter 9 - Page 14
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 do 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.
Depreciation
Chapter 9 - Page 15
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.

Depreciation
Chapter 9 - Page 16
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
Depreciation
Chapter 9 - Page 17
MAY-YY Depreciation = 640/9 = $71.11
*Net book value = Recoverable cost – Accumulated depreciation

Depreciation
Chapter 9 - Page 18
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.
Depreciation
Chapter 9 - Page 19
Quiz

Answer: 1
Depreciation
Chapter 9 - Page 20
Units-of-Production Method Example

Depreciation
Chapter 9 - Page 21
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 can 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.
Depreciation
Chapter 9 - Page 22
• 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.

Depreciation
Chapter 9 - Page 23
Units-of-Production Method Production Amount Restrictions

Depreciation
Chapter 9 - Page 24
Units-of-Production Method Restrictions

Depreciation
Chapter 9 - Page 25
Units-of-Production Capacity Restrictions

Depreciation
Chapter 9 - Page 26
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.
Depreciation
Chapter 9 - Page 27
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.
Depreciation
Chapter 9 - Page 28
• Once depreciation has been processed for an asset in the current open period, you can
perform any transactions on those assets and the depreciation for those assets only with
transactions will be automatically rolled back.
• 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.
Depreciation
Chapter 9 - Page 29
Quiz

Answer: 1
Depreciation
Chapter 9 - Page 30
Depreciation Program Processes

Depreciation Program Processes
Generate Accounts
• Builds accounting combinations using Oracle Workflow. Discussed in more detail in
Release 12.x 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.x 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.
Depreciation
Chapter 9 - Page 31
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.
Depreciation
Chapter 9 - Page 32
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.
Depreciation
Chapter 9 - Page 33
Quiz

Answer: 2
Depreciation
Chapter 9 - Page 34
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.
Depreciation
Chapter 9 - Page 35
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.
Depreciation
Chapter 9 - Page 36
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.
Depreciation
Chapter 9 - Page 37
Useful Depreciation Reports

Depreciation
Chapter 9 - Page 38
Useful Depreciation Reports

Depreciation
Chapter 9 - Page 39
Summary

Depreciation
Chapter 9 - Page 40
Asset Retirements
Chapter 10
Asset Retirements
Chapter 10 - Page 1
Asset Retirements
Chapter 10 - Page 2
Asset Retirements

Asset Retirements
Chapter 10 - Page 3
Objectives

Asset Retirements
Chapter 10 - Page 4
Agenda

Asset Retirements
Chapter 10 - Page 5
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.
Asset Retirements
Chapter 10 - Page 6
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.
Asset Retirements
Chapter 10 - Page 7
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.
Asset Retirements
Chapter 10 - Page 8
• You can reinstate only the most recent partial retirement if you have performed several
partial retirements on the asset.

Asset Retirements
Chapter 10 - Page 9
Quiz

Answer: 1
Asset Retirements
Chapter 10 - Page 10
Fully Retiring Assets

Fully Retiring Assets
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.
Asset Retirements
Partially Retiring Assets

Partially Retiring Assets
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.
Asset Retirements
• 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.
Asset Retirements
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
Asset Retirements
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

Asset Retirements
Quiz

Answer: 3
Asset Retirements
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.
Asset Retirements
- 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.

Asset Retirements
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
Asset Retirements
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.
Asset Retirements
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.
Asset Retirements
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.
Asset Retirements
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.
Asset Retirements
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
Asset Retirements
Recording Retirements

Recording Retirements
Full Retirement with Multiple Retirement Accounts Dr Cr
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
Proceeds of Sale Clearing 2,000
Asset Cost 4,000
Cost of Removal Clearing 500
Asset Retirements
*Gain or Loss 250
* Note the different components of the gain or loss amount.

Asset Retirements
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.
Asset Retirements
Retirement Journal Entries Example

Retirement Journal Entries Example
Journal Entries Created by Oracle Assets Dr Cr
Depreciation Expense 250
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.
Asset Retirements
Recording Prior Period Reinstatement Entries

Recording Prior Period Reinstatement Entries
Period Asset Cost Accum Derp YTD Depr Depr Expense
Year 1- Q1 4,000 250 250 250
Year 1- Q2 4,000 500 500 250
Year 1- Q3 4,000 750 750 250
Year 1- Q4 4,000 1,000 1,000 250
Year 2 - Q1 0 0 250 250

Year 2 - Q2 0 0 0 0
Year 2 - Q3 4,000 1,750 750 0
Year 2 - Q4 4,000 2,000 1,000 250
Asset Retirements
Retirement Reports

Asset Retirements
Retirement Reports

Asset Retirements
Retirement Reports

Asset Retirements
Summary

Asset Retirements
Asset Retirements
Asset Accounting
Chapter 11
Asset Accounting
Chapter 11 - Page 1
Asset Accounting
Chapter 11 - Page 2
Asset Accounting

Asset Accounting
Chapter 11 - Page 3
Objectives

Asset Accounting
Chapter 11 - Page 4
Agenda

Asset Accounting
Chapter 11 - Page 5
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:
•Accounting Calendar
•Functional Currency
•Account Structure
• Accounting Convention
If the ledger has not been defined during Oracle General Ledger setup, complete as follows:
Asset Accounting
Chapter 11 - Page 6
• 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.
• Assign the ledger to a responsibility.
You can use Oracle Assets with multiple ledgers within a single installation.

Define Additional Journal Entry Sources
(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
(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.
Asset Accounting
Chapter 11 - Page 7
Assets Journal Entries Flow

Assets Journal Entries Flow
(N) Create Accounting
Oracle Assets creates journal entries for depreciation expense, asset cost, and other accounts.
The Create Accounting – Assets concurrent program creates journal entries for transaction
events in Oracle Assets. The journal entries can be transferred to and posted in General Ledger.
If you choose not to transfer the journal entries to General Ledger at this time, you can run the
Transfer Journal Entries to GL – Assets concurrent program to do this 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 to the
GL_JE_BATCHES, GL_JE_HEADERS, and GL_JE_LINES tables via Subledger
Accounting (SLA).
Asset Accounting
Chapter 11 - Page 8
• 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 12.1 Asset Management Fundamentals lesson Asset Books for more detailed
information on Asset Books setup requirements.

Asset Accounting
Chapter 11 - Page 9
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.
Note: If you upgrade from Release 11i to Release 12.1, the FA: Use Workflow Account
Generator profile option will be set to Yes.
Asset Accounting
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.
Asset Accounting
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.

Asset Accounting
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.
Asset Accounting
Journal Entries Created

Journal Entries Created
The Create Accounting process creates journal entries for the appropriate general ledger
accounts. 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
Asset Accounting
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.

Asset Accounting
Quiz

Answer: 1
Asset Accounting
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.
Asset Accounting
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.
Asset Accounting
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.
Asset Accounting
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
• 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
Asset Accounting
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.
Asset Accounting
Reconciling a Reserve Account

Reconciling a Reserve Account
Reconcile the following reports to the columns in the Reserve Detail Report:
Match the following columns >
Asset Accounting
Report Name and Column Name Reserve Detail Report Column
Asset Additions Report Additions column
- Accumulated depreciation column
Reserve Adjustments Report Adjustments column
- Reserve adjustments column
Asset Retirements Report Retirements column
- Difference between Cost retired and Net book value
retired column

Asset Reclassification Reconciliation Report Reclasses column
Asset Reconciliation Reserve Ledger Report Depreciation column
- Depreciation amount column
Asset Transfers Report Transfers column

Asset Accounting
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.
Asset Accounting
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 transferred
to the FA_MASS_ADDITIONS interface table through Standard Report Submission
(SRS).
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
Asset Accounting
Posting Report. Its current cost column should match with the cost column on the Mass
Additions Posting Report.
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.

Asset Accounting
Quiz

Answer: 4
Asset Accounting
Summary

Asset Accounting
Asset Inquiry & Reporting
Chapter 12

Chapter 12 - Page 1

Chapter 12 - Page 2


Chapter 12 - Page 3
Objectives


Chapter 12 - Page 4
Agenda


Chapter 12 - Page 5
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

Chapter 12 - Page 6
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.

Chapter 12 - Page 7
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.

Chapter 12 - Page 8
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.

Chapter 12 - Page 9
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.


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.

• 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.


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.

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.

Quiz

Answer: 4

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

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.
Instructor Note: Rules have been defined in iAssets for the assets book, using the management
hierarchy option that goes through the HR hierarchy for approval. The iAssets rules have been
created using the iAssets Setup Administrator responsibility and assigned to requestor and

approvers responsibilities via iAssets system profiles. Users have been associated with jobs
that have an approval authority.


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.

Oracle iAssets Setup Steps
1. Set up Rules
2. Set up 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.

3. Assign Rule Names to 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.

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.

6. Review the status of your request.


Assets Reports Groupings

Assets Reports Groupings
See the Oracle Assets User Guide Release 12.1 for detail information on all available reports.

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.

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.

Summary


Tax Accounting
Chapter 13
Tax Accounting
Chapter 13 - Page 1
Tax Accounting
Chapter 13 - Page 2
Tax Accounting

Tax Accounting
Chapter 13 - Page 3
Objectives

Tax Accounting
Chapter 13 - Page 4
Objectives

Tax Accounting
Chapter 13 - Page 5
Agenda

Tax Accounting
Chapter 13 - Page 6
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.
Tax Accounting
Chapter 13 - Page 7
Asset Books Regions

Asset Books Regions
(N) Setup > Asset System > Book Controls
Before you can define a tax asset book, you must first set up the corporate asset book that the
tax book will be associated with. See the Release 12.x 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 ledger for your tax book then the
associated corporate book. You can then Allow G/L Posting.
Tax Accounting
Chapter 13 - Page 8
• 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.
Tax 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.
Tax Accounting
Chapter 13 - Page 9
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 existing asset
categories to the tax book. See the Release 12.x 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.
Tax Accounting
Quiz

Answer: 1
Tax Accounting
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.
Tax Accounting
• 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.

Tax Accounting
Quiz

Answer: 1
Tax Accounting
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.
Tax Accounting
- 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.

Tax Accounting
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.
Tax Accounting
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.
Tax Accounting
• 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.
Tax Accounting
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.
Tax Accounting
Quiz

Answer: 2
Tax Accounting
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.
Tax Accounting
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.
Tax Accounting
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
Tax Accounting

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.
Tax Accounting
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)
Tax Accounting
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.
Tax Accounting
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.
Tax Accounting
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
Tax Accounting
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.

Tax Accounting
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.
Tax Accounting
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.
Tax Accounting
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
Tax Accounting

• 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.
Tax Accounting
- 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.
Tax Accounting
General Tax Reports

Tax Accounting
Special Tax Reports

Tax Accounting
Depreciation Adjustment Reports

Tax Accounting
Summary

Tax Accounting
Summary

Tax Accounting

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• Familiarity with data processing concepts and techniques

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Passwords DROP USER scott

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Lowercase Syntax variables CREATE ROLE role

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This simplified path translates to the following:

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

3. (B) Click the Approve button.