Accounting For Some Modules

PJM
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Content
Introduction................................................................................................iv
Purpose................................................................................................iv
Scope....................................................................................................iv
Structure...............................................................................................v
Related documents...............................................................................v
Oracle Payables.........................................................................................vi
Assumptions.........................................................................................vi
Events...................................................................................................vi
Accounts..............................................................................................vii
Accountin entries..............................................................................viii
!otes....................................................................................................."
Oracle Receivables....................................................................................."i
Assumptions........................................................................................."i
Events..................................................................................................."i
Accounts.............................................................................................."ii
Accountin entries.............................................................................."iv
!otes.................................................................................................."i"
Oracle Inventory# Purc$asin and Order Entry..........................................""
Assumptions........................................................................................""
Events..................................................................................................""
Accounts.............................................................................................""i
Accountin entries..............................................................................""i
!otes................................................................................................""iv
Oracle %i"ed Assets.................................................................................""v
Assumptions ...................................................................................""vii
Events ............................................................................................""viii
Accounts ..........................................................................................."""
Accountin Entries ........................................................................."""ii
!otes ................................................................................................"li
Oracle Pro&ect Accountin........................................................................"lv
Assumptions....................................................................................."lvii
Events..............................................................................................."lvii
Pro&ect AutoAccountin functions and processes............................"lviii
Accountin entries..........................................................................."lviii
!otes......................................................................................................l
Encumbrance Accountin...........................................................................li
Assumptions..........................................................................................li
Events...................................................................................................li
Accounts...............................................................................................lii
Accountin entries................................................................................lii
!otes...................................................................................................liv
Open en closed..........................................................................................lv
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Oracle Payables + of !Undefined Bookmark, SEC1
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Open.....................................................................................................lv
Closed...................................................................................................lv

Introduction
0$ile implementin Oracle Applications t$ere is often a need for an
interated functional overvie1 on &ournal entries. 2$is need is especially
felt 1$en setup discussions are on 1it$ t$e customer and decisions $ave
to be made. 2$e customer enters t$e discussions from a functional point
of vie1.
2$e available Oracle information and documentation is framented and
detailed. %or eac$ module or application separate manuals e"ist. 2$ese
manuals are focused on descriptions of 1indo1s and specific functions.
As part of t$e Practice /evelopment pro&ect of Oracle 2$e !et$erlands a
document is created t$at covers t$e accountin issues in Oracle
Applications in an interated 1ay. 2$is is t$e result.
Purpose
2$e purpose of t$is document is to create an overvie1 of t$e accountin
entries in Oracle Applications in a suc$ a 1ay t$at:
3. t$e determination of t$e system accounts ta4es place in a structured
1ay. In practice# as part of t$e implementation# t$e customer 1ill
determine t$e c$art of accounts. Often system accounts are not ta4en
into account.
*. t$e document can be used as pro&ect documentation and information
to e"plain setup decisions. 2$is is also t$e case for %ast%or1ard
implementations for 1$ic$ all decsions already $ave been made.
Scope
2$is document covers t$e follo1in applications: 5eneral 6eder#
Receivables# Payables# Cas$ Manaement# %i"ed Assets# Pro&ect
Accountin# Purc$asin# Order Entry en Inventory. Ot$er E78usiness
applications are not in t$e scope of t$is document. Cas$ Manaement is
covered as part of Payables and Receivables. Purc$asin# Order Entry and
Inventory are $andled in one c$apter.
%or eac$ Application assumptions are made concernin t$e setup. 2$ese
are made on base of best practices in 2$e !et$erlands.
2$is document is focused on setup related options t$at affect t$e content
and structure of &ournal entries.
Ot$er topics t$at are not in t$e scope of t$is document:
3. !e1 developments in future releases are not ta4en into account. 2$is
document is solely based on Release 33.(9 33i.
*. 2$e setup of t$e accountin fle"field.
:. Reportin issues and tools li4e %S5 and Oracle discoverer.

). Specific intercompany and consolidation issues.
(. 2ec$nical specifications of tables and prorams t$at support t$e
accountin process in Oracle Applications.
Structure
%or eac$ application you 1ill find a separate c$apter. Eac$ c$apter $as
t$e follo1in content:
3. Eac$ c$apter starts 1it$ assumptions t$at $ave been made. Most
assumptions are made on base of best practice in 2$e !et$erlands.
*. In t$e second part t$e events of t$e application are described. An
event is a trier t$at causes a &ournal entry in 5eneral 6eder. 2$e
events 1ill be used to cateori;e t$e accounts and &ournals t$at are
described in t$e ne"t parts.
:. 2$e t$ird part ives an overvie1 of t$e accounts t$at are part of t$e
setup of t$e application. %or eac$ account a relation is made to one or
more events. A second table# 1it$ t$e same accounts# ives an
overvie1 in 1$ic$ forms t$e setup of t$at account $as to ta4e place.
). 2$e fourt$ part s$o1s for eac$ event t$e structure and content of t$e
&ournal. 2$is information is presented in a table.
(. %inally eac$ c$apter ends 1it$ notes.
A separate c$apter is introduced to cover encumbrance accountin.
Encumbrance accountin is related to Purc$asin# Oracle Payables and
5eneral 6eder.
Related documents
3. %ast %or1ard documents
*. Accountinflo1 in Oracle R33I voor Canon Consumer Imain
5roup by 6uu4 de <o4. =ersion 3# dated *3 auustus *>>3.
:. Oracle Payables ?ser 5uide# Release 33i# &anuary *>>>.
). ?nloc4in t$e Mystery of Encumbrance Accountin by =ictoria
6eavy.

Oracle Payables
In t$is c$apter accountin issues are described for t$e application Oracle
Payables. 2$is application covers t$e purc$ase invoice and payment
processes. 2o be able to reconcile t$e payments it is best practice to
implement Cas$ Manaement as 1ell. 2$e accountin entries t$at are a
result of reconciliation are processed by Oracle Payables.
%or encumbrance related issues see c$apter Encumbrance Accountin.
ssumptions
3. 2$e Account for Payment option is set to 8ot$. 2$is means accountin
entries 1ill be created at t$e time of payment -creation. and at t$e
time of payment reconciliation by usin Cas$ Manaement. In previous
releases of Oracle Applications t$is feature 1as $andled by t$e Allo1
Reconciliation Accountin option.
*. 2$e Account for 5ain96oss option is set to 8ot$ as 1ell. 2$is means t$at
forein currency losses and ains are recorded at t$e moment of t$e
payment issue and at t$e moment of t$e payment clearin.
:. Automatic 0it$$oldin 2a" Payables is not used.
). 2$e accountin met$od is set to Accrual 8asis Accountin. 2$is means
you create accountin entries for invoices and payments by usin t$e
liability account. -Cas$ 8asis Accountin only creates accountin
entries for t$e payment.
(. 2$e Automatic Offset Met$od is set to 8alancin. 2$is means t$e
liability accounts 1ill $ave t$e same balancin sement value as t$e
accounts t$at are entered in t$e invoice distributions.
@. 2$e pooled ban4 account option is set on yes. 2$is means t$e ban4
account is s$ared by multiple balancin sement values.
,. Interest Invoicin ma4es it possible to create an interest invoice for an
overdue invoice at t$e time of payment. Separate accounts are used to
record t$e accountin entries. 2$is feature is not commonly used in t$e
!et$erlands and t$erefor not recorded as an event in t$is c$apter.
'. 2a" and frei$t are included.
E!ents
P
E!en
t nr"
E!ent name #$ Source #$ Cate%ory &otes
3 Invoice Payables Purc$ase Invoice 0$en ad&ustin or cancellin an
invoice t$e same accounts are
used. Only debit 9 credit 1ill be
reversed.

P
E!en
t nr"
E!ent name #$ Source #$ Cate%ory &otes
* Prepayment Payables Purc$ase Invoice 0$en ad&ustin or cancellin a
prepayment t$e same accounts
are used. Only debit 9 credit 1ill
be reversed.
: Prepayment application Payables Purc$ase Invoice 0$en unapplyin a prepayment
t$e same accounts are used. Only
debit9 credit 1ill be reversed.
) Payment Payables Payment 0$en ad&ustin or voidin a
payment t$e same accounts are
used. Only debit9 credit 1ill be
reversed.
( Payment maturity Payables Payment 2$is event ta4es only place 1$en
t$e Account for Payment 0$en
Payment is Issued option is
enabled.
@ Reconciliation Payables Reconciled
Payment
0$en unreconcilin a payment
t$e same accounts are used. Only
debit9 credit 1ill be reversed.
ccounts
'ype 1 ( ) * + ,
6iability 6iability - - - -
E"pense E"pense -
Prepayment Asset - -
%uture dated payment Asset -
PO rate variance ain Revenue -
PO rate variance loss E"pense -
/iscount E"pense -
Reali;ed ain Revenue -
Reali;ed loss E"pense -
Roundin E"pense
%rei$t E"pense -
Intrest invoice
e"pense
E"pense
Intrest invoice liability 6iability
Cas$ clearin Asset - - -
Cas$ Asset -
8an4 c$ares E"pense -
8an4 errors E"pense -
2a" Asset -
.inancia
ls
options
Payable
options
Supplie
r /Site
Bank
accou
nt
Payables
document
s
'a0 In!oice
6iability A - - -
E"penseAA -
Prepayment - -
%uture dated payment
A
- - - -
PO Rate variance ain -
PO Rate variance loss -

.inancia
ls
options
Payable
options
Supplie
r /Site
Bank
accou
nt
Payables
document
s
'a0 In!oice
/iscount A -
Reali;ed ain A - -
Reali;ed loss A - -
Roundin A9AAA -
%rei$t - -
Interest invoice
e"pense
-
Interest invoice
liability
-
Cas$ clearin A - -
Cas$ A -
8an4 c$ares A - -
8an4 errors A - -
2a" - -
A2$ese are t$e accounts for 1$ic$ automatic offsets are created.
AA2$is account is enerated by Account 5enerator 1$en t$e invoice is
related to a pro&ect.
AAA2$e roundin account 1ill be used 1$en:
3. Bou use multiple curencies and t$e payment currency does not
round 1it$in t$e payment currency precision.
*. 2$e functional currency amounts of payments do not eCual t$e
amount recorded as t$e liability.
:. Bou $ave enabled automatic offsets and t$e cas$ account is
pooled# and you $ave roundin errors.
0$et$er t$e future dated payment account is used from t$e supplier site
or t$e payables document is defined by t$e Payables Option D?se %uture
/ated PaymentE.
3
ccountin% entries
P11 In!oice
ccountin% entry 2ebit Credit
E"pense -or AP Accrual.A -
2a" -
%rei$t -
6iability -
PO rate variance ain9 lossAA 3-4 3-4
Invoice Price varianceA 3-4 3-4
A 2$is 1ill be t$e AP Accrual account in case t$e AP invoice is matc$ed to
a Purc$ase Order and t$e item used on t$e Purc$ase order is an inventory
item. 2$e AP Accrual account is an orani;ation parameter and is can be
found in t$e Oracle Purc$asin and Inventory C$apter.

AA 2$ese accountin entries can only be created 1$en an invoice is
matc$ed to a purc$ase order.
P1( Prepayment
Prepayment -
6iability -
P1) Prepayment pplication
Prepayment -
6iability -
0$en applyin an invoice to a prepayment# t$e prepayment $as to be
paid. Only t$en t$e prepayment is available.
P1* Payment
6iability -
Cas$ clearin -
/iscount -
Reali;ed ain9 loss 3-4 3-4
In case of a future dated payment t$e future dated payment account is
used instaead of t$e cas$ clearin account. At time of maturity t$e future
dated payment is credited. /iscount and reali;ed ain9 loss is recorded at
t$e time of maturity.
P1+ Payment maturity
%uture dated Payment -
Cas$ clearin -
/iscount -
P1, Reconciliation
Cas$ -
Cas$ clearin -
8an4 c$ares -

8an4 errors -
&otes
3. Automatic offset only efects t$e accounts t$at are mar4ed 1it$ A. Ot$er
accounts can only be balanced by manual entries in Oracle 5eneral
leder.
*. Automatic offset is only relevant 1$en more t$an one balancin
sement value is used in an Operatin ?nit.
:. Automatic offset does not support Interest invoicin. Fo1ever Interest
invoicin is not common practice in 2$e !et$erlands.
). 2$e pooled ban4 account option is only relevant 1$en more t$an one
balancin sement value is used in an Operatin ?nit.
(. %uture dated payments are not common practice in 2$e !et$erlands.
2$is functionality ma4es a difference bet1een issuin of a payment
and t$e moment a payment is mature. Only 1$en a payment is mature
-status of t$e payment is !eotiable. it is possible to clear t$e payment
by usin Cas$ Manaement. 2o use t$is feature t$e option ?se %uture
/ated Payment Account $as to be set to Payment /ocument or
Supplier Site.
@. !ever c$ane accountin options in t$e payment Accoutin Payables
Options form. 2$is could create inconsistent accountin entries in t$e
system.
,. 2$e PO Rate =ariance 5ain and 6oss accounts are only used in case
you matc$ an invoice 1it$ a purc$ase order t$at involves inventory
items.
'. 2$e e"pense clearin account in previous releases of Oracle
Applications does not e"ist anymore in Release 33i.

Oracle Recei!ables
Receivables. 2$is application covers t$e sales invoice and collection
processes. 2o be able to reconcile t$e receipts it is best practice to
implement Cas$ Manaement as 1ell. 2$e accountin entries t$at are a
result of reconciliation are processed by Oracle Receivables.
21o main types of receipts can be distinuis$ed:
3. Cas$ receipt. 2$is is a receipt t$at potentially is lin4ed to an
outstandin item. 0$en t$e outstandin item -and t$e related liability
account. can not be found a default liability account 1ill be used.
*. Miscellaneous receipt. 2$is is a receipt t$at is not related to an
outstandin item. Instead of usin a liablity account# any type of
account can be used. 2$ese account are related to receivable activities.
ssumptions
3. Clearance met$od G 8y Matc$in
*. 2$e accountin met$od is set to Accrual 8asis Accountin. 2$is means
you create accountin entries for transactions and receipts by usin
t$e liability account. -Cas$ 8asis Accountin only creates accountin
entries for t$e receipt.
:. !o unallocated receipts are recorded.
). Receipt remittance by usin t$e %actorin met$od is not in t$e scope.
E!ents
R
E!en
t nr"
E!ent name #$ Source #$ Cate%ory Remarks
3 Invoice -reular. Receivables Sales Invoices
* 8ill in arrears invoice Receivables Sales Invoices /etermined by t$e invoicin rule
t$at is used in t$e more tab of t$e
transactions 1indo1. 2$e revenue
reconition proram creates t$e
accountin entries.
: 8ill in advance Invoice Receivables Sales Invoices /etermined by t$e invoicin rule
t$at is used in t$e more tab of t$e
transactions 1indo1. 2$e revenue
reconition proram creates t$e
accountin entries.

R
E!en
t nr"
) /ebit memo Receivables /ebit Memos
( Credit memo Receivables Credit Memos 2$is event ta4es place by usin
t$e Credit transactions 1indo1s.
@ Apply credit memo to
invoice
Receivables Credit Memo
Applications
, On7account credit Receivables Credit Memos On account credits are credits
t$at are not applied to a specific
transaction. 2$is event ta4es
place by usin t$e Credit
transactions 1indo1s or by
applyin a receipt.
' Ad&ustment Receivables 2$is event ta4es place 1$en usin
a separate 1indo1. It can be
positive or a neative ad&ustment.
+ /eposit Receivables A deposit is bein created by
usin t$e 2ransactions 1indo1.
3> Invoice applied to deposit Receivables Sales Invoices Application ta4es place by fillin
out t$e field Commitment in t$e
2ransactions 1indo1.
33 5uarantee Receivables A uarantee is bein created by
usin t$e 2ransactions 1indo1.
3* Invoice applied to
uarantee
Receivables Sales Invoices Application ta4es place by fillin
out t$e field Commitment in t$e
2ransactions 1indo1.
3: Applied receipt Receivables 2rade Receipts 2$is is event includes a discount.
Also valid for receipts on a deposit
and uarantee.
3) ?napplied receipt Receivables 2rade Receipts
3( ?nidentified receipt Receivables 2rade Receipts 2$is is t$e case 1$en a -cas$.
receipt $as no customer. 2$ese
can not be applied.
3@ C$ane from unidentified
to unapplied
Receivables 2rade Receipts
3, C$ane from on account
to applied
Receivables 2rade Receipts
3' On account receipt Receivables 2rade Receipts 2$is is t$e case 1$en a -cas$.
receipt $as a customer but cannot
be related to a specific
transaction.
3+ Miscellaneous receipt Receivables Misc Receipts 2$is receipt is not matc$ed to an
invoice. 2$e revenue account is
derived from t$e receivable
activity.
*> Receipt 1it$ discount Receivables 2rade Receipts
*3 Receipt -to be remitted. Receivables 2rade Receipts Create a receipt t$at needs to be
remitted by t$e ban4 -Dincasso
tapeE.
** Remittance of t$e receipt Receivables Remittance
*: Reconciliation of t$e
remitted receipts
Receivables ?sin Cas$ Manaement
ccounts
'ype 1 ( ) * + , 5 6 7 18 11 1( 1) 1*
Reali;ed ain Revenue -
Reali;ed loss E"pense -
?nallocated Revenue Revenue
Cross currency
roundin
E"pense
Feader roundin E"pense
Cas$ Asset - -
8an4 c$are E"pense - -

'ype 1 ( ) * + , 5 6 7 18 11 1( 1) 1*
Receipt confirmation Asset
Remitted receipt Asset
%actored receipt Asset
S$ort term debt
?napplied receipt Asset - -
?nidentified receipt Asset
On account receipt Asset
Receivable Asset - - - - - - - - - - - -
Revenue Revenue - - - - - - - -
Clearin Asset
?nbilled receivable Revenue - - -
?nearned revenue Revenue - - - - -
2a" 6iability - - - - - - -
%rei$t Revenue - - - - - - -
Earned discount Revenue
?nearned discount Revenue
Ad&ustment -1rite7off. E"pense -
8an4 Error E"pense - -
%inance C$are Revenue -
Misc. Cas$ Revenue
'ype 1
+
1, 15 16 17 (8 (1 (( ()
Reali;ed ain Revenue
Reali;ed loss E"pense
?nallocated Revenue Revenue
Cross currency
roundin
E"pense
Feader roundin E"pense
Cas$ Asset - - - - -
8an4 c$ares E"pense - -
Receipt confirmation Asset - -
Remitted receipt Asset - -
%actored receipt Asset
S$ort term debt
?napplied receipt Asset - - - -
?nidentified receipt Asset - -
On account receipt Asset -
Receivable Asset - - -
Revenue Revenue -
Clearin Asset
?nbilled receivable Revenue
?nearned revenue Revenue
2a" 6iability
%rei$t Revenue
Earned discount Revenue -
?nearned discount Revenue -
Ad&ustment -1rite7off. E"pense
8an4 error E"pense - -
%inance C$are Revenue
Misc. cas$ Revenue -
System
options
Bank
accounts
'rans"
'ypes
Custo
mer
Site
Sales Rep 'a0 Recei!able
acti!ity
Reali;ed 5ain -
Reali;ed 6osses -
?nallocated Revenue -
Cross currency
roundin
-
Feader roundin -
Cas$ -

System
options
Bank
accounts
'rans"
'ypes
Custo
mer
Site
Sales Rep 'a0 Recei!able
acti!ity
8an4 c$ares -
Confirmed receipts -
Remitted receipts -
%actored receipts -
S$ort term debt -
?napplied receipts -
?nidentified receipts -
On account receipts -
Receivable A - - -
Revenue A - - -
Clearin A - -
?nbilled receivableA - -
?nearned revenueA - -
2a" A - - - -
%rei$t A - - -
Earned discount -
?nearned discount -
Ad&ustment -1rite7off. -
8an4 Error -
%inance C$are -
Misc. Cas$ -
A 2$ese are accounts t$at can be manaed by Auto Accountin.
3
ccountin% entries
R11 In!oice re%ular
Receivable -
Revenue -
2a" -
%rei$t -
R1( Bill in arrears in!oice
?nbilled Receivable -
Revenue -
2a" -
%rei$t -
/ependin on t$e 8ill in arrears rule t$e revenue 1ill be ta4en in different
periods and t$e &ournal entry above 1ill be enerated eac$ time.
Revenue -
2a" -
%rei$t -

Receivable -
At t$e final period t$e unbilled Receivable is transferred to Receivable. At
t$at time t$e sales invoice 1ill be enerated and send to t$e customer.
2$e amount of t$e Receivable entry is t$e total of all t$e ?nbilled
receivable entries t$at $ave been recorded in t$e previous periods.
R1) Bill in ad!ance in!oice
Receivable -
?nearned revenue -
2a" -
%rei$t -
?nearned revenue -
Revenue -
At t$e first period t$e total receivable amount is recorded and an invoice
is sent to t$e customer. 2$e revenue 1ill be recorded in t$e comin
periods as it is defined in t$e 8ill in advance invoicin rule.
?nearned revenue -
Revenue -
R1* 2ebit memo
Receivable -
Revenue -
2a" -
%rei$t -
Receivable -
%inance c$are -
R1+ Credit memo
Receivable -
Revenue -
2a" -
%rei$t -

R1, pply credit memo to in!oice
Receivable -
Receivable -
R15 On1account credit
Receivable -
Revenue -
An on7account credit can be a credit on Revenue# 2a" or %rei$t. 2$e
&ournal entry above is a credit on Revenue.
R16 d9ustment
Receivable -
Ad&ustment -
2$e entry above is a postive ad&ustment. Ad&ustment must be seen as a
1rite7off. Ad&ustment entries can be made in combination 1it$ receipts.
R17 2eposit
Receivable -
?nearned revenue -
R118 In!oice applied to deposit
Receivable -
Revenue -
2a" -
%rei$t -
?nearned revenue -
Receivable -
R111 #uarantee
?nbilled receivable -

?nearned revenue -
R11( In!oice applied to %uarantee
Receivable -
Revenue -
2a" -
%rei$t -
?nearned revenue -
?nbilled receivable -
R11) pplied receipt
Cas$ -
8an4 c$are -
8an4 error -
Receivable -
?napplied receipt -
?napplied receipt -
2$e moment of creatin t$is &ournal entry is dependent on t$e settin
Clearance Met$od in Receipt classes. 0$en t$e met$od is set to /irectly
t$e entry is created at t$e time of processin t$e receipt. If t$e met$od is
set to 8y Matc$in t$e entry is created at t$e time of clearin t$e receipt
by Oracle Cas$ Manaement.
R11* Unapplied receipt
Cas$ -
8an4 c$are -
8an4 error -
?napplied receipt -
R11+ Unidentified receipt
Cas$ -
8an4 c$are -
8an4 error -
?nidentified receipt -
R11, C:an%e from unidentified to unapplied

?nidentified receipt -
?napplied receipt -
R115 C:an%e from unidentified to unapplied
Receivable -
?napplied receipt -
R116 On account receipt
Cas$ -
8an4 c$are -
8an4 error -
On account -
?napplied receipt -
?napplied receipt -
R117 ;iscelleneous receipt
Cas$ -
Misc. cas$ -
A miscelleneous receipt is a receipt t$at is not related to an outstandin
item.
R1(8 Receipt <it: discount
Cas$ -
Receivable -
Receivable -
Revenue -
Receivable -
/iscount -earned9 unearned. -
R1(1 Receipt 3to be remitted4
Receipt confirmation -
?napplied receipt -

?napplied receipt -
Receivable -
R1(( Remittance of t:e receipt
Remitted receipt -
Receipt confirmation -
R1() Reconciliation of t:e remitted receipts
Cas$ -
Remitted receipt -
&otes
3. 2$e profile option AR: ?se Invoice Accountin for Credit Memos
determines t$e 1ay accountin entries for credit memos are
enerated. If t$is option is set to Bes t$en Receivables credits t$e
oriinal transaction. 0$en t$e option is set to !o# Receivables uses
AutoAccountin to determine t$e accounts.
*. 0$en enterin a credit memo you $ave to c$oose a Rulin Met$od and
a Split 2erm Met$od. 2$e options for bot$ are %I%O# 6I%O and prorate.
2$ese rules do not effect t$e &ournal entries t$emselves. 2$e met$ods
determine 1$at element of t$e invoice $as to be credited.
:. 2$e accounts %actored receipt and S$ort term debt are only used for
remittances 1$en usin t$e factorin met$od.
). 2$e &ournals AR7*># AR7*3 and AR7** are related to t$e HIncassoI
functionality. 2$is is common practice in t$e !et$erlands.

Oracle In!entory, Purc:asin% and Order Entry
In t$is c$apter accountin issues are described for Oracle Purc$asin and
Inventory. Only actual &ournal entries are included in t$is c$apter.
Encumbrances are $andled in a separate c$apter.
ssumptions
3. Inventory is not used in a manufacturin environment. 5oods are
received# moved bet1een orani;ations and sold.
*. Receivin of oods is done in t1o steps. 2$e first step is receivin
t$e oods for inspection. 2$e second step is to deliver t$e oods to
t$e inventory or ot$er department .
E!ents
I&=
E!en
t nr"
3 Receipt of
inventory item
Purc$asin Accrual9 Receivin 2$e cateory depends on t$e 1ay
receipt accountin is $andled. 2$e
cateory accrual is used 1$en t$e
met$od is period end. Receivin is used
1$en t$e receipt &ournal is enerated
directly.
* Receipt of e"pense
item
Purc$asin Accrual9 Receivin 2$e same.
: /eliver Purc$asin Accrual9 Receivin 2$e same.
) Return to vendor
-oods not in
stoc4.
( Return to vendor
-oods in stoc4.
@ Sales order
s$ipment
Inventory Inventory
, Cycle count
ad&ustment
Inventory Inventory
' Miscelleneous
2ransfer
Inventory Inventory
+ Interor. 2ransfer Inventory M26
3> Subinventory
2ransfer
Inventory M26

ccounts
'ype 1 ( ) * + , 5 6 7 18
Receivin Inspection Asset - - - -
Purc$ase Price
=ariance
E"pense - -
Receivable Asset -
Payable 6iability -
Intrasit Inventory Asset -
Material Asset - - - - - - -
Outside Processin Asset
Material Over$ead Asset
Over$ead Asset
Resource Asset
E"pense E"pense -
Invoice Price =ariance E"pense
Inventory AP Accrual 6iability - - - -
Sales Revenue
Cost of 5oods Sold
-CO5S.
E"pense -
Cost =ariance
Account
E"pense
Cycle count
ad&ustment
E"pense -
Scrap E"pense -
Ot:er Or%ani>atio
n
Subin!ento
ry
Receivin Inspection -
Purc$ase Price
=ariance
- -
Receivable - -
Payable - -
Intrasit Inventory -
Material - -
Outside Processin - -
Material Over$ead - -
Over$ead - -
Resource - -
E"pense - - -
Invoice Price =ariance -
Inventory AP Accrual -
Sales -
Cost of 5oods Sold -
Cost =ariance
Account
-
Cycle count
ad&ustment
-
Scrap -
ccountin% entries
I&=11 Recei!e to Inspect

Receivin inspection -
Inventory AP AccrualA -
A 2$is account 1ill be posted /ebit 1$en matc$in an AP Invoice to t$e related Purc$ase order.
I&=1( 2eli!er to In!entory
MaterialA -
Purc$ase Price =ariance 3-4 3-4
? In case of t$e use of an e"pense item on t$e related Purc$ase order# t$is account 1ill be an
e"pense item.
I&=1) Return to =endor 3#oods not in stock4
I&=1* Return to =endor 3#oods in stock4
Material -
Purc$ase Price =ariance 3-4 3-4
I&=1+ Recei!e an E0pense Item
E"pense account -
I&=1, Sales Order S:ipment

CO5S -
Material -
I&=15 Cycle count ad9ustments
Cycle count ad&ustment 3-4 3-4
Material 3-4 3-4
I&=16 ;isc" transfer
Scrap -
Material -
I&=17 Interor% transfer
Material -Orani;ation A. -
Material -Orani;ation 8. -
Receivable -Orani;ation 8. -
2ransfer Cost -
Intransit -
Payables -Orani;ation A. -
I&=118 Subin!entory transfers
Material -A. -
Material-8. -

&otes

Oracle .i0ed ssets
8efore 1e o into t$e details of Events# Assumptions# Accounts en
Accountin Entries# t$is c$apter ives a lobal introduction of t$e
terminoloy used 1it$in assets concernin functionality t$at influences
t$e construction of &ournal transactions.
CIP !ersus Capitali>ed transactions"
Assets supports t$ree types of Assets# HCapitali;edI# HCIPI and
HE"pensedIJ every Assets $as a correspondin status.
3. HE"pensedI $as no Asset &ournals as a resultJ t$e cost of assets
$as been ta4en -as e"penses in t$e PK6. in t$e period t$e
purc$ase invoice 1as distributed in eneral 6eder.
*. HCIPI Assets are not Bet depreciatedJ
:. And HCapitali;edI
Assets support t$e follo1in Events: for# HCapitali;edI and HCIPI
transactionsJ
Additions J
/epreciation J
Ad&ustments J
2ransfers J
Reclassifications J
RevaluationEs J
Retirements and J
2a" accountin.
/ependin on t$e type of an Asset# t$e transaction 1ill be a CIP
transaction or a Capitali;ed transaction.
In t$e t$ird part of t$is c$apter 1$ere 1e 1ill describe t$e &ournal
transactions. %or HAdditionsI t$e &ournals for HCIPI and HCapitali;edI 1ill
be discussed separately # for all ot$er events Capitali;ed type 1ill be
described. 2$e bi difference 1it$ CIP is t$at CIP assets 1ill not
depreciate# and $as no Haccumulated deprecationI to account for in all
ot$er events.
sset @CorporateA, @'a0A and @Bud%etA books types
Bou cannot allo1 eneral leder postin for your budet boo4s.
Asset boo4s of t$e 2ype H2a"I and HCorporateI produce &ournal lines if
you allo1 596 Postin for t$is Asset 8oo4.

E0pensed !ersus morti>ed d9ustmentsB
An ad&ustment mi$t influence t$e $istorical depreciation calculation in
retrospect. 2$e correction can be ta4en -e"pensed. in t$e current asset
period# or can be spread over t$e remainder of an asset life -amorti;ed..
8ot$ Ad&ustments types are part of t$e /utc$Es best practice. 2$e
difference is not really t$e &ournal -1itc$ accounts are $it.# but t$e
difference is t$e 1ay t$e amounts are calculated.
2$e only difference in t$e accounts t$at are $it is t$e depreciation &ournal.
/epreciation &ournals for E"pensed ad&ustments $ave one e"tra &ournal
lineJ 2$e depreciation e"pense -ad&ustment. line 1$ic$ represents t$e
part of t$e depreciation e"pense t$at is a result of t$e ad&ustment. It is
t$e depreciation e"pense for t$e current period as a result of t$e
ad&ustment on top of t$e normal periodic depreciation.
Prior period transactions !ersus Current Period transactionsB
Any transaction can be relevant for depreciation as of t$e period t$e
transaction 1as made in. 8ut it can also influence t$e depreciation of any
number of prior periods in t$e same fiscal year. If a transactions is
sub&ect to prior period effect. It does not influence t$e &ournal from t$e
prior period addition # ad&ustment# transfer# reclassification or retirement
itself# but t$e depreciation transaction as a result of a prior period
transaction is different as a depreciation transaction as a result of current
period transaction


ssumptions
!ot all functionality of Oracle %i"ed Assets is 1ill be discussed in t$e
remainder of t$is c$apter. %or t$e /utc$ best practice t$e follo1in
assumptions are made:
/epreciation Met$od Set up:
depreciate an asset in t$e year it is retired is set to Bes
/epreciation 8oo4s L Calendar Set up:
depreciate assets in t$eir first year of life is set to !o
/epreciation 8oo4s L Accountin rules Set up:
Allo1 Amorti;e c$anes is set to Bes
Allo1 Revaluation is set to Bes
Revalue accumulated /epreciation G Bes # because
t$e H!oI7option 1ill transfer t$e accumulated depreciation to
t$e revaluation reserve on every revaluation. Amorti;ation of
Revaluation Reserve or Retire Revaluation reserve G Bes# t$ere
are not bot$ no.
revaluation of fully reserved asset is not limitedJ -empty.
/epreciation 8oo4s L !atural Accounts Set up:
Every account field# $as a separate valueJ
only e"ception is t$e ain and loss account for COR G
-Cost of removal. it can be 3 value. 2$e same oes for POS
-Profit of Sale. and !8= -!et 8oo4 =alue. retired.
Intercompany Receivables and Payables clearin
account numbers are specific accounts for Assets# t$ey can
$ave t$e same value.
2$e default Account enerator Account is a balance
s$eet account 1it$ al ot$er sement set to ;ero value -not
applicable.J
2a"7boo4 setup
t$ere are no 2a" boo4s definedJ
Investment 2a" Credits are not usedJ
life e"tension factor G -3#>. J and no life e"tension
ceilin J
!o Asset cost# /epreciation# Revaluation and E"pense
Ceilins are used
/eferred Income 2a" 6iabilityJ is not used
no Ad&ustment Current Earnins depreciation rules and
8oo4s are used.

E!ents
2$e Asset accounts for 5eneral 6eder transactions are a result of t$e
reconi;ed Events# Assumptions made in previous pararap$s# and t$e
Account enerator set up.
Per Event %A73# %A7* e"t# t$e most common variations of t$e relevant
accountin entries a mentioned in t$e Remar4 section of t$e table belo1.
E!ent
number
Prefi0C.
E!ent name #$ Cate%ory Remark
3 Payables# Pro&ect
and t$ird party
create Mass
Additions.
Purc$ase
Invoice
Pro&ects
?ser defined
/ifferent oriinate from
PayablesJ Create Mass Additions
Pro&ectsJ Create Mass Additions MMM
SN67loader
* Asset Mass Addition
6ine /eletions
!9a PS 2$is event is mentioned because it
specifically $as no 56 transaction as a result.
2$e transaction s$ould be made manually or
be avoided by only deletin Mass addition
lines if you also delete a correspondin Mass
addition credit line.
: Additions Addition
CIP Addition
/ifferent Journals for Additions because of:
-:a. Capitali;ed and -:b. CIP Additions
Current and Prior period additionsJ
-:c. Sinle and mered Additions
-:d. is t$e prior period effect of t$is
transaction
) Capitali;ation of CIP
Assets
CIP Addition /ifferent Journals for capitali;ation because of:
Capitali;ationEs -)a. in t$e period and -)b.
After t$e period t$e asset 1as added.
C$ane Asset type to CIP -)c. /e7
capitali;ationJ PS -It can only be don as a
current period transaction.
( Periodic
/epreciation
Depreciation /ifferent Journals for /epreciation because of:
-(a. /epreciation for Assets 1it$out
ad&ustments and amorti;ed ad&ustments# or
-(b. 1it$ E"pensed ad&ustmentsJ
-(c.J /epreciations for Revaluated Assets and
Parameter: Amorti;e Revaluation Reserve G
Bes
@ Ad&ustments Ad&ustments
CIP Ad&ustment
@a. E"pensed ad&ustment of recoverable cost
J
@b. Amorti;ed ad&ustment of recoverable
cost J
@c. 2ransfer of Source lines from assets
added in a prior period 1itc$ result in
transfer of cost# transfer of depreciation# and
transfer of e"pense.
-@d. 2ransfer of Source lines from assets
added in t$e current periods or
-@e. Addin mass addition lines to an e"istin
Asset.
Ps. /epreciation Met$od# 6ife Ad&ustments# Rate
Ad&ustments and capacity Ad&ustments do not
directly result in &ournal transactions. /ependin
on t$e effect t$ey $ave on t$e depreciation t$e
1ill influence t$e amounts of t$e depreciation
transaction -amorti;ed or E"pensed.
, 2ransfer
As a
assinment
transfer
Or as number
2ransfer
CIP transfer
-,a. 2$e transfer bet1een cost centers results
in transfer of cost and depreciation for
current period transfersJ
-,b. for t$e prior period e"pense part in a

E!ent
number
Prefi0C.
of unit
ad&ustment
prior period transfer.
-,c.2$e transfers bet1een balancin
sements
' Reclassification Reclass K
CIP Reclassification
/ifferent Journals for Reclassification because of:
-'a. Current Reclassification# and
-'b. Prior period ReclassificationEsJ
>+ A Retirement Retirement

CIP Retirement
/ifferent Journals for Retirement because of:
0$et$er Cost of removal and Proceeds of sale
amount are entered on retirement: +a. for
e"pensin t$e !et boo4 value retired 5ain
-+b. for clearin t$e COR clearin account#
-+c. for clearin t$e POS clearin account#
-+d. for retirin a revaluation reserve
-+b. entries for retirement ain an loss
accounts on 3 PK6 accountJ
-+c. Retire Revaluation Reserve G Bes9no
>+ 8 Reinstatements Retirement
CIP Retirement
/ifferent Journals for Reinstatements because of:
-3>a. !umber of periods since Retirement
-3>b. entries for retirement ain an loss
accounts on 3 PK6 accountJ
-3>c. Retire Revaluation Reserve G Bes9no
3> Revaluations Ad&ustments MMM
CIP
Ad&ustments MMM
/ifferent Journals for /epreciation because of:
-33b. Revalue Accumulated /epreciation G
Bes -!O G move t$e accumulated
/epreciation to t$e Revaluation reserve on
revaluationEs. -33c.
Retire Revaluation Reserve G Bes9no -loo4 at
t$e retirement transaction.

ccounts
Asset uses modifiable Account enerator definitions to enerate all t$e
reCuired account code combinations -CCI/Es. .
3ll possible sset ccounts
ss
et
Boo
k
ss
et
Cate
%ory
ss
et
;as
s
ddi
tion
$ine
Retrie!ed t:rou%: ccount #enerator
3?14 definitions
Cate%ory ccount
&ames
Asset Cost - Yes
Asset Clearin - - !o. At leased not al1ays:
For manual additions, Oracle Assets gets the
clearing account from the category (Account
Generator)
%or mass additions# t$e clearin account
comes from your source system.
(for details exceptions on Account generator
rules) Asset Manual, chapter Accounting
CIP O Cost - Yes
CIP O Clearin - - !o. At leased not al1ays J
- Identical to t$e Asset clearin account..
/epreciation Reserve - Yes
Revaluation Amorti;ation - Yes
Revaluation Reserve - Yes
sset ccount &ames
/epreciation E"pense - Yes,
but not on Reclassification (for details exceptions on
Account generator rules) Asset Manual, chapter
Accounting
Book ccount &ames
/epreciation Ad&ustment - Yes
!et 8oo4 =alue Retired 5ain - Yes
!et 8oo4 =alue Retired 6oss - Yes
Proceeds of Sale 5ain - Yes
Proceeds of Sale 6oss - Yes
Proceeds of Sale Clearin - Yes
Cost of Removal clearin - Yes
Cost of Removal 5ain - Yes
Cost of Removal 6oss - Yes
Intercompany Accounts Payable - Yes
Intercompany Accounts
Receivable
- Yes
Revaluation Reserve Retired
5ain
- Yes
Revaluation Reserve Retired
6oss
- Yes
/eferred /epreciation E"pense -
Yes
/eferred /epreciation Reserve -
Yes
3?14 ccount %enerator
Account enerator uses a '<o1step %eneration process to enerate all
t$e reCuired se%ment values usin ) Sources, for t$e potent ional *:
different accounts per assetJ 2$e Account enerator 1or4flo1 process is
divided into : parts usin : different account name %roups.

ccount name %roups
Every one of t$e *: account names belons to only 3 Account name
roup t$is results in:
2$e Cateory Accounts names.
Asset Account !ame# and
8oo4 Account names.
Sources
Seeded t$ere are : specific rules t$at enerate all t$e sements of t$e *:
account names. 2$e sources used in t$ese rules are:
specific natural account values per account name located on t$e
Asset boo4 definitionJ
specific account7code7combinations per account name located on
t$e Asset cateory definition per account boo4J
a specific account7code7combinations 6ocated on t$e Asset
assinment definitionJ
and default Account enerator values located on t$e Asset boo4
definition.
#eneration of asset CCI2 se%ments in a nuts:ell
Seeded t$e eneration 1or4s as described belo1J
t$e balancin sement -it is al1ays retrieved from t$e Asset level.
t$e !atural Account uses a different source per account name -as
described in t$e
All ot$er sements et t$eir value sourced from t$e default
Account enerator values located on t$e Asset boo4 definition.
Account name 7 /epreciation E"pense O 1or4s different# all
sements are retrieved from t$e Asset Assinment definition.
'<o1step procedure
2$e derivation for asset Accounts is a t1o7step procedure.
2$e fist time any account is needed for t$e accountin of a
particular asset. account enerator 1ill enerate t$e account and
store t$ese values per asset9per account name in an interim table
for assets J
Every time accountin event for an asset after t$is first eneration
Asset 1ill use t$e stored CCI/ values from t$e interim table.

ccountin% Entries
If an asset is depreciated# H/epreciation e"penseI is al1ays a part of t$e
accountin entry for a particular asset in a iven asset period. 2o ma4e
t$e e"amples easier to understand t$e H/epreciation e"penseI line is
e"cluded of t$e Accountin entries belo1. If you loo4 into t$e e"amples in
t$e Asset ?ser uide# c$apter accountin# t$e H/epreciation e"penseI
lines are al1ays t$ere.
%or t$e ease of compre$ension of t$e entries you 1ill not miss t$e
H/epreciation e"penseI line. It 1ill only disturb t$e compre$ension
process. 0$en you 1ill c$ec4 t$e accountin entry aainst t$e system or
t$e manual you 1ill notice t$e difference. Please note t$at t$e system and
manual are correct# 1e too4 t$e liberty of s4ippin t$is line to simplify t$e
e"amples.
1 4 Rele!ant non sset transaction
.11 Create ;ass addition lines
Asset Clearin -
Payables or CIP pro&ects -
2$is transactions is a result of Payables or Pro&ect HCreate Mass
Addition linesI prorams. If you are feedin t$e Mass addition lines
t$rou$ t$e Mass addition open interface from a t$ird party system
you 1ill $ave to influence t$e credit account in t$is transaction to fit
your needs in t$e flo1 of your financial transactions.
( 4 2elete ;ass dditions transaction
.1( 2elete ;ass addition lines
!9a -
!9a -
2$is Asset transaction $as no 56 effect -no 56 7 transactions as a
result.. So if you do delete asset 1it$in t$e Mass Addition
functionality# Ma4e sure you delete a debit and credit line from
mass additions for t$e same amount. So $ave Payables -AP. or
Pro&ect -PA. reverse incorrect transactions so can delete bot$ t$e
debit and t$e credit line in Asset Mass Additions.
If you delete mass addition lines in asset 1it$out t$e reversal in AP
and PA your HAsset Clearin accountI 1ill not balance at period end.

)4 dditions
.1)a Capitali>ed ddition
Asset Cost -
Asset Clearin -
2$is is t$e normal situation# an automated addition t$rou$ Mass
additions -from Payables# Pro&ects or t$ird party soft1are. or a
manual additions -detailed or Cuic4. t$rou$ t$e additions forms of
t$e Asset Menu.
.1)b Construction in Pro%ress ddition
CIP Cost -
CIP Clearin -
Idem As for :a# but no1 t$e asset $as t$e status CIP.
.1)c Capitali>ed ddition 3as a result of ;er%ed ;ass addition $ines4
Asset Cost -
Asset Clearin -mass addition line 3. -
Asset Clearin -mass addition line *. -
Asset Clearin -mass addition line :. A3. -
Idem As for :a# but no1 t$e capitali;ed asset $as been mered
1it$in Mass Additions. PS t$is can also be in t$e case for a CIP Asset.
-3. %or HAdditionI &ournals from mass additions. t$e Accountin
entry 1ill al1ays $it t$e clearin account as mentioned in t$e
Mass addition 6ine# no matter 1$at Account enerator $as
defined.
.1)d ddition 3prior period effects4
/epreciation E"pense -Ad&ustment. -
/epreciation Reserve -
2$is entry occurs 1$en t$e date placed in service is in a period
1itc$ lies before t$e current Assed period. 2$e missed depreciation
is e"pensed in t$e financial t$at corresponds 1it$ t$e current asset
period.

* 4 Capitali>ationDs 3status sset c:an%es from CIP tot Capitali>ed4
.1*a Capitali>ation 3in t:e same .1period t:e CIP sset <as added as CIP4
Asset Cost -
CIP Clearin -
%inancially# in 56 It is as if t$e assed $as never $ad t$e status CIP.
2$e CIP Cost Account is not $it t$is event. CIP Clearin must be $it
because payable $as $it t$is account as 1ell.
.1*b Capitali>ation 3in a .1period after t:e CIP sset <as added as CIP4
Asset Cost -
CIP Cost -
0$en you capitali;e an asset in a period after t$e period you added
it# Oracle Assets creates &ournal entries t$at transfer t$e cost from
t$e CIP cost account to t$e asset cost account. 2$e clearin account
$as already been cleared. !o furt$er corrections needed because
Assets are not depreciated until t$ere capitali;ed.
.1*c 2e1Capitali>ation 3in t:e period t:e asset <as entered4
CIP Cost -
Asset Clearin -
+4 2epreciations
2$ere are ) different depreciation accountin entries: -%A7(a. depreciation
entries for assets 1it$out ad&ustments or for assets 1it$ amorti;ed
ad&ustments. -%A7(b.# depreciation entries for assets 1it$ e"pensed
ad&ustments. 8ot$ typeEs can be 1it$ or 1it$out -%A7(c. for t$e
amorti;ation of a revaluation reserve.
.1+a 2epreciation 3for sset <it:out or morti>ed ad9ustments 4
/epreciation E"pense -
2$e amount of t$is &ournal is influenced by a lare number of
settin -Asset setup. but t$e only settin t$at influence t$e &ournal
structure is e"pense9or amorti;ation of ad&ustments. If t$ere are
amorti;ed ad&ustments t$e ad&ustment 1ill be spread over t$e
remainder of t$e asset live.

.1+b 2epreciation 3for sset <it: E0pensed ad9ustments 4
/epreciation E"pense -ad&ustment. -
If ad&ustments are e"pensed t$e ad&ustment 1ill influence t$e PK6
in t$e period t$e ad&ustment 1as made# t$is on top of normal
depreciation.
.1+c morti>in% re!aluation reser!e
Revaluation Amorti;ation -
Revaluation Reserve -
Is only possible if t$e asset is revaluated and t$e Asset depreciation
boo4 c$ec4bo" HAmorti;e Revaluation ReserveI is set to yes.
,4 d9ustments
2$ere are ) different accountin entries for t$e many different possible
ad&ustments to an asset Cost# Met$od# 6ife rate an capacity Ad&ustments.
2$ey all result in t$e same accountin entries. A cost ad&ustment includes
any ad&ustment t$at affects t$e recoverable cost# i.e.# a c$ane in cost#
salvae value# depreciation# or depreciation e"pense#. 2$e -). are
-%A7@a. 7 manually performed cost ad&ustment in t$e 8oo4s 1indo1J
-%A7@b. 7 2ransfer of Source 6ines entered in prior periodsJ
-%A7@c. 7 2ransfer of Source 6ines entered in t$e current period.
-%A7@d. 7 cost ad&ustment by addin a mass addition to an e"istin
asset usin Mass Additions.
C$anes to assets t$at $ave not been depreciated and c$anes to CIP
assets do not result in @d9ustmentA entries since no depreciation
$as been ta4en.
If you c$ane financial information after you $ave run depreciation# you
must c$oose 1$et$er to e0pense or amorti>e t$e ad&ustment. %or bot$
situations you could et t$e e"tra ad&ustin &ournal entry.
E0pensed d9ustment
%or e"pensed ad&ustments# Oracle Assets recalculates depreciation usin
t$e ne1 information and e"penses t$e entire ad&ustment amount in t$e
current period. E"pensin t$e ad&ustment results in a oneOtime ad&ustin
&ournal entry.
morti>ed d9ustment
%or amorti;ed ad&ustments# Oracle Assets spreads t$e ad&ustment amount
over t$e remainin life or remainin capacity of t$e asset. Bou can set up
your amorti;ed ad&ustments to $ave a retroactive start date by c$anin
t$e default amorti;ation start date-usually t$e system date. to a date in a
previous period. Any ad&ustment amount missed since t$e amorti;ation
start date is ta4en in t$e current period.

.1,a Reco!erable cost d9ustment
/epreciation E"pense
-ad&ustment ?1.
-
-3. 2$is line is only t$ere if t$e ad&ustment is e"pensed. Or
Amorti;ed 1it$ a retroactive date.
.1,b addin% mass addition to an e0istin% asset usin% ;ass dditions
Asset Cost -
Asset Clearin -
.1,b d9ustment 3transfer of source lines of assets added in prior period4
ccountin% entry sset 2ebit Credit
Asset Cost !e1 ?1 -
Asset Cost Old -
/epreciation E"pense !e1 -
/epreciation E"pense Old -
-ad&ustment. ?(
!e1 -
/epreciation Reserve !e1 -
/epreciation Reserve Old -
2$is could be t$e case if additions ended up 1it$ an incorrect asset.
And t$ese lines are transferred to t$e appropriate assets t$at $ave
$ad depreciation in prior asset periods.
-3. !e1 and Old refer to t$e source and destination Asset# Asset
enerates accountin entries for bot$ assets.
-*. 2$is line is only t$ere if t$e ad&ustment is e"pensed. Or
Amorti;ed 1it$ a retroactive date.
.1,c d9ustment 3transfer of source lines of assets added in t:e current period
Asset Cost -destination Asset. -
Asset Clearin - source Asset. -
2$is could be t$e case if additions ended up 1it$ an incorrect
asset. And t$ese lines are transferred to t$e appropriate asset t$at
$as no depreciation.

54 'ransfers
.15a 'ransfer 3bet<een Cost Centers4
ccountin% entry Cost
center
2ebit Credit
Asset Cost !e1 -
-A3.
!e1 -
Asset Cost Old -
/epreciation e"pense
-A* .
!e1 -
/epreciation e"pense Old -
-3. /epreciation for t$e ne1 cost center in t$e current period
-*. 2$e reali;ed e"penses in t$e past are optionally transferred to
t$e ne1 balancin sement -Gprior period effect.. 2$e transfer
$as to be reali;ed as a prior period transaction.
.15b 'ransfer 3bet<een Balancin% Se%ments4
ccountin% entry Balancin
%
Se%men
t
2ebit Credit
Asset Cost !e1 -
-A3.
!e1 -
Intercompany Accounts Payables
- A*.
!e1 -
Intercompany Accounts
Receivable
%rom -
Asset Cost %rom -
/epreciation Reserve %rom -
/epreciation e"pense
- A: .
!e1 -
/epreciation e"pense %rom -
-3. /epreciation for t$e ne1 balancin sement in t$e current
period
-*. 2$is &ournal $its t$e HAsset Intercompany Account PayablesI
and HAsset Intercompany Account ReceivablesI to create a
&ournal transaction t$at is in balance per 8alancin sement.
-:. 2$e reali;ed e"penses in t$e passed are optionally transferred to
t$e ne1 balancin sement -Gprior period effect.. 2$e transfer
$as to be reali;ed as a prior period transaction
64 Reclassifications
.16 Reclassifications
ccountin% entry Cate%or
y
2ebit Credit
Asset Cost Old -
Asset Cost !e1 -

ccountin% entry Cate%or
y
2ebit Credit
/epreciation E"pense -t$is
period.
Old -
/epreciation Reserve -797 t$is
period.
!e1 -
Oracle Assets does not ad&ust for prior period e"penses 1$en you
reclassify Assets
74 Retirements nd Reinstatements
.17 Retirements
3?14 ccountin% entry 2ebit Credit
-3. A3 Asset Cost -
-3. /epreciation Reserve -
-3. /epreciation E"pense A*
.
-
-3. !et 8oo4 =alue Retirement
-5ain.
A:
.
3-4
-6oss.
A:
.
3-4
-*. Proceeds of Sale Clearin A)
.
3-4 3-4
-*. Proceeds of Sale -5ain. A:
.
A)
.
3-4
-*. Proceeds of Sale -6oss. A:
.
A)
.
3-4
-:. Cost of Removal -5ain. A:
.
A)
.
3-4
-:. Cost of Removal -6oss. A:
.
A)
.
3-4
-:. Cost of Removal Clearin A)
.
3-4 3-4
-). Revaluation Reserve A(
.
-
-). Revaluation Reserve Retired
-5ain
A:
.
A(
.
3-4
-6oss.
A:
.
A(
.
3-4
-3. 2$is accountin entry is build from four separate parts:
Retirement of Asset 8oo4 =alue#
E"pense t$e proceeds of sale#
E"pense t$e cost of removal#
Retirement of t$e value of t$e Revaluation reserve
-A*. 2$e /epreciation e"pense 1ill be reversed from retirement
date up t$e current period if it is a prior period retirement.
-A:. -part 37). 2$e 3#ain4 accounts 1ill be $it# if t$e sum of t$e
PK6 elements is a positive revenue. 2$e -$oss4 accounts are $it
if t$e sum is a neative resultJ 2$e PK6 elements are - !8=
retired# Revaluation reserve retired# cost of removal and
proceeds of sale. .
If all 5ain and loss account $ave t$e same value -G t$e same
account. Assets 1ill summari;e retirement PK6 accounts to one
line. If not separate lines 1ill be account for ) different account
names.

-A). -Part *7:. 2$e accountin for proceed of sales -POS. and Cost of
removal -COR. depend on t$e amount mentioned for POS and
COR fields in t$e retirement %ORMJ GL - !o amount G no
transactions.
-A(. -Part ).2$is accountin entry is only possible if t$e asset is
revaluated and t$e Asset depreciation boo4 c$ec4bo" HRetire
Revaluation ReserveI is set to yes.

.17B Reinstatements 3 re!ersal of retirement ?14
3?14 ccountin% entry 2ebit Credit
-3. A3 Asset Cost -
-3. /epreciation Reserve -
-3. /epreciation E"pense A*
.
-
-5ain.
A:
.
3-4
-6oss.
A:
.
3-4
-*. Proceeds of Sale Clearin A)
.
3-4 3-4
-*. Proceeds of Sale -5ain. A:
.
A)
.
3-4
-*. Proceeds of Sale -6oss. A:
.
A)
.
3-4
-:. Cost of Removal -5ain. A:
.
A)
.
3-4
-:. Cost of Removal -6oss. A:
.
A)
.
3-4
-:. Cost of Removal Clearin A)
.
3-4 3-4
-). Revaluation Reserve A(
.
-
-5ain
A:
.
A(
.
3-4
-6oss.
A:
.
A(
.
3-4
-3. All remar4s on retirements are also relevant for Reinstatements
-remar4s %A7+A -3 trou$ (.. 8ut t$e accountin entries $ave
s1itc$ed /ebit and Credit 1it$ t$e transactions %A7+A for
Retirements.
-*. /epreciation E"pense 1ill also be $it if t$ere are periods in
bet1een retirin and reinstatin. -%or t$e depreciation of missed
periods.
184 Re!aluation
.118 Re!aluation
Asset Cost -
Revaluation Reserve 3?14 -
-3. 2$is &ournal is as presented $er only 1$en t$e Asset 8oo4
c$ec4bo"es Revaluation allo1ed# and revalue H/epreciation
ReserveI are bot$ set to yes.
-*. %or ot$er variation of revaluation &ournals loo4 at t$e e"amples
made in HJournal entries for revaluationsI in t$e c$apter
Accountin of t$e Asset user 5uide.

&otes
%A73. Setup reCuirements in %i"ed Assets Relevant to Accountin entries
from Assets
%A7*. Common setup c$oices t$at influence H%A Account eneratorIJ
%A7:. Common customi;ations on for %A Account eneratorIJ
%A7). Customi;ed Account enerator definitionsJ
%A7(. Asset Accountin 5otc$aEs
%A7@. Fo1 do Asset &ournals# end up in 5eneral lederJ
%A7,. Recoverable cost# versus ot$er ad&ustmentsJ
%A7'. 2a" accountin
.114 Setup reEuirements in .i0ed ssets Rele!ant to ccountin% entries from ssets
If you 1ant to create &ournal entries from your ta" boo4# your ta" boo4
must $ave t$e same account structure# eneral leder calendar# and
functional currency as t$e associated corporate boo4. And you must
enter a different set of boo4s for your ta" boo4 and t$e associated
corporate boo4.
Bou cannot create &ournal entries from your budet boo4.
2$e create mass additions process only imports mass addition
lines for Assets c$ared to accounts t$at are already set up in your
asset cateories. And are defined as an Asset account -Account
type.. So t$e clearin account you use in Payables must be used in
t$e asset Setup as clearin account on one of t$e Asset cateories.
And asset7clearin accounts must be set op in 56 as an Asset
account7type.
If Bou are 1or4in 1it$ more t$an 3 SO8 an more t$an 3 Operatin
?nit Payables must be tied to t$e same eneral leder set of boo4s
as t$e corporate Asset boo4 for 1$ic$ you 1ant to create mass
additions in Oracle Assets# and Bou cannot create mass additions
for ta" boo4s.
.1(4 Common setup c:oices t:at influence @. ccount %eneratorAB
2$e setup c$oices mentioned belo1 are common in a /utc$
implementation:
All Potential Asset Accounts $ave t$eir o1n value in t$e fle" field
sement natural Account.
/efault account combination $as H>>>>>7>>>>7"""""7>>>>>I on
all sements e"cept company and account. 2$e natural account
-""""". is a balance s$eet account.
Common Modifications are t$e ad&ustment to t$e Asset boo4
account into t1o type -PK6. and -8alance s$eet.# 1$ere t$e
balance s$eet accounts $ave no Cost center# and all t$e -PK6.
Accounts do $ave a cost enter# as for depreciation e"pense.

.1)4 Common customi>ations on for . ccount %eneratorAB
2$e customi;ations mentioned belo1 are common in a /utc$
implementation:
2$e Cost center is derived from t$e asset E"pense Account
2$e 8alance s$eet accounts are enerated separately forms PK6
Accounts in t$e Account enerator process for boo4 control
accounts -because of t$e reCuired value Hn9aI on balance s$eet
accounts. And t$e HCost center valueI for all PK6 accounts.
Standard derivation from account enerator
o 8y default# Oracle Assets creates &ournal entries 1it$out
cost center level detail# e"cept for depreciation e"pense.
o ?sin t$e default assinments# it creates &ournal entries
usin t$e balancin sement from t$e distribution line in
t$e Assinments 1indo1 and t$e account sement.
o 2$e Account 5enerator ets t$e ot$er sements from t$e
default sement values you entered for t$e boo4.
o Bou can modify t$e default Account 5enerator process so
t$at Oracle Assets creates &ournal entries to a different
detail level.
.1+4 sset ccountin% #otc:aDs
.1+"14 Period names of sset Calendar must map identically to
t:e defined #$ calendar names"
So c$ec4 t$e 56 calendar definition before definin an Asset
depreciation calanderPPP
.1+"(4 Customi>ed ccount %enerator definitions
Patc$es can over1rite customi;ed Account 5enerator definitions# If
you do not notice t$is# youEre Asset accountin is incorrectPPP
Ma4e sure you $ave tested and approved all transaction before
you o in production. -See remar4 HAccount enerator determines
5eneral leder accounts only ones for every asset.I.
Save a copy of t$e approved and accepted H0or4flo1 definitions:
for %A Account eneratorI on a local ore common dis4# -not only in
t$e database.# before you o in production. Applyin Patc$es can
over1rite 1or4flo1 definitions.
Re7save t$e your customi;ed H0or4flo1 definitions: for %A Account
eneratorI after every alteration
.1+")4 ccount %enerator determines #eneral led%er accounts
only ones for e!ery asset"
2$e values are enerated only onesJ Account 5enerator is a t1o7step
process. In t$e first step -t$e initial H5enerate accountsI run.# t$e
accounts are enerated for every ne1 Asset.. Account enerator stores

t$e result of t$e process in %AQ/IS2RI8?2IO!QACCO?!2SJ fi"ed assets 1ill
use t$ese accounts.
So you must et t$e initial run correct. Correctin t$e Accounts
enerated in a production situation is not a simple tas4. PPP
C$anes to Account 5enerator $ave no effect on t$e e"istin Asset
distributions# it does influence ne1 asset -distributions.. 2o c$ane t$e 56
accountin for assets you need to force re7eneration of t$e asset
Accounts:
So Ma4e sure youEre customi;ed Account enerator process is saved
in t$e production database before you run t$e HAsset depreciation
runI or H5enerate AccountsI for t$e first time. PPP
Production environment -/atabase. J
o %orce Oracle Assets to create ne1 distribution
lines -ro1s inJ %AQ/IS2RI8?2IO!QACCO?!2S. by. HMass
2ransfersI.
2est and implementation environments -/atabase. J
o 2R?!CA2E %AQ/IS2RI8?2IO!QACCO?!2S# and
rerun 5enerate Accounts process.
.1,4 Fo< do sset 9ournals, end up in #eneral led%erB
2$e 5enerate Account# and RCreate JournalR prorameSs t$at are a part of
t$e /epreciation run# enerate# create and transfer t$e Asset Journal
transactions to 56.
?p to Release 33i Asset 1as9is a little different from ot$er modules. 2$e
&ournal does not $ave to be imported in 5eneral leder. 2$e accountin
entries end up unposted 5eneral 6eder 1it$out $avin to HImport any
asset transactionsI in 56.
.154 Reco!erable cost, !ersus ot:er ad9ustments 3$ife time1B 2epreciation ;et:od1,
Rate1 and Capacity d9ustments"4
Recoverable cost Ad&ustments
Ad&ustments to t$e HAsset recoverable cost -
3
.I can be a result of an
asset cost ad&ustment in an Asset form and t$e transfer of source lines
-
*
. from one asset to t$e ot$er. 8ut it can also be a cost ad&ustment by
addin a HMass addition lineI to an e"istin Asset.
All t$ese HRecoverable Cost Ad&ustmentsI result in a different Asset
Cost and t$e resultin &ournal transactions all $it t$e Asset Cost
Account of t$e relevant Asset Cateory.
All ot$er ad&ustments
Ot$er Ad&ustments -depreciation met$od# depreciation rate or capacity
ad&ustments. do not result in a different &ournal. 8ut t$e ad&ustments
influence t$e outcome of t$e depreciation calculation.
3
Recoverable cost Ad&ustments is t$e amount t$at needs to be recovered by depreciation -ea. 2$e
recoverable cost is t$e portion of t$e asset cost t$at can be depreciated. It is t$e current cost less
t$e salvae value.
*
2ransfer of source lines G is t$e transfer of lines t$at initiated t$e value -Asset Cost. of t$e assetJ
-ore part of t$is value.. Source line transfers c$ane t$e asset cost# depreciation reserve and
e"pense of old and t$e ne1 asset.

.164 'a0 accountin%
2a" Accountin is not an issue for t$e ma&ority of /utc$ companies
because t$ey 1ill account t$e depreciation in t$eir HCompany Asset
/epreciation 8oo4sI in a manner t$at 1ill be accepted by t$e /utc$ fiscal
aut$orities. 2$erefore usually 2a"7boo4s 1ill not be reCuired. As a result
1e 1ill not discuss t$e influence of ta" related functionality for t$e asset
&ournal transactions.
2$ere is no reulation for Asset cost7# /epreciation7# Revaluation7
and E"pense CeilinsJ
%unctionality as HInvestment 2a" creditsI are not used since t$e
H0IRI reulated is abandoned in Folland.
Ad&ustment Current Earnins depreciation rules and 8oo4s are not
used in FollandJ
2$ere is no reulation t$at 1ould introduce t$e use of life
e"tension factorJ or life e"tension ceilinsJ
Revaluation of fully reserved asset is not common practiceJ
/eferred Income 2a" 6iabilityJ is sometime used because t$ere are
some reulations for accepted economic life# but t$ese rules are
also common practice for t$e commercial valuation of assets.

Oracle Pro9ect ccountin%
Pro&ect Accountin. 8efore ettin to t$e assumptions and a description of
t$e accountin entries it is important to 4no1 t$e basic elements of
Pro&ect Accountin. Elements t$at influence t$e eneration of accountin
entries are described belo1.
Pro9ect 'ype
2$e pro&ect type determines $o1 Oracle Pro&ects processes costs
-e"penditure items. for a pro&ect. It provides defaults for and controls
pro&ect entry and processin. Bou must associate eac$ pro&ect type 1it$ a
pro&ect type class:
3. ?se t$e Indirect pro&ect type class to collect and trac4
e"penditure item costs and labor $ours for over$ead activities.
*. ?se a Capital pro&ect type class to collect and trac4 costs and
labor $ours for asset development activities t$at you plan to
capitali;e as one or more assets.
:. ?se a Contract pro&ect type class to collect and trac4 costs# labor
$ours# revenue# and billin for services performed for and reimbursed
by a client
2istribution Rule
2$e pro&ect type determines 1$ic$ revenue distribution rule appears as
t$e default value for t$is field. It also determines 1$ic$ ot$er revenue
distribution rules you can c$oose from. Oracle Pro&ects predefines t$e
follo1in revenue distribution rules:
3. Cost/Cost Accrue revenue and bill usin t$e ratio of actual cost to
budeted cost.
*. Cost/E!ent Accrue revenue usin t$e ratio of actual cost to
budeted cost # and bill based on events.
:. Cost/Gork Accrue revenue usin t$e ratio of actual cost to
budeted cost # and bill as 1or4 occurs.
). E!ent/E!ent Accrue revenue and bill based on events.
(. E!ent/Gork Accrue revenue based on events# and bill as 1or4
occurs.
@. Gork/E!ent Accrue revenue as 1or4 occurs# and bill based on
events.
,. Gork/Gork Accrue revenue and bill as 1or4 occurs.
Costin%
Costin is t$e processin of e"penditures to calculate t$eir cost to eac$
pro&ect and determine t$e 56 accounts to 1$ic$ t$e costs 1ill be posted.
Costin is performed for t$e follo1in types of e"penditures:

E0penditure type Remark
6abor
E"pense Reorts
?saes
Miscellaneous 2ransactions
8urden 2ransactions
Supplier Invoices from
Oracle Payables
E"penditures submitted
from Self7Service E"penses9
Self7Service 2ime
Imported e"penditures
Ad&usted e"penditures in
Oracle Pro&ects 1$ic$ need
re7costin
Burdenin% 3Cost Plus Processin%4
8urdenin -also 4no1n as cost plus processin. is a met$od of calculatin
t$e burden costs by applyin one or more burden cost components to t$e
ra1 cost amount of eac$ individual transaction.
Re!enueHBased Cost ccrual
Cost accruals are t$e accountin transactions to account for e"penses in
t$e same accountin period in 1$ic$ revenue is enerated. Cost accruals
are also referred to as Cost of Goods Sold or Cost of Sales.
0it$ cost accruals# you initially account for t$e costs incurred as an asset
in a cost 1or4 in process -0IP. account. Bou determine 1$et$er you
account ra1 or burdened cost as t$e cost 0IP. 0$en you accrue revenue#
t$e costs are reconi;ed as e"pense by usin cost accruals.
CrossHC:ar%e
Allo1 c$ares from ot$er operatin units
Intercompany Billin%
Intercompany billin# a processin option 1it$in t$e cross c$are feature#
enerates invoices for 1or4 performed bet1een t1o orani;ations.
InterHPro9ect Billin%"
InterOpro&ect billin enerates invoices for 1or4 performed bet1een t1o
pro&ects.
Borro<ed and $ent
2$e borro1ed and lent met$od creates accountin entries to pass costs or
s$are revenue 1it$out eneratin internal invoices.
E!ents
E"amples of events include an invoice reduction# a performance bonus# or
a revenue 1riteOoff.

utoaccountin%
Oracle Pro&ects creates many different accountin transactions
t$rou$out its business cycle -1$en postin labor cost debits and labor
revenue credits# for e"ample.. Bou can use AutoAccountin to specify $o1
to determine t$e correct eneral leder account for eac$ transaction.
ccount %enerator
0$en you enter pro&ect information in Purc$asin and Payables# account
enerator create account code combinations for use in purc$asin
reCuisitions# purc$ase orders# and payables supplier invoices.
ssumptions
3. Capital Pro&ects -interation 1it$ Oracle %i"ed Assets. are not
defined. Only pro&ects 1it$ t$e type of Indirect -Over$ead# internal
pro&ects. and t$e type of Contract are used.
*. 2$e e"penditure types 6abor# ?sae and E"pense reports are used.
!ot used are 8urden transactions# Cross C$arin# 0IP tranactions
and 8orro1ed and 6ent.
:. Concernin revenue accountin t$e revenue as 1ell as t$e invoice
are based on distribution rules. 2$ere is no revenue based on Cost
accrual and percent complete. 8orro1ed and 6ent is not used
eit$er.
E!ents
P E!ent
number
3 Create 2imecards 6abor Cost 2$rou$ E"penditure batc$es or Import 2$rou$
Self Service 2ime
* Create e"pense
Reports
/istribute and 2ransfer to Accounts Payables
: Create ?sae 6os ?sae Cost
) Create
Miscellaneous
2ransactions
Miscellaneous
2ransactions
( 8reate 8urden
2ransactions
8urden Cost
@ Create purc$ase
Orders
Purc$ase Orders Pro&ect Related information entered in Oracle
Purc$asin.
, Create Ad&ustments Mass Ad&ustments functionality
' Create Supplier
Invoices
Purc$ase Invoices 2$e account is enerated by Account 5enerator
-0or4flo1 builder.
+ Create
Revenue9Invoices
Revenue 2$e Invoice is transferred to Account Receivables
and t$e revenue is transferred to 56
3> Create 0IP 0IP

Pro9ect utoccountin% functions and processes
Eac$ accountin transaction is identified by an AutoAccountin function.
AutoAccountin functions are components of prorams t$at you submit to
enerate accountin entries. 2$e %ollo1in functions are mostly used:
.untion/ ccount Part of <:ic: processes Remark
6abor Cost Account 7/istribute 6abor Costs
7Interface 6abor Cost to 56
/etermines cost account for all labor
items# includin strai$t time and
overtime
6abor Cost Clearin
Account
7/istribute 6abor Costs
7Interface 6abor Cost to 56
/etermines clearin account for labor
costs
6abor Revenue Account 75enerate /raft Revenue
7Interface Revenue to 56
7Interface Invoices to Receivables
/etermines revenue account for labor
items
E"pense Report Cost
Account
7/istribute E"pense Reports Costs /etermines cost account for e"pense
report items
E"pense Report 6iability
Account
7Interface E"pense Reports /etermines liability account for e"pense
report costs
E"pense Report Revenue
Account
75enerate /raft Revenue
/etermines revenue account for
e"pense report items
Misc 2rans Clearin
Account
7/istribute ?sae9Miscellaneous Costs
7Interface ?sae and Miscellaneous Costs
to 56
/etermines clearin account for
Miscellaneous 2ransaction Items
Misc 2rans Cost Account 7/istribute ?sae9Miscellaneous Costs /etermines cost account for
Misc 2rans Revenue
Account
?sae Cost Account 7/istribute ?sae9Miscellaneous Costs /etermines cost account for usae
items
?sae Cost Clearin
Account
7/istribute ?sae9Miscellaneous Costs
7Interface ?sae and Miscellaneous Costs
to 56
/etermines clearin account for usae
costs
?sae Revenue Account 75enerate /raft Revenue
/etermines revenue account for usae
items
Revenue and Invoice
Accounts
/etermines accounts to trac4 revenue
and receivable
Supplier Invoice Cost
Account
7/istribute Supplier Invoice Ad&ustments
Costs
/etermines cost account for ad&usted
supplier invoice items
Supplier Invoice Revenue
Account
supplier invoice items
Event Revenue Account 75enerate /raft Revenue
revenue events
ccountin% entries

8elo1 are some e"amples of accountin entries t$at can be made. !ot
all t$e transactions are descriped but t$e most common oneEs.
P1 $abor cost ccount
6abor e"pense -
Payroll clearin -
P 1 ;iscellaneous 'ransaction
cost account for Miscellaneous 2ransaction -
clearin account for Miscellaneous
2ransaction
-
P 1 Burden 'ransaction
cost account for 8urden 2ransaction -
clearin account for Pro&ect 8urden
2ransaction
-
P 1 cost account for usa%e
cost account for usae -
?sae Cost Clearin Account -
P H E0pense account
E"pense account -
Payables liability -
P H E!ent Re!enue accountin% Grite on/manual/utomatic
Asset account -
revenue account -
P H Unbilled Recei!able

asset account-unbilled receivables account. -
Revenue account -
P O ccounts Recei!able
asset account -usually an accounts
receivable account.
-
unbilled receivables asset account or t$e
unearned revenue liability account
-
P O Unearned Re!enue ccount
receivables asset account -
liability account -
&otes
2$ere are some functions 1$ic$ can $old more t$e one transaction. 2$is
can be usefull if you $ave different accountin rules for t$e same
function. %or e"ample t$e $abor Cost ccount function $as multiple
transactions: Indirect Private 6abor# Indirect Public 6abor# Private 8illable
6abor# Private !onO8illable 6abor# Public 8illable 6abor# Public !onO8illable
6abor# All 6abor# All Capital# All Contract# All Indirect# Private Capital#
Private !onOCapital# Public Capital# Public !onOCapital.
If you only $ave one accountin rule for labor costs you can set up t$e
HAll 6aborI transaction. Fo1ever if you 1ant to ma4e an accountin7
difference bet1een HIndirectI and HContractI pro&ects you $ave to set up
H Contract# AllI and HIndirect# All H .

Encumbrance ccountin%
In t$is c$apter encumbrance accountin issues are described.
Encumbrance accountin is supported by Oracle Purc$asin# Oracle
Payables and Oracle 5eneral 6eder.
Compared to actual accountin as described in t$e c$apters before#
almost no system accounts are involved. More comple" is t$e
encumbrance process itself. It is not &ust one &ournal at a certain point of
time but a serie of moments at 1$ic$ encumbrance amounts are posted#
liCuidated and posted aain.
ssumptions
3. It is possible to enter Encumbrance &ournals in Oracle 5eneral
6eder directly. Fo1ever t$is is not common practice and 1ill not
be covered in t$is c$apter as an event. ?sually encumbrances are
created from events in Oracle Purc$asin and Payables.
*. Encumbrance &ournals are cateori;ed by a type. It is common to
define t$e type of Commitment for ReCuisitions and t$e type of
Obliation for Purc$ase Orders and Invoices. 0$en t$e types for
Invoice and Purc$ase Order are t$e same no additional
encumbrance &ournal 1ill be enerated at t$e time of approvin a
matc$ed invoice.
:. 2$e c$are account and t$e budet account $ave t$e same value.
In t$e Accounts and Accountin entries c$apters t$ese accounts
are identified toet$er as t$e e"pense account.
E!ents
E!e
nt
nr"
E!ent name #$
Source
#$ Cate%ory Encumbranc
e 'ype
Remarks
3 ReCuisition Purc$asin
Purc$ases Commitment 0$en reservin or approvin

a ReCuisition.
* Cancel ReCuisition Purc$asin
Purc$ases Commitment
: Purc$ase order Purc$asin
Purc$ases Obliation9
Commitment
0$en reservin or approvin
a Purc$ase Order.
) Cancel Purc$ase order Purc$asin
Purc$ases Obliation
( Invoice -unmatc$ed. Payables Purc$ase
Invoice
Invoice 0$en approvin t$e invoice.
@ Invoice -matc$ed. Payables Purc$ase
Invoice
Invoice9
Obliation
0$en postin t$e &ournals
from AP to 56.
, Receipt Purc$asin
Receivin Obliation 0$en postin t$e &ournals

from Purc$asin to 56.

ccounts
'ype 1 ( ) * + , 5
Reserve for
Encumbrance
Asset - - - - - - -
E"pense E"pens
e
- - - - - - -
ReE/ PO/
In!oice
Set of
Books
Reserve for
EncumbranceA
-
E"penseAA -
A 2$is account is al1ays enerated in 5eneral 6eder 1$en postin t$e
&ournals.
AA At a reCuisition and PO t$is account is enerated by Account enerator.
0$en enterin an invoice in AP t$is account is only enerated by
Account enerator 1$en a pro&ect is involved.
ccountin% entries
E&C11 ReEuisition
E"pense -Commitment. -
Reserve for Encumbrance -Commitment. -
E&C1( Cancel reEuisition

E&C1) Purc:ase order
E"pense -Obliation. -
Reserve for Encumbrance -Obliation. -
E&C1* Cancel Purc:ase order
E&C1+ In!oice 3unmatc:ed4
2$e debit entry of t$e E"pense account ta4es place after t$e invoice is
approved and t$e concurrent proram Proram O Create Journals is ran.
2$e credit entry of t$e E"pense account ta4es place 1$en t$e proram
2ransfer Journals to 56 is ran.
E&C1, In!oice 3matc:ed4
2$e debit entry of t$e E"pense account $as already ta4en place in Oracle
Purc$asin. 8ecause t$e encumbrance type for Purc$ase orders and
Invoices is bot$ Obliation -Assumptions. no debit entry ta4es place 1$en
t$e matc$ed invoice is approved.
E&C15 Receipt

2$is &ournal entry only ta4es place 1$en receipt accountin is
implemented.
&otes
3. 2o import encumbrance &ournals in Oracle 5eneral 6eder t$e
proram Create Journals $as to be run. 2$is is !O2 t$e case for
encumbrance &ournals t$at are triered by t$e events Invoice
-matc$ed K unmatc$ed. and Receipt. 2$ese are imported by t$e
proram Import Journals. 2$e reason is t$at t$e timin of t$ese
&ournals is related to t$e actual &ournals.
*. An encumbrance &ournal 1ill be balanced by t$e Reserved for
Encumbrance Account. 2$is $appens 1$en t$e &ournals are posted
in 5eneral 6eder.

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Accounting For Some Modules

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Accounting For Some Modules

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>+ A Retirement Retirement

Purc$ases Commitment 0$en reservin or approvin

Receivin Obliation 0$en postin t$e &ournals

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